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Thread on @EIB economic appraisal of energy investment + relationship with monetary climate impact valuation 👇
Consultation: eib.org/en/about/partn…
Literature: floriandierickx.github.io/library/eib/in…
Statement @EIB #UNClimateSummit yesterday:
@AMcDowell #AskEIB
Consultation: eib.org/en/about/partn…
Literature: floriandierickx.github.io/library/eib/in…
Statement @EIB #UNClimateSummit yesterday:
@AMcDowell #AskEIB
[1] @EIB Energy Lending Policy (ELP) draft (July 2019) - under review - states to include external climate cost estimates associated with GHG emissions [hyp.is/Hxo-3t7VEem0yV…]
🤔What were related comments received? 👇
🤔What were related comments received? 👇
[2] Emphasis on cost of renewables: @Grupa_PGE @FluxysGroup @eni @Eurogas_Eu @uniper_energy @EDSO_eu]. In reply, @EIB states that all projects need to pass economic assessment of Energy Lending Policy (Annex II)[hyp.is/eGwQ9N7dEemeit…]
🤔 How is this calculated and applied? 👇
🤔 How is this calculated and applied? 👇
[3] From EPL Annex IV [hyp.is/To8A_t7bEemYMf…]:
(a) @EIB intents to use @JosephEStiglitz @lordstern1 cost estimates from 2017 up to 2050, in mid- to high *range* scenario:
＄40-80/t CO2, 2020 🙄
＄50-100/t CO2, 2050 🙄
(a) @EIB intents to use @JosephEStiglitz @lordstern1 cost estimates from 2017 up to 2050, in mid- to high *range* scenario:
＄40-80/t CO2, 2020 🙄
＄50-100/t CO2, 2050 🙄
(a*) This means dropping low-range scenario sourced from @SEIclimate 2006-study in 2013 ['Economic Appraisal of Investment Projects at the EIB' @calthrop_e: hyp.is/7vmBNN7iEem_dC…], which was reiterated and extended to 2050 in 2015 'EIB Climate Policy' [hyp.is/KLuK1N7jEemSIp…]
[4] Comments:
(a) Climate impacts should not be monetized to start with. This is an existential problem that requires political decisions, not monetary cost-benefit balancing.
@ProfSteveKeen @blair_fix @MaxJerneck @gwcarpenter @delbeke_jos @noahq @JesseJenkins @AarneGranlund
(a) Climate impacts should not be monetized to start with. This is an existential problem that requires political decisions, not monetary cost-benefit balancing.
@ProfSteveKeen @blair_fix @MaxJerneck @gwcarpenter @delbeke_jos @noahq @JesseJenkins @AarneGranlund
(b) Monetizing long-term climate impacts is almost impossible, and holds enormous uncertainties.
*mainstream* economic research does not account for this, and doesn't acknowledge this sufficiently
@RichardTol
*mainstream* economic research does not account for this, and doesn't acknowledge this sufficiently
@RichardTol
(b*) Links with @KevinClimate @jessicadjewell @nature debate on role IAMs with free-market axioms feeding @IPCC_CH
[@Peters_Glen + @jessicadjewell ]
- Modest carbon taxes
- Discount rates falsely claim feasibility large-scale CCS
[@Peters_Glen + @jessicadjewell ]
- Modest carbon taxes
- Discount rates falsely claim feasibility large-scale CCS
(c) Using these unreliable long-term estimates for real-world policy that affects everybody is unresponsible.
The only thing that counts is deciding that:
We. don't. want. fossil. energy/emissions. any. more.
Do what it takes.
➡️❗️Use fine-grained short-term physical quota ❗️
The only thing that counts is deciding that:
We. don't. want. fossil. energy/emissions. any. more.
Do what it takes.
➡️❗️Use fine-grained short-term physical quota ❗️
[5] Further info on how those monetary values are used in @EIB project assessment:
(1) The high range value is used to evaluate low-carbon projects, and low-range value is used to evaluate conventional energy projects [hyp.is/hWK2ot7bEemM0Y…]
(1) The high range value is used to evaluate low-carbon projects, and low-range value is used to evaluate conventional energy projects [hyp.is/hWK2ot7bEemM0Y…]
(2) Cost-benefit analysis needs to account for *costs that already have been internalized through other policy measures* (such as EU ETS, price-floor, fossil subsidies)
This seems a very slippy ground. @EIB admits this.
This seems a very slippy ground. @EIB admits this.
