As climate-change talks get under way, negotiators are filled with a sense of foreboding, reports Geoffrey Lean in Cancun.
Gathering clouds: Eildon Hills, Melrose, photographed by Daily Telegraph reader Curtis Welsh Photo: Curtis WelshBy Geoffrey Lean 6:32AM GMT 29 Nov 2010
Maybe the name has something to do with it – Cancun means “nest of serpents” in the original Indian language of the area – but it would have been hard to pick a less propitious place to host a conference widely hailed as the last chance to get international negotiations to combat climate change back on track.
For this Mexican resort has an unrivalled record in consigning such talks to the compost heap of history. In 1981 it was here, at one of Ronald Reagan’s first summits, that global negotiations on tackling world poverty went off the rails, even if it was the intransigence of developing countries rather than the old ham himself that was to blame. Beside these same azure seas 20 years later, the current round of world trade talks went awry and have yet to recover.
A sense of foreboding is one of the few points of general agreement among the 15,000 participants congregating for the next two weeks on this long thin strip of land, marooned between a wide lagoon and the Caribbean Sea. Jairem Ramesh, the Indian environment minister, sees it as the “last chance” for climate change talks to succeed; Connie Hedegaard, the EU’s climate chief, believes a disappointing outcome would “put the whole process in danger”; and American and Canadian politicians are thinking of moving negotiations to other, more selective, meeting places. No wonder Chris Huhne, the Energy and Climate Change Secretary, says that Britain’s main goal over the next two weeks will be “keeping the show on the road”.
In truth, this resort is fittingly named to host the giant climate conferences that take place at the end of each year. They do indeed resemble snakepits – the mutual hissing of competing camps laced with a fair amount of poison. Last year’s in Copenhagen was the worst of them all: in addition to the snakes, there was a liberal sprinkling of tarantulas and serpent-headed Gorgons that turn living things to stone. So high were the expectations for that summit in the Danish capital that its failure and the disappointments it engendered have petrified the process.
Twelve months ago, world leaders turned up expecting a triumph, only to have to scramble to prevent complete breakdown. It was a traumatic experience – so much so that dealing with global warming has slumped sharply and alarmingly down the international agenda.
Public support – long arrogantly taken for granted by environmental activists – has also eroded on both sides of the Atlantic. The hacked emails from the University of East Anglia may have had something to do with it, though – despite all the hype from climate sceptics – they did nothing to dent the science that underpins global warming. Nor, for that matter, did the occasional, inexcusable, errors over the predicted effects of climate change unearthed soon afterwards from the 3,000-page report produced by the Inter-governmental Panel on Climate Change. Further damage was inflicted by the blustering and bombastic responses from the panel’s chairman, Rajendra Pachauri, who still clings obstinately to office despite a broad hint from the official investigation into the affair that he should go. But the main cuplrit, according to opinion polls, was the cold winter in Britain and much of North America: that did more than any of the “climategate” furores to sow doubt in the public mind that the world was heating up.
This is why some sceptics – who rightly denounce anyone who claims that a temporary heatwave is a confirmation of global warming – will doubtless soon be claiming that the present cold snap denies it, however inconsistent and opportunistic such an assertion would be. As it happens, there was unusual warmth last winter in places ranging from Alaska to North Africa, East Asia to much of continental Europe. Worldwide, 2010 is set to be either the warmest or second warmest year on record.
Individual hot or cold spells prove nothing. What counts is the overall temperature trend over many years and, though this appears to have increased more slowly over the past decade, it remains remorselessly upwards. Indeed, a Met Office report published last week concluded that, even as public and political resolve to tackle global warming has waned since Copenhagen, the evidence that humanity is heating up the planet has become “even stronger”.
Earlier this month, Karl Rove, the American political strategist, exulted that “climate is gone”, meaning that it was no longer the potent issue it once was. Most scientists might agree with his comment – but not in the way Rove meant it. What they fear is that the benign conditions under which humanity has grown and prospered over the past 11,000 years are rapidly disappearing. Already, the people at the sharp end – principally the Third World rural poor who depend intimately on nature – are struggling to cope with the shifting seasons. An Oxfam report, published today, concludes that 21,000 people died as a consequence of weather-related disasters such as floods and droughts in the first nine months of this year.
Far worse is to come, scientists believe. The Royal Society is publishing a set of papers today that paint a bleak picture of a world that has warmed by an average four degrees centigrade – double what most scientists agree would trigger disastrous effects. The reports conclude that, if policies do not change, then this grim future will be upon us far faster then we realise – by the 2070s, within the lifetimes of our children.
Yet this is not inevitable. It can still be stopped. If progress is made at Cancun, the rise in global temperature could be kept to beneath the critical two-degree threshold. As the United Nations Environment Programme has recently pointed out, the Copenhagen summit may have failed to live up to expectations, but it did stimulate some 80 countries, those jointly responsible for 80 per cent of the world’s carbon dioxide emissions, to announce targets for bringing them under control.
Taken together, these could get the world nearly two thirds of the way to limiting global warming to just two degrees. The gap could then be filled by additional measures, such as reducing the enormous subsidies pumped into fossil fuels, cutting emissions from shipping and aircraft, which are uncontrolled, and addressing other causes of climate change, such as the black carbon puffed out by diesel engines and Third World cooking stoves, and HFCs, widely used as ozone-friendly refrigerants.
