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World’s war on greenhouse gas emissions has a military blind spot

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World's war on greenhouse gas emissions has a military blind spot
© Reuters. FILE PHOTO: A South Korean army K1A1 tank fires during a live-fire drill which is a part of the joint military drill “Freedom Shield” between South Korea and U.S. at a military training field near the demilitarized zone separating the two Koreas in Pocheo

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By Sarah McFarlane and Valerie Volcovici

LONDON/WASHINGTON (Reuters) – When it comes to taking stock of global emissions, there’s an elephant in the room: the world’s armed forces.

As temperatures hit new highs, scientists and environmental groups are stepping up pressure on the U.N. to force armies to disclose all their emissions and end a long-standing exemption that has kept some of their climate pollution off the books.

Among the world’s biggest consumers of fuel, militaries account for 5.5% of global greenhouse gas emissions, according to a 2022 estimate by international experts.

But defence forces are not bound by international climate agreements to report or cut their carbon emissions, and the data that is published by some militaries is unreliable or incomplete at best, scientists and academics say.

That’s because military emissions abroad, from flying jets to sailing ships to training exercises, were left out of the 1997 Kyoto Protocol on reducing greenhouse gases – and exempted again from the 2015 Paris accords – on the grounds that data about energy use by armies could undermine national security.

Now, environmental groups Tipping Point North South and The Conflict and Environment Observatory, along with academics from the British universities of Lancaster, Oxford and Queen Mary are among those pushing for more comprehensive and transparent military emissions reporting, using research papers, letter campaigns, and conferences in their lobbying drive.

In the first five months of 2023, for example, at least 17 peer reviewed papers have been published, three times the number for all of 2022 and more than the previous nine years combined, according to one campaigner who tracks the research.

The groups also wrote in February to the U.N. Framework Convention on Climate Change (UNFCCC) calling on the United Nation’s climate body to include all military emissions given their significance for comprehensive global carbon accounting.

“Our climate emergency can no longer afford to permit the ‘business as usual’ omission of military and conflict-related emissions within the UNFCCC process,” the groups wrote.

Emissions accounting will come into focus in the first global stocktake – an assessment of how far behind countries are from the Paris climate goals – due to take place at the COP28 climate summit in the United Arab Emirates starting on Nov. 30.

“The omission of conflict-related emissions in UNFCCC accounting is a glaring gap,” said Axel Michaelowa, founding partner of Perspectives Climate Group, adding that hundreds of millions of tons of carbon emissions may be unaccounted for.

‘RECOVERY AND PEACE’

For now, however, there are few signs there will be any tangible response to the lobbying drive this year.

The UNFCCC said in an emailed response to questions that there were no concrete plans to amend guidance on military emissions accounting, but that the issue could be discussed at future summits, including at COP28 in Dubai.

Asked whether military emissions would be discussed at the U.N. summit, the UAE presidency said one of its thematic days during the two-week summit would be “relief, recovery and peace”, without giving further details.

There are signs, however, that some militaries are preparing for changes in their reporting requirements in the coming years, while others are making strides to cut their climate impact.

NATO, the 31-country Western security alliance, for example, told Reuters it has created a methodology for its members to report their military emissions.

Countries such as New Zealand are exploring whether to add previously excluded areas, such as emissions from overseas operations, while Britain and Germany are looking to address grey areas in their reporting, defence officials said.

And Washington sent U.S. Army and Navy representatives to the COP27 climate summit in Egypt last year, the first time a Pentagon delegation has attended the global climate summit.

“What I think that signified is that we are part of the conversation, we are certainly emitters when it comes to fossil fuels and energy,” Meredith (NYSE:) Berger, assistant secretary for energy, installations and environment at the U.S. Navy and one of the Pentagon delegates, told Reuters.

The U.S. military’s oil use and emissions are falling.

The U.S. Defence Logistics Agency, which oversees oil buying, said 84 million barrels were purchased in 2022, down almost 15 million from 2018. Emissions in 2022, meanwhile, fell to 48 million tonnes from 51 million tonnes the previous year.

The U.S. Department of Defense said those figures included all emissions, but that it stripped out international transport and bunker fuels from the numbers reported to the UNFCCC.

MORE DRONES

Neta Crawford, a professor of international relations at Oxford University, said U.S. troop withdrawals from Afghanistan and Iraq, the adoption of renewable energy technologies, more fuel-efficient vehicles, as well as fewer and smaller military exercises, had contributed to the declines in the fuel use.

The wider use of drones may also have helped.

