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The environmental impact of AI is becoming harder to ignore, from soaring energy use and water consumption to the rapid expansion of data centres and microchip production. What is being built in the name of innovation is also concentrating power, intensifying surveillance and deepening democratic risk.

Facebook Data Center in USA. © Greenpeace
March 2012: An aerial view of the 150-acre Facebook data centre in Forest City, North Carolina. © Greenpeace

In Australia, data centres threaten the energy transition

Amid the frenzied global expansion of AI-driven data centres, Australia has emerged as the second-largest market for investment in data centres in the world, behind only the United States.

This out-of-control expansion threatens to derail Australia’s energy transition by adding enormous new energy demand and prolonging reliance on polluting fossil fuels, with many data centre operators even looking to build new gas plants just to power their own operations. Data centres are being rolled out at a feverish pace, with some of the largest planned for Australia needing as much electricity as a small city.

Without strong guardrails, Australia risks replicating the disastrous US pattern — local communities paying the price with higher electricity bills, noise and environmental pollution, while AI and Big Tech companies receive priority access to power and resources.

The environmental impact of AI: energy, water and emissions

The AI boom is being sold as inevitable progress, but the real question is not whether artificial intelligence can do useful things in theory. It is who owns it, who profits from it, what it is mostly being used for, and who pays the environmental and political bill when the hype turns into microchip manufacturing plants, data centres, rising power demand, water stress, surveillance and attacks on democratic life.

A Greenpeace Germany report released in 2025 warned that AI’s electricity demand, emissions, water use and raw material needs are all rising fast, and that AI data centre electricity demand could be 11 times higher in 2030 than in 2023 unless governments intervene. A February 2026 report backed by Beyond Fossil Fuels made the greenwashing problem even clearer, finding that 74% of industry claims about AI’s climate benefits were unproven and that it could not identify a single case where consumer generative AI systems such as ChatGPT, Gemini or Copilot were delivering material, verifiable and substantial emissions cuts.

This matters because it punctures one of the sector’s favourite talking points, namely that energy-hungry generative AI can be excused by vague future climate benefits. In reality, the buildout itself is locking in more extraction, more infrastructure and more corporate power, while the largest firms try to present that expansion as climate leadership.

That is why the debate cannot be reduced to whether AI might do good one day, because the system being built right now is already redistributing power upwards while pushing environmental costs and information risks outwards.

AI data centres and why communities are pushing back

Across different countries, people are fighting data centres not because they are anti-technology, but because they recognise the pattern: land grabbing, noise pollution, pressure on water systems, strain on local grids and the steady erosion of community control over land and infrastructure.

Near Perth, a three-storey, 120-megawatt data centre will no longer go ahead after the developer withdrew plans amid community opposition over its impact on culturally significant sites. In New Brunswick, New Jersey, city leaders removed data centres from a redevelopment plan after public backlash and restored a park requirement, while residents and campaigners explicitly raised concerns about environmental harm, energy consumption, water use and noise pollution. In San Marcos, Texas, the city council voted 5-2 to block a proposed data centre after an hours-long meeting and more than 100 public comments.

In September 2025, South Dublin County Council in Ireland passed a motion calling for a nationwide ban or moratorium on new data centres, or strict conditions including 100% renewables, amid concern that communities are being forced to absorb the economic and ecological costs of someone else’s digital expansion. In the UK, campaigners won permission for a legal challenge against a 90MW hyperscale data centre in Buckinghamshire after the government admitted it had made a “serious error” in approving the scheme.

South Africa shows the growing disconnect between the push for AI infrastructure and the ecological realities of water stress and climate disruption. Australia, meanwhile, shows how rapidly this model is being scaled up globally, with the world’s second-biggest data centre buildout after the United States.

These are not fringe skirmishes. They are early signs of a broader democratic backlash against a model of digital expansion that expects local communities to absorb the costs while distant corporations and billionaires bank the gains.

Resistance is also becoming cultural, not just local. The QuitGPT boycott has gained traction as a symbolic rejection of the idea that ChatGPT should become the default interface for work, knowledge and everyday life. The movement is explicitly a reaction to OpenAI’s deal with the US Department of Defense, and it took on added urgency as the US and Israel began bombing Iran almost immediately afterwards. Dutch historian and author Rutger Bregman has helped amplify it by urging people to cancel their subscriptions, first pointing to more than 700,000 supporters, then more than one million. More than 2.5 million users are now boycotting ChatGPT.

The opposition to OpenAI and ChatGPT is no longer confined to specialists but is reaching writers, organisers, educators and mainstream audiences who are starting to question what exactly they are being asked to normalise.

Big Tech, AI power and the threat to democracy

If you want to understand why campaigners are increasingly focusing on chips as well as chatbots, start with Nvidia, the American chipmaking giant, and its CEO, Jensen Huang. Nvidia announced a staggering annual revenue of US$ 215.9 billion, underscoring just how central the company has become to the global AI boom. Recent earnings show Nvidia’s business is now dominated by data centres and AI chips, not gaming, with roughly 80% to 90% of revenue coming from data centres while gaming has fallen below 10%.

Huang has framed AI as “the largest infrastructure build-out in human history” and as foundational infrastructure for the modern world, which is precisely why Nvidia cannot be treated as a passive supplier standing outside the social and ecological consequences of the boom. Without Nvidia’s chips, much of the present generative AI race simply would not happen at its current scale.