But there is a catch. Many countries are pledged only to achieve their most ambitious targets if other nations do the same. Ever since Copenhagen, they have been playing a game of climatic “after you, Claude’’, waiting for others to go first. Above all, they have been waiting for the United States, and they are likely to do so for a long time yet. The big Republican gains in the mid-term elections have put paid to the already slim prospects of US climate legislation for the foreseeable future.
That is one reason why no one expects a breakthrough at Cancun. Another is a long legacy of mistrust between rich and poor countries, aggravated by last year’s carry-on at Copenhagen. With that in mind, the conference’s Mexican hosts, who are much more competent than the dire Danes whose appalling leadership contributed to the failure 12 months ago, are lowering their sights. They are concentrating on trying to achieve accord on subsidiary issues, such as an agreement to reward countries for not felling their forests and setting up a big fund to help poor nations cope with the effects of global warming. In this way they hope to build trust and lay the foundations of an eventual agreement.
But, while breakthough is highly unlikely, a breakdown remains very much on the cards. Some old hands here – such as Yvo de Boer, the UN’s chief negotiator at Copenhagen – can glimpse similar tell-tale clouds gathering over the sea. If they are right and the storm breaks, this may well turn out to be the last set of serious UN climate negotiations for many years. The snakepit will have claimed another victim.
Monday, 29 November 2010
EPA Says Fuel Economy Showing Slight Improvement
By Jonathan Welsh
Getty ImagesFuel efficiency is improving for new cars and light trucks, but car makers will have to increase the pace to keep up with tightening federal standards. According to a report from the Environmental Protection Agency, the average 2010 model-year passenger vehicle goes 22.5 miles per gallon, up from 22.4 mpg in 2009.
The agency says vehicles also improved slightly in tailpipe emissions, to 395 grams of CO2 per mile, compared with 397 last year. The results are part of the EPA’s annual report “Light-Duty Automotive Technology, Carbon Dioxide Emissions, and Fuel Economy Trends: 1975 through 2010”.
The report provides data on the fuel economy, CO2 emissions and technology characteristics of new light-duty vehicles, which includes cars, minivans, SUVs and pickup trucks.
The year-to-year improvement seems modest in light of the federal corporate average fuel economy, or CAFE, target of 35.5 mpg by 2016. The Obama administration has been looking at ways to further increase fuel economy to as high as 62 miles per gallon by 2025.
Two factors seem to brighten the outlook for meeting government goals. First, the overall trend looks better when stretched out over several years. According to EPA data, fuel economy has increased each year beginning in 2005 for a total improvement of 3.1 mpg. The recent upswing reverses a trend of decreasing fuel economy and increasing CO2 emissions from 1987 through 2004.
The agency also notes that while its fuel-economy estimates are based on “real world” data consistent with the ratings that appear on new-car window stickers, a different standard is used to calculate fuel economy under the CAFE-compliance system. EPA says its estimates are about 20% lower on average compared with the CAFE figures. So the car makers are closer than they appear to meeting federal targets.
Getty ImagesFuel efficiency is improving for new cars and light trucks, but car makers will have to increase the pace to keep up with tightening federal standards. According to a report from the Environmental Protection Agency, the average 2010 model-year passenger vehicle goes 22.5 miles per gallon, up from 22.4 mpg in 2009.
The agency says vehicles also improved slightly in tailpipe emissions, to 395 grams of CO2 per mile, compared with 397 last year. The results are part of the EPA’s annual report “Light-Duty Automotive Technology, Carbon Dioxide Emissions, and Fuel Economy Trends: 1975 through 2010”.
The report provides data on the fuel economy, CO2 emissions and technology characteristics of new light-duty vehicles, which includes cars, minivans, SUVs and pickup trucks.
The year-to-year improvement seems modest in light of the federal corporate average fuel economy, or CAFE, target of 35.5 mpg by 2016. The Obama administration has been looking at ways to further increase fuel economy to as high as 62 miles per gallon by 2025.
Two factors seem to brighten the outlook for meeting government goals. First, the overall trend looks better when stretched out over several years. According to EPA data, fuel economy has increased each year beginning in 2005 for a total improvement of 3.1 mpg. The recent upswing reverses a trend of decreasing fuel economy and increasing CO2 emissions from 1987 through 2004.
The agency also notes that while its fuel-economy estimates are based on “real world” data consistent with the ratings that appear on new-car window stickers, a different standard is used to calculate fuel economy under the CAFE-compliance system. EPA says its estimates are about 20% lower on average compared with the CAFE figures. So the car makers are closer than they appear to meeting federal targets.
Gillard Pledges to Push Climate Change, Health Care
By RACHEL PANNETT
CANBERRA—Australian Prime Minister Julia Gillard vowed Monday to press ahead with economy-shaping initiatives on climate policy and health care in 2011 despite her center-left Labor Party's fragile grip on power.
Climate change issues have been given a fresh start in Australia after an August federal election narrowly returned Ms. Gillard's government to office on the back of support from rural-based independents and a Greens party lawmaker who are pushing for action.
Australia is the biggest per capita polluter in the developed world because of its reliance on fossil fuels, mainly coal, for electricity generation.
Ms. Gillard's renewed drive to green up the resource-rich 1.1 trillion Australian dollar (US$1.06 trillion) economy comes at a time of scant international support, however. The push to cap greenhouse-gas emissions is all but dead in the U.S. and few observers are confident of a breakthrough when world diplomats meet in Mexico this week to try to eke out a less-ambitious attack on global warming.