(3) @EIB claims needing long-term forecasts of ETS prices for appraisal energy projects (no surprise, lock-in effects!).
"it does this based on a range of forecasts from specialized consultancies and scenarios from relevant bodies"
"The bank does not make those public"
Why?
"it does this based on a range of forecasts from specialized consultancies and scenarios from relevant bodies"
"The bank does not make those public"
Why?
@EIB [6] Additional information:
(1) RE vs. fossil investments of multilateral/state development banks: @BjarneSteffen
Based on 841 projects (2006-2015), @EIB claim of being 'biggest climate financer' seems not to hold : ]
Summary:
(1) RE vs. fossil investments of multilateral/state development banks: @BjarneSteffen
Based on 841 projects (2006-2015), @EIB claim of being 'biggest climate financer' seems not to hold : ]
Summary:
@EIB @BjarneSteffen (2) Carbon capture and storage #CCS is *not* a miracle solution (although good to deploy, we will need it)
@baeckelmans @snam @exxonmobil @Shell
Summary thread @SimonLLewis @guardian & @DrSimEvans @CarbonBrief :
@baeckelmans @snam @exxonmobil @Shell
Summary thread @SimonLLewis @guardian & @DrSimEvans @CarbonBrief :
@EIB @BjarneSteffen @baeckelmans @snam @exxonmobil @Shell @SimonLLewis @guardian @DrSimEvans @CarbonBrief (3) Planting trees on the scale that was recently argued to be used as a tool for climate mitigation, is neither a solution (although nevertheless, good to take care of that as well)
Summary thread blogpost @rahmstorf :
Summary thread blogpost @rahmstorf :
@EIB @BjarneSteffen @baeckelmans @snam @exxonmobil @Shell @SimonLLewis @guardian @DrSimEvans @CarbonBrief @rahmstorf (4) The EU ETS system did until now not provide what it was designed for.
Summary thread of EU ETS functioning and carbon leakage calculation method:
Summary thread of EU ETS functioning and carbon leakage calculation method:
@EIB @BjarneSteffen @baeckelmans @snam @exxonmobil @Shell @SimonLLewis @guardian @DrSimEvans @CarbonBrief @rahmstorf (4*) Even the recent decline in coal production in Germany can be hardly attributed to the EU ETS, and is rather an effect of decreasing international gas market prices.
Summary thread @KarstenCapion :
@nworbmot
Summary thread @KarstenCapion :
@nworbmot
@EIB @BjarneSteffen @baeckelmans @snam @exxonmobil @Shell @SimonLLewis @guardian @DrSimEvans @CarbonBrief @rahmstorf @KarstenCapion @nworbmot (5) In addition to unclear @EIB subsidy rules based on monetary values of climate change, there is the problem of subsidizing fossil fuel-dependent sectors :
Summary thread of 6 recent reports :
Summary thread of 6 recent reports :
@EIB @BjarneSteffen @baeckelmans @snam @exxonmobil @Shell @SimonLLewis @guardian @DrSimEvans @CarbonBrief @rahmstorf @KarstenCapion @nworbmot (6) In addition, there are legal obstacles. This has been described very clearly by @ClientEarth @KylaTienhaara in a letter to the UN Commission on International Trade Law (#UNCITRAL)
Twitter thread summary:
Blogpost summary: floriandierickx.github.io/blog/2019/07/2…
Twitter thread summary:
Blogpost summary: floriandierickx.github.io/blog/2019/07/2…
@EIB @BjarneSteffen @baeckelmans @snam @exxonmobil @Shell @SimonLLewis @guardian @DrSimEvans @CarbonBrief @rahmstorf @KarstenCapion @nworbmot @ClientEarth @KylaTienhaara (6*) An example is the Germany company #Uniper lawsuit using Investor-State Dispute Settlements regulation against the Dutch government for it's coal-phase out @corporateeurope
@EIB @BjarneSteffen @baeckelmans @snam @exxonmobil @Shell @SimonLLewis @guardian @DrSimEvans @CarbonBrief @rahmstorf @KarstenCapion @nworbmot @ClientEarth @KylaTienhaara @corporateeurope (6**) Ongoing implementation of @icao Corsia offsetting-scheme might also undermine EU action in aviation [].
Based on @EUCouncilPress @Transport_EU docs, it does not seem that member states realize this.
Pre-debate thread:
Based on @EUCouncilPress @Transport_EU docs, it does not seem that member states realize this.
Pre-debate thread:
