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POLITICO Pro Morning Energy and Climate: COP27 fireworks — Midterm angst — Fit for 55 progress – POLITICO Europe

by Nov 9, 2022Blog0 comments

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Presented by the Greens/EFA in the European Parliament.
with Karl Mathiesen, Victor Jack,Charlie Cooper and America Hernandez
the Greens/EFA in the European Parliament
For two exclusive weeks, from November 7 to November 18, to mark COP27 in Sharm El-Sheikh, POLITICO Pro’s Energy and Climate newsletter will be free for all, offering access to the hottest political takes and insight from the most important international gathering of the year. If this has been forwarded to you, find out more about this newsletter and POLITICO Pro here.
— Dire warnings and promises of opening the cash spigots dominated the first day of leaders’ speeches at COP27
— Michael Bloomberg and former French diplomat Laurence Tubiana call for sub-national actors to lead on climate change as a way of bracing for a possible Republican victory in the midterms.
— Brussels is scrambling to get climate deals done before arriving at COP27.
Good morning from Sharm El-Sheikh, where 50,000 people (!) attending the climate meeting are waiting to be picked up at their resorts in dusty shuttles; and where the press corps can type overlooking the Sinai Desert. Drop us a line at [email protected], [email protected], [email protected], [email protected], [email protected] and [email protected]. Or give us a shout on Twitter: @america_hdz@karlmathiesen, @fed_disario, @ZiaWeise, @Victor__Jack and @CharlieCooper8.
CLIMATE FINANCE AT THE COP: This climate summit was always going to be about the cash — and the first day of leaders’ addresses in Sharm El-Sheikh didn’t disappoint. U.N. chief António Guterres opened the day with a blistering attack on climate complacency, warning: “Greenhouse gas emissions keep growing. Global temperatures keep rising. And our planet is fast approaching tipping points that will make climate chaos irreversible. We are on a highway to climate hell with our foot still on the accelerator.” He called for a historic pact between developed and developing countries to cut greenhouse gas emissions, end the use of coal, boost renewable energy and for wealthy countries to help vulnerable ones.
Trillions, not billions: French President Emmanuel Macron is getting with the program. In his speech, he called for a “huge shock of concessional financing” — backing a program proposed by Barbados’ PM Mia Mottley to revamp global finance, to give debt-ridden countries a breathing space on repayments if they’re hit with disasters, and to boost lending from bodies like the International Monetary Fund. It’s a sign that the current cautious approach to climate cash isn’t working — a pledge by rich countries to supply $100 billion a year will only be met (maybe) by next year, and the scale of climate-related disaster shows that much more money will be needed. Karl and Sara Schonhardt have more here.
Meloni and Sunak on board: Italy’s new right-wing leader Giorgia Meloni painted a green picture of her nationalist administration, saying Rome fully backed the effort to reach $100 billion a year in climate finance. Then came the chaser: “Fighting climate change is a common endeavor, which requires the full engagement of all countries and pragmatic cooperation among all major global actors,” she said. “Unfortunately, we have to admit now that this is not happening.” The nations doing the most to fight climate change, she argued, “risk paying a price to the advantage of those that today are most responsible for CO2 emissions on the planet” — a.k.a. China — “This is paradoxical, and measures are needed to redress these imbalances.”
The U.K.’s new Conservative PM Rishi Sunak (who showed up without King Charles in tow) also vowed there would be no backsliding on climate finance, despite his government’s desperate attempt to restore financial credibility by cutting spending. More from Esther Webber here.
More money needed: But those rich world promises aren’t coming fast enough for countries like Pakistan — which suffered devastating climate-related flooding this year that will cost it at least $30 billion. “Millions of people are going into winter without shelter or livelihood,” Prime Minister Shehbaz Sharif said. “Women and children are still looking to us to protect their basic needs.”