At a two-week United Nations climate conference in the Mexican resort city of Cancun, negotiators will focus not on the stick of mandatory emissions limits but on the carrot of tens of billions of dollars in subsidies from industrialized countries to help developing nations grow on a greener path.
Still, motivated by domestic political forces—with the environmentalist Greens party set to control the balance of power in the upper house Senate from July 1 next year under Australia's electoral system—Mr. Gillard has made it increasingly clear she intends to use the new alliance between her minority government and independents to accelerate moves to green up the economy.
That reverses an election pledge not to push for any form of tax on greenhouse-gas emissions during the current three-year parliamentary term.
In a major policy speech Monday to mark the end of the Parliamentary year, the prime minister said lawmakers must decide in 2011 on a way to price greenhouse-gas emissions that is "supported by a broad enough consensus that it can be legislated."
"No responsible decision maker will be able to say next year that they need more time or more information on climate change," she said in the Sydney speech.
Labor, which convincingly won a first term in office in November 2007 on a wave of popular support for its climate-change policies, triggered a major voter backlash when it shelved a cap-and-trade plan in April after failing to push it through a hostile Senate.
The Greens argued that plan was too lenient on big polluters, while conservative lawmakers believed it was too harsh and would harm key industries like coal mining and steel making. The Greens now want Australia to introduce a carbon tax as an interim measure before introducing a full carbon trading plan once a global agreement is reached.
Businesses also have lent support to the idea of a carbon tax, including BHP Billiton Chief Executive Marius Kloppers, who has said it would provide certainty for future investment.
Monday's speech comes as a Victorian state election at the weekend threw into doubt another key Labor reform: Plans for the federal government to assume majority funding for public health care from the states.
The health initiative, to be paid for by slashing the flow of goods and services tax revenues to state governments by up to half, is designed to improve aging hospitals that have long wait lists and too few doctors.
Like the August national poll, Saturday's election failed to deliver a clear victory to either of the state's major political forces. With the final count continuing, it looks most likely the conservative Liberal-National coalition will emerge as victor over the 11-year state Labor government of John Brumby.
Victoria state Liberal leader Ted Baillieu has threatened to tear up a health agreement reached with all states and territories except Western Australia earlier this year.
Legislation underpinning the health agreement is currently before the federal parliament. Ms. Gillard reiterated Monday she is committed to increasing Canberra's share of public hospital funding to 60% from July 1.
Write to Rachel Pannett at rachel.pannett@dowjones.com
CANBERRA—Australian Prime Minister Julia Gillard vowed Monday to press ahead with economy-shaping initiatives on climate policy and health care in 2011 despite her center-left Labor Party's fragile grip on power.
Climate change issues have been given a fresh start in Australia after an August federal election narrowly returned Ms. Gillard's government to office on the back of support from rural-based independents and a Greens party lawmaker who are pushing for action.
Australia is the biggest per capita polluter in the developed world because of its reliance on fossil fuels, mainly coal, for electricity generation.
Ms. Gillard's renewed drive to green up the resource-rich 1.1 trillion Australian dollar (US$1.06 trillion) economy comes at a time of scant international support, however. The push to cap greenhouse-gas emissions is all but dead in the U.S. and few observers are confident of a breakthrough when world diplomats meet in Mexico this week to try to eke out a less-ambitious attack on global warming.
At a two-week United Nations climate conference in the Mexican resort city of Cancun, negotiators will focus not on the stick of mandatory emissions limits but on the carrot of tens of billions of dollars in subsidies from industrialized countries to help developing nations grow on a greener path.
Still, motivated by domestic political forces—with the environmentalist Greens party set to control the balance of power in the upper house Senate from July 1 next year under Australia's electoral system—Mr. Gillard has made it increasingly clear she intends to use the new alliance between her minority government and independents to accelerate moves to green up the economy.
That reverses an election pledge not to push for any form of tax on greenhouse-gas emissions during the current three-year parliamentary term.
In a major policy speech Monday to mark the end of the Parliamentary year, the prime minister said lawmakers must decide in 2011 on a way to price greenhouse-gas emissions that is "supported by a broad enough consensus that it can be legislated."
"No responsible decision maker will be able to say next year that they need more time or more information on climate change," she said in the Sydney speech.
Labor, which convincingly won a first term in office in November 2007 on a wave of popular support for its climate-change policies, triggered a major voter backlash when it shelved a cap-and-trade plan in April after failing to push it through a hostile Senate.
The Greens argued that plan was too lenient on big polluters, while conservative lawmakers believed it was too harsh and would harm key industries like coal mining and steel making. The Greens now want Australia to introduce a carbon tax as an interim measure before introducing a full carbon trading plan once a global agreement is reached.
Businesses also have lent support to the idea of a carbon tax, including BHP Billiton Chief Executive Marius Kloppers, who has said it would provide certainty for future investment.
Monday's speech comes as a Victorian state election at the weekend threw into doubt another key Labor reform: Plans for the federal government to assume majority funding for public health care from the states.
The health initiative, to be paid for by slashing the flow of goods and services tax revenues to state governments by up to half, is designed to improve aging hospitals that have long wait lists and too few doctors.
Like the August national poll, Saturday's election failed to deliver a clear victory to either of the state's major political forces. With the final count continuing, it looks most likely the conservative Liberal-National coalition will emerge as victor over the 11-year state Labor government of John Brumby.
Victoria state Liberal leader Ted Baillieu has threatened to tear up a health agreement reached with all states and territories except Western Australia earlier this year.
