Deforestation is not only a global environmental problem that requires strong action. It is also a risky activity to support financially. This is true across all categories of asset owners and managers in the United States and globally.
Investors may not realize that they are supporting deforestation. Despite recent progress, a continued lack of transparency in sectors most at risk of illegal forest clearing, such as cattle, oil palm, soy and timber, means that investors may not know the extent of their exposure to material financial risks from deforestation through companies they invest in. This does not inoculate them, however, from the financial impacts they incur when these material risks are realized. Investors should therefore take these risks seriously.
One specific material risk worthy of examination is legal risk. Not all deforestation is illegal, but the scale of illegal logging is vast – between $50 and $150 billion per year according to Interpol. While companies engaged in the forest, food and land sector should act in accordance with the law, asset owners and managers cannot assume that is always the case. One potential consequence is exposure to legal action for producers involved in forest crime, companies who interact with these producers in their supply chains, or the financiers and investors who support these activities financially.
These legal risks include major environmental laws, such as the U.S. Lacey Act or Endangered Species Act. However, they also go far beyond, to include major U.S. laws not specifically addressing environmental concerns. This report looks at the most applicable laws where perpetrators or enablers of forest crime could be legally vulnerable. Investors should understand these broad legal risks so they can ask more of the companies they invest in, before it is too late.
Download the full report here: Legal Risks to Investors from Forest Crime
In 2015, nearly 200 countries came together to adopt the Paris Agreement. Parties to this historic accord committed to take steps both to limit warming to well under two degrees Celsius above pre-industrial levels and to increase resilience to the impacts of climate change. National climate goals are at the heart of the agreement and are critical to achieving its objectives. Every five years, countries submit their goals—called “Nationally Determined Contributions,” or NDCs—which are to be increasingly ambitious over time. The agreement also encourages countries to submit and update “adaptation communications” that articulate their priorities, needs, and strategies for guarding against climate impacts. To support the Paris Agreement, California is sharing its “ocean-climate contribution” at COP24.
This paper explores the next natural step for consumer goods companies adopting traceability through the supply chain: full transparency for stakeholders, suppliers and consumers. We examine examples of risk mitigation, opportunities for value creation, and distributed ledger technology (DLT) solutions that are already in use. Download the pdf: Climate Advisers Whitepaper September 2018.
Creating visibility across the chain for company stakeholders, regulators, and the end consumer will open opportunities based on:
External stakeholders are increasingly concerned due to the lack of information around climate risk. Traceability and transparency IT solutions can prevent surprises in the supply chain, leading to predictable revenue and earnings, and improved forecasting and budgeting.
The financial impact of a recall in the U.S. can be substantial: 52 percent of all recalls cost more than $10M, and 23 percent cost over $30M, according to the Grocery Manufacturers Association. Transparency and traceability can play a critical role in containing the damage.
Access to capital
From a lending and investment perspective, the notion of traceability and transparency will grow in importance alongside the burgeoning field of supply chain finance and investors’ commitment to support the Sustainable Development Goals and Paris Agreement.
Brand loyalty can be established with open communication about sourcing. A recent study by Unilever found that 33 percent of consumers are now choosing to buy from brands they believe are doing social or environmental good, and 21 percent said they would actively choose brands if they made their sustainability credentials clearer. The trends represent a potential untapped opportunity of €966 billion ($1.3 trillion) out of a €2.5 trillion ($3.2 trillion) total market for sustainable goods.
Consumer goods companies have an opportunity to stay attuned to their market, achieve significant efficiencies, and enhance relationships from the first link of the supply chain to the Point of Sale and beyond.
Ending Tropical Deforestation: Mining Global Financial Data to Increase Transparency and Reduce Drivers of Deforestation
The climate and forest community has not yet harnessed the full power of the information age to create transparency in the global commodities markets. There exists a wealth of global financial data that can reveal the financial drivers of deforestation. Using the power of big data, forest champions—including indigenous peoples, business leaders, investors, policymakers, and law enforcement—can be empowered to find and draw attention to illegality and wrongdoing in commodities markets and supply chains.
Additionally, companies can proactively use this information to reduce the material risk associated with deforestation and illegality in supply chains. Radical transparency techniques, in addition to illustrating overlaps in ownership structures and detecting instances of intentional overvaluation of assets, have been proven effective in holding companies to account for illegal or unethical activities and for violating zero-deforestation commitments. However, their full potential has yet to be unleashed.
