The European Union proposes new measures for energy but there is no agreement on the gas price cap

The weekly round-up on the climate crisis and data on carbon dioxide levels in the atmosphere.

The European Commission he presented on 18 October another series of emergency measures to combat the increase in energy prices, without however setting a ceiling on the price of gas since member states are still divided on the matter.Over 15 EU countries are in favor, including Italy, Poland, Greece and Belgium, but there is no agreement on how to structure the proposal.Germany and the Netherlands are against this, according to which a cap on gas prices could make it difficult for individual countries to attract fuel from global markets at a time when Russian supplies are in short supply.France would instead like to extend the scheme used this summer locally by Spain and Portugal to the entire EU.

The proposals will now have to be approved by European Union member states.Among these, the idea of ​​fixing a temporary "maximum dynamic price" to trade on the European TTF (Title Transfer Facility) gas market, where operators buy and sell futures contracts from Monday to Friday and which acts as a reference for gas trade in Europe.The Commission described this proposal as a "measure of last resort" and said that the price cap would have to meet certain conditions, including that it does not cause an increase in demand for gas in Europe.It is a handbrake to be pulled in case of emergency, without having defined but a level above which it triggers, a reference value calculated using external parameters.By January 31, trading venues will have to impose maximum and minimum price limits on forward energy derivatives every day, to limit their volatility.Furthermore, the EU will instruct energy regulators to set an alternative reference price for liquefied natural gas (LNG) by 31 March 2023.

Another proposal that has been much talked about in the run-up is the joint purchase of gas between EU countries to try to fill depleted storage depots in time for next winter and negotiate lower prices.Under the proposal, member states would be required to jointly purchase 15% of the volume needed to reach the EU's target of filling gas storages to 90% by 1 November 2023.Individual countries should mobilize local companies to participate in the program, which will not have Russia among its suppliers.In summary, there will be joint purchases of gas, but the European Commission will not do them, as happened with the anti-Covid vaccines, nor the Member States.The energy companies will have to come to an agreement.

“We know we are strong when we act together…Member States and energy companies should exploit their common purchasing power,” said European Commission President Ursula von der Leyen.

To help energy companies left with little cash following the surge in energy prices, it has been proposed to use bank or public guarantees to cover "profit margins" on energy transactions.

The plans also include redirecting almost €40 billion of unspent EU budget funds to help vulnerable citizens and businesses affected by high energy prices.

The President of the European Council, Charles Michels, he declared that the leaders of EU countries have reached an agreement to work on the measures proposed by the Commission.

Meanwhile, the price of gas continues to go down.On Tuesday 18 October it reached 113.51 euros per megawatt hour on the Amsterdam TFF until settling at 114 euros, recording a drop of more than 10%.The drop in prices is essentially due to the reduction in consumption, partly due to the rationing policies implemented in various countries, partly due to greater attention on the part of citizens.Above all, industrial consumption is collapsing, making the specter of recession increasingly concrete.

China, Xi Jinping reiterates his commitment to net zero emissions by 2060 but in the meantime prioritizes energy security over ecological transition

In his opening speech at the 20th Communist Party Congress, the most important event in China's five-year political cycle, Chinese President Xi Jinping he declared that the government will give priority to protecting the environment and promoting green lifestyles.

“The congress opened under a clear blue sky.This was once unusual in the capital.Nature conservation is an essential part of building a modern socialist country,” Xi told more than 2,300 delegates in Beijing.

Just over two years ago, during the UN General Assembly, Xi Jinping he announced China's commitment to achieving the net zero emissions (i.e. the balance between emissions and absorption of carbon dioxide) by 2060 and peak emissions by 2029 and then begin the decline phase from 2030.

In his speech Xi he reiterated this commitment:“Based on China's energy and resource endowments, we will advance initiatives to reach peak carbon emissions in a well-planned and gradual manner, in line with the principle of having the new before discarding the old.”Which means we won't abandon “efficient and clean coal” until other energy technologies have been developed.

China will significantly increase domestic energy supply and reserve capacity for raw materials, Ren Jingdong, deputy director of the National Energy Administration (NEA) and a member of the ruling group of the Communist Party of China (CPC), said. key in order to guarantee supplies and stabilize prices.The objective, reports Reuters, is to have a diversified domestic supply base centered on coal, while simultaneously accelerating the development of domestic oil and gas resources.Ren added that the country will further strengthen its coal and oil reserve system by accelerating the construction of storage hubs and terminals to receive natural gas.China is aiming for domestic resource production capacity exceeding 4.6 billion tonnes of standard coal by 2025, up from a 2022 target of 4.41 billion.Furthermore, he adds the state newspaper Global Times, the government “will promote the development of clean energy, including wind, solar, hydroelectric and nuclear energy, seeking to make non-fossil fuels account for about 20% of China's total energy consumption by 2025 and about 25% by 2030".