Protest at NVIDIA GTC Conference in San José, California. © Brooke Anderson / Greenpeace
March 2026: On the opening day of Nvidia’s GPU Technology Conference, Greenpeace USA drove a triple-billboard truck to deliver a direct message to CEO Jensen Huang: ‘Hey Jensen, your graphics processors that are fuelling the AI boom are overheating. So is the planet.’ © Brooke Anderson / Greenpeace

Greenpeace East Asia’s October 2025 findings rank Nvidia last on AI supply-chain decarbonisation and argue that the company’s record revenues are being built on a “decarbonisation deficit” outsourced to suppliers in Taiwan and South Korea that still depend heavily on fossil power.

Greenpeace East Asia’s reporting also highlighted a 4.5-fold increase in emissions from AI chip manufacturing in a single year, showing how quickly the environmental cost of this infrastructure race is escalating. This is not a side effect of the boom. It is part of the industrial model that underpins OpenAI, Anthropic, Amazon and the wider rush to scale generative AI as fast as possible.

Amazon tells a similar story. Jeff Bezos’s Amazon made more than US$ 77 billion in profits in 2025 while cutting around 30,000 workers as it ramped up AI spending. This is what “innovation” looks like when it is steered by monopoly power: record profits, job cuts, rising capital expenditure and a false promise that more automation will somehow trickle down into public good.

AI, war and manipulation

The political economy of the AI boom should worry anyone who cares about democracy and civil liberties. Tech leaders and companies spent heavily to curry favour with Donald Trump after his reelection, including OpenAI chief executive Sam Altman’s US$ 1 million donation to Trump’s inauguration fund, while reporting also tied OpenAI co-founder Greg Brockman to a US$ 102 million Trump war chest drive.

Palantir and Alex Karp have gone further into the architecture of state power. ICE agreed to pay Palantir $30m to build its “ImmigrationOS” surveillance platform, while Karp defended the company’s work with ICE and later said critics of ICE should be protesting for “more Palantir”, not less. That tells you a great deal about what counts as “progress” when AI, border violence, data extraction and executive power converge.

Protest Against NSA with Airship in Utah. © Douglas Pizac / Greenpeace
June 2014: A coalition of grassroots groups from across the political spectrum joined forces to fly an airship over the NSA’s data centre in Bluffdale, Utah to protest the government’s illegal mass surveillance program. Greenpeace flew its 135′ long thermal airship over the data centre carrying the message “NSA Illegal Spying Below”. © Douglas Pizac / Greenpeace

The debate over AI and war has become sharper too. Anthropic reportedly sought explicit contractual prohibitions on mass domestic surveillance and fully autonomous weapons, and has been in conflict with the Pentagon over refusing to broaden those terms, while OpenAI struck a Pentagon deal for classified systems and revised it only after backlash, adding stronger restrictions against domestic surveillance and autonomous weapons without human oversight. That does not make Anthropic harmless, but it does show that even inside this industry there are real fault lines over how far companies are willing to go in militarisation and state surveillance.

Amnesty International has called for bans on AI-based practices including public facial recognition, predictive policing, biometric categorisation, emotion recognition and migrant profiling, while Forbidden Stories has investigated firms pitching AI-enabled surveillance tools that can target journalists, dissidents and activists.

Culture and information are being reshaped at speed as well. Deezer says it is now receiving more than 60,000 fully AI-generated tracks a day, roughly 39% of all music delivered to the platform daily. Six of Spotify’s top 50 trending songs in the US in late January were fully AI-generated. Suno was generating 7 million songs a day. Suno chief executive Mikey Shulman gave the game away when he said: “It’s not really enjoyable to make music now. It takes a lot of time, it takes a lot of practice”, reducing musical craft to a friction problem for software to remove. Sam Altman’s remark that it takes “20 years of life and all of the food you eat” to “train a human” landed for the same reason, because it exposed a worldview in which human creativity and ecological limits are treated less as values than as inefficiencies.

The biggest AI companies have not just disrupted creative industries, they have been repeatedly accused in court of building their products on unlicensed human work, with lawsuits from authors and visual artists, from major news organisations including The New York Times, and from Hollywood studios such as Disney and Universal alleging large-scale copyright infringement. Whether every case succeeds or not, the pattern is clear: companies that present themselves as engines of innovation have been credibly accused of treating books, journalism, music and art as raw material to be scraped, absorbed and monetised without consent, compensation or democratic accountability.

The same systems are also corroding the information environment. Research from Proof News found that leading AI tools gave inaccurate, harmful or incomplete answers to basic election questions more than half the time, while a separate GroundTruthAI analysis reported by NBC found that popular chatbots answered election queries incorrectly 27% of the time.

Pro-Trump Rally in Washington DC. © Tim Aubry / Greenpeace
January 2021: Pro-Trump rally in Washington, DC. © Tim Aubry / Greenpeace

Grok on X has already shown how this can play out in practice. Election officials traced false claims about ballot deadlines and candidate eligibility back to Grok during the 2024 US race, and later warned that such errors could mislead or confuse voters at scale. With more high-stakes elections approaching, that is not a marginal bug. It is a democratic risk amplified by billionaire-owned platforms, automated recommendation systems and synthetic content designed for maximum engagement rather than truth.

