COP-17 OPENS IN DURBAN, CLIMATE FUND DISPUTE, CARBON PRICES AT RECORD LOWS, BRAZIL SUSPENDS CHEVRON DRILLING (BY BOB PERCIVAL)

On Monday November 28 the 17th Conference of the Parties (COP-17) to the UN Framework Convention on Climate Change also meeting as the 7th Meeting of the Parties to the Kyoto Protocol convenes in Durban, South Africa. Even though developed countries’s Kyoto Protocol commitments to reduce emissions of greenhouse gases (GHGs) during the 2008-2012 period will expire next year, there seems to be little prospect of a new global agreement to succeed Kyoto. In an apparent effort to undermine the conference, thousands of more stolen emails from the Climate Research Unit of the University of East Anglia again have been posted anonymously on the internet, this time on a Russian server. They are from the same time period as the emails posted two years ago and they do not appear to contain any significant new revelations. Investigations spawned by the first incident led to the climate scientists whose emails had been purloined being cleared of any wrongdoing, but they gave some politicians a convenient excuse to retract their support for policies to control GHG emissions.

In pre-COP negotiations, the U.S. reportedly refused to agree to a new blueprint for the Green Climate Fund to provide financial assistance to developing countries for the transition to low-carbon economies. The fund, created in 2009 at COP-15 in Copenhagen, was supposed to provide $100 billion in annual assistance by the year 2020. Pilita Clark & Javier Blas, US Blocks Key Fund in Climate Agreement, Financial Times, Nov. 25, 2011, at 1. This will be a major issue to be subject to further negotiations at the Durban COP.

Last week the prices of carbon allowances fell to record lows. The price of UN-backed certificates of emission reductions (CERs) fell to €5.90 (approximately $7.85). This represents a decline in price of more than 50 percent since last June. On November 24 the price of EU cap-and-trade allowances hit a record low of €7.80 (approximately $10.35) per ton, a 15 percent decline in one week. Javier Blas, Carbon Prices Tumble to Record Low, Financial Times, Nov. 25, 2011, at 22. The decline may be due in part to fears of a European economic collapse if the current financial problems of countries in the Eurozone are not adequately resolved.

Last week the government of Brazil imposed a moratorium on offshore drilling by Chevron while it investigates the causes of a 3,000-barrel oil spill that occurred earlier this month at Chevron’s Frade project. On November 21 IBAMA, the Instituto Brasileiro do Meio Ambiente E Dos Recursos Naturais Renováveis (Brazilian Institute of Environment and Renewable Natural Resources), the Brazilian government agency responsible for regulating Chevron’s activities, fined the company ₨50 million (approximately $28 million), and it indicated that additional fines of up to ₨40 million could be imposed. The chief executive of Chevron’s Brazilian unit, George Buck, apologized for the spill during a hearing before Brazil’s Congress on November 23.