Discussion Draft: The Economic Impact at the National Level of the Illegal Conversion of Forests for Export-Driven Industrial Agriculture
Between 2000-2012, half of all tropical deforestation was the result of illegal clearing for industrial agriculture (Lawson et al. 2014). This report aims to characterize the costs of this illegality. While the impacts are widespread, including global, we focus our analyses on the costs to the countries in which the deforestation occurs. We hope a broad estimate of financial loss will help convince forest country actors, like Finance Ministers, of the gains to be made by enforcing laws and regulations related to land use for industrial agriculture. (more…)
The International Civil Aviation Organization (ICAO) Carbon Offsetting Reduction Scheme for International Aviation (CORSIA) allows airlines to contribute towards the aviation industry’s goal of carbon neutral growth from 2020 onwards by financing greenhouse gas (GHG) emission reductions outside of the aviation sector.
To fully comply with CORSIA, most airlines covered by CORSIA will need to purchase emission reductions. This is because air travel is expected to continue growing globally, and the corresponding increase in greenhouse gas emissions will likely outpace emission reductions achieved through efficiency and other means. Many airlines already offer GHG offsets to interested customers, including through forest conservation which is tangible and popular with airline customers. More specifically, leading airlines such as Air Canada, Delta Air Lines, Kenya Airways, Qantas and United Airlines enable their passengers to voluntarily offset emissions from their flights with forest conservation and restoration activities. (more…)
The 192 Parties to the International Civil Aviation Organization have agreed to a set of Emission Unit Criteria (EUC) to measure programs for eligibility in the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). This paper demonstrates how emission reduction units generated from forest programs under the United Nations Framework Convention on Climate Change (UNFCCC) “Warsaw Framework for REDD+” meet these criteria. (more…)
This case studies series examines the potential business risks for companies that source commodities from areas with deforestation. The series spotlights three companies (IOI Corporation, JBS, and United Cacao) and summarizes the business risks and negative financial consequences that the three companies faced. (more…)
The International Civil Aviation Organization and its 191 member States agreed in October 2016 to implement a Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) to limit future increases in greenhouse gas emissions from the sector. This market-based scheme creates a potential global demand of over 2 billion metric tons of investment-grade emissions reductions from 2021 to 2035.
Ethiopia could meet some of this demand with its current and projected supply from reducing emissions from deforestation and forest degradation and through forest restoration. This report provides a quantitative analysis of Ethiopia’s opportunities from making these emission reductions available to airlines in Ethiopia and beyond.
The International Civil Aviation Organization and its 191 member States agreed in October 2016 to implement a Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) to limit future increases in greenhouse gas emissions from the sector. This market-based scheme creates a potential global demand of over 2 billion tonnes of investment-grade emissions reductions from 2021 to 2035.
Indonesia could meet some of this demand through its current and projected supply of emissions reduced from deforestation and forest degradation, and through forest restoration. This report provides a quantitative analysis of Indonesia’s opportunities from making these emission reductions available to airlines in Indonesia and beyond.
Distributed Ledger Technology (DLT) is an easily deployable technology that can play a critical underlying role in meeting the objectives of the Paris Agreement, which requires an immediate and dramatic shift of our global economic systems. DLT has the potential to demonstrate how Non-State Actors and private sector companies in particular perform against their stated climate objectives, by making new data publicly available, that is directly incorporated into a wide range of financial transactions. (more…)
Palm oil is an inexpensive and highly versatile vegetable oil derived from the fruit of the oil palm tree. It can be found in half of all consumer goods in Western grocery stores, from chocolate, ice cream, and baked goods to soaps, lotions, and detergents.
Palm oil is the highest-yielding vegetable oil crop as well as the most actively traded vegetable oil in the world. As a petroleum alternative, it can power vehicles, heat homes, and manufacture plastic.
And with annual sales of around $50 billion, palm oil is also a big business, albeit one with oversized risks.
Over the past 15 years, palm oil plantations in Indonesia and Malaysia have expanded, tripling their production. The two countries now produce around 85% of the global supply. From one million hectares (ha) in 1990, Indonesia’s oil palm estate grew to 21 million ha in 2015. Now oil palm concessions lease more than 10% of the nation’s total land area.
After falling 4.8% in 2015–2016, the first decline in 18 years, due to El Niño and related climate change effects, global palm oil production is expected to increase by 7.3%, to 63 million tons, in 2016–2017, according to FitchGroup’s BMI Research forecasts.