Technology for the common good: democratic control, privacy and renewable energy

A different future is possible.

Technology for the common good would mean a society where digital tools are built first to meet real social and ecological needs, not to deepen billionaire control or chase speculative profit, and where AI is not treated as an automatic solution but used only when it is appropriate, justified and not more resource-intensive than simpler alternatives.

It would run on 100% additional renewable energy, disclose its full energy, water and supply-chain footprint, and be designed so communities are not left paying the price through higher bills, water stress or pollution.

100 Days Projection Message at Golden Gate Bridge, California. © Paul Kuroda / Greenpeace
April 2025: Greenpeace USA projected a powerful message of purpose and defiance onto the Marin Headlands, facing the Golden Gate Bridge, California. The action marked 100 days into the administration’s second term. © Paul Kuroda / Greenpeace

Ownership and governance would be far more democratic, with strong public rules, limits on monopoly power, meaningful community consent, and institutions able to steer technology towards climate resilience, public services, biodiversity protection and other shared needs. It would also mean building forms of sovereign AI, where data and models are not simply extracted into distant corporate clouds but remain subject to local democratic control, clear auditability, strict privacy safeguards and public-interest rules. Access would be broad, affordable and accessible by design, and the freedoms it protects would include privacy, freedom of expression, the right to dissent, and protection from surveillance, manipulation and exclusion, so that technology expands people’s power instead of shrinking it.

This is an edited version of a blog first posted by Mehdi Leman for Greenpeace International.

Note: Greenpeace’s approach to AI is cautious, human-led and grounded in accountability. We do not support the use of AI-generated content in public-facing communications, and any limited use of AI must be carefully reviewed by humans for accuracy, bias, transparency, security and alignment with Greenpeace’s values. We also respect artists’ work and intellectual property rights, and we value the labour of artists, creatives and content creators; creative work should not be copied, exploited or repurposed in ways that undermine authorship, consent, attribution or livelihoods.

https://www.greenpeace.org.au/learn/the-energy-and-environmental-impact-of-ai-and-how-it-undermines-democracy/

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Top maritime court rejects bid to halt UN deep-sea mining inquiry

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A United Nations investigation into deep-sea mining firms will continue after the world’s top maritime court rejected their bid to suspend the inquiry triggered by a US-backed push to extract critical minerals from the ocean floor.

In two orders issued on Saturday, the International Tribunal for the Law of the Sea (ITLOS) declined to halt an inquiry launched by the International Seabed Authority (ISA) into whether permit holders, including Tonga Offshore Mining Ltd (TOML) and Nauru Ocean Resources Inc (NORI), have breached their obligations under UN exploration contracts.

The two companies are subsidiaries of Canadian firm The Metals Company (TMC), which earlier this year sought permits from the United States to commercially mine the deep seabed in an area already covered by its UN exploration licences, bypassing the ISA’s regulatory process.

The inquiry was opened after TMC’s move raised questions over whether its subsidiaries had complied with their contractual obligations to the ISA, which regulates mining in international waters under the UN Convention on the Law of the Sea. TOML and NORI sued the ISA last June for allegedly targeting them “in breach of due process” and without “good faith”.

    While allowing the inquiry to proceed, the court ordered the ISA to ensure the companies receive due process. Judges said the regulator must explain the factual and legal basis of its inquiry, clarify the procedures being followed and provide TOML and NORI with a meaningful opportunity to respond.

    The companies seeks to mine an area called the Clarion-Clipperton Zone, which holds vast reserves of critical minerals like nickel, manganese and rare earths but is also home to a little-studied deep ocean ecosystem with thousands of unnamed species.

    In response to the court’s ruling, the ISA welcomed the decision, saying the inquiry “remains in effect” and would continue “with due regard to all applicable legal requirements”.

    Last week, during an annual meeting of its member governments, ISA secretary-general Leticia Carvalho said the resources in the ocean floor are “the common heritage of humankind” and upheld the agency’s role as “more important than ever”.

    TMC also welcomed the court decision in a statement and claimed that judges ruled to “protect the rights of TMC subsidiaries”.

    “Contractors like NORI and TOML, who have together spent hundreds of millions of dollars on the promise of a fair regulatory framework, should be informed of the factual and legal basis of any non-compliance inquiries, understand the procedure being applied, and receive a meaningful opportunity to respond,” said Gerard Barron, CEO of The Metals Company.

    Iridogorgia and bamboo coral pictured around the Johnston Atoll Unit of the Pacific Remote Islands Marine National Monument (Photo: NOAA Office of Ocean Exploration and Research)

    Environmental groups said the ruling allows scrutiny of the companies’ actions to continue.

    Louisa Casson, deep-sea mining campaigner with Greenpeace, said the “entire litigation has been an egregious waste of time and money”, which was part of the industry’s “textbook distraction tactic” meant to delay the consequences of the inquiry.

    “If the inquiry confirms that TMC’s subsidiaries are breaching their contracts, governments must send the strongest possible signal that complicity in unlawful deep sea mining will not be tolerated,” she said.

    While investigation is still ongoing, NORI’s contract is set to expire this week and is up for review. Governments asked the ISA to report back and make “make appropriate recommendations” by the next ISA assembly, its main decision-making body set to take place next week from July 27 to 31.

    The court ordered both the ISA and TMC to submit a report on how they complied with the ruling by August 31, and called on both to “cooperate and refrain from any action that might lead to
    aggravating the dispute”.