“One of the biggest emissions reduction technologies has been the used of unmanned aerial vehicles – drones,” said a senior U.S. defense official, who spoke to Reuters on condition of anonymity. “When you take a human out of the aircraft, you get dramatically improved energy performance.”

Groups lobbying the U.N. to lift the military exemptions point to a surge in emissions related to the Ukraine conflict as a good reason for the change.

“Ukraine has absolutely brought the spotlight onto this issue in a way that other conflicts have not,” said Deborah Burton at environmental group Tipping Point North South.

A report from Dutch carbon accounting expert Lennard de Klerk estimated the first 12 months of the war in Ukraine will trigger a net increase of 120 million tonnes of greenhouse gases, equivalent to the annual output of Singapore, Switzerland and Syria combined.

And academics from Oxford and Queen Mary University of London are holding a conference on military emissions in Oxford on Sept. 26, with the aim of generating new research that could help inform changes to reporting requirements.

Ukraine’s environment ministry spokesperson said it supports the efforts and would seek backing from governments at COP28 for more transparent military emissions reporting.

‘FREE RIDE’

While the Ukraine war has heightened the focus among climate activists on military emissions, some experts say it is a distraction for governments focused on regional security, and that could slow discussions in the near term.

“It’s important to understand the Ukraine crisis has made this a little bit more complicated,” said James Appathurai, NATO’s deputy assistant secretary general for emerging security challenges.

Some militaries say publishing details on their oil use would be a window into their overseas operations.

“We would not want to let everybody know how much fuel we use in these missions – how far we fly, how far we drive, and what our exercise patterns are,” said Markus Ruelke, from the German defence ministry’s environmental protection unit.

Some military emissions are recorded under unspecified fuel combustion in the U.N.’s reporting tables, the UNFCCC said.

In the meantime, global military emissions will remain poorly understood, said Stuart Parkinson, executive director of the group Scientists for Global Responsibility.

“It’s all very well telling people to stop flying or switch to an electric car, whether that’s an expense or inconvenience to them, but it’s hard to do that when the military gets a free ride,” he said.

Commodities

Oil prices rise after US interest rate cut

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By Paul Carsten

(Reuters) – Oil prices rose on Thursday after a large interest rate cut from the U.S. Federal Reserve, but Brent was still hovering around its lowest levels of the year, below $75, on expectations of weaker global demand.

futures for November were up 66 cents, or 0.9%, to $74.31 a barrel at 1156 GMT, while WTI crude futures for October were up 58 cents, or 0.8%, to $71.49 a barrel. The benchmarks had earlier risen more than $1 each.

The U.S. central bank cut interest rates by half a percentage point on Wednesday. Interest rate cuts typically boost economic activity and energy demand, but the market also saw it as a sign of a weaker U.S. labor market that could slow the economy.

“While the 50 basis point cut hints at harsh economic headwinds ahead, bearish investors were left unsatisfied after the Fed raised the medium-term outlook for rates,” ANZ analysts said in a note.

The Bank of England on Thursday held interest rates at 5.0%.

Weak demand from China’s slowing economy continued to weigh on oil prices.

Refinery output in China slowed for a fifth month in August, statistics bureau data showed over the weekend. China’s industrial output growth also slowed to a five-month low last month, and retail sales and new home prices weakened further.

Markets were also keeping an eye on events in the Middle East after walkie-talkies used by Lebanese armed group Hezbollah exploded on Wednesday following similar explosions of pagers the previous day.

Security sources said Israeli spy agency Mossad was responsible, but Israeli officials did not comment on the attacks.

© Reuters. FILE PHOTO: An aerial view shows a crude oil tanker at an oil terminal off Waidiao island in Zhoushan, Zhejiang province, China January 4, 2023. China Daily via REUTERS/File Photo

Citi analysts say they expect a counter-seasonal oil market deficit of around 0.4 million barrels per day (bpd) to support Brent crude prices in the $70 to $75 a barrel range during the next quarter, but that would be temporary.

“As 2025 global oil balances deteriorate in most scenarios, we still anticipate renewed price weakness in 2025 with Brent on a path to $60/barrel,” Citi said in a note on Thursday.

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Commodities

Oil market deficit seen temporarily supporting Brent prices in Q4 – Citi

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Investing.com — Brent crude oil prices could be bolstered in the near-term by demand possibly outstripping supply in the fourth quarter, according to analysts at Citi.

A reported decision by the Organization of the Petroleum Exporting Countries and its allies to delay the beginning of a tapering in voluntary output cuts, along with ongoing supply losses in Libya, is predicted to contribute to a oil market deficit of around 0.4 million barrels per day in the final three months of 2024, the Citi analysts said.

