A proposal supported by the UAE to fund the fight against climate change
by burying carbon pollution underground has been blocked by a powerful,
perhaps insurmountable foe: Brazil.
Climate negotiators are in
the German city of Bonn this week debating a stalled proposal to award
UN-administered carbon credits to projects that capture and bury carbon
dioxide.
The move would richly reward the UAE, which plans to
build the world’s first nationwide carbon-capture network but had looked
to international funding to help defray its cost of billions of
dollars.
If Brazil maintains the veto it disclosed last week in
an official filing, the rule change is unlikely to proceed this year,
experts said. The proposal had already been put on hold on a number of
occasions, including the Copenhagen climate summit last December.
Brazil
has worked behind the scenes to delay the proposal for years, analysts
say, but declared open war in a submission to the UN Framework
Convention on Climate Change (UNFCCC).
The plan to steer credits
to carbon capture projects through the Clean Development Mechanism
(CDM), a funding scheme, amounted to “subsidies to enhance fossil fuel
production”, Brazil claimed. “[Carbon capture and storage] technologies
have implications which are incompatible with the nature and
characteristics of CDM project activities,” Brazilian negotiators wrote.
Carbon
capture systems use chemical processes to divert the carbon dioxide
produced by a power station or other industrial facility and concentrate
it for underground injection, usually in an aquifer or an oil and gas
reservoir.
In a shot seemingly aimed at the OPEC states, the
negotiators added: “Brazil believes that [the] CDM was not conceived for
giving subsidies to oil and natural gas production through, in
particular, countries with on-shore production and very low costs of
production.”
The rule change is not imminent, said Antto Vihma, a climate researcher at
the Finnish Institute of International Affairs in Helsinki. “I’m
positive it’s not going to happen this year,” he said. “The pressure has
been there for a long time for the inclusion in the CDM and there is
nothing groundbreaking on the table right now.
“It’s a
consensus-based process and Brazil is not isolated; it gets a fair
amount of backing from the Alliance of Small Island States.”
OPEC
producers and the coal industry, along with international bodies such
as the International Energy Agency, have endorsed carbon capture as the
most viable means to combat climate change by taking the carbon out of
the emissions of fossil fuels that provide most of the world’s energy.
Brazil
and others, however, say the technology’s promise to seal emissions
permanently underground is unproven and the money for carbon capture
would be better spent on carbon-free energy sources such as solar power.
The
Brazilians said they also were concerned that a flood of new carbon
credits could cause a collapse in prices of the credits, which are
traded on an open market in Europe and bought by polluters to offset
their emissions.
Brazil has a financial interest in the carbon
market as it is the third-largest seller of CDM credits worldwide. It
earns more than €266 million (Dh1.17 billion) a year by selling the
credits at current prices, based on statistics from the CDM website. The
country is in a position to earn billions of euros more in coming years
for its efforts to slow deforestation.
UN experts are meeting to
determine technical aspects of a climate change treaty. Heads of state
and high-level politicians will gather in Mexico in December to take
another crack at reaching a new international treaty on reducing
emissions. They will rely on the drafts that come out of this week’s
talks.
Funding for carbon capture is only one issue among dozens
being debated, but the technology needs to take off in the developing
world if it is to have a significant impact on combating global warming,
said Chandran Vigneswaran, a spokesman for the Global Carbon Capture
and Storage Institute, an industry group based in Australia.
“Without
carbon capture and storage, the task of the world in reducing its
emissions is extremely difficult, and without the developing world
investing in carbon capture it is near impossible,” he said.
Brazil’s
filing left open the door to a compromise, noting that carbon capture
in developing countries “could be developed in another framework, using
special financial mechanisms, funding and partnerships under the UNFCCC,
but not as an offset mechanism”.
Sam Nader, the director of
carbon at Masdar, Abu Dhabi’s clean energy firm, is a member of the
UAE’s negotiating team at climate talks and said last month the country
would look to secure alternative funding streams for carbon capture and
storage in this year’s talks.
“Carbon capture and storage is like
putting an insurance policy on hydrocarbon industry,” Mr Nader said
recently. “When you contribute in developing and deploying the
technology that will make gas-fired or oil-fired [plants] clean, you are
assuring their continuation.”