Tackling the Climate Emergency:Economic and judicial instruments

[Bird on a Fire]

Austria's Conservative-Green coalition are introducing a carbon levy:

Austria will implement a carbon levy of 30 euros per tonne next year as part of an overhaul of the tax system that officials said on Sunday would reward behaviour that helps protect the environment while cutting corporate and income taxes.

Chancellor Sebastian Kurz, whose conservatives govern in coalition with the Greens, called the package which will provide a cumulative 18 billion euros ($21 billion) of tax cuts through 2025 the biggest tax revamp in modern Austrian history.

The carbon levy will start in mid-2022 and rise to 55 euros per tonne in 2025.

The government will cushion the blow of higher travel and heating costs via regional "climate bonuses" of 100 euros per year for urban dwellers and up to 200 euros for people who live in the countryside, where public transport is less available.

https://www.reuters.com/business/energy ... 021-10-03/

They're using the money raised to drop corporation tax and higher income brackets, while also reducing health insurance costs and increasing child benefit.

So forward-thinking Conservatives can also achieve their policy goals (cutting taxes for corporations and the wealthy) alongside introducing Paris-compliant measures - it needn't be an opportunity available only to the left. It's just a shame, for right-wingers and indeed the world, that so many conservative governments around the world hitched their wagon instead to denying science and trying to keep a dying industry on life support.

[bjn]

That is somewhat regressive, it they made it revenue neutral and just handed the tax back on a per capita basis it would be much more effective and equitable. With a setup like that, markets can work wonders.

[Bird on a Fire]

BREAKING NEWS

UN Human Rights Council overwhelming votes to approve motion to recognise "clean, healthy and sustainable environment" as a fundamental human right! This could be big!

Just seeing tweets so far, e.g. https://twitter.com/duycks/status/1446465731592327202

[Bird on a Fire]

42 yes
1 no (Russia)
3 abstentions (China, India, Japan)

No great surprises there. Nice to the see small, poor, extra-vulnerable nations who've been backing this get a win.

[Bird on a Fire]

https://www.theguardian.com/environment ... -law-firms

Fossil fuel companies are losing huge sums of money to pay lawyers defending environmental cases.

And in general they're on the back foot and losing ground rapidly. Activist lawyers and citizens' movements are chucking a fair bit of grit in their wheels.

Plus, that's a lot of top lawyers wrapped up in setting precedents and understanding technical arguments from the inside out. Every now and then, some of them realise they've made more than enough blood money and semi-retire to the feel-good side. I heard some of them talking at the ClientEarth summit last week. They can achieve a lot of leverage because they know where to stick the levers.

[Fishnut]

From The Guardian: Leading UK fracking firm taken over by green energy group.

[Third Energy] has been taken over by Wolfland Group, a renewable energy company. It has halted all fossil fuel production from its conventional gas wells and has no plans for further exploration or development. Instead it will focus on green energy, including solar farms, and the use of existing wells for geothermal energy and the burial of captured carbon dioxide emissions.

I like this

[Bird on a Fire]

Exxon being taken to court by Massachusetts's attorney general:

The Massachusetts high court on Tuesday ruled that the US’s largest oil company, ExxonMobil, must face a trial over accusations that it lied about the climate crisis and covered up the fossil fuel industry’s role in worsening environmental devastation.

Exxon claimed the case brought by the Massachusetts attorney general, Maura Healey, was politically motived and amounted to an attempt to prevent the company from exercising its free speech rights. But the state’s supreme judicial court unanimously dismissed the claim in the latest blow to the oil industry’s attempts to head off a wave of lawsuits across the country over its part in causing global heating.

Healey’s lawsuit accuses Exxon of breaking the state’s consumer protection laws with a decades-long cover-up of what it knew about the impact on the climate of burning fossil fuels. The state also says the company deceived investors about the risks to its business posed by global heating.

It's true enough that they did hide knowledge of climate change from both the public and their investors. Will be interesting to see whether consumer protection laws are held to apply here - a consumer-led lawsuit seems much more idiomatically USian than pinko commie stuff like worrying about human rights and international law.

And this case is part of a wider pattern:

In March, a federal court also refused to put a block on the state’s legal action and ruled that Exxon was obliged to turn over documents to investigators.

The oil industry suffered another defeat on Monday when a federal appeals court ruled that a lawsuit by Rhode Island against 21 fossil fuel companies, including Exxon, BP and Shell, can go ahead in state court. Fossil fuel companies are attempting to move cases into what they regard as the more friendly forum of federal courts.

Among other things, state systems often permit a much broader discovery process, which could force Exxon and other companies to hand over highly embarrassing documents revealing what they knew about the climate crisis and when, and how they responded.

At least 10 other federal courts across the country have rejected the industry’s attempts to get similar cases out of the state systems.

Hopefully a lot more cases to come. Well worth a read of the full article.

[Bird on a Fire]

OTOH, economic instruments seem to be really lagging behind judicial ones right now, and I don't think that's just because I barely understand moneywords.

I note that Egypt wants it to be the top issue at this year's COP, after the lofty promises but subsequently tight fists from Glasgow last year.