China's pledge to end global financing for coal has led to a collapse in overall energy financing, but not a surge in support for renewable energy, it reads in an article by EnergyMonitor.Since announcing net-zero emissions and halting overseas coal plant investment, the Chinese government has actually begun eliminating coal financing.

Data released by the non-profit organization China Dialogue, derived from research conducted by the American Enterprise Institute, a think tank based in Washington, and the International Institute of Green Finance, a think tank based in Beijing, show that it is in 2021 and in the first half of 2022, China did not finance any coal projects for the Belt and Road, the so-called New Silk Road.However, the report also shows that money that once financed coal plants has not been channeled into clean energy.

So where has all the money that previously went to coal gone?“The answer is simple:nowhere, because there has been a collapse in energy investments in general,” explains Cecilia Springer of the Global China Initiative at Boston University.Over the past 20 years, China's two most active banks, the China Development Bank and the Export-Import Bank of China, have directed $234.6 billion into overseas energy projects.But in 2021 there was a total collapse in outflows, with the money going nowhere.

The collapse of international energy financing is largely due to difficult economic conditions both in China and around the world.“Suddenly, the conversation around energy security began to dominate clean energy, while economic forecasts turned bleak,” Geall continues.“In China, there is now talk of boosting the coal industry and keeping coal plants running longer to avoid turbulence in the oil and gas markets.All this strengthens the country's coal lobby and investments in clean energy fall to the bottom of the priority list."

Added to this is another obstacle, continues the article by EnergyMonitor.Chinese investment in renewable energy, both domestically and internationally, tends to come from private companies and not the large banks and state-owned enterprises that have traditionally supported fossil fuels.“Private companies  – including China Sunergy, based in Nanjing, and Suntech Power, based in Jiangsu – are smaller and do not automatically enjoy the same support from financial institutions that large state-owned enterprises do.This makes it more difficult for them to raise funds to invest in projects abroad,” explains Byford Tsang, of the E3G think tank.It will take time for commercial and political banks to establish better-suited mechanisms for renewable energy companies to invest abroad, with more flexible financing arrangements and an openness to working with smaller players.

However, the article continues, China's commitment to renewable energy and its promise to achieve net zero emissions by 2060 do not appear to have been set aside.According to research by independent analyst Hongqiao Liu, approximately 874 GW of new solar and wind capacity will be built in China over the current five-year plan period (2021-25), which is more than the grid capacity of continental Europe. .Currently, China supplies 80% of the world's photovoltaic panels, is a leader in the development of onshore and offshore wind, and dominates in supplies of critical minerals.“China's goal is to move from a polluting, energy-intensive, low-cost manufacturing industry to services and innovation.Enhancing low-carbon infrastructure, both at home and abroad, is an opportunity to achieve this,” concludes Geall.

Worst floods since 2012 have caused 600 deaths and displaced 1.3 million people in Nigeria

Floods caused by an unusually heavy rainy season, exacerbated by climate change and the release of excess water from a dam, they hit 33 of Nigeria's 36 states, causing 600 deaths and the displacement of 1.3 million people. According to reports The New York Times, it is the worst flood in the last ten years.

Sadiya Umar Farouq, minister of humanitarian affairs and disaster management, said more than 108,000 hectares of farmland had been submerged and more than 200,000 houses, roads and infrastructure had been partially or completely destroyed.A boat carrying at least 80 people fleeing rising water levels capsized in the south-eastern state of Anambra, causing at least 76 deaths.

Farouq warned that the southern states of Anambra, Delta, Cross River, Rivers and Bayelsa could experience further flooding until November and urged state and local governments to prepare to evacuate "people living on flood plains in elevated areas, providing tents and relief materials, fresh water and medical supplies for possible outbreaks of waterborne diseases."

Among the most affected are several rice-producing states in northern and central Nigeria.Which could contribute to making an already difficult situation more critical at a time when annual food inflation has reached 23%.President Muhammadu Buhari has ordered the release of 12,000 tonnes of food products from the nation's strategic reserves.

Last year the United Nations warned that Nigeria risked suffering the effects of climate change as rains intensified.Nigeria's national climate policy document, released in 2020, had also warned of the country's exposure to adverse climate events.