Article 6 of the Paris Agreement establishes a broad framework for voluntary cooperation among Parties in the implementation of their nationally determined contributions (NDCs). The Article sets out three approaches through which Parties may voluntarily interact: 1.) “bottom up,” bilateral or regional cooperative approaches via internationally transferred mitigation outcomes (ITMOs), 2.) a centrally-governed UNFCCC mechanism to contribute to mitigation and support sustainable development, and 3.) non-market approaches (these are outlined in Article 6.2, 6.4 and 6.8, respectively). In line with the principles of the Convention, every Party can determine its preferred approach in this new architecture and choose whether to participate. As its capabilities and national circumstances evolve, a country may choose to use one or multiple approaches.
Approximately half of all current NDCs demonstrate interest in fulfilling a portion of their emission reduction targets (unconditional or conditional) using international market-based approaches,1 which may take the form of emission trading or similar mechanisms. The effective implementation of Article 6.2 can support such approaches, stimulating efficient, bottom-up, voluntary cooperation between Parties to implement existing NDCs and strengthen the ambition of mitigation actions over time. Encouraging the transfer of high-quality emission reductions generated in all sectors, including the land sector, can drive needed flows of finance to mitigation actions addressing both sources and sinks, particularly in developing countries.
This paper, which builds upon a previous non-Party stakeholder submission from a subset of these organizations, addresses key questions and issues in the implementation of Article 6.2, with a focus on the guidance needed to appropriately account for ITMOs.
The International Civil Aviation Organization and its 191 member States agreed in October 2016 to implement a Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) to limit future increases in greenhouse gas emissions from the sector. This market-based scheme creates a potential global demand of over 2 billion tonnes of investment-grade emissions reductions from 2021 to 2035.
Colombia could meet some of this demand through its current and projected supply of emissions reduced from deforestation and forest degradation, and through forest restoration. By choosing to participate in the early Phases of this scheme, starting in 2021, the Colombian Government could generate more than $300 million in additional investment at an estimated cost of $23 million to its aviation industry, which represents a small fraction – less than 0.4 percent – of global emissions from international aviation.
By Peter Graham
In a promising development for climate protection, in 2016 the International Civil Aviation Organization (ICAO) committed to launch, by 2021, a Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). CORSIA will limit the net carbon dioxide emissions of flights between participating countries to 2020 levels, and will require airlines to procure emission reductions achieved elsewhere to “offset” their emissions above these levels. Forecasts indicate that airlines will need to offset some 2.5 billion metric tons of emissions from 2021 to 2035 – and potentially more if CORSIA’s ambition is strengthened.
This paper will outline some experiences drawn from existing carbon markets that exhibit high standards of transparency and public reporting, briefly explain how establishing such standards for CORSIA is in the self-interest of all stakeholders, and provide recommendations for transparency in CORSIA.
REDD+, based on the history of its development through UNFCCC negotiations and implementation, has already had to address many interrelated issues, including capacity building, monitoring systems, measurement, reporting and verification (MRV), finance, market and non-market approaches, adaptation, and NDCs. The future of REDD+ depends on how these same issues will be addressed through the CMA’s upcoming program of work. As Parties begin shaping the negotiating agenda, they should be considering the linkages (operational and political) that underlie the success of the high-level negotiations in Paris. Paying close attention to the linkages between and among agenda items should help to avoid entrenching old negotiating silos that, in the past, made it difficult to maintain momentum established on a carefully balanced political agreement.
The International Civil Aviation Organization and its 191 member States agreed in October 2016 to implement a Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA)to limit future increases in greenhouse gas emissions from the sector. This market-based scheme creates a potential global demand of over two billion tonnes of investment-ready emissions reductions from 2021 to 2035. Peru could meet some of this demand with its current and projected supply from reducing emissions from deforestation and forest degradation and through forest restoration. By choosing to participate in the early Phases of this scheme, starting in 2021, the Peruvian Government could generate more than $500million in additional investment at an estimated cost of $24 million to its aviation industry, which represents a small fraction –less than 0.4percent –of global emissions from international aviation.
The surprising November 2016 election of Donald Trump to the Presidency of the United States left many in the environmental community scrambling to understand the implications of a Republican executive for President Obama’s climate legacy – and, more concretely, the U.S. emissions trajectory. Republican lawmakers had met the Obama regulatory agenda with increasing hostility, attempting on multiple occasions to block, roll back, and otherwise defund the his climate initiatives. With sympathetic President Trump in the White House, these efforts are expected to bear fruit – but juicy the fruit, how bountiful the harvest? New analysis from Climate Advisers explores the vulnerability of some of Obama’s key climate priorities to a smorgasbord of Republican rollback tactics, including disapproval under the Congressional Review Act (already underway for the Bureau of Land Management’s methane emissions rule), court settlements, lax enforcement and new legislation, among others.
This paper explores a specific approach to carbon pricing, called “Price and Block Grant,” where the federal government prices carbon and states take the lead in spending decisions. Under the proposal, U.S. states receive the majority of revenue in the form of block grants. The balance is reserved for reducing federal taxes or funding select new federal spending. The Price and Block Grant approach allows the U.S. to address key national and state priorities without massively increasing the federal budget deficit. Price and Block Grant builds on the strength of the U.S. federalist system, raises much-needed revenue, and is an efficient way to reduce U.S. emissions. Experts on both sides of the ideological spectrum agree that pricing carbon and other GHGs is likely the most efficient way to reduce emissions, and far more cost-effective than top-down regulations such as the Clean Power Plan. This carbon pricing approach represents an enormous new revenue stream while remaining consistent with conservative principles of limited government and local control. It eschews top-down federal regulations in favor of a market-based approach, promotes efficient and sound environmental policy and puts local actors in charge of key spending decisions. It is simply smart policy.
Despite ongoing political changes in the United States and Germany, the transatlantic allies continue to have deep, shared agendas. On climate change, however, Germany and the United States differ. Accepting these differences, the surprising truth is that the United States and Germany have tremendously overlapping interests in a wide variety of areas that might collectively be referred to as the clean energy economy. Both countries understand the economic opportunities and security benefits that flow from clean energy. This paper highlights nearly twenty concrete areas for transatlantic cooperation on clean energy, looking both at the domestic and international level. These policy recommendations focus primarily on the economic and security benefits of transatlantic clean energy cooperation.
Last spring, Climate Advisers released an initial assessment of the suite of recently finalized, proposed and planned regulations pushed forward by the Obama administration, and how close those efforts brought the U.S. to achieving the target range of emissions reductions by 2025 and through 2030. In this report, we update these projections based on recent policy developments and new reference case emissions data made available through the 2015 U.S. Energy Information Administration’s Annual Energy Outlook and the U.S.’s Second Biennial Report to the UNFCCC.
What will climate diplomacy look like after Paris? And what can the United States do in Paris, if anything, to make sure the years that follow trigger as much climate progress as the past few years? This essay explores these questions: first looking at what Paris will achieve and the global emissions gap, then identifying opportunities to spur climate action and potentially narrow the gap through international partnerships between developed and developing nations, and finally exploring opportunities for the United States in December to help define the post-Paris international climate agenda around these partnerships, with specific recommendations for the Obama administration.
From Investment to Impact: Quantifying the Emissions Reduction Benefits of U.S. International Climate Programs
In this analysis, Climate Advisers undertook an exercise to estimate the annual emissions reductions from programs funded through U.S. international climate and development finance. This paper focuses specifically on measuring the impact of mitigation-related activities.
The inclusion of strong forest conservation targets and indicators in the UN post-2015 sustainable development agenda is essential in order to ensure effective implementation at the national level, mitigate climate change, mobilize resources to address extreme poverty and promote inclusive, sustainable growth. This brief discusses the final outcome on forests and land use in the sustainable development goals and targets, and assesses both the level of ambition and need for comprehensive indicators to measure action.
This brief by Climate Advisers and Sierra Club provides a balanced assessment of the risks and challenges facing the Obama administration as it seeks to mitigate climate change using the Clean Air Act. It outlines the CAA and its applications for regulating domestic greenhouse gas emissions, summarizes the likely challenges the administration will face in the coming years, and provides political analysis on the extent to which the United States will sustain its recent climate progress after the election of a new President and Congress in late 2016.
When the United States announced its domestic pledge for the new international climate agreement expected to be negotiated in Paris later this year, the numbers became well known the world over: thee U.S. pledged to lower its carbon emissions by 26%-28% below 2005 levels by 2025. Less well understood is the path that will get us there. The two most frequently asked questions posed by those following the global climate debate have been: are these reductions achievable, and how? In this analysis, Maria Belenky found that, ten years out, announced and planned measures can get the U.S. within striking distance of meeting its target.
The Billion-Ton Solution: Europe’s Chance to Lead on Climate Action through International Mitigation Partnerships
In this analysis, Andreas Dahl-Jørgensen argues that the most promising and politically realistic way to further increase climate ambition in 2015 is for Europe and other advanced economies to make additional pledges for mitigation that they intend to secure outside their borders. Doing so would reduce more emissions at a lower cost, unlock large emission cuts in developing countries that would otherwise not occur, help ensure a global climate agreement, facilitate the linking of regional systems and carbon markets, and deliver significant development benefits.
