India’s National Action Plan on Climate Change (NAPCC) sets out eight focal points for the government’s sustainable development strategy through 2017. The NAPCC is likely to become a significant driver of new investment opportunities in the country’s renewable energy portfolio, and in solar generation in particular.

As the world’s second most populous country and second largest growing economy, India has unique challenges in developing an energy supply adequate to meet the country’s development needs, including providing electricity to the 44% of its population without grid access.

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After the demise of the Lieberman-Warner legislation in early June, it was widely acknowledged that legislators still lacked a comprehensive understanding of the science and policy choices surrounding climate change. It is widely expected that the 111th Congress will again take up the issue, but this time with an Administration supportive of its efforts and on-going international negotiations that will need more active American engagement. With the increased likelihood of some legislative success in the next Congress, the policy making process has shifted to committee inquiries and hearings.

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Project developers operating under the Kyoto Protocol’s Clean Development Mechanism (CDM) now face additional scrutiny after several major organizations agreed to adopt a new voluntary verification standard. Eligibility for the CDM is premised on the requirement that a project will not proceed without the financial incentives provided by the creation of salable emission reduction credits. In other words, if a project is financially viable without generating emission credits, it is not eligible for CDM participation. This concept is known as additionality - the benefits generated by CDM projects must be additional to any that would have occurred without CDM support.

Organizations that verify emissions reductions for CDM projects, known as Designated Operational Entities (DOEs), have expressed concerns over their ability to reject ineligible projects, as a means of protecting the integrity of the CDM. As a result, a group of major DOEs recently agreed to criteria that may significantly impact the approval process for projects that wish to issue Certified Emission Reduction (CER) credits. The criteria will be considered for official inclusion into the CDM process by the Executive Board of the CDM, likely later this year. Until then, it is a voluntary agreement between many of the major DOEs, but still impacts projects being proposed from July forward.

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Earlier today, the House Energy and Commerce Subcommittee on Energy and Air Quality convened a hearing to discuss the importance of, and ways to encourage, building energy efficiency as a part of a “least cost, comprehensive strategy” to reduce greenhouse gas (GHG) emissions in the U.S.

Witnesses representing a broad range of interests widely recognized the need to make improved building energy efficiency a key part of any effective climate change strategy. As several witnesses cited, recent studies have shown that the building sector accounts for about 40% of the nation’s carbon dioxide emissions from fossil fuel use. By implementing simple, currently existing, building technologies and practices – such as more efficient lighting, water heating, and appliances, and more energy efficient design – annual U.S. energy consumption can be reduced by 11 percent by 2020. Thus, residential and commercial buildings offer the greatest opportunities for low-cost GHG reductions.

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The Government today released its much-discussed green paper on the design features of its newly branded “Carbon Pollution Reduction Scheme” for commencement in 2010.  This follows Professor Garnaut’s release of his draft report on the scheme earlier this month, and the Government’s commitment to unveil the key features of the scheme by the end of this year.  It proposes the introduction of a broad-based cap and trade scheme with the following features:

Broad coverage: petrol in, reforestation opt-in

Broad coverage to include stationary energy, transport, industrial processes, fugitive emissions, waste and forestry, with agriculture likely to be incorporated by 2015.  The points of liability primarily fall on large facilities and upstream fuel suppliers.  The proposed threshold for direct obligations is 25,000 t CO2-e or more a year, which will capture approximately 1,000 Australian companies.  The impact of the inclusion of the transport sector, a highly sensitive issue, has been softened by a transitional measure of fuel tax cuts on a cent for cent basis, to be reviewed three years after the scheme starts.  There was also a question mark around forestry: the Government has dealt with this by proposing that reforestation be included on a voluntary “opt-in” basis while deforestation is not.

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Emissions trading is a mechanism that provides countries, companies, and environmentally-conscious individuals with flexible cost-efficient means to meet greenhouse gas emission reduction goals. Emissions trading operates similarly to commodities markets, with purchase and sale contracts defining the rights and obligations of the parties and allocating risk. In a series of articles, ClimateIntel will discuss significant issues arising under these emission reduction purchase agreements.

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EPA is requesting comments on proposed standards for Underground Injection Control (UIC) of carbon dioxide (CO2) at commercial sequestration facilities. When finalized, these standards should provide commercial sequestration project developers with a more consistent and predictable regulatory environment in which to carry out ambitious carbon capture and sequestration projects.

EPA already regulates most underground injection of liquids, gasses, and slurries under existing SDWA regulations, including programs addressing the use of CO2 in enhanced oil recovery activities and pilot CO2 sequestration projects. Because large-scale injection of CO2 for long-term sequestration raises unique technical and safety issues, however, EPA had previously stated that more targeted regulations for commercial projects would be necessary.

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Although this Congress, and this Administration, will almost certainly not come to an agreement on comprehensive global climate change legislation, Congress continues to create the intellectual foundation for moving forward quickly once a new Administration is inaugurated next year. Two hearings this week should give some insight into how Congress intends to navigate some difficult issues.

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EPA has announced that it will propose regulatory standards for underground injection wells at commercial-scale carbon sequestration projects tomorrow, July 15, 2008. The announcement strikes a positive note for an Administration that, only four days earlier, announced that it had no intention of taking further action to regulate greenhouse gas emissions under the Clean Air Act.

Under the Safe Drinking Water Act, EPA must review and permit any project that places fluids underground for storage or disposal to ensure that the project will not endanger drinking water sources. To date, EPA has established five classes of underground injection wells, each subject to its own unique set of regulatory standards and requirements for siting, constructing, operating, and closing regulated facilities.

In the absence of a separate standard for commercial CO2 sequestration, EPA has regulated sequestration projects on a case-by-case basis. More uniform standards for carbon capture and sequestration (”CCS”) projects would provide a greater level of certainty to the CCS industry at a time when the US and other G-8 countries are placing great hopes on CCS as pillar of their respective long-term greenhouse gas mitigation strategies.

EPA will release the proposed standards to the press tomorrow at 1:30 p.m., eastern time. Once available, ClimateIntel.com will make the regulations available through this site.

UPDATE 7/15/08: Carbon Sequestration Standards Proposed by EPA

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This afternoon EPA unequivocally confirmed that the current administration will not propose, let alone implement, comprehensive greenhouse gas (GHG) regulation. In a long-awaited, 588-page Advance Notice of Proposed Rulemaking (“ANPR”), EPA surveys its Clean Air Act authority, outlines an analysis of whether GHGs endanger public health and welfare (and thus can constitute “regulated pollutants”), and reviews the applicability of climate change regulations under its stationary source, mobile source, and stratospheric ozone regulatory authorities. The Notice also opens a 4-month public comment period on the subject of GHG regulation.

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