Twenty countries most exposed to the climate crisis are considering not paying the 685 billion in collective debt to reinvest it in climate projects

A group of 20 vulnerable countries most exposed to the impacts of climate change, called the V20, has put forward a series of proposals on how richer countries should pay for “loss and damage”. “The term ‘loss and damage’ refers to the impacts of human-induced climate change affecting people around the world.Damages refer to things that can be repaired, such as damaged houses, while losses refer to things that have been completely lost and will not come back, such as human lives,” explains to Carbon Brief the Prof.Saleemul Huq, director of the International Center for Climate Change and Development (ICCCAD) and pioneer of loss and damage research.

“The reason we are talking about loss and damage is that for years we have failed to finance adaptation to the impacts of the climate crisis,” he declared al Guardian Shauna Aminath, Minister of Environment of the Maldives.“Rich countries' long-standing commitment to provide one hundred billion dollars a year in climate finance to poor states by 2020 has not yet been met, and most of the money that arrives goes to climate reduction projects. of emissions in middle-income countries, rather than aid to the poorest to adapt to climate impacts".

The twenty countries are reportedly considering not repaying the 685 billion dollars of collective debt, loans which according to them are an "injustice", as stated by Mohamad Nasheed, former president of the Maldives.

“Helping poor countries cope with loss and damage must go well beyond standard responses to disasters and the immediate impacts of extreme weather events,” added Aminath.“Climate-related disasters, such as hurricanes or floods, cause damage not only to physical infrastructure, which donations often focus on, but also to social well-being, including health and education.”Many countries are already spending a growing share of their budgets to adapt to climate change and to rebuild after the destruction in a spiral that pushes them further into debt.As Nasheed further explains, poor nations are stuck in a Sisyphean trap:“They have to borrow money to ward off rising seas and storms, only to see disasters exacerbated by climate change destroy the improvements they've made.But the debt remains and countries are often forced to ask for a loan once again."These funds, adds Aminath, could be spent on health, education and the fight against poverty.

Read also >> Who pays for the climate disaster?

The V20 discussion paper proposes the introduction of a tax on oil and gas production to finance a "loss and damage" fund.The demands of the twenty countries are likely to be a key theme of the next UN climate conference, which begins in Egypt on November 6.They are unlikely to be adopted at COP27, but they highlight the variety of different ways of raising and allocating funds that could be included in a comprehensive loss and damage strategy.

According to Aminath, publicly funded development banks, such as the World Bank, should play an important role, along with the International Monetary Fund which offers a financing method called special drawing rights, the G7 governments and others.“We need a mosaic approach to loss and damage,” he said.

The UK, US and Germany are pushing for radical reform of the World Bank, reports The Guardian in another article.Alok Sharma, president of COP26, also went in this direction, who, in a public speech in Washington DC, declared:“The world is recognizing that we cannot meet this century's major challenge with institutions defined by the last century.We must incentivize every aspect of the international system to recognize the systemic risk of climate change and manage it effectively."

David Theis, a spokesman for the World Bank Group, said in a statement that the bank recognizes that climate change is having a disproportionate impact on poor countries and small island developing countries.He added that banks are “committed to finding comprehensive debt solutions that bring real benefits to populations in poor countries, particularly those with high debt vulnerability who lack the financial resources to address the challenges they face ”.

In Scotland, libraries and other public buildings become "heat banks" to help those who are unable to afford energy costs

Glasgow councilors last month they voted unanimously the creation of “heat banks” in the city to help people who cannot afford to heat their homes this winter.30 city locations have been identified, including several municipal libraries and spaces close to the public transport network, where people can spend the day.Also the Glasgow Fuel Support Project it will help individuals and families with supplementary payments, advice and assistance to cover the increase in bills compared to usual costs.

“It is a sad indictment of the failure of energy policy in the UK that we have to talk about providing warm places for people to spend the day because the cost of energy is becoming unaffordable for too many of our citizens,” he declared councilor Ruairi Kelly, delegate for neighborhood services and heritage for the city.

After Glasgow, other UK cities, including Bristol, Dundee and Aberdeen, have said they are considering taking similar steps.However, the main associations in the United Kingdom that fight against poverty have asked city institutions not to "repeat the mistakes of the past" by making an emergency response a structural intervention, as has already happened in the past with food banks.

“Of course we understand why the 'heat banks' were created, they will be a lifeline for some, but it reinforces the idea that the welfare state is peripheral and contingent,” he commented Peter Kelly, director of the Poverty Alliance.

“We cannot accept that heat banks are just another example of our failing social safety net, as we have seen with food banks over the last decade of austerity.But in the face of Westminster's inaction, I am pleased that after today's vote Glasgow will do its part to keep people warm and safe this winter." he added Scottish Greens councilor Blair Anderson.

Preview image:Bendo data, Attribution, go Wikimedia Commons