    The post Top maritime court rejects bid to halt UN deep-sea mining inquiry appeared first on Climate Home News.

    Top maritime court rejects bid to halt UN deep-sea mining inquiry

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    Q&A: What the EU’s carbon market review means for climate action

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    The European Commission has put forward new plans to cut emissions under the EU carbon market more slowly, from 2031 onwards.

    On 17 July, the commission presented its long-awaited proposal for reform of the EU’s Emissions Trading System (ETS).

    It recommended a number of changes, including giving companies free allowances to cover their emissions for longer than previously planned, conditional on climate investment plans.

    The proposal offers a more business-friendly and “savvy” approach, argued EU climate commissioner Wopke Hoekstra in a press conference.

    But critics believe it could “weaken” the system and put EU climate targets at risk.

    Alongside the proposal, the commission also announced a new target for electricity to make up 46% of energy consumption by 2040, doubling the current rate of 23%.

    This could cut EU spending on imported fossil fuels by €260bn annually, according to the commission.

    In this Q&A, Carbon Brief outlines the details of the new ETS proposal – which is subject to negotiation with member states – and explores what it could mean for climate action.

    What is the EU Emissions Trading System?

    The EU ETS is a carbon market, which puts a price on the greenhouse gas emissions of companies in power generation, industry, aviation and other sectors.

    It covers everything from electricity generation to steel production, as well as flights within the EU and a handful of other European countries.

    Emissions in these sectors have halved since the ETS launched in 2005, according to the European Commission.

    A European parliament briefing describes the system as a “cornerstone” of EU climate policy, covering around 40% of the bloc’s overall emissions.

    It applies to emissions in all 27 EU countries alongside Iceland, Liechtenstein, Norway and electricity generation in Northern Ireland. (The UK established its own ETS after Brexit.)

    The ETS operates as a “cap and trade” system, which puts a limit on the amount of carbon dioxide equivalent (CO2e) that can be emitted within the sectors it covers.

    The “cap” on emissions gradually decreases each year until, eventually, they are expected to reach zero.

    The currency of trade within the system is “allowances”. One allowance is equal to one tonne of CO2-equivalent emissions.

    At present, around 57% of these allowances are bought by companies in auctions. The EU generated around €43bn in revenue from these auctions in 2025.

    The remaining 43% of allowances are given to companies for free, to cover some or all of their emissions.

    This is intended to prevent “carbon leakage” – the idea that companies operating in countries with strict climate policies will relocate to countries with looser rules.

    The amount of free allowances varies by sector, depending on factors including the level of competition with overseas firms that do not face a carbon price.

    What did companies and countries want from the ETS review?

    Countries and companies have been divided on how they wanted the ETS to evolve.

    Some pushed for more ambition to help meet European climate goals. Others called for it to be rolled back, amid rising costs for businesses.

    In March, 10 countries including Italy, Hungary and Poland wrote a letter to the commission calling the ETS an “existential risk” for key industrial sectors, reported Euronews.

    Italy had earlier even called for the system to be suspended outright.

    France and other countries favoured introducing a slower descent towards bringing the emissions cap to zero by 2039.

    Some steel and chemical companies also criticised the cost burden of the ETS.

    Other organisations focused on calls for stability and predictability in the system.

    In recent weeks, Spain, the Netherlands and five other countries called on the commission to “resist gutting” the ETS in its review, said E&E News. They said the ETS should be strengthened to “ensure long-term investment predictability and regulatory stability”.

    Weakening the system could “undermine investment signals and leave Europe more exposed to fossil-fuel shocks”, said a March 2026 briefing from climate thinktank E3G.

    Another E3G briefing said the “risk” is that politicians weaken the system as a short-term economic fix, “undermining one of the EU’s main tools for delivering on its industrial transformation ambitions”.

    Dozens of investment organisations called on EU countries to facilitate a “robust and predictable” ETS. They said that “policy stability is the cheapest investment stimulus available to the EU”.

    In its list of priorities for ETS reform, the NGO Carbon Market Watch said that “now is not the time to backslide” on its aims and terms.

    What is in the new proposal from the European Commission?

    The commission’s proposal outlines a number of changes to the ETS, to bring it in line with the EU’s climate goal to cut emissions to 90% below 1990 levels by 2040.

    The review will “bring relief to industry”, the commission says, while also continuing the ETS’ “essential” role in climate action.

    However, others are more sceptical about the impacts it could have on climate action.

    Below, Carbon Brief details the main aspects of the proposal.

    Free allowances extended

    The European Commission proposes to extend free allowances beyond a previously agreed date.

    Free allocations were due to reduce from this year and be fully removed by 2034.

    However, the commission has proposed to extend this to 2038, on the condition that companies receiving free allowances set out how they will invest in decarbonising their EU operations.

    It proposes that from 2031 onwards, 80% of free allowances in the system would be given to companies that have submitted plans for investment in EU decarbonisation.

    The remaining 20% of free allowances would only be allocated to those that can prove they followed through with planned investments and achieved the emissions reductions they had previously outlined.

    This move is a “step in the right direction”, says Dr Kirsten Scholl, the director for EU affairs at thinktank Epico, but it must not “impose excessive administrative burdens”.