Which it absolutely should be, for two reasons. One is justice: the world's poorer countries are responsible for fewer cumulative emissions, are bearing the brunt of the consequences already, and are least able to adapt. The latest IPCC WG3 report suggests many regions won't even be able to have economies with climate change in the 1.5-2°C range.

It's also important for practical terms. Even the fossil companies that claim to have Paris-compliant decarbonisation plans are investing huge sums of money in stopping the agreement from working:

The dozen biggest oil companies are on track to spend $103m a day for the rest of the decade exploiting new fields of oil and gas that cannot be burned if global heating is to be limited to well under 2C.

The Middle East and Russia often attract the most attention in relation to future oil and gas production but the US, Canada and Australia are among the countries with the biggest expansion plans and the highest number of carbon bombs. The US, Canada and Australia also give some of the world’s biggest subsidies for fossil fuels per capita.

Fossil fuels should not, in 2022, be an attractive (or even legal) investment. If successful businesses are still investing in, rather than dumping, fossil assets then the market isn't working properly.

[Sciolus]

One good bit of legal news: case law used to say that charities had to invest to maximise their financial returns, with the only exception being if the investments were directly contrary to the charity's specific aims. That exception has now been loosened so they can choose to only invest ethically. Commentary.

The proposed investment policy necessarily excluded more than half of publicly traded companies and many commercially available investment funds (a depressing indication of how fundamentally the financial system has to change to align the economy with a 1.5°C pathway).

[Bird on a Fire]

One good bit of legal news: case law used to say that charities had to invest to maximise their financial returns, with the only exception being if the investments were directly contrary to the charity's specific aims. That exception has now been loosened so they can choose to only invest ethically. Commentary.

The proposed investment policy necessarily excluded more than half of publicly traded companies and many commercially available investment funds (a depressing indication of how fundamentally the financial system has to change to align the economy with a 1.5°C pathway).

That's excellent news!

I love hearing about these odd roadblocks to progress being overcome. It's also nice to see ways that genuine systemic change can come about through piecemeal technocratic interventions. Keep em coming

[Sciolus]

Now, if we can just get pension funds to realise that trashing the environment is exactly contrary to their core purpose...

[Fishnut]

Now, if we can just get pension funds to realise that trashing the environment is exactly contrary to their core purpose...

But if old people die in heatwaves and severe cold snaps then they won't have to pay out so much in pensions.

[Bird on a Fire]

There's some useful stuff here about moving to a "green" pension. Haven't gone through in detail as I don't have one, but maybe interesting for others.

https://makemymoneymatter.co.uk/21x/

[discovolante]

There is also Divest UK which has a number of local subgroups/branches/whatever you want to call them: https://www.divest.org.uk/

[Bird on a Fire]

Some interesting work by activist investors - forcing Australian energy giant AGL to hang onto its coal plants, rather than "de-merging" them. As they are loss-making stranded assets, the hope is that by forcing the corporation to retain ownership they'll have to be shut down:

AGL had planned to “demerge” itself into two separate companies, with one taking responsibility for more than 4.5 million retail customers and the other its electricity generators – notably, its three ageing coal-fired power plants, the last of which isn’t due to shut until 2045.

The retail business should have a bright future. The coal plants don’t. The idea was to separate them to boost the former by separating it from the declining value of the latter. AGL management said the split would “unlock value for shareholders”.

The demerger was due to go to a shareholder vote next month, and needed 75% support to pass. AGL management has now conceded it has no chance of reaching that, having been stymied by the software billionaire and renewable energy investor Mike Cannon-Brookes, who earlier this month took control of 11.3% of its shares.

Cannon-Brookes wants the company to stay as one, shut its coal plants by 2030 and spend up big on renewable energy and energy storage, arguing it is the best way to keep electricity prices down for consumers while turning a profit. He successfully made the case to enough major shareholders that a demerger would be, in his words, a “terrible outcome for shareholders, communities and the climate”.

https://www.theguardian.com/australia-n ... looks-like

[bjn]

Some interesting work by activist investors - forcing Australian energy giant AGL to hang onto its coal plants, rather than "de-merging" them. As they are loss-making stranded assets, the hope is that by forcing the corporation to retain ownership they'll have to be shut down:

AGL had planned to “demerge” itself into two separate companies, with one taking responsibility for more than 4.5 million retail customers and the other its electricity generators – notably, its three ageing coal-fired power plants, the last of which isn’t due to shut until 2045.

The retail business should have a bright future. The coal plants don’t. The idea was to separate them to boost the former by separating it from the declining value of the latter. AGL management said the split would “unlock value for shareholders”.

The demerger was due to go to a shareholder vote next month, and needed 75% support to pass. AGL management has now conceded it has no chance of reaching that, having been stymied by the software billionaire and renewable energy investor Mike Cannon-Brookes, who earlier this month took control of 11.3% of its shares.

