Search Climate Insights Directory

The Union of Concerned Scientists analyzed 28 S&P 500 companies to determine their impact on climate science and policy discussions. The study found that while some companies are consistent in their support for climate action, others—particularly in the energy sector—actively spread misinformation and obstruct policy. Many companies exhibit contradictory behavior, supporting climate science in public relations while opposing it in government filings or through the funding of anti-science think tanks and trade groups. The report highlights a critical lack of transparency in corporate political spending and business risk disclosures, recommending stricter SEC and congressional requirements to hold corporations accountable.

The report argues that a universally applied market-based instrument (MBI), specifically a cap-and-trade scheme, is the most effective and politically feasible way to address emissions from international transport. To comply with the principle of common but differentiated responsibilities (CBDR), the report proposes a governance structure where revenues or allowances are selectively disbursed to ensure no net incidence on developing countries. The remaining value would be transferred to the Green Climate Fund and used for fuel-efficiency improvements. The author concludes that an emissions trading system (ETS) is superior to levy-based systems because it avoids being classified as an international tax and does not require the direct funding of an international organisation or the hypothecation of national fiscal revenues.

The report evaluates the first two phases of the EU ETS, finding that while it successfully capped emissions, its actual abatement impact was modest (40–80 MtCO2/yr) and heavily influenced by the 2008-2009 financial crisis. It notes that the system failed to drive large-scale long-term low-carbon investment due to price volatility and over-allocation. The analysis also highlights significant 'windfall profits' in the power and industrial sectors resulting from free allowance allocations and the pass-through of carbon costs to consumers. The document concludes by suggesting strengthening measures such as price floors and set-asides, and reviews similar emerging schemes in jurisdictions like Australia, China, and the USA.

The report analyzes the global shift in carbon pricing dynamics away from a US-centric model toward Asia-Pacific initiatives, including Korea, Australia, and Chinese pilot schemes. It argues that while the US Federal government remains deadlocked, other industrialised nations must implement carbon pricing to avoid stranded assets and maintain international credibility. Using the EU ETS as a primary case study, the document highlights the effectiveness of cap-and-trade in delivering operational emission savings and the importance of 'easing policies' like free allocation to protect trade-exposed, carbon-intensive industries. It emphasizes that carbon pricing is a 'necessary but not sufficient' tool, requiring complementary measures such as energy efficiency programs and strategic revenue recycling to support low-carbon innovation. The author suggests that regional cooperation and the potential for 'border levelling' measures after 2020 may be necessary if global agreements fail.

China is transitioning from top-down command-and-control energy policies to market-based instruments, aiming for a national carbon trading system by 2016. While the country has been a global leader in the Clean Development Mechanism (CDM), its domestic market remains in a research-and-development stage. Current efforts focus on seven regional pilots and potential sector-based schemes for power and buildings. Significant hurdles remain, including the lack of reliable baseline emission data, the absence of a mature free-market economy, and the need for a legal infrastructure to manage permit allocation and verification.

The report assesses China's ambition to launch a national carbon trading system by 2015, noting that while the government is determined to move away from inefficient top-down administrative measures, a functional domestic market does not yet exist beyond the Clean Development Mechanism (CDM). It highlights the initiation of seven regional pilots (Beijing, Chongqing, Guangdong, Hunan, Shanghai, Shenzhen, and Tianjin) as critical experiments that will determine the future of Chinese climate policy. The authors identify significant hurdles, including a lack of reliable emission data, the absence of a mature free-market economy, and the need for robust legal frameworks for monitoring, reporting, and verification (MRV).

The document argues that the expansive use of offset credits under AB 32 risks undermining the cap-and-trade system by allowing companies to avoid actual emissions reductions. The authors propose reducing the percentage of total emissions that can be met through offsets to no more than 2.5% per compliance period and implementing stricter protocol requirements to prevent 'business-as-usual' activities from being credited. They also recommend enhanced verification oversight, including performance reviews of verification bodies and measures to prevent double counting of credits across different programs.

The paper evaluates the EUETS between 2005 and 2010, finding that while 2008 allocation caps were more stringent than the first trading period, a surplus of allowances later emerged due to the economic crisis. It notes that traded certificates represent a small portion of surrendered allowances, though this share grew in the second phase, and observes that some countries became net importers of EUAs despite having national surpluses.

The document argues that GHG offsets are a critical component of effective climate policy, providing flexibility for regulated industrial emitters and expanding emission reductions to non-regulated sectors. Through a review of international and domestic systems and original CIMS modelling, the brief demonstrates that offsets can significantly lower the societal cost of carbon policies. It proposes two primary implementation paths: integrating offsets as a compliance mechanism within sector-by-sector regulations or establishing a separate, independent offset regime to cover sectors like agriculture and waste.

The document argues that integrating offsets into Canada's GHG regulations can significantly lower compliance costs for industrial emitters and expand emission reductions to difficult-to-regulate sectors like agriculture and forestry. It highlights that offsets are not exclusive to cap-and-trade systems but can complement performance standards, as seen in jurisdictions like Alberta and New South Wales. Modelling suggests that unlimited access to domestic offsets could reduce costs for industrial emitters by up to 40% and nearly double total emission reductions when expanding coverage. The brief proposes two implementation paths: allowing offsets for direct compliance within sector regulations or establishing a separate, independent carbon management fund.

The research evaluates the transition from voluntary to mandatory emissions trading in Japan using the CASE-ASIA model. It compares two primary designs—one including the electricity sector in the ETS and one applying a CO2 tax to it—across various allocation modes including full auctioning, border adjustments (BA), and output-based allocation (OBA). The findings highlight a critical trade-off between electricity prices and industrial product prices, noting that border adjustments for exports are essential for Japan due to its high export volume of steel and cement. While OBA is most effective at limiting production decreases, the study concludes there is no single superior design, and policy choices will depend on government priorities regarding revenue and competitiveness.

The paper examines how to equalise carbon costs between domestic and imported cement and clinker. It identifies two primary calculation requirements: the difference in carbon costs of production and the carbon intensity of imported products. The author evaluates three options for determining carbon intensity—plant-by-plant assessment, benchmarking, and default values—concluding that a system of stringent default factors with an option for plant-level evidence is the most practical compromise to balance accuracy with administrative feasibility.

The paper assesses how different carbon tax rates (10 and 100 yuan/tCO2) affect various Chinese industrial sectors. It finds that while a low carbon price is a safe starting point, a higher price of 100 yuan/tCO2 would significantly impact energy-intensive sectors like ferrous metals and electricity, potentially reducing GDP by 1.1% unless revenue is redistributed to stimulate consumption. The study highlights the electricity sector as the primary driver for CO2 emission reductions and suggests that targeted carbon pricing for energy-intensive sectors could be more efficient than a nationwide policy.

The analysis indicates that South Africa is vulnerable to border carbon adjustments (BCAs) from the US and EU, with potential annual charges of €380 million and US$210 million respectively. The non-ferrous metals and iron and steel sectors are the most exposed, facing ad valorem tax equivalents exceeding 10%. To mitigate these risks, the document suggests South Africa could pursue WTO redress or negotiate sectoral emissions reduction agreements to gain exemptions.

The report evaluates the EU ETS, concluding that emissions trading is an effective tool for reducing CO2 emissions with modest macroeconomic impacts. It highlights the risks of free allowance allocation, such as windfall profits and reduced economic efficiency, and recommends a transition toward auctioning. The document also identifies that international competitiveness risks are concentrated in a few carbon-intensive sectors and suggests tailored solutions like benchmarked free allocation or multilateral border adjustments to prevent carbon leakage.

The document concludes that a federal US carbon market is unrealistic for the foreseeable future, but identifies potential for linking the EU ETS with regional systems like the Western Climate Initiative (WCI) and California. It highlights that while the Regional Greenhouse Gas Initiative (RGGI) is operational, its low prices make it an unattractive linking partner. The authors argue that a bottom-up climate architecture, rather than a single global carbon market, is the most likely trajectory for international climate cooperation.

The document analyzes the divergence in economic recovery between Western economies and emerging markets following the 2008 financial crisis. It argues that while the world avoided 1930s-style tariff wars, a new era of 'creeping protectionism' has emerged through non-tariff barriers, industrial subsidies, and regulatory standards. The author highlights a leadership vacuum in global trade governance as the US and EU adopt defensive postures, while emerging powers like China, India, and Brazil remain reactive and hampered by domestic structural weaknesses.

The research investigates the risk of 'double-counting' international offsets, where both the buying developed country and the supplying developing country claim the same emission reduction toward their pledges. Using a spreadsheet model based on McKinsey abatement cost curves, the authors find that if offsets count twice, global abatement could be reduced by up to 1.6 billion tons CO2e in 2020. This dilution could increase the existing emissions gap by as much as 20%, potentially hindering the goal of limiting warming to 2°C. The paper compares this to a 'Buyer Only' scenario and proposes remedies such as shared crediting, partitioning eligible sectors, and implementing a common international transaction tracking mechanism.

The report examines ten indigenous carbon market projects across Canada, the United States, Australia, New Zealand, and Mexico. It highlights diverse methodologies—including afforestation, avoided deforestation, and traditional fire management—to demonstrate how carbon revenues can support environmental, cultural, and economic goals. The document identifies systemic challenges such as a lack of federal policy, difficulties with third-party verification of tribal land governance, and the technical complexity of proving 'additionality'. It recommends participatory planning, the use of voluntary markets for 'co-benefits', and the development of indigenous-specific verification resources to ensure local ownership and sustainability.

The document details California's efforts to reduce greenhouse gas emissions to 1990 levels by 2020 under the Global Warming Solutions Act of 2006 (AB32). It outlines a cap-and-trade program scheduled for January 2012, alongside 'early action' measures such as the Low Carbon Fuel Standard and landfill methane capture. The briefing also highlights California's leadership in the Western Climate Initiative and the political support for these measures following the defeat of Proposition 23 in November 2010.