    The EU’s carbon border adjustment mechanism (CBAM) was designed to replace the existing system of free allowances in the ETS.

    It is a tax applied to certain imported goods, based on the amount of CO2 emissions released during their production. It began to be phased in at the start of 2026.

    As a result, free allocation is being gradually phased out from 2026-38.

    However, the commission has proposed that 15% of free allocations due to be removed because of CBAM should be reintroduced from 2028, to “reduce the speed at which CBAM is phased-in and mitigate the remaining carbon leakage risk”.

    The commission says that preventing carbon leakage “remains a crucial element” of the ETS.

    Pushing back the phase-out of free allowances and the full implementation of CBAM “risks squandering the EU’s credibility with investors and trading partners alike”, says Francesco Lombardi Stocchetti, a policy advisor on sustainable economy at the Bellona Foundation, an environmental NGO.

    “Europe cannot lead the clean industrial transition just by moving the goalposts,” he adds in a statement.

    Slowing path to reach zero emissions by a decade

    The commission has proposed to cut emissions in the ETS more slowly from 2031 onwards.

    This could mean new allowances are able to enter the scheme into the 2040s, instead of ending in 2039 as previously planned.

    But the planned changes are still “aligned” with the EU’s 2040 climate target and net-zero requirement by 2050, says the commission.

    The overall ETS cap on emissions was reduced by 1.7% each year up to 2020 and then by 2.2% annually since 2021.

    It is then agreed to drop by 4.3% over 2024-27 and 4.4% from 2028 onwards.

    Maintaining similar rates after 2030 would not be “realistic”, says the commission’s proposal.

    Instead, it suggests that the cap should fall by 3.7% per year over 2031-35 and by just 1.7% annually over 2036-40.

    Simon Evans on Bluesku: The cap on EUETS emissions was due to hit zero by 2039

    This will make the path to zero emissions within the ETS “more gradual and aligned with domestic climate ambition level”, claims the commission.

    But WWF says that the proposal would allow an extra 2bn tonnes of CO2e to be emitted. (See: What could the changes mean for greenhouse gas emissions?)

    Aviation

    The commission has proposed plans to incorporate more airline emissions into the ETS.

    The plan outlines that, from 2029, all flights departing from the European Economic Area (EU, Iceland, Liechtenstein and Norway) and landing in other countries within 5,000km of a point in central Europe should be added to the ETS.

    This distance means that the changes would not apply to flights landing in China or the US. (Both the US and China have opposed the expansion of ETS coverage for flights.)

    The commission also proposes including emissions from private jets and other “business flights” in the ETS.

    It notes that aviation currently accounts for 14% of EU transport emissions. This is expected to skyrocket to around 90% by 2050, given it is more difficult to decarbonise than other modes of transport.

    Some aviation emissions have been included in the ETS since 2012. This included emissions from air travel within the EEA and flights departing from Switzerland and the UK.

    The airline industry did not respond favourably to reports of plans to expand beyond this scope.

    On 8 June, the biggest airlines in Europe urged commission president Ursula von der Leyen not to extend the ETS to cover international flights, saying that it would raise ticket prices.

    A study commissioned by Carbon Market Watch found that the ETS encompassing all flights departing from the EEA, not just those within it, would result in a “very small impact on ticket prices and passenger demand”.

    Auction money

    Under the proposed changes, EU countries would need to funnel half of the money they receive from ETS auctions towards decarbonising sectors covered by the system.

    This would amount to more than €100bn in investment for decarbonisation before 2030, says the commission.

    Around three-quarters of the money generated by the ETS has been allocated to EU countries since 2013, the proposal notes.

    Since 2023, countries have been required to spend all of this money on climate and energy-related activities – at least on paper.

    But the proposal says the “transparency and effectiveness” of this mechanism has been “insufficient”.

    Currently, only around 5% of the ETS money “directly supports industrial decarbonisation in sectors such as steel, chemicals and fertilisers”, it adds.

    Going forward, the proposal says that 50% should be put towards actions aiding clean-energy plans, industrial decarbonisation and improved waste management, as some examples.

    A briefing by thinktank Institut Montaigne noted that the money generated within the system for EU countries to help finance the energy transition should be “at the heart” of ETS discussions, amid budget constraints in many EU countries at the moment.

    CO2 removals

    The commission has proposed integrating permanent carbon removals into the ETS to “give additional flexibility” for certain sectors that struggle to decarbonise. This action was previously agreed within the terms of the EU’s 2040 climate target.

    “Permanent” removals refer to direct air capture with carbon storage and similar measures, rather than temporary removals such as planting trees.

    The removals would be integrated into the system by increasing the allowance cap by an amount equivalent to the number of removals purchased.

    This will set up “additional emission space” for hard-to-abate sectors and also support the “scale-up of the carbon removals industry”, outlines the proposal.

    It also proposes that certain companies, such as shipping and aircraft operators, could compensate for their emissions with their own certified carbon removals.

    These emissions would not be permitted to “go beyond zero”, adds the proposal.

    Sven Harmeling, the head of climate at Climate Action Network (CAN) Europe, says that adding carbon removals “would weaken the ETS impact, undermine the carbon price and create new loopholes for polluters instead of accelerating the transition away from fossil fuels”.

    The proposal “fails to ensure that only high-integrity removal technologies would be considered”, he adds in a statement.