Scholz pledges no fossil fuel increase: Russia’s bloody invasion of Ukraine has cast a shadow over this year’s climate summit as European countries scramble to deal with the energy emergency by turning to fuels like coal. But German Chancellor Olaf Scholz insisted that any uptick in fossil fuel use will be temporary. “There must not be a worldwide renaissance of fossil fuels,” he said. “And for Germany I can say: there will not be one.”
THE PLAN FOR TRUMP 2.0: With the U.S. midterms likely to result in the Democrats losing control of at least one of the houses of Congress, billionaire and former New York Mayor Michael Bloomberg and Laurence Tubiana, a former French diplomat and CEO of the European Climate Foundation, have reignited calls for cities, states and businesses to do more of the heavy lifting in fighting climate change. “If we are to stave off ever-worsening climate impact, everything points to the need for immediate and radically faster action,” the two write in an op-ed for POLITICO. “But to do this, we need to empower the groups best positioned to lead.”
Sounds familiar? After climate-skeptic Donald Trump became U.S. president in 2016, and walked out of the Paris Agreement, Bloomberg funded the We are Still In campaign. Faced with a potential second Trump presidency in 2024, Tubiana said in an interview, “we need a safety net.” Tubiana backs the idea of extending the next round of Nationally Determined Contributions (NDCs) — which is expected for 2025 —  to commitments by non-state actors and cities. “My battle this year would be, let’s have a really formal recognition of the action of some national actors in particular cities and regions.”  
Little blue dot: While the world braces for a possible return of Trump to the White House, the man who never made it past the front door thanks to 537 disputed ballots in Florida lambasted the world for not doing enough to combat climate change. “We continue to use the thin blue shell of atmosphere surrounding our planet as an open sewer,” Al Gore told the delegates, adding: “It is a choice to continue this pattern of destructive behavior.”
GREEN TRADE: The World Trade Organization has a message for campaigners who worry that economic growth and battling climate change are incompatible. A new WTO report shows that “paradoxically, economic progress is both the cause of and the solution to the climate crisis.”  About 30 percent of the world’s CO2 emissions in 2018 were related to international trade, the report says, adding that about three-quarters of those greenhouse gases were concentrated in the energy and transportation sectors. And several studies estimate that “around one-third of deforestation-related emissions were driven by international trade,” the report says.
Bright side: Still, the bulk of the paper focuses on trade’s potential to help mitigate climate change and reduce CO2 emissions. “Trade can increase counties’ access to lower-emissions goods, services and capital equipment, and can help to diffuse critical technologies and know-how,” the authors write.
BRUSSELS SCRAMBLES AHEAD OF COP: The EU wants to show the world it’s serious about climate change, so there’s a rush on this week to complete trilogues on a few aspects of the bloc’s mammoth Fit for 55 legislation. Expect an agreement today on the Effort Sharing Regulation (ESR) setting national targets for areas not covered by the Emissions Trading System. On Thursday a deal is likely on new land-use and forestry (LULUCF) rules to boost the EU’s carbon sinks. Last month, the EU struck a final deal on setting a 2035 deadline for ending the sale of new CO2-emitting cars and vans. Those three deals could boost the bloc’s 2030 emissions cuts to 57 percent from a planned 55 percent.
CARBON BORDER TAX: European governments and lawmakers will also gather today to discuss how best to implement the Carbon Border Adjustment Mechanism (CBAM), a landmark file that officials expect to be adopted on November 12.
BOSCH TO PAY BIG TO SETTLE CALIFORNIA EMISSIONS PROBE: California officials reached a settlement Monday with Bosch for the company to pay $25 million amid a probe into the German engineering giant’s role in the diesel emissions cheating scandals at Volkswagen and Fiat Chrysler. Bosch was accused of participating in misconduct by providing hardware, software and other services to the carmakers “when it knew or should have known that these auto manufacturers were violating environmental and consumer protection laws,” but Bosch said it “neither acknowledges the validity of the claims brought forward, nor does it concede any liability,” Reuters reports.