Legislation underpinning the health agreement is currently before the federal parliament. Ms. Gillard reiterated Monday she is committed to increasing Canberra's share of public hospital funding to 60% from July 1.
Write to Rachel Pannett at rachel.pannett@dowjones.com
How to Change the Global Energy Conversation
Forcing countries to agree to emissions caps will never work, argue Ted Nordhaus and Michael Shellenberger. Instead, they say, the focus should be on technology innovations
By TED NORDHAUS and MICHAEL SHELLENBERGER
It's time for a rethink on climate change.
For two decades, world leaders have been trying—and failing—to hammer out a workable deal on global warming. Now they're meeting once again, this time in Cancún, Mexico, to kick around the same issues one more time—and, inevitably, stumble over all of the same roadblocks.
At the heart of it, these deals all come down to mandating emissions cuts, which means paying a lot more for energy. Some greens deny it, but clean energy still costs vastly more than fossil fuels. Significantly raising energy costs slows economic growth—something no country wants to do.
As a result, every country has an incentive to point the finger at someone else, while trying to game the system: sheltering key industries, understating emissions and overstating reductions.
There is a better way. Nations should focus on lowering the cost of clean energy, not raising the cost of fossil energy. The goal? Make clean energy cheap enough to become a viable option for poor as well as rich nations. Until that happens, emissions will continue to rise, and no effort to regulate carbon can succeed.
How do we accomplish that? Stop subsidizing old technology that will never compete with fossil fuels and create incentives for innovation. Along with ramping up support for research, governments should buy cutting-edge clean-energy technologies, prove them—and then give away the intellectual property, so others can improve on it.
At the same time, wealthy nations shouldn't try to hammer out these kinds of agreements in the United Nations, where they get bogged down in politicking with smaller nations. Big countries should work through the G20 and the World Trade Organization—forums that are, however imperfect, focused on economic and trade issues.
Finally, until clean energy becomes much less costly, there are relatively cheap fixes we can make to curb emissions, such as closing the most inefficient coal plants. And we should change how we look at climate-related aid to developing nations, focusing on better roads, housing, sewage and electrical systems.
Here's a closer look at these ideas, and how they can get us past the current deadlock.
PUSH FOR INNOVATION
Our highest goal should be to make clean energy radically cheaper and truly competitive with fossil fuels through innovation. That's where governments should focus their efforts.
Emissions cuts have overshadowed technology innovation for so long in part because of a widespread myth—that today's clean-energy sources are either ready or almost ready to replace fossil fuels. They are not. It will take much more innovation to make them cost-competitive.
And the impetus for that needs to come from governments. Virtually all demand for clean-energy technology is a result of states subsidizing companies to make clean tech and consumers to buy it. Governments will continue to be the central driver of clean-energy innovation for the foreseeable future; without public support, the technology isn't close to being cost-competitive with fossil fuels.
Because policy makers have not fully come to terms with this reality, nations simultaneously spend too little and too much on clean tech: too little on research, development and demonstration of new technologies, and too much subsidizing the commercialization of older technologies that will never be cheap enough to stand on their own. If clean-tech companies can profit making uneconomic, but subsidized, technologies, why invent anything better?
Public investments in clean tech should work more like military procurement of new defense technologies and less like federal crop supports. What we need is competitive deployment.
Governments should solicit bids for projects or technologies within a given class—say, a next-generation nuclear reactor or a new solar-panel technology. Once a new technology with the lowest cost is proved, it should be set as the benchmark for another round of bids—all with an eye toward ever-newer, ever-cheaper technologies.
The military has used this method for decades to drive down the costs and improve the performance of critical technologies. A decade of Pentagon procurement drove the price of microchips to $20 a chip by the mid-'60s from over $1,000 in the late '50s.
At the same time, the military heavily invested in government, university and industrial research labs to deliberately create knowledge spillover—the sharing of intellectual property—which is crucial to rapid innovation.
The money for this new regime could come from various sources. The obvious source is redirecting existing energy subsidies. We might also impose a small fee on oil imports, or dedicate revenue from new oil and gas leases, as has been proposed by a number of Republican lawmakers. A low carbon tax might also help—one that might generate roughly $25 billion annually, but not so high as to slow the economy.
PROTECT—BUT SHARE
National investments in innovation won't happen if they are motivated solely, or even primarily, by the desire to achieve global emissions-reduction goals. They need to serve more immediate national objectives, such as reducing reliance on fossil fuels and getting a piece of a rapidly growing global energy market.
This will mean pulling off a balancing act. Nations will have to protect, at least partially, their domestic clean-tech industries. There is no clean-tech industry without state subsidies, and there is no incentive for states to subsidize those industries without good reason to think that those subsidies will in large part benefit domestic companies.
Yet nations should not entirely block foreign businesses from accessing their clean-tech markets—or else they'd become too dependent on home-grown ideas and technologies. That's a bad bet. Radical innovation requires that ideas spill over—quickly—between nations and companies.
In fact, governments should make the sharing of clean-energy intellectual property an explicit part of the competitive-deployment system. The companies that win bids to deliver the next generation of solar panels and nuclear plants at the lowest cost would have to share their intellectual property with competitors—and quickly move on to compete for the next aggressive benchmark.
Bids in such a system would reflect the value of both intellectual property and technology and so might cost a bit more. But probably not much; the reality is that clean-tech IP is massively overvalued. There is little real value in intellectual property that allows a company to produce clean energy at several times the cost of fossil fuels.