    However, the director of the Potsdam Institute for Climate Impact Research, Prof Ottmar Edenhofer, describes the move as “an important step”, saying:

    “For the first time, it creates a credible and long-term investment framework for carbon-removal technologies in Europe.”

    International credits

    The commission proposes that firms covered by the ETS could make use of “high-integrity” credits bought on the global carbon market from 2036 onwards.

    This relates to the EU’s 2040 climate target, in which up to 5% of the 90% reduction in GHGs can come from global carbon credits.

    Amélie Laurent, a policy advisor in carbon accounting at the Bellona Foundation, says in a statement that these credits “should be in a strategic last resort reserve, not an excuse to avoid doing our homework”.

    Aurora D’Aprile, the EU policy director at the International Emissions Trading Association, notes in a statement:

    “For international credits, early preparation on governance and procurement and greater certainty around a pilot from 2031, will be essential to establish a credible demand signal.”

    Other sectors extended

    The commission has outlined plans to expand the inclusion of the maritime sector in the ETS.

    Maritime accounts for around 4% of the EU’s total emissions. The new proposals for the sector include adding certain small ships of 400-5,000 tonnes to the system.

    The proposal also outlines plans to incorporate more waste incineration into the ETS on a gradual basis from 2031.

    Since 2024, some waste-burning companies have been required to monitor and report their emissions under the ETS. But they did not have to purchase credits.

    Now, the commission proposes introducing the sector on a gradual basis.

    Under the proposals, companies would require allowances for 25% of their emissions in 2031, 50% in 2032, 75% in 2033 and 100% from 2034 onwards.

    Market stability reserve review

    The market stability reserve was added to the ETS in 2019 to help stabilise the flow of allowances.

    It acts like an overflow container holding extra allowances. If the number of allowances in the market falls below a certain threshold, more are brought out from the reserve to balance things out.

    Equally, if the market is flooded with too many allowances, depressing prices, then some are removed and put into the reserve.

    The commission has proposed a reform of the reserve, including changing the upper and lower limits for when allowances are released or removed.

    It wants to reduce the rate at which allowances are withdrawn from auctions when they exceed a certain threshold from 24% to 12% from 2028.

    This means that the permits would be able to stay in the market for longer.

    As shown in the chart below, the price of carbon in the EU increased tenfold over 2017-2021, exceeding €80 (£68) per tonne of CO2.

    Carbon price in the EU ETS over 2012-26, in € per tonne of CO2. Credit: Carbon Brief, based on data from Energy Instrat and EEX
    Carbon price in the EU ETS over 2012-26, in € per tonne of CO2. Credit: Carbon Brief, based on data from Energy Instrat and EEX

    Nevertheless, the commission proposal says the reserve was “effective in mitigating price shocks” on the ETS caused by the Covid-19 pandemic and the surge in energy prices after Russia invaded Ukraine in 2021.

    UK-EU ties

    The EU and UK have agreed in principle to link their carbon markets, but the commission’s proposal says negotiations are still “under progress”.

    It adds that the commission “foresees” future financial contributions from the UK to the EU’s ETS, if a final agreement is reached.

    Many companies have called for the systems to be linked. In June, dozens of carbon-capture organisations and industry groups signed a letter calling for greater certainty on EU-UK links to ensure cross-border carbon-capture and storage projects are covered, for example.

    Switzerland’s ETS has been linked to the EU since 2020.

    What could the changes mean for greenhouse gas emissions?

    The European Commission says the ETS plays a “crucial role” in meeting its climate targets “cost-effectively”.

    The system contributed to a 41% reduction in EU industrial emissions over 2021-23, a decrease of around 800m tonnes of CO2 per year, according to recent analysis from the London School of Economics.

    As highlighted in the chart below, the EU’s overall GHG emissions have dropped by 40% since 1990.

    Greenhouse gas emissions in the EU over 1990-2025 (solid line) and projections out to 2050 (dotted line). The red dots indicate climate targets for 2020, 2030, 2040 and 2050. Credit: Carbon Brief, based on data from the European Environment Agency
    Greenhouse gas emissions in the EU over 1990-2025 (solid line) and projections out to 2050 (dotted line). The red dots indicate climate targets for 2020, 2030, 2040 and 2050. Credit: Carbon Brief, based on data from the European Environment Agency

    Climate commissioner Hoekstra told a press briefing that the proposal is “fully aligned” with the EU’s target to cut GHGs to 90% below 1990 levels by 2040. He called the plan “completely climate-law proof”.

    He also noted that no other EU policy has contributed to reducing emissions on the scale of the ETS, describing it as a “phenomenal asset”.

    But campaigners and experts are concerned that the proposed changes could slow decarbonisation and put the EU’s climate goals at risk.

    Carbon Market Watch says the plans would “severely weaken” the ETS and “risk undermining the achievement of the EU’s 2040 and 2050 climate targets”.

    The proposals “would represent a major setback for EU climate ambition, weakening incentives to cut emissions, extending reliance on fossil fuels and putting the 2040 climate target at risk”, says a statement from WWF.

    WWF estimates that 2bn extra tonnes of CO2 would be emitted if the proposals were approved in the EU.

    Michael Bloss, a German member of the European parliament (MEP) for the European Greens, says the plans would release around 1.4bn tonnes of extra CO2. He describes the proposal as “climate vandalism”.

