It was a single word change from 'commitments' to 'contributions' towards emission reductions that allowed the curtain to fall on climate talks in Warsaw, which went a day beyond scheduled close on November 22.
Though there was no clarity on the proposed flow of $US100 billion annually from developed to developing countries by 2020, and the issue of historical responsibilities for emissions was thrown back in the discussion ring, there were some decisions that emerged from the meeting of nearly 190 nations. Work on a "loss and damage" mechanism was authorised by the conference to help the poorest cope with the impact of climate change, commitments of some $US100 million were made to fund adaptation program and there was agreement on a forest-protection deal.
"The [Warsaw] agreement lays the groundwork for a legally-binding treaty to be adopted in 2015, and enter force by 2020, which would cut climate-altering greenhouse gas emissions," a statement from the United Nations said.
The milestones preceding the global agreement are also chalked out. United Nations secretary general Ban Ki-moon said he would convene a climate summit in New York in September 2014 during the General Assembly. This is not part of the formal negotiating process. This will be followed by the next Conference of Parties (COP-20) in December 2014 in Peru. The first quarter of 2015 will see nations that are ready, make pledges on emissions. The global climate treaty is expected to be signed at the December 2015 conference (COP-21) in France.
Meanwhile, announcements on paring investments in coal continued to flow. Last week the UK joined the US in committing to minimise funding of foreign coal-fired power stations. "We will work to get support of more countries and the multilateral development banks," UK energy secretary Edward Davey said in Warsaw. Funding for coal would be allowed under "rare circumstances" when alternatives are not available and there is a case for reducing poverty. Ontario – Canada's most populous province – is planning legislation to prevent the construction of new coal plants and ban the burning of coal.
Australia, on the other hand, moved closer to ending its carbon tax with the lower house approving the Clean Energy Legislation (Carbon Tax Repeal) Bill. It still needs to pass in the upper house.
On the financing front, LDK Solar – China's second biggest maker of solar wafers – secured a CNY 1.56 billion ($US256 million) credit facility in an agreement with 16 banks. The funds will be limited to operations in its home province of Jiangxi and cannot be used to pay down debt, the company said in a statement. The loan will help increase production when needed, said Sam Tong, its president and chief executive. “When the global solar industry regains strength, we are committed to taking advantage of new opportunities that emerge,” he added.
There are signs of traction in the solar market. Trina Solar returned to profit in the third quarter and raised its shipment forecast 11 per cent. JinkoSolar raised its shipment forecast for 2013 to 1.7-1.8GW against 1.5-1.7GW earlier. It also posted a quarterly profit, benefiting from its diversification into the development of solar farms, in addition to producing and selling panels. Hareon Solar, another Chinese manufacturer, said it plans to invest CNY 10 billion ($US1.6 billion) to build 1GW of projects in the northern province of Inner Mongolia. Construction of the first 100MW – costing CNY 1 billion – is expected to be completed next year.
The other financing news was from the US, where Bank of America raised $US500 million through a green bond, according to data compiled by Bloomberg. Closely held renewable-energy developer Tenaska closed a $US319 million refinancing of a solar project in California.
Wind power dominated the auction for new power capacity in Brazil, bagging all the contracts in this round. Developers agreed to build 39 wind farms with a total capacity of 868MW, the national energy agency EPE said. The power generated will be sold to distributors at an average price of BRL 124.43, or $US54.87, per MWh.
European carbon advanced last Friday, although it was not enough to erase gains made over the previous few days, after the bloc's regulator said it will explore procedural ways to accelerate a market rescue plan. European Union Allowances (EUAs) for delivery in December ended last Friday’s session at €4.43/t on ICE Futures Europe exchange in London, compared with €4.50/t at the close of the previous week. Dec-13 EUAs fell to a low of €4.28/t on Tuesday morning. The European Commission presented three options for a timetable on postponing the sale of 900Mt allowances on Thursday. Front-year permits bounced back on Friday to a high of €4.57/t.