The only value of present-day clean-tech intellectual property is as a public good, not a private one. Governments support clean tech in the hope that subsequent iterations of present-day intellectual property will be substantially cheaper and hence scalable without the need for government subsidies. Paying to procure cutting-edge clean-energy IP along with the technology it creates is more than worth it in order to accelerate the spillover of new knowledge among clean-tech firms, even if it costs marginally more.
In reality, strong financial incentives for commercialization of clean-energy technologies are more than sufficient to spur private-sector innovation, even without strong intellectual-property protections. Witness tech firms the world over rushing to take advantage of China's epic state investments in new clean-energy technologies—despite China's cavalier attitude toward intellectual property.
In short, the competitive advantage for companies would be not today's intellectual property, but rather the ability to rapidly and repeatedly create new intellectual property to win competitive contracts. Such a strategy will strengthen America's innovation system and help U.S. businesses capture intellectual property developed abroad—all while encouraging precisely the kind of knowledge spillover between nations and businesses that is in everyone's interest.
FORGET THE U.N.
The U.N. is the wrong place for hammering out the details of an international agreement on clean-energy innovation. The venue is too big and too rancorous. Small countries use the U.N. as a platform to push historical grievances against big ones, and nothing gets done.
Instead, the focus should shift to the relatively few nations that are responsible for the vast majority of emissions—and that have the resources to do something about it.
Look at the numbers. There are 192 members in the U.N. But two nations, the U.S. and China, produce more than 40% of the world's emissions. If you broaden that to the G-20 countries, you've accounted for 80% of total global carbon emissions—as well as 85% of global GDP, 80% of world trade and two-thirds of world population. The best way to address climate problems is to work through existing forums for these big countries, like the G-20 meetings.
As the recent meeting showed, the G-20 hardly guarantees agreements among nations over vital matters like currency manipulation. But it is still an easier forum than the U.N. General Assembly. And focusing on technology innovation to make clean energy cheap—instead of on polarizing measures like emissions cuts—will make it easier still.
DO THE SMALL STUFF
It will take years and maybe decades before clean energy becomes cheap enough to replace fossil fuels. What can countries do in the meantime?
For starters, wealthy nations can help poorer ones address other factors that are contributing to global warming. Black carbon—the incomplete combustion of cheap, dirty fuels in places like India—accelerates warming and can be reduced by replacing old diesel generators and primitive wood stoves with more-efficient alternatives.
These actions are economical, delivering more energy for less fuel, and bring an immediate public-health benefit—fewer respiratory illnesses and deaths from breathing dirty stove smoke. Methane, too, a potent greenhouse gas, can be cheaply captured in places like dairy farms and landfills and burned for energy.
There are other relatively easy things the U.S. and other rich nations can do. The U.S. could better enforce the non-carbon standards of the Clean Air Act, shutting down the country's oldest and most inefficient coal plants and replacing them with natural gas or clean-energy technologies produced through a competitive-deployment process. Over the next decade, such a strategy could quickly reduce mercury and asthma-causing pollutants, as well as cut carbon emissions from U.S. coal plants by as much as 10%—all while advancing the goal of inventing ever-cheaper low-carbon energy technologies.
HELP EMERGING COUNTRIES ADAPT IN A DIFFERENT WAY
Finally, we should immediately change how we distribute climate-related aid to developing nations.
First, we should stop talking about that aid in terms of climate change. It's impossible to tell if floods, droughts and hurricanes are caused by climate change—and that's unlikely to change for many decades. Trying to draw a distinction between disasters caused by climate change and "natural" disasters serves a political purpose, not a scientific one: justifying climate "reparations" from rich too poor countries.
Rich nations should focus instead on helping small nations deal with problems related to natural disasters in general. Aid should be spent on better roads, water and sewage systems, and housing—an infrastructure that can, in short, stand up to everything from earthquakes to big storms, whether caused by increased warming or not.
The proper institutional home for those efforts should be well-established international development agencies, such as the World Bank, the International Monetary Fund and the U.S. Agency for International Development—not the U.N. They're not perfect, but these institutions have a better track record of underwriting global development, collectively spending upward of $150 billion annually on international development efforts. Loans and aid for infrastructure development have traditionally created new markets, and what's more likely to win the support of Western countries in tough economic times, appeals to environmental guilt or to economic self-interest?
Beyond that, the best route to helping nations absorb natural disasters is to broaden access to energy. Wealthy societies can handle disasters a lot better than poor ones, and access to cheap energy is crucial for building wealth.
Fossil fuels alone won't cut it. They're still too expensive for about a third of the world's population, and will get pricier still as demand rises. If there is to be universal access to energy, there must be a global commitment to developing alternatives.
So we come back to the beginning. Energy that is cheap, clean and available to all should be understood as a fundamental public good and should be the central objective of climate policy. It's the best way to align national interests with the global one, economic benefits with environmental ones and emissions reductions with adaptation.
It's also the best approach for America. The U.S. has taken a pounding over the past decade as a global laggard on climate. Much of this was unfair—Europe manipulated the Kyoto treaty's accounting to start in 1990 and 1997 so it could count emissions reductions from the collapse of Communism. But it is also the case that the U.S. has not offered a suitable alternative to the U.N. framework.
The new climate framework we're proposing plays to America's strengths. It offers the country the chance to move from being the global scapegoat to the global leader. We are an electric nation born of invention—one that has long used technology to overcome tough challenges. With that as our mandate, we can do a lot to help the world solve this one.