    Chiara Martinelli, the director of CAN Europe, says:

    “Every extra tonne of CO2 allowed under the ETS makes Europe’s climate challenge harder and more expensive. Weakening the ETS now is a gift to polluters that have prioritised shareholder payouts instead of investing in cleaner production.”

    How was the proposal received?

    The European Commission’s new ETS proposal has been met with a mixed response.

    Scholl from Epico says the proposal has “important flexibilities that can help address competitiveness challenges and provide greater certainty for industrial investment”. But she adds in a statement:

    “Concerns remain about whether the proposed changes preserve the long-term investment signal of the ETS and sufficiently recognise companies that have already committed to ambitious decarbonisation pathways.”

    Edenhofer from the Potsdam Institute for Climate Impact Research adds that the proposals provide “clarity on the contribution that emissions trading is intended to make towards the 2040 climate target”.

    Elisa Giannelli, a programme lead at E3G, says in a statement:

    “Today’s proposal might please some, but it risks increasing both the long-term cost and the time needed to deliver the EU’s growth strategy.”

    Pepe Escrig, a senior researcher, also at E3G, adds that the commission held onto some of the ETS’ “essential foundation”, but “yielded to political pressure to weaken it as a quick fix to broader challenges”.

    This has left the plan “pull[ing] in two directions: strengthening support for industrial investment while weakening parts of the framework meant to drive it”, says Escrig.

    Andrea Spignoli, the policy manager of sustainable markets at Bellona Europa, says the proposal risks “weakening green investments” and putting a larger decarbonisation burden onto other sectors that are not covered by the ETS.

    Greg Van Elsen, a senior industrial policy coordinator at CAN Europe, says in a statement:

    “Free pollution permits were never meant to become a permanent subsidy. Extending them until 2038 rewards delay instead of industrial decarbonisation.”

    Lobby groups also had mixed reactions to different aspects of the proposal.

    The International Air Transport Association says it is “deeply frustrated” with the proposal.

    The organisation’s director general, Willie Walsh, claims the consequences will be “harmful”, “sowing acrimony over extraterritoriality, slowing global decarbonisation and sapping European competitiveness”.

    WindEurope says the proposal risks “slowing decarbonisation and failing to channel billions in ETS revenues to industrial electrification”.

    BusinessEurope’s director general, Markus J Beyrer, says some aspects “raise concerns”. For example, he says the “new conditionalities for free allocations risk increasing bureaucratic complexity and the uncertain role for international carbon credits”.

    What is ‘ETS2’?

    ETS2 is a separate emissions trading system to the main ETS. It is due to take effect in 2028 and is not affected by the current ETS review or resultant proposals.

    It will operate under a similar system as the existing ETS, covering emissions from transport, buildings and smaller industries in other sectors.

    One key difference, however, is that ETS2 will not provide any allowances for free. They will all be auctioned and bought by companies.

    On 15 July, 10 countries, including Italy and Poland, had urged the commission to also reconsider the ETS2 during this review. They were unsuccessful.

    Similar to the original ETS, the commission believes the carbon price under the new ETS2 system will “provide a market incentive for investments in building renovations and low-emissions mobility”.

    However, in June, member-state governments and the European parliament agreed on a number of “safeguards” to support price stability.

    For example, if allowance costs under the ETS2 exceed €45 per tonne of CO2, they agreed that 40m allowances will be put into the system from a reserve to normalise the supply – double the amount previously agreed.

    A European Environment Agency briefing said the ETS2 will “affect fuel prices and mobility costs” and that money will be syphoned into a social climate fund to “support vulnerable households and investments”.

    What happens next?

    EU countries will now negotiate over the terms of the commission’s proposal before it goes to a vote in the European parliament.

    Ireland, which recently took over the six-monthly rotating presidency of the Council of the EU, has stated that it wants the ETS proposals to be signed off by the end of this year.

    A previous document from the council, which represents member-state governments, outlined a target to agree a deal by the first quarter of 2027.

    Clean Energy Wire says that this would be an “unusually ambitious timetable for one of the bloc’s most technically complex pieces of climate legislation”. 

    Politico notes that “months of arguing” is likely to occur.

    The post Q&A: What the EU’s carbon market review means for climate action appeared first on Carbon Brief.

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    Flood deaths in West African cities raise fraught issue of slum evictions

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    Scientists have found that the deadly floods across parts of West Africa in recent weeks were made more likely and intense by human-driven climate change, while the expansion of cities into flood-prone areas amplified the devastation, raising the thorny problem of how to better protect poorer urban communities. 

    A report from the World Weather Attribution (WWA) group highlighted how the floods hit some of West Africa’s most densely populated coastal regions, where rapid urbanisation has pushed formal and informal settlements dangerously into floodplains, while converting land into farms has reduced drainage.

    Since May, West African countries including Ghana, Togo, Côte d’Ivoire and Nigeria have experienced weeks of torrential rain and deadly flash floods. Homes have been submerged, thousands of people displaced and over 70 people killed.

    WWA scientists said climate models showed that human-induced climate change increased the intensity of the rainfall, with what was once a rare amount of rain falling in just three days – a downpour that can now be expected every two to four years.

      “The event is not rare already today and therefore the flood risk is certainly not going away but will increase in particular with additional pressures from growing populations and urbanisation,” said Friederike Otto, a professor of climate science at Imperial College London.