They added that such a trend could offer some temporary support to “in the $70 to $75 per barrel range.”

Meanwhile, the benchmark could be further boosted by a potential rebound in recently tepid demand from top oil importer China, the analysts said.

But they flagged that they still anticipate “renewed price weakness” in 2025, with Brent on a path to $60 per barrel due to an impending surplus of one million barrels per day.

On Thursday, crude prices were higher after a super-sized interest rate cut from the US Federal Reserve elicited a mixed reaction from traders, while worries over global demand also lingered.

By 03:30 ET, the Brent contract gained 0.9% to $74.34 per barrel, while futures (WTI) traded 1.0% higher at $70.58 per barrel. The benchmarks had recovered after slipping in Asian trading, with Brent in particular hovering near its lowest mark of the year.

The Fed slashed interest rates by 50 basis points on Wednesday and indicated that it would announce further cuts this year, as the central bank kicks off an easing cycle to shore up the economy following a prolonged battle against surging inflation.

Lower rates usually bode well for economic activity, but the Fed’s aggressive cut also sparked some concerns over a potential slowdown in broader growth.

While Fed Chair Jerome Powell moved to soothe some of these fears, he also said that the Fed had no intention of returning to an era of ultra-low interest rates, and that the central bank’s neutral rate was likely to be much higher than seen in the past.

His comments indicated that while interest rates will fall in the near-term, the Fed was likely to keep rates higher in the medium-to-long term.

Meanwhile, US government data released on Wednesday showed a bigger-than-expected, 1.63 million barrel draw in inventories, which analysts at Citi said was due to lower net imports and domestic production “outpacing” a drop of crude oil consumed by refineries.

“US crude output was hit by Hurricane Francine, with a peak of 732,000 [barrels per day] of offshore Gulf of Mexico oil output shut-in […], with the tail end of the impact reaching until Tues[day] Sept. 17, which should still show up in next week’s data,” the Citi analysts said in a note to clients.

While the fall was much bigger than expectations for a decrease of 0.2 mb, it was also accompanied by builds in distillates and gasoline inventories. The increses in product inventories added to worries that U.S. fuel demand was cooling as the travel-heavy summer season wound to a close.

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Commodities

Gold prices retreat as markets look past 50 bps Fed rate cut

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Investing.com– Gold prices moved in a flat-to-low range in Asian trade on Thursday, and were nursing overnight losses after less dovish signals from the Federal Reserve offset some optimism over a bumper rate cut. 

Strength in the pressured bullion prices, as the greenback rose sharply on bets that U.S. interest rates may not fall as much as expected in the medium to long term. 

The yellow metal also saw some profit-taking after hitting record highs in the run-up to Wednesday’s Fed decision. 

rose 0.1% to $2,561.30 an ounce, while expiring in December fell 0.5% to $2,585.65 an ounce by 00:24 ET (04:24 GMT). Spot prices were nursing some overnight losses, and pulled back further from recent record highs. 

Fed cuts rates by 50 bps, but offers less dovish outlook 

The Fed by 50 basis points- the upper end of market expectations- in its first rate cut since the COVID-19 pandemic in 2020. The central bank also announced the beginning of an easing cycle. 

Fed Chair Jerome Powell quelled some concerns over a slowing economy after the outsized rate cut, stating that risks between rising inflation and a softer labor market were evenly balanced. Powell flagged the prospect of more rate cuts, with markets pricing in a total of 125 bps worth of rate cuts by the year-end. 

But Powell also said the Fed had no intention of returning to an ultra-low rate environment as seen during COVID-19, and said the Fed’s neutral rate will be much higher than seen previously. 

His comments presented a higher outlook for rates in the medium-to-long term, and somewhat diminished optimism over Wednesday’s cut. 

Still, the prospect of lower rates bodes well for non-yielding assets such as gold, given that it decreases the opportunity cost of investing in bullion. 

Other precious metals rose on Thursday, but were also nursing overnight losses. rose 0.5% to $978.15 an ounce, while rose 0.2% to $30.755 an ounce.

Copper prices rise, China rate decision awaited 

Among industrial metals, copper prices advanced on Thursday amid expectations of more stimulus measures from top importer China, with an interest rate decision from the country due on Friday. 

Benchmark on the London Metal Exchange rose 0.4% to $9,425.50 a ton, while one-month rose 0.6% to $4.2970 a pound.

The People’s Bank of China is widely expected to keep its benchmark unchanged on Friday. But persistent signs of economic weakness in the country are expected to eventually spur further cuts in the LPR.

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