UN negotiators are meeting in Lima, Peru to construct a draft climate change mitigation agreement that will be finalized over the next year with the goal of signing it in Paris in 2015. The plan is to allow each country to develop a greenhouse gas emissions reduction strategy that can be realistically achieved. “But while scientists and climate-policy experts welcome the new momentum ahead of the Lima talks, they warn that it now may be impossible to prevent the temperature of the planet’s atmosphere from rising by 3.6 degrees Fahrenheit. According to a large body of scientific research, that is the tipping point at which the world will be locked into a near-term future of drought, food and water shortages, melting ice sheets, shrinking glaciers, rising sea levels and widespread flooding — events that could harm the world’s population and economy.” [New York Times]
Oil prices began tumbling further last week when Opec announced it would maintain existing production quotas. Some analysts believe an oil price game of chicken is being waged against US producers, while others view Opec’s decision as simply letting the market run its course. “It’s clear that a production war is on and it will be survival of the fittest,” Phil Flynn, a senior market analyst at the Price Futures Group in Chicago, said by e-mail today. WTI “will see a test of $60 soon,” he said…“It’s essentially being left up to demand and supply fundamentals, which could mean it’s going to take a while before the market is ultimately more balanced,” Daniel Hynes, a senior commodity strategist at Australia and New Zealand Banking Group in Sydney, said by phone. “We’ve seen the emergence of some opportunistic buying by the Chinese. If that’s ongoing, that could be supportive.” [Bloomberg via Fuel Fix]
Major German utility E.ON yesterday announced plans to split the company into a renewables focused enterprise and a conventional energy production, trading and power generation firm. “In a first step, the firm said it would transfer a majority of the new company’s capital stock to its shareholders, avoiding the sale of new shares on the open market as is the case during an initial public offering. Instead, investors will receive shares in the new company in addition to holdings in the parent firm, in much the same way that Bayer shareholders received shares in speciality chemicals unit Lanxess. E.ON, which has €31bn in net debt, said it would dispose of its minority stake in the new company over the medium term to bolster its finances.” [The Guardian]
