“This is a major milestone in the U.S.-China relationship,” Obama said at a news conference with Xi in Beijing. The two nations, which account for more than a third of greenhouse-gas emissions, have a “special responsibility” to lead efforts to address climate change, he said.

The climate deal capped two days of meetings and announcements of deals that Obama and Xi said marked a high point for U.S.-China cooperation. Officials from both countries also negotiated a breakthrough in talks to eliminate tariffs on communications and technology products from printer cartridges to magnetic-resonance imaging machines, vowed greater military coordination and extended the validity of visas for tourists and business travelers.

Obama is setting a new target for the U.S., agreeing to cut greenhouse gas emissions to 26 to 28 percent below 2005 levels by 2025. The current U.S. target is to reach a level of 17 percent below 2005 emissions by 2020.

China’s Commitments

Xi committed China to begin reducing its carbon dioxide emissions, which have risen steadily, by about 2030, with the intention of trying to reach the goal sooner, according to a statement released by the White House.

China, the world’s largest greenhouse-gas emitter, also agreed to increase its non-fossil fuel share of energy production to about 20 percent by 2030, according to the White House.

Obama called the plan “an ambitious but an achievable goal.”

The agreement may signal an opening to the new relationship that both leaders said they sought after being at odds over computer hacking attacks that federal law enforcement officials suspect originated in China, territorial disputes involving two U.S. allies and probes by Chinese prosecutors of American companies such as Microsoft Corp.

Personal Involvement

Obama and Xi were personally involved in the discussions. Obama sent Xi a letter on the matter this year, according to administration officials, and the topic was a central theme during the more than five hours of meetings last night in Beijing after the Asia-Pacific Economic Cooperation summit.

One outcome may be fresh momentum for international negotiators in advance of the 2015 United Nations climate conference in Paris.

“These are big emitters, and these are very aggressive targets,” Martijn Wilder, head of global environmental markets at law firm Baker McKenzie, said today by phone from Sydney. “This makes it very difficult for other countries to say we’re not going to do anything.”

European Union Parliament President Martin Schulz said the announcement shows that the drive toward the UN climate talks is “clearly growing.”

Big Impact

Jake Schmidt, director of international programs for the Natural Resources Defense Council, a Washington-based environmental group, said no other countries can have as big an impact on theclimate debate as the U.S. and China.

“They shape how the market invests,” he said. “They’ve also been two of the most difficult players in the history of the climate negotiations so the fact that they are coming out and saying they are going to take deep commitments will be a powerful signal to the rest of the world.”

Obama, at a UN-sponsored climate meeting in New York in September, called on the more than 120 officials present to take action “not this year, or the year after, but right now, because no nation can meet this global threat alone.”

Chinese officials signaled at the same summit that the country would act on a carbon-dioxide cap soon. China has been taking steps to cut emissions, saying in September it plans to start a national carbon-trading market by 2016. China selected seven cities and provinces, including Shanghai, Beijing and Guangdong, to set regional caps and institute pilot programs for trading rights as part of its initiative to cut emissions by as much as 45 percent before 2020 from 2005 levels.

China’s Pollution

China has domestic political reasons to pursue emissions cuts. Pollution in Beijing reached hazardous levels for at least 10 days in October. To cut the haze while leaders from APEC nations were in Beijing, the government put limits on the number of cars on the roads and restricted industrial production and construction.

Obama has made climate change a central issue for his final two years in office, though his agenda is under attack by Republicans, who are set to take control of both chambers of Congress at the start of next year.

The administration officials, who briefed reporters before the announcement on condition of anonymity, said the new targets can be implemented without congressional action.

Republicans, who won control of the U.S. Senate in midterm elections on Nov. 4, are threatening to fight the administration’s efforts to cut greenhouse-gas emissions from U.S. power plants and his pledge to raise $100 billion to help poor nations combat climate change.

Copyright 2014 Bloomberg

Lead image: China and US handshake via Shutterstock

The findings highlight the policy shift needed to limit global warming, which the IEA said is on track to increase the world’s temperature by 3.6 degrees Celsius by the end of this century. That level would increase the risks of damaging storms, droughts and rising sea levels.

“In Saudi Arabia, the additional upfront cost of a car twice as fuel efficient as the current average would at present take 16 years to recover through lower spending on fuel,” the IEA said. “This payback period would shrink to three years if gasoline were not subsidized.”

Renewable use in electricity generation is on the rise and will account for almost half the global increase in generation by 2040, according to the report. It said about 7,200 gigawatts of generating capacity needs to be built in that period to keep pace with rising demand and replace aging power stations.

The share of renewables in power generation will rise to 37 percent in countries that are members of the Organization for Economic Cooperation and Development, according to the IEA.

It said that globally, wind power will take more than a third of the growth in clean power; hydropower accounts for about 30 percent, and solar 18 percent. Wind may produce 20 percent of European electricity by 2040, and solar power could take 37 percent of summer peak demand in Japan, it said.

The IEA singled out the Middle East as a region where fossil fuel subsidies are hampering renewables. It said 2 million barrels per day of oil are burned to generate power that could otherwise come from renewables, which would be competitive with unsubsidized oil.