**A message from the Greens/EFA in the European Parliament: “Europeans started the climate crisis and are still fueling it today. A full-blown conflict with the Global South at COP27 is a failure of climate leadership. If Timmermans doesn’t act, Von der Leyen needs to step up. The Global South are our key allies in this fight for survival.” More.**
MACRON CONVENES MAJOR POLLUTERS: Macron sits down today with the heads of the country’s 50 most polluting industrial sites to hash out a decarbonization plan — although some invitees told my Paris Influence colleague Alexandre Léchenet last week that the goals of the meeting were still hazy.  “The 50 sites represent half of industrial emissions, so if we succeed at decarbonizing them we will have decarbonized 10 percent of our [total] emissions,” a presidential adviser explained. The Elysée wants to obtain “quantified and precise commitments that are coherent and respectful of our objectives” to “bring down emissions without lowering production.” 
Who’s on the list? Nearly half the sites produce cement, concrete, lime and minerals and are run by Lafarge, Calcia, Holcim, Vicat and Lhoist. Steel giant ArcelorMittal; chemicals plants run by ExxonMobil, TotalEnergies, Butachimie, Naphtachimie Solvay and Versalis; and agri outfits Tereos, Roquette, Yara, Borealis and Novacarb were also invited. Hydrogen producer Air Liquide and Saint-Gobain’s iron and pipe producer rounded out the group. 
BUY AMERICAN: Around 48 billion cubic meters of liquefied natural gas (LNG) was exported from the U.S. to the EU between January and October this year — more than double the amount shipped for all of last year, according to the EU-U.S. Task Force on Energy. With Russian pipeline flows severely reduced, the increase has been very welcome — but not without its own complications.
Talking gas: The task force issued a joint statement on Monday, following last Thursday’s meeting between delegations led by Commission President Ursula Von Der Leyen’s head of cabinet Björn Seibert, and U.S. President Joe Biden’s energy adviser Amos Hochstein. The two sides “committed to work on keeping a high level of LNG supplies to Europe in 2023 of an additional 50 bcm compared to 2021.” That’s in line with the original commitment the U.S. made in March to help the EU keep the gas flowing until 2030. 
Price friction: Amid growing irritation among EU leaders with the prices the U.S. is charging the bloc for LNG, the joint statement says the two sides discussed how they would both “contribute to ensuring security of supply and [gas] storage filling in 2023 at prices reflecting economic fundamentals.” It also notes the EU’s plan for joint purchasing of gas between countries and their gas-consuming companies, suggesting that the nascent European gas-buyers cartel may well play a role in future LNG purchases.
Von der Leyen signed a deal with Kazakhstan’s Prime Minister Alikhan Smailov to promote the development of the materials the EU needs to build wind turbines, batteries and semiconductors, as well as to boost renewable hydrogen production.
European households are paying double last year’s prices for gas and two-thirds more for electricity, even as governments spend billions to shield consumers from the energy crisis, Bloomberg reports.
Oil and gas producers have branded the U.K. one of the most “fiscally unstable” regimes in which to do business, as the country looks to slap windfall taxes on energy producers, the FT reports.
Poland will not only delay its plans to shut down existing coal mines but will also expand production and even open new facilities, two ministers say, reports Notes from Poland.
**A message from the Greens/EFA in the European Parliament: “We Europeans started the climate crisis and we are still fueling it. If everybody emitted as many emissions into the atmosphere as Europeans, the planet would be directly heading to a world of 3 degrees or more. We continuously ignore our historical climate debt. We still invest in coal, oil and gas. We even subsidize fossil fuels in the European Union with over 112 billion Euro per year. We need to get real! The switch to renewable energy is also the way to free ourselves from the fossil shackles that tie us to Russia, Qatar and Kazakhstan. Climate action is in our deepest interest, it is also the security policy of the future. It is our shield to protect our freedom and peace, everyone on this planet and for generations to come” says the Greens/EFA MEP Michael Bloss at COP27 in Sharm el-Sheikh. Read more.**
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