Cannon-Brookes wants the company to stay as one, shut its coal plants by 2030 and spend up big on renewable energy and energy storage, arguing it is the best way to keep electricity prices down for consumers while turning a profit. He successfully made the case to enough major shareholders that a demerger would be, in his words, a “terrible outcome for shareholders, communities and the climate”.

https://www.theguardian.com/australia-n ... looks-like

Nice to see a billionaire who isn't a total arsehat.

[Sciolus]

This might be encouraging. Some oil wells were given planning permission, despite not including scope 3 (downstream) carbon emissions in their EIA. That is clearly an inadequate EIA and is obvious grounds for refusal. So far, the courts have refused appeals against the permission, but the Supreme Court has now agreed to hear it.

[IvanV]

This might be encouraging. Some oil wells were given planning permission, despite not including scope 3 (downstream) carbon emissions in their EIA. That is clearly an inadequate EIA and is obvious grounds for refusal. So far, the courts have refused appeals against the permission, but the Supreme Court has now agreed to hear it.

A very faint "might", would be my suspicion.

The Supreme Court has recently bent over backwards to prevent this kind of thing overturning consents. The Heathrow 3rd runway consent is the case in point. The lower court did overturn the consent, seemingly on very strong and powerful grounds, but the Supreme Court found some clever legal wiggle-room through that and reversed it.

I'm a bit surprised the Supreme Court will even hear it. But maybe they are worried that this is a can of worms, since downstream emissions have been routinely ignored, and they want to make quite clear that's no grounds for overturning the consent.

Or I could be wrong.

[Sciolus]

I'm pretty sure you're right. But of course Heathrow was an example of where the scope 3 emissions (in this case, from aircraft using the airport, which make up the vast majority of the emissions) were clearly and explicitly recognised as an issue in the government's position, and they argued that it could be managed. They didn't just sweep them under the carpet and pretend they didn't exist as in the oil well case.

[Woodchopper]

EU member states have reached a deal on the world’s first major carbon border tax, finalising the details early on Sunday in the face of claims from the bloc’s key trading partners that the levy creates protectionist trade barriers.

Environmental regulators and ministers from across the bloc signed off on the introduction the Carbon Border Adjustment Mechanism (CBAM), a tool that will force foreign importers to cover the cost of their carbon emissions, after the deal was provisionally agreed on Tuesday.

The deal, a central part of the EU’s strategy to reduce its carbon emissions to net zero by 2050, is expected to be formally agreed by leaders at the European Council and adopted into EU law by the European parliament before coming into force in 2026.

Peter Liese, lead negotiator for the European parliament, told Reuters on Sunday that the CBAM was “the biggest climate law ever in Europe, and some say in the world”. Liese said a large amount of CO₂ emissions would be cut “at the lowest possible price.” 

However, the deal has sparked controversy with the EU’s main trading partners, who say it will expose their industries to unfair competition.

The US and South Africa, in particular, have said the CBAM will unfairly penalise their manufacturers, which may now face a wave of cheap imports from companies that are unwilling to pay the EU charge and instead export their goods elsewhere.

https://www.ft.com/content/4a0db207-cf2 ... 52b93980e8

The EU's CBAM will hopefully have two effects. It will provide a strong incentive for firms outside the EU to reduce their own carbon emissions. Within the EU it will make it much easier to impose carbon taxes as EU firms won't face competition from lower priced imports from places with higher emissions.

[dyqik]

It won't only make carbon taxes easier to implement due to avoidance of undercutting, but also more direct regulation of carbon emissions from industry.

[IvanV]

However, the deal has sparked controversy with the EU’s main trading partners, who say it will expose their industries to unfair competition.

The US and South Africa, in particular, have said the CBAM will unfairly penalise their manufacturers, which may now face a wave of cheap imports from companies that are unwilling to pay the EU charge and instead export their goods elsewhere.

I don't think I've ever heard that particular effect described as "unfair competition" before. It is unlikely it could form the basis of a WTO complaint.

And, you know what, if you don't like it, there's a very simple solution to it - imitate! If the EU measure did have the effect of trying to provoking other countries into imitation, that would be very useful. I think many people have been concerned it would not have that effect at all.

[discovolante]

ClientEarth sue Shell: https://www.clientearth.org/latest/pres ... investors/ (sorry if already posted here).

My local pensions divestment activist group is at the very very beginning stages of exploring the legal aspects of divestment - not that it hasn't been done by pension funds already but there's still not enough momentum that you don't need to try and persuade people individually...

[discovolante]

One good bit of legal news: case law used to say that charities had to invest to maximise their financial returns, with the only exception being if the investments were directly contrary to the charity's specific aims. That exception has now been loosened so they can choose to only invest ethically. Commentary.

The proposed investment policy necessarily excluded more than half of publicly traded companies and many commercially available investment funds (a depressing indication of how fundamentally the financial system has to change to align the economy with a 1.5°C pathway).

I can't access that link by the way, which case was it? Googling reveals a couple of similarish ones around the same time.

[Sciolus]

Sorry, they must have moved it behind the paywall after I posted. You can still read it in Google's cache.

The case is Butler-Sloss & Ors v The Charity Commission for England and Wales and Her Majesty's Attorney General [2022] EWHC 974 (Ch) .