—Ted Nordhaus and Michael Shellenberger are co-founders of the Breakthrough Institute, a public-policy think tank in Oakland, Calif. They are co-authors of "Break Through: From the Death of Environmentalism to the Politics of Possibility." They can be reached at reports@wsj.com
Oil companies and banks will profit from UN forest protection scheme
Redd scheme designed to prevent deforestation but critics call it 'privatisation' of natural resources
John Vidal, environment editor, in Cancun guardian.co.uk, Sunday 28 November 2010 19.58 GMT
Some of the world's largest oil, mining, car and gas corporations will make hundreds of millions of dollars from a UN-backed forest protection scheme, according to a new report from the Friends of the Earth International.
The group's new report – launched on the first day of the global climate summit in Cancun, Mexico, where 193 countries hope to thrash out a new agreement – is the first major assessment of the several hundred, large-scale Redd (Reduced emissions from deforestation and degradation) pilot schemes. It shows that banks, airlines, charitable foundations, carbon traders, conservation groups, gas companies and palm plantation companies have also scrambled into forestry protection.
While forestry is billed as one issue where significant progress could be made at the talks, over the weekend David Cameron, Chris Huhne, the climate change secretary, and the government's chief scientists all played down the prospect of a global deal to cut carbon emissions.
"British ministers are going to Mexico this week with an approach that is both realistic and optimistic," the prime minister wrote in the Observer . "Realistic, because we don't expect a global deal to be struck in Cancun, but optimistic too, because we are viewing this as a stepping stone to future agreement."
Huhne, who will attend the second week of the talks, was more blunt: "No one expects a binding deal on climate change in Cancun." But he said deforestation and longer-term climate finance were areas where progress could be made.
The Redd scheme is central to slowing, or halting, deforestation, which causes huge releases of carbon dioxide. But critics say that the scheme amounts to privatisation of natural resources.
FoE's report shows, for example that the Anglo-Dutch oil firm Shell has linked with Russian gas giant Gazprom and the Clinton Foundation to invest in the Rimba Rey project, 100,000ha of peat swamp in Indonesia. The project is expecting to prevent 75m tonnes of carbon being emitted over 30 years, which could earn the three groups $750m at a modest carbon price of $10 a tonne.
It also says that an investment of little more than $10m by the bank Merrill Lynch, the conservation group Flora and Fauna International and an Australian carbon trading company could generate more than $430m, over 30 years, from a project to protect 750,000ha of forest in Aceh province, Indonesia.
The "Redd rush" is limited to voluntary carbon offsets for now but is expected to become a stampede if the 193 countries meeting this week reach an outline forestry protection agreement that would allow governments to offset national emissions against forest conservation. It could result in eventual cash flows of $30bn a year from rich countries – who need to offset emissions – to poor countries, where most of the world's endangered forests are.
But the report's authors say great social risks attached to the schemes must be addressed. "There are significant risks that Redd will lead to the privatisation of the world's forests, transferring them out of the hands of indigenous peoples and local communities and into the hands of bankers and carbon traders," they say.
Many of the world's greatest stretches of forests are the traditional home of indigenous peoples, and millions of others may be dependent on access to forests, say the authors, who urge that ownership of land and carbon rights must be resolved. "Many Redd-related disputes are now unfolding. Respect for indigenous peoples' rights seems to be a missing element," says the report. "A Redd race is under way. Redd is emerging as a mechanism that has the potential to exacerbate inequality, reaping huge rewards for corporate investors whilst bringing considerably fewer benefits or even serious disadvantages to forest dependent communities. It could become a dangerous distraction from the business of implementing real climate change cuts."
One major concern is that the weak legal definitions of "forest" and "degraded land" would let the powerful logging and palm companies carry on business as usual by persuading governments to redefine what constitutes a forests.
Greenpeace claimed last week that Indonesia planned to class large areas of its remaining natural forests as "degraded land" in order to cut them down and receive $1bn of climate aid for replanting them with palm trees and biofuel crops.
However some observers, including Lord Stern, say the Redd schemes offer the best opportunity for cost-effective and immediate reductions in greenhouse gas emissions. They say thatmore technologically sophisticated options, such as carbon capture and storage, could take several years to come into large-scale operation, and they are more expensive.
A spokesperson for Shell said the company could not yet comment on the Friends of the Earth report.
John Vidal, environment editor, in Cancun guardian.co.uk, Sunday 28 November 2010 19.58 GMT
Some of the world's largest oil, mining, car and gas corporations will make hundreds of millions of dollars from a UN-backed forest protection scheme, according to a new report from the Friends of the Earth International.
The group's new report – launched on the first day of the global climate summit in Cancun, Mexico, where 193 countries hope to thrash out a new agreement – is the first major assessment of the several hundred, large-scale Redd (Reduced emissions from deforestation and degradation) pilot schemes. It shows that banks, airlines, charitable foundations, carbon traders, conservation groups, gas companies and palm plantation companies have also scrambled into forestry protection.
While forestry is billed as one issue where significant progress could be made at the talks, over the weekend David Cameron, Chris Huhne, the climate change secretary, and the government's chief scientists all played down the prospect of a global deal to cut carbon emissions.
"British ministers are going to Mexico this week with an approach that is both realistic and optimistic," the prime minister wrote in the Observer . "Realistic, because we don't expect a global deal to be struck in Cancun, but optimistic too, because we are viewing this as a stepping stone to future agreement."