Michael Wolosin and Maria Belenky created this white paper discussion draft looking at the domestic pledges nations are expected to put forward over the next few months during the run-up to the Paris climate talks in December 2015. They explored how far these pledges could go to meeting the global goal of limiting climate change to two degrees Celsius. Climate Advisers found that just domestic pledges could account for up to half of the emissions reduction the world needs through 2030, and essentially keep global emissions flat through the 2020s. That is entirely without taking into account what more could be achieved through international finance or mitigation partnerships.
This paper by Michael Wolosin and Donna Lee analyzes how various interests, constituencies, and concerns have shaped U.S. financial commitments to REDD+, and opportunities and constraints on future forest-related funding in the broader context of U.S. climate finance.
This paper by Michael Wolosin analyzes the main measurable outputs of the New York Declaration on Forests, by quantifying the total emissions reduced or avoided, and total area of forest conserved or restored, that would be achieved by the combined measures included in the Declaration.
Raising Global Climate Ambition: 9 Pragmatic Steps for World Leaders to Deliver the Low-Carbon Economy
A new report by Nigel Purvis and the Center for American Progress identifies nine pragmatic steps world leaders should take by the end of 2015, to start moving in the right direction at the global level. While the politics of climate action, both at home and abroad, remain challenging for many world leaders, this piece looks at politically feasible measures that are available to world leaders to create a low-carbon economy.
A new report by Nigel Purvis, Abigail Jones, Cecilia Springer and the Brookings Institution explores whether the World Bank’s coal-fired power plant lending policy should also cover projects designed to retrofit existing plants in middle-income countries — by adding scrubbers and other technologies that increase efficiency and reduce air pollution. In middle-income countries that do not mandate coal retrofits, the World Bank could play a helpful role in financing improvements, particularly as part of broader policy reforms designed to reduce climate pollution and increase efficiency across the power sector.
A new report by Cecilia Springer and the Center for American Progress finds that the U.S. government should lead a global effort to improve vehicle efficiency through more stringent, long-term fuel-economy standards for cars and trucks. Doing so would align interests in economic growth, energy security, public health, and climate protection across a wide range of countries.
Climate Advisers’ Managing Director Abigail Jones released a new options paper with colleague Michael Wolosin that proposes a number of ways to integrate forests into the post-2015 development agenda. Based on the political costs and benefits of each approach considered, they recommend both mainstreaming forest targets across relevant goal areas and housing forest-specific targets under a standalone natural resource management goal.
Together with Habitat for Humanity, Save the Children US, and World Wildlife Fund, Climate Advisers Managing Director Abigail Jones released a list of 10 consensus targets for 2030 that mainstream environmental sustainability, including greenhouse gas abatement and resilience strategies, across poverty alleviation priorities for the post-2015 global development agenda.
Climate Advisers’ Managing Director Abigail Jones released a new paper together with the Center for American Progress that looks to the upcoming post-2015 Development Goals, and identifies how they can include specific, measurable targets that both address climate change and alleviate poverty. The report reveals that many actions to fight climate change and prepare for its unavoidable impacts will improve public health, safety, and livelihoods.
Measuring Green Prosperity in Indonesia: Millennium Challenge Corporation and the Social Cost of Carbon
Climate Advisers’ Managing Director Michael Wolosin released a new discussion paper that argues for including climate in cost-benefit analyses the Millennium Challenge Corporation uses for selecting projects, most immediately in Indonesia’s Green Prosperity program. He also considers several technical challenges to doing so, and recommends an Indonesia-specific estimate of the social cost of carbon as an initial value.
Trading Up: The Case for an International Carbon Market Reserve to Reduce Volatility at the Limits in 2020 and Beyond
Climate policymakers face major challenges when designing future global carbon markets. On one hand, domestic carbon markets are currently spreading and linking rapidly around the world; carbon markets, and carbon pricing instruments in general, present the most flexible mechanism to create low-carbon economies. Yet today’s global carbon market is somewhat dysfunctional and highly volatile—characterized by dramatic changes in supply, demand, price, and public confidence. In this paper we make the case for one useful, albeit partial, solution: a new international carbon market reserve with the authority and mandate to adjust the supply of global carbon market securities when prices rise or fall to extremes. An international carbon market reserve could help nations temper likely swings in global carbon markets by increasing the supply of carbon credits when demand exceeds supply, and potentially reduce supply by purchasing credits when prices fall.