“Reforming energy subsidies is not easy, and there is no single formula for success,” the report said.

Copyright 2014 Bloomberg

Lead image: Oil rig via Shutterstock

TORONTO — Today, the International Energy Agency (IEA) released their annual World Energy Outlook revealing that fossil fuel consumption subsidies reached $550 billion in 2013. According to the IEA these subsidies are failing to help those around the world who lack access to energy and are discouraging investment in energy efficiencies and renewables.

The Global Renewable Fuels Alliance (GRFA) reacted today, stating that biofuels offer environmental and economic benefits but require the right policies to be enacted by governments to increase their production and consumption.

“Fossil fuel subsidies are theoretically intended to increase energy access, but according to the IEA these subsidies are failing while discouraging investment in energy efficiencies and renewables. This raises a glaring question: who’s the $550 billion benefiting?” asked Bliss Baker, spokesperson for the GRFA.

Despite falling oil prices, fossil fuel consumption subsidies rose by $6 billion to $550 billion in 2013, up from $544 billion in 2012. By comparison, all global renewable energy sources received less than a quarter of that amount in subsidies.

“It seems counter productive to subsidize the most profitable industry on Earth that contributes the majority of global greenhouse gas emissions, especially when biofuels are growing and are the only commercial alternative to transport fossil fuels,” stated Baker.

According to this year’s World Energy Outlook, by 2040, biofuels use will more than triple, rising from 1.3 million barrels of oil equivalent per day (mboe/d) in 2012 to 4.6 mboe/d in 2040. According to the IEA this will represent 8% of road-transport fuel demand.

In 2011, the IEA released their Technology Roadmap – Biofuels for Transport, which stated that biofuels could make up 27% of the world’s transport fuels by 2050 and eliminate 2.1 gigatonnes of CO2 emissions. Later in 2012, the IEA called for biofuels production to double so their CO2 reduction goal could be met by 2020. It is important that countries adopt the right policies to achieve these potential CO2 reductions.

“The potential for biofuels use tripling by 2040 is positive news. However, it does not represent the full potential of a fully developed global biofuels industry. With the right policies, biofuels could provide over a quarter of the world’s transport fuels by 2050 and eliminate 2.1 gigatonnes of CO2 emissions,” stated Baker.

In addition, enacting the right biofuels friendly policies could unlock tremendous potential, particularly in Africa.

Heiner Thofern, head of the UN’s Food and Agriculture Organization’s (UNFAO) Bioenergy and Food Security Project, has previously said that if “done properly and when appropriate, bio-energy development offers a chance to drive investment and jobs into areas that are literally starving for them.” A 2011 study by the UNFAO showed that biofuel production can boost food and energy security and reduce poverty in developing countries at the same time.

“Another year has passed and fossil fuel subsidies continue to grow despite fuel prices falling. The GRFA is calling on all nations and organizations to make it a priority to eliminate these subsidies and focus our efforts on building up the capacity of commercial alternatives, like biofuels,” concluded Baker.

To learn more about biofuels around the world, visit the new GRFA website at www.globalrfa.org.

The Global Renewable Fuels Alliance is a non-profit organization dedicated to promoting biofuel friendly policies internationally. Alliance members represent over 65% of the global biofuels production from 44 countries. Through the development of new technologies and best practices, Alliance members are committed to producing renewable fuels with the smallest possible footprint.

In Missouri, Secretary of State Jason Kander has issued a cease and desist order against Boyd A. Ware of Centralia, Mo., and his company, Central Missouri Energy, LLC. According to the order, Ware and Central Missouri Energy (CME) offered and sold securities without being registered with Kander’s office, deceived investors with phony information and scammed Missourians out of nearly $200,000.

An investigation by Kander’s office revealed that Ware founded CME in 2006 for the purpose of operating a biodiesel plant in Fulton, Mo. The order alleges CME began offering investments in an initial offering around August 2006 for a minimum investment of $25,000. Investors were told the funds would be used to construct a biodiesel facility and meet the working capital needs of the plant. However, according to the order, the biodiesel facility has never been built after more than seven years.

“Not only did this company illegally sell investments, they used deceptive tactics to lure investors into what they thought was a promising investment and withheld the truth about where funds truly went,” Kander said. “Missouri investors should always contact my office before investing to help protect themselves from scams like these.”

According to the order, at least four Missouri residents invested at least $182,500 with Ware for CME between 2006 and 2009. Ware allegedly led investors to falsely believe CME had secured funding guarantees from the U.S. Department of Agriculture, was engaged in partnership negotiations with companies in Illinois and Mexico to develop biodiesel and had sold 90 percent of the initial units offered, among other things.

Kander’s office alleges Ware told investors CME was using “several reputable law firms” to review the business practices of CME. In fact, he was paying Mexican national Manuel Camargo, who claimed to be an attorney. Camargo’s ex-wife, however, said he never graduated college and held no professional designations as an attorney in the U.S. or Mexico, and the investigation revealed no proof disputing her claims.

According to the order, CME funds from investors were used to pay over $4,000 for Ware to make trips to Mexico, at least $22,000 for payments to Camargo’s ex-wife, at least $150,000 to Camargo and over $50,000 in payments to a second company owned by Ware.