Huhne, who will attend the second week of the talks, was more blunt: "No one expects a binding deal on climate change in Cancun." But he said deforestation and longer-term climate finance were areas where progress could be made.
The Redd scheme is central to slowing, or halting, deforestation, which causes huge releases of carbon dioxide. But critics say that the scheme amounts to privatisation of natural resources.
FoE's report shows, for example that the Anglo-Dutch oil firm Shell has linked with Russian gas giant Gazprom and the Clinton Foundation to invest in the Rimba Rey project, 100,000ha of peat swamp in Indonesia. The project is expecting to prevent 75m tonnes of carbon being emitted over 30 years, which could earn the three groups $750m at a modest carbon price of $10 a tonne.
It also says that an investment of little more than $10m by the bank Merrill Lynch, the conservation group Flora and Fauna International and an Australian carbon trading company could generate more than $430m, over 30 years, from a project to protect 750,000ha of forest in Aceh province, Indonesia.
The "Redd rush" is limited to voluntary carbon offsets for now but is expected to become a stampede if the 193 countries meeting this week reach an outline forestry protection agreement that would allow governments to offset national emissions against forest conservation. It could result in eventual cash flows of $30bn a year from rich countries – who need to offset emissions – to poor countries, where most of the world's endangered forests are.
But the report's authors say great social risks attached to the schemes must be addressed. "There are significant risks that Redd will lead to the privatisation of the world's forests, transferring them out of the hands of indigenous peoples and local communities and into the hands of bankers and carbon traders," they say.
Many of the world's greatest stretches of forests are the traditional home of indigenous peoples, and millions of others may be dependent on access to forests, say the authors, who urge that ownership of land and carbon rights must be resolved. "Many Redd-related disputes are now unfolding. Respect for indigenous peoples' rights seems to be a missing element," says the report. "A Redd race is under way. Redd is emerging as a mechanism that has the potential to exacerbate inequality, reaping huge rewards for corporate investors whilst bringing considerably fewer benefits or even serious disadvantages to forest dependent communities. It could become a dangerous distraction from the business of implementing real climate change cuts."
One major concern is that the weak legal definitions of "forest" and "degraded land" would let the powerful logging and palm companies carry on business as usual by persuading governments to redefine what constitutes a forests.
Greenpeace claimed last week that Indonesia planned to class large areas of its remaining natural forests as "degraded land" in order to cut them down and receive $1bn of climate aid for replanting them with palm trees and biofuel crops.
However some observers, including Lord Stern, say the Redd schemes offer the best opportunity for cost-effective and immediate reductions in greenhouse gas emissions. They say thatmore technologically sophisticated options, such as carbon capture and storage, could take several years to come into large-scale operation, and they are more expensive.
A spokesperson for Shell said the company could not yet comment on the Friends of the Earth report.
Madagascar Oil brings tar sands project to London market
The Voahary Gasy an alliance of Madagascan environmental groups complains that the government has released very little information
Tim Webb The Guardian, Monday 29 November 2010
The arrival of Madagascar Oil on the Aim market today allows investors to buy into what are likely to be among the dirtiest oil sands projects – benefiting from the lowest tax rates – anywhere in the world.
Oil has been seeping through the ground in the impoverished and politically unstable African island, which rebuffed another attempted coup this month, for centuries. But Madagascar has never before produced oil in commercial quantities. Until now the oil sands were considered uneconomical, moreover companies were put off by the risks involved in doing business there.
Higher oil prices make the projects viable and the government is desperate to get production going, possibly as early as next year. It is ready to entice Madagascar Oil and French partner Total with an extremely generous tax regime. Operators are being offered 99% of the revenue for the first ten years while they recoup their costs, with just 1% for the government. Platform, a campaign group which monitors oil companies' activities around the world, said the offer was "unheard of".
An area of 29,500 sq km covers five main oil sands blocks. Extracting the fuel is controversial because it uses far more energy and water than more conventional production processes.
The most advanced project is Tsimiroro – owned and operated by Madagascar Oil – holding a "best estimate" of almost 1bn barrels. It could produce 90,000 barrels a day for 30-40 years and breaks even at just under $50 a barrel. The larger field, Bemolanga, holds a best estimate of just under 1.2bn barrels of oil, and could produce a much larger amount, although costs are higher. Operated by Total, with Madagascar Oil holding a 40% stake, they would have to spend about $9bn (£5.7bn) to build the upgraders and other facilities to get production started.
Madagascar Oil's stock market valuation of £183m is more typical of small oil explorers than a company holding such quantities of proven reserves. Madagascar Oil's chief executive Laurie Hunter described the company as "an execution not an exploration play".
It's unlikely to be plain sailing. The World Bank ranks Madagascar as 138th out of 193 countries in its "ease of doing business" ranking. Corruption is rife and the country is unstable. The government came to power in a military backed coup last spring which overthrew the democratically elected leader.
The companies have negotiated an extremely attractive deal. At Tsimiroro, after the first ten years taking 99% of the revenue, Madagascar Oil is being offered 80% during the second decade, with the government taking 20%, followed by a 70%-30% split the following decade and so on.
For a country ranked 170th poorest out of 182 by the IMF, these revenues will be much needed, but Mika Minio-Paluello from democratic and environmental campaign group Platform said the government's take should be much higher. "Oil companies go into these kinds of chaotic situations and negotiate immensely profitable terms. It's understandable that companies want to protect their investment but this goes much further and Madagascar could be stuck with these contracts for decades."