      Impact made worse by informal settlements

      On top of climate change, scientists said urbanisation, inadequate drainage, poor waste management and the expansion of informal settlements into floodplains have left millions more people exposed to flooding.

      Informal settlements are neighbourhoods which develop without authorisation from government authorities. More commonly known as slums or shanty towns, they often lack land tenure and services like running water and electricity and tend to be home to poorer communities.

      Across West Africa and much of the developing world, as people have moved from rural areas to cities in search of work, these settlements have expanded into wetlands, flood-retention areas and riverbanks. This has further heightened flood risks across West African cities.

      Kiswendsida Guigma, technical advisor at the Red Cross Red Crescent Climate Centre, said West Africa’s coastal cities are being “squeezed between repeated flooding and rapid urban growth”, pushing infrastructure beyond its limits and making it harder for communities to recover.

      Roussel Teguia, a post-doctoral research fellow at Canada’s Université Laval, said the recent floods have exposed longstanding failures in urban planning across West Africa’s fast-growing coastal cities where much of the region’s economy is concentrated.

      Campaigners oppose Dangote’s planned Kenya refinery over climate and ecological risks

      Teguia said the floods are deadlier due to factors including rapid urbanisation in low-lying areas, lack of affordable housing alternatives and the long-standing marginalisation of poor communities. He also condemned the destruction of wetlands, mangroves and floodplains for roads and buildings when instead these natural bodies “should be treated as critical public safety infrastructure”.

      “These floods should not be understood only as natural disasters,” he said. Residents of informal settlements must stop being treated as the problem, since they are often the first victims of “an urban model that exposes them to risk and then blames them for being exposed”, he added.

      Short-sighted approach to relocation

      Cote d’Ivoire’s capital Abidjan recorded 59 of the deaths, with about 20 dying in the densely-settled slope neighbourhood of Mossikro. Local media reported that authorities had previously relocated residents from this area due to fears about vulnerability to deadly landslides and flooding, but some people had returned to previously evacuated sites and died when the hillside collapsed due to the rain.

      Local authorities have since started demolishing houses in the area, to the anger of many locals who say they were not consulted or warned about the demolitions, which are costing them their properties and livelihoods. “If you destroy this place, where am I supposed to go?” one unnamed resident told Al Jazeera.

      The government says many of the structures were built illegally in flood and landslide-risk zones and it plans to move 3,000 people first and 2,000 more later. Municipal official Yue Hilaire told the TV channel the municipality has been trying to persuade them to leave for a long time. “Frankly we are tired,” he said. “The mayor instructed us to evict them because we don’t want to witness another tragedy every year.”

      Loss and damage fund delays first project approvals as needs dwarf resources

      Guigma said that to avoid people returning, the government should ensure that “where people are relocated they also have relatively good economic opportunities for them to stay”.

      Demolishing poor people’s homes without offering real alternatives is not prevention, Teguia argued, calling on governments to provide safe, serviced and affordable land close to jobs and transport, stop the occupation of wetlands and regulate powerful land owners and users.

      Relocation programmes often fail because they are designed as land-clearing or security operations rather than social processes, he explained.

      Governments must move from reactive crisis management measures to a long-term comprehensive approach to risk, Teguia said. Relocation policies need to be just, fairly compensated, include affected communities and encompass economic and social networks – otherwise they “simply move the vulnerability elsewhere”, he warned.

      Finance gap limits flood response

      The WWA scientists said deadly floods will continue unless governments do more to reduce people’s exposure and vulnerability, calling for investments in safe and affordable housing, improved drainage and sanitation, stronger enforcement of building regulations, more effective early warning systems and greater involvement of at-risk communities in planning.

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      Joyce Kimutai, research associate in extreme weather and climate change at Imperial College London, said the study is a clear example of “the need for international cooperation on climate justice”, adding that developed countries have a responsibility to help nations like Togo, Cote d’Ivoire and Ghana to adapt to a worsening problem that, as low emitters of greenhouse gas, they did not cause.

      But significant financial support for countries grappling with increasing climate disasters may still be some way off. Earlier this month, the UN’s fledgling Fund for Responding to Loss and Damage (FRLD) postponed approving its first round of projects after requests for support far exceeded the money available.

      One of the roughly 180 submissions the fund received was a Nigerian recovery and resilience project to address flood losses and damage in Lagos which is prone to yearly flooding. 

      Otto of Imperial College London said such situations where the role of climate change is certain “should be the kinds of events where this fund should pay and help, but of course, that would require first money to be in the fund”.

      Ghana and Togo have also identified increasingly frequent flooding as a major climate risk in their national adaptation plans, prioritising investments in drainage, resilient infrastructure, flood management, early warning systems and climate-resilient urban planning.

      Most “zombie credits” locked out of new UN carbon market after China and India snub

      But while these adaptation plans acknowledge that delivering the proposed measures requires more international aid, wealthy nations are likely to have missed their 2025 goal of doubling adaptation finance for developing countries. Funding reached just over $30 billion in 2024, far below the target of $40 billion by 2025.

      The WWA findings underscore the urgent need to speed up support for vulnerable communities who have done little to cause climate change, said UN Climate Change Executive Secretary Simon Stiell, adding that “all climate finance commitments must be delivered in full”.

      The post Flood deaths in West African cities raise fraught issue of slum evictions appeared first on Climate Home News.

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