Climate Advisers, Profundo, and other groups have released a new analysis that discusses serious undisclosed risks associated with the scheduled December 12 Initial Public Offering of the palm oil company PT Sawit Subermas Sarana (SSMS) on the Jakarta Stock Exchange. The report highlights poor social and environmental practices carried out by SSMS, including holding contested land banks and engaging in illegal deforestation, in addition to financial decisions that underrepresent shareholders and demonstrate a clear conflict of interest with lenders. This analysis is the first product of a new series produced by Profundo, Climate Advisers, and other partners that will provide analysts and investors with reliable, thorough, and financially actionable information about sustainability and governance performance of key companies in commodity sectors that may be linked to deforestation.
Federal efforts to impose a cost on carbon emissions raise meaningful questions about the international competitiveness of U.S. energy-intensive industries and the likelihood of emission leakage to countries without similar policies. Any efforts to “level the playing field” for international trading partners will raise flags regarding compatibility with our international obligations, particularly with respect to the rules of the World Trade Organization (WTO). In this paper, former WTO appellate body member Jennifer Hillman discusses the design of potential carbon tax border measures and how they can comply with WTO obligations.
The production of just four agricultural commodities is responsible for over half of global deforestation. Companies across the world have realized the threat that deforestation and climate change pose to their supply chains and business models. A new paper prepared by Climate Advisers for seven global NGOs explores the policy opportunities for a promising new public-private partnership – the Tropical Forest Alliance. It sets forth concrete recommendations for how the Obama Administration can work together with the private sector to promote deforestation-free commodities.
In a new fact sheet with World Resources Institute and the Overseas Development Institute, Climate Advisers’ managing directors Abigail Jones and Michael Wolosin breakdown U.S. climate finance numbers over the Fast Start Finance period.
This paper by Climate Advisers managing director of research and policy Michael Wolosin and associate Cecilia Springer identifies success stories, emerging strategies, and existing NGO actions and efforts to reduce tropical deforestation associated with the production and trade of key global commodities. Michael and Cecilia have been facilitating civil society stakeholder input to the Tropical Forest Alliance 2020 – a new alliance of governments and companies with the same goal. This background study, based on interviews with more than 20 civil society experts, will help identify opportunities for new partnerships and actions through the TFA.
Nigel Purvis, Samuel Grausz, and Andrew Light of the Center for American Progress describe how international carbon markets have driven ambitious new action against climate change around the world while supporting economic growth and poverty alleviation. The report outlines the current serious challenges facing these important markets and offers a number of recommendations for how to strengthen and employ the markets to confront the growing challenge of climate change.
Poverty and forest loss often go hand in hand. In a new literature review, Climate Advisers researchers identify forest solutions that have a proven track record of measurably reducing poverty in rural and forest communities and creating benefits for national economic development.
This research paper commissioned by the High-Level Panel on the CDM Policy Dialogue analyzes the options for including REDD+ in the Kyoto Protocol’s Clean Development Mechanism (CDM), the world’s largest carbon market mechanism. After careful examination of benefits and risks, Climate Advisers director of research and policy Michael Wolosin and coauthors recommended that the Panel “give close consideration to expanding CDM to include additional REDD+ activities, and/or piloting sectoral “RED” at national or subnational scale.”
Air Supremacy: The Surprisingly Important Dogfight over Climate Pollution from International Aviation
Aviation emissions are one of the fastest growing sources of climate pollution and have outsized climate consequences because they involve a potent mix of pollutants and because altitude magnifies their harmful impacts. Europe, spurred by a strong awareness of the threat of climate change, has grown impatient with the slow pace of international climate diplomacy and regulated emissions of all flights into and out of Europe. The United States and other nations see in Europe’s move a naked power grab with dangerous consequences for non-European airlines. Many of the prevailing feelings about this recent transatlantic turbulence rests on myths and misconceptions. The persistence of these myths also explains why few policymakers understand the challenge and importance of bringing this dispute in for a safe landing. Failure to do so would pose enormous risks not only for transatlantic trade relations but also for the global climate and trade systems.
Almost three years ago, the United States launched a major effort to help tropical forest nations dramatically reduce deforestation, one of the primary sources of climate pollution. In a new report jointly published with Resources for the Future, Climate Advisers director of research and policy Michael Wolosin assess progress of this effort to date. The analysis breaks down the agency and programmatic sources of U.S. forest-climate finance, and takes a close look at where funding is going by country, by region, and by strategy. It identifies a few gaps between the program’s existing objectives and strategies and their implementation that can and should be corrected. It also identifies changes in the global strategic landscape for REDD+, and recommends two important new directions for expanding the U.S. approach to reducing deforestation beyond the existing strategy.