Environmental regulations are also unlikely to be onerousin an island famed for its biodiversity. The Voahary Gasy an alliance of Madagascan environmental groups complains that the government has released very little information. But the first projects are likely to use up more energy than the world's only other existing oil sands projects, in Alberta in Canada. The Tsimiroro project will use an "in-situ" method, which involves injecting vast amounts of steam into the ground to heat up the oil and allow it to surface. According to industry estimates, to extract five barrels of oil at Tsimiroro will burn up one barrel of oil, although any excess electricity produced to generate steam could be used at the other project. According to environmental group the Pembina Institute, for every barrel of oil used in similar oil Canada projects in Alberta, about 5.5 barrels of oil are produced on average.
The Bemolanga field, one of the world's largest untapped oil sands fields, could also be more energy - and carbon - intensive than equivalent projects in Alberta. The project would use open cast mining to dig out the oily sand and rock. Because the material's bitumen content is lower at 5.5% – compared to 11% in Alberta – it would be harder to separate. However, it is thought that a higher proportion of the oil in Bemolanga could be recovered than in Alberta, so this would reduce the comparative energy intensity.
In Canada, the federal government has threatened to force companies to use carbon capture and storage (CCS) to reduce emissions although it's not clear if this will ever become law. Hunter said Madagascar has "a very attentive environmental regulator" but admits: "Requirements to use CCS at some time in the future has not come up in conversation. The Madagascar government is very keen to get on with production with the fields."
Tim Webb The Guardian, Monday 29 November 2010
The arrival of Madagascar Oil on the Aim market today allows investors to buy into what are likely to be among the dirtiest oil sands projects – benefiting from the lowest tax rates – anywhere in the world.
Oil has been seeping through the ground in the impoverished and politically unstable African island, which rebuffed another attempted coup this month, for centuries. But Madagascar has never before produced oil in commercial quantities. Until now the oil sands were considered uneconomical, moreover companies were put off by the risks involved in doing business there.
Higher oil prices make the projects viable and the government is desperate to get production going, possibly as early as next year. It is ready to entice Madagascar Oil and French partner Total with an extremely generous tax regime. Operators are being offered 99% of the revenue for the first ten years while they recoup their costs, with just 1% for the government. Platform, a campaign group which monitors oil companies' activities around the world, said the offer was "unheard of".
An area of 29,500 sq km covers five main oil sands blocks. Extracting the fuel is controversial because it uses far more energy and water than more conventional production processes.
The most advanced project is Tsimiroro – owned and operated by Madagascar Oil – holding a "best estimate" of almost 1bn barrels. It could produce 90,000 barrels a day for 30-40 years and breaks even at just under $50 a barrel. The larger field, Bemolanga, holds a best estimate of just under 1.2bn barrels of oil, and could produce a much larger amount, although costs are higher. Operated by Total, with Madagascar Oil holding a 40% stake, they would have to spend about $9bn (£5.7bn) to build the upgraders and other facilities to get production started.
Madagascar Oil's stock market valuation of £183m is more typical of small oil explorers than a company holding such quantities of proven reserves. Madagascar Oil's chief executive Laurie Hunter described the company as "an execution not an exploration play".
It's unlikely to be plain sailing. The World Bank ranks Madagascar as 138th out of 193 countries in its "ease of doing business" ranking. Corruption is rife and the country is unstable. The government came to power in a military backed coup last spring which overthrew the democratically elected leader.
The companies have negotiated an extremely attractive deal. At Tsimiroro, after the first ten years taking 99% of the revenue, Madagascar Oil is being offered 80% during the second decade, with the government taking 20%, followed by a 70%-30% split the following decade and so on.
For a country ranked 170th poorest out of 182 by the IMF, these revenues will be much needed, but Mika Minio-Paluello from democratic and environmental campaign group Platform said the government's take should be much higher. "Oil companies go into these kinds of chaotic situations and negotiate immensely profitable terms. It's understandable that companies want to protect their investment but this goes much further and Madagascar could be stuck with these contracts for decades."
Environmental regulations are also unlikely to be onerousin an island famed for its biodiversity. The Voahary Gasy an alliance of Madagascan environmental groups complains that the government has released very little information. But the first projects are likely to use up more energy than the world's only other existing oil sands projects, in Alberta in Canada. The Tsimiroro project will use an "in-situ" method, which involves injecting vast amounts of steam into the ground to heat up the oil and allow it to surface. According to industry estimates, to extract five barrels of oil at Tsimiroro will burn up one barrel of oil, although any excess electricity produced to generate steam could be used at the other project. According to environmental group the Pembina Institute, for every barrel of oil used in similar oil Canada projects in Alberta, about 5.5 barrels of oil are produced on average.
The Bemolanga field, one of the world's largest untapped oil sands fields, could also be more energy - and carbon - intensive than equivalent projects in Alberta. The project would use open cast mining to dig out the oily sand and rock. Because the material's bitumen content is lower at 5.5% – compared to 11% in Alberta – it would be harder to separate. However, it is thought that a higher proportion of the oil in Bemolanga could be recovered than in Alberta, so this would reduce the comparative energy intensity.
In Canada, the federal government has threatened to force companies to use carbon capture and storage (CCS) to reduce emissions although it's not clear if this will ever become law. Hunter said Madagascar has "a very attentive environmental regulator" but admits: "Requirements to use CCS at some time in the future has not come up in conversation. The Madagascar government is very keen to get on with production with the fields."
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