COP27’s much-vaunted “loss and damage” fund remains subject to major uncertainties — including where the money will come from. In the meantime, the Biden government is easing some restrictions on ESG investments, and Europe is proposing a price cap for natural gas.
This is Overnight Energy & Environment, your source for the latest news on energy, environment, and beyond. For CNNBreakingNews, we’re Rachel Frazin and Zack Budryk. Are you forwarding this newsletter?
Uncertainties about the fund lead to skepticism
A newly agreed “loss and damage” fund, in which developed countries would pay for climate damage suffered by vulnerable developing countries, lacks both details and actual funding, raising the question of whether it is simply a symbolic breakthrough.
Developing countries, which have been responsible for the least amount of climate pollution in years, have called for such a fund, which the United States and other wealthy countries have resisted.
That changed over the weekend when nearly 200 countries agreed to set up a new fund at the United Nations Climate Change Conference (COP27) in Sharm el-Sheikh, Egypt.
The agreement states that the fund will help developing countries respond to “economic and non-economic losses and damage associated with the adverse effects of climate change, including extreme weather events.”
OK, so what else is unknown?
- The deal does not provide for money or organizational structure, so such details will be worked out in the coming months. It sets up a “transitional committee”, made up of representatives from 24 countries, which has the task of finding sources of funding and determining the structure and administration of the fund.
- “A loss and claims fund has been set up, and that alone is important, but it’s an empty ship,” Morgan Bazilian, a professor of public policy at the Colorado School of Mines, told CNNBreakingNews.
What about the USA?
- The government divided by the midterm elections is likely to pose a hurdle to raising US funding. Some Republicans are already speaking out against it.
- “Insane. This wasn’t even on my list of the 1 million things the United States should do with money we don’t have,” Senator Kevin Cramer (R-N.D.) said in a written statement his office shared with CNNBreakingNews when asked about his thoughts on the deal.
But reaching this point in the first place is a first:
- “There was simply a huge breakthrough this time when the United States and other traditional blockers were persuaded to stop blocking,” said Jean Su, director of the energy justice program at the Center for Biological Diversity.
- She acknowledged that there were still “big questions,” including “whether funding is actually being provided,” but said it had ultimately “given vulnerable communities around the world a glimmer of hope.
Read more about the uncertainties here.
Biden eases ESG restrictions for financial advisors
The Biden administration is making it easier for asset managers to consider climate change and other environmental and social factors when planning for retirement.
The Department of Labor issued a new final rule on Tuesday that allows these trustees to consider “the economic impact of climate change” when making investments they oversee.
Deputy Secretary for Worker Benefits Safety, Lisa Gomez, said in a statement that the rule was enacted to end a “deterrent effect” caused by the Trump era restrictions on taking environmental and social factors into account when investing.
In 2020, the Trump administration enacted a rule that would likely discourage consideration of environmental and social factors when making these types of investments.
Read more about the new rule here.
WHITE HOUSE UNVEILS ENVIRONMENTAL JUSTICE SCREENER
The White House unveiled a tool on Tuesday that aims to review communities with environmental justice — disadvantaged communities that face high environmental pressures.
Brenda Mallory, chair of the White House Environmental Quality Council, said in a statement that the tool would allow the government to ensure that these communities particularly benefit from their climate action.
“The climate and economic justice screening tool identifies communities that have faced historic injustices and have borne the brunt of environmental pollution so we can ensure they are among the first to recognize the benefits of climate protection,” she said.
EU proposes gas price cap before winter
The European Commission proposed a temporary cap on natural gas prices on Tuesday to reduce energy costs and secure supplies before winter.
According to the Commission, the so-called “market correction mechanism” would serve to “protect EU companies and households from excessively high gas prices in the EU” while reducing volatility on European gas markets.
“Following the Russian invasion of Ukraine and the upgrade of energy supplies, natural gas prices across the EU have experienced unprecedented price peaks,” the Commission said in a statement.
the end of August, Russian state-owned energy company Gazprom closed its main gas pipeline to Europe for three days of maintenance, but then never resumed operations.
Natural gas prices reached an all-time high in Europe in the second half of August — a situation that the Commission described as “very damaging to the European economy, with contagious effects on electricity prices and an increase in overall inflation.”
- On Tuesday, Gazprom threatened to cut off its last running gas pipeline to Europe, which runs through Ukraine, next week. The company accused Kiev of diverting gas supplies destined for Moldova and creating a “transit imbalance.”
- Ukraine’s gas transmission system operator denied the allegations and claimed that all volumes of gas destined for Moldovan customers were “completely” transferred.
In light of the impending uncertain winter, the European Commission stressed that it intends to prevent “the repetition” of price increases in August by proposing a “temporary and targeted instrument.”
How does it work? In the event of extreme gas price increases, the instrument would automatically intervene and set a safety price cap of 275 euros (282 USD) per megawatt hour for derivatives with the Month-Ahead Title Transfer Facility (TTF).
Read more from Sharon Udasin from CNNBreakingNews here.
WHAT WE READ
- The US has promised tribes that they would always have fish, but the fish they have pose toxic risks (ProPublica and Oregon Public Broadcasting)
- Lake Michigan nuclear power plant won’t reopen after federal application denied (MLive)
- Europe’s wind industry stumbles when it’s needed most (The New York Times)
- Bison’s move to home countries revives a spiritual bond (The Associated Press)
- EPA reports decline in significant Clean Water Act violations
- The Biden government wants to provide $550 million for municipal clean energy
🦖 Easier clicking: Not historically accurate, but we’ll let it slide.
That’s it for today, thanks for reading. Check out CNNBreakingNews’ Energy and Environment page for the latest news and coverage. I’ll see you tomorrow.