Sink or Swim: The Economic Impacts of an International Maritime Emissions System for Greenhouse Gases on the United States
In a Brookings Institution report, Climate Advisers president Nigel Purvis and associate Samuel Grausz analyze the impacts of a global system to reduce maritime greenhouse (GHG) emissions on the United States. They examine the potential benefits of such a policy to the potential costs using a simple economic model to provide a rough estimate of the changes in prices and demand for U.S. imports and exports resulting from such a policy.
The last decade has seen increasing interest in defining a common agenda at the intersection of environment and development. “Green development” and “green growth” are everywhere – but what do the mean? And how can we define success? Climate Advisers Director of Research and Policy Michael Wolosin organized a workshop highlighting new approaches to integrate the environmental benefits of development into decision-making and impact evaluation frameworks for the 2012 Annual InterAction Forum.
Climate Advisers associate Samuel Grausz argues with co-author Nathan Richardson that the EPA could craft aviation emissions regulations under the Clean Air Act that could achieve environmental and industry goals while implementing the ICAO policy or satisfying the EU “equivalency” requirement. These regulations could be both broad and flexible, covering existing and new aircraft engines and allowing compliance through airframe and operational changes. Learn more about the Blue Skies Project
Energizing Rio+20: How the United States Can Promote Sustainable Energy for All at the 2012 Earth Summit
In this Center for Global Development report, Nigel Purvis and Abigail Jones show how the United States can help with global efforts to expand access to clean energy and reduce the number of people without access to modern energy while advancing global climate-protection goals. Their policy recommendations focus on catalyzing skills and investment from the private sector to help eradicate energy poverty and expand clean energy solutions.
The world remains in the grip of a lingering climate policy recession. In this paper, Climate Advisers’ president Nigel Purvis seeks to determine whether circumstances warrant a new climate of despair. He concludes that global climate negotiations, while essential, will produce only a modest international agreement and probably not before 2020. He also concludes that the United States will do more than many predict, but far less than the world needs of it.
The global demand for vegetable oils is increasing at an unsustainable rate – more than 5 percent annually over the past decade – contributing to massive deforestation in tropical regions.Climate Advisers’ new report “Recipes for Success: Solutions for Deforestation-Free Vegetable Oils,” co-authored with the Union of Concerned Scientists, offers solutions for businesses, governments and consumers on producing and using vegetable oil without causing deforestation.
Climate Advisers’ Samuel Grausz and Nigel Purvis with Center for American Progresses’s Rebecca Lefton examine existing studies of the economic impact of the controversial inclusion of aviation in the European Union Emissions Trading System (EU ETS) and find that existing studies show that airlines could potentially make profits from the policy.
Climate Advisers Director of Research and Policy Michael Wolosin interprets trends revealed by a recent State Department release of fast start finance data, most notably that U.S. climate financing is increasing through non-climate programs with climate benefits.
Climate Advisers president Nigel Purvis and Director of Research and Policy Michael Wolosin argue that a new package of foreign aid from the U.S. Millennium Challenge Corporation to Indonesia to support green growth in the clean energy and land use sectors represents an important milestone in Indonesia’s own development and a step forward in modernizing U.S. foreign aid programs.
Climate Advisers’ Abigail Jones, Nigel Purvis and Andrew Stevenson examine the World Bank’s proposal to phase out lending for new coal-fired power plants in middle-income countries, and argue that the World Bank should allocate scarce multilateral development funding for other pressing investments that cannot attract private capital as easily.
Samuel Grausz summarizes the state of knowledge on the social cost of coal-fired power plants in an effort to help inform ongoing policy discussions at the World Bank.
Glenn Hurowitz and Samuel Graus advocate for new alternative compliance mechanisms that provide the same cost control and flexibility for utilities as traditional alternative compliance payments (ACPs), while also reducing emissions significantly beyond what is possible through a clean energy standard alone. In other words, the alternative compliance mechanisms described in this issue brief produce more emissions bang for the buck, creating a significantly more effective and affordable overall policy than traditional ACPs.
With funding increases becoming politically difficult, other options are needed to increase U.S. policy impacts on reducing tropical deforestation. In a new Discussion Paper jointly sponsored by Resources for the Future and Climate Advisers, authors Michael Wolosin, Anne Riddle, and Daniel Morris propose a “whole-of-government” approach to tropical deforestation. The discussion paper defines the scope and goals of a “whole-of-government” approach, reviews existing programs and coordination, and identifies three major areas where policy adjustments and actions through existing authorities can have immediate and tangible impact on reducing deforestation.
Interest in low emissions development is growing in many parts of the world for both climate and non-climate reasons, yet gaps in knowledge and implementation capacity are evident. In a new discussion paper for Resources for the Future, Nigel Purvis and Abigail Jones call for the creation of a semiformal international coordinating entity to enrich country-specific low emissions development activities by building knowledge and capacity as well as enhancing the scale and predictability of funds.
The political landscape for efforts to reduce tropical deforestation has significantly shifted from the 111th to the 112th Congress. In a new Policy Brief jointly sponsored by Resources for the Future and Climate Advisers, authors Peter Jenkins and Michael Wolosin present the results and primary insights gained from interviews of 29 key hill staffers of both parties and both chambers during February of 2011. The brief identifies the motivations behind support for, and the feasibility of, various policy options to provide the funding streams and attention needed to reduce deforestation in developing countries.
This essay focuses on promising opportunities for climate action amid the policy recession in the western world. Both Europe and the United States are reforming traditional domestic policies and improved coordination between donor agencies can yield strong bilateral and multilateral low-emission development programs.
This paper represents a joint effort between Climate Advisers and Project Catalyst, to help convey an important truth: the United States must find the political will to lead on international climate finance, and doing so is possible despite current economic and political conditions.
This paper presents a new theory of change for international climate action based on the concept of green growth. It also aims to connect this way of thinking to today’s global climate diplomacy and suggests a practical way forward. The focus is almost exclusively on the challenge of emissions mitigation in developing nations.
This paper proposes that policy makers create a new “Comprehensive Oil Pollution and Energy Security Trust Fund” with the funding and mandate to address all of the national security, economic and environmental threats to the United States from oil.
The purpose of this note is to provide options for promoting a diverse set of U.S. national interests related to the international dimensions of oil exploration, production, transportation and consumption. Climate Advisers believes these ideas could be adopted in the context of an oil pollution bill.
One of the most widely discussed issues in Congress is the mandatory rates of renewable energy consumption for utilities. Climate Advisers proposes a possible solution of allowing utilities to fund international clean energy and submit this expense for a certain percentage of their domestic compliance obligation.
U.S. cap-and-trade legislation would generate new funding for international adaptation, clean technology, and reducing deforestation in developing countries. In a brief fact sheet, Climate Advisers shows the expected revenue these allowance allocations will generate.
We examine here how the U.S. economy and U.S. households would be affected if the auction revenues set aside for tropical forests in Waxman-Markey were to be cut in half or completely eliminated. Because public funding for tropical forests would finance programs to prepare nations to participate in U.S. carbon markets, a decrease in public funding could result in fewer cost-saving international “offsets”. The paper examines optimistic, medium, and pessimistic offset supply responses under different levels of public market readiness funding.
In this paper, the authors argue that the most dangerous thing Europe and the United States could do is ignore the strategic implications of Copenhagen and fall back into old strategies with a new sense of patience. They recommend a fundamental shift in thinking.
Developed by Climate Advisers and Resources for the Future, the Forest Carbon Index provides data on global, national, and local forest carbon supply, explicitly taking into account country-specific economic, biological, and risk factors. The Index brings together 27 datasets integrated and mapped across approximately 1.5 million locations, creating the clearest picture yet of how forests are likely to feature in climate solutions.
At the UN negotiations in Copenhagen, President Obama can reclaim U.S. leadership on climate progress—even without new congressional legislation. Nigel Purvis and Andrew Stevenson provide a step-by-step outline for how the administration should proceed in a background paper for Resources for the Future.
The Commission on Climate and Tropical Forests, co-chaired by John Podesta and Senator Lincoln Chaffee, is a bipartisan group of leaders that have issued recommendations on the best means to address tropical forest conservation as a part of broader U.S. climate change policies. Climate Advisers served as the Commission’s secretariat and provided critical research and analysis for the Commission’s final report.
In this paper for the German Marshall Fund, Climate Advisers president Nigel Purvis draws a blueprint for a new transatlantic climate change partnership-one that could serve as the basis for a joint approach to China, India, and other emerging economies.
Managing Climate-Related International Forest Programs: A Proposal to Create the International Forest Conservation Corporation
As a result of new climate change policies, by 2015 the U.S. may be spending up to $11.5 billion per year to help developing nations reduce tropical deforestation. In a paper for Resources for the Future, Climate Advisers’ Nigel Purvis and Andrew Stevenson argue that Congress and the Obama administration should create the International Forest Conservation Corporation (IFCC), a specialized agency with the unique mandate, authority, and expertise needed to effectively manage this funding.
Paving the Way for U.S. Leadership: The Case for Executive Agreements and Climate Protection Authority
In a paper for Resources for the Future, Climate Advisers president Nigel Purvis argues that President Obama should work with Congress to create a new Climate Protection Authority.