By Oliver Wright, Whitehall Editor
Wednesday, 10 November 2010
Britain's promise to more than double its use of biofuels by 2020 is "significantly" adding to worldwide carbon emissions, the Government admitted yesterday. Britain is signed up to a European guarantee to source 10 per cent of its transport fuel from renewable sources, such as biofuels, within the next 10 years.
But ministers have said that the policy is proving counter-productive and the greenhouse emissions associated with biofuels are substantially greater than the savings. They are now urging the European Commission to rethink the plan. The admission coincides with a major study published this week which concludes that biofuels will create an extra 56 million tons of CO2 per year – the equivalent of 12 to 26 million cars on Europe's roads by 2020.
This is because Europe will need to cultivate an area somewhere between the size of Belgium and the Republic of Ireland with biofuels to meet the target, which can only be done through land conversion – and more controversially, deforestation. The work will be on such a scale that the carbon released from the vegetation, trees and soil will be far greater than those given off by fossil fuels they are designed to replace.
The study, from the Institute for European Environmental Policy, found that far from being 35 to 50 per cent less polluting, as required by the European Directive, the extra biofuels will be twice as bad for the environment.
First generation biofuels, made from crops such as oilseed rape, sugar cane and palms , were once considered a solution to burning fossil fuels. Such crops, it was argued, would give off the same amount of carbon as they had absorbed when growing – making their use carbon neutral and a key component in reducing global emissions.
Last year Britain signed up to a European Union directive compelling the country to use biofuels to provide 10 per cent of total energy in transport by 2020, as part of a National Renewable Energy Action Plan. But since then, a growing body of scientific evidence has suggested that far from reducing emissions, biofuels may be increasing them.
There is not enough cultivatable land available to grow them in Europe, so forests in South America and Asia are being destroyed to meet European demand. Although under European rules biofuels cannot be bought from "new" agricultural lands such as these, biofuel businesses have got around this by buying up existing land. Forests are then cut down to make up for the loss of agriculture – a trick known as Indirect Land Use Change (ILUC).
Almost all biofuels used in the UK come from sources outside the EU, and the UK is anticipated to be the largest single importer from outside the community in order to reach its targets. In its response to a European consultation on biofuels published yesterday on the Department of Transport's website, the Government said it was time to reassess the policy.
"We consider that the results of the analytical work are compelling in showing that the greenhouse gas emissions from [ILUC] are significant compared to the potential emissions savings from biofuel use. The precise scale is uncertain, [but] this uncertainty cannot be ignored and, as with other aspects of climate change, cannot be a justification for inaction," the statement said.
Environmental charities have long argued that the European Union needs to rethink the target. Last night they welcomed the Government's move.
Tim Rice, ActionAid's biofuels policy advisor, said: "It's welcome that the Government recognises that greenhouse gas emissions from indirect land use change are significant. But now it must urge the European Commission to make sure that this compelling evidence is factored into new legislation."
Sir John Harman, chair of the Institute for European Environmental Policy and a former head of the Environment Agency, said the extent of the biofuels problem was now clear.
"What our report found was for European member states to meet their recently published plans on biofuels, they would have to cultivate an area somewhere between the size of Belgium and the Republic of Ireland. This is not viable and will result in a big Indirect Land Use Change outside the EU," he said.
Last night the Transport Minister Norman Baker said the Government was pushing the European Commission to take action to reduce the risk that producing biofuels will have knock-on effects including deforestation.
"Like other EU member states, the UK is required to source 10 per cent of its transport energy from renewable sources by 2020, however I agree that the environmental benefits of biofuels can only be realised if they are produced in a sustainable way."
Case study: Brazil
Since 2004, the amount of sugar cane grown in Brazil has increased by more than 50 per cent – a figure which is expected to double again by 2018.
The Brazilian government knows that, to open foreign markets to ethanol, it must demonstrate that production does not lead to deforestation. In 2009, it introduced zones for sugar cane expansion – excluding two of Brazil's most biodiverse areas: the Amazon rainforest and Pantanal.
But other agriculture in those zones has been pushed out as a result, into those same areas. When the farmers moved in, trees and other vegetation were burned or cleared to make way for pasture, reducing the capacity to store and sequester carbon.
As the land was cleared, the soil started oxidising, releasing massive amounts of stored carbon. While precise calculations are difficult, emissions from indirect land use change are significant.
Wednesday, 10 November 2010
Oil, Food Groups Challenge EPA on Ethanol
By TENNILLE TRACY
WASHINGTON—Major oil and food industry trade groups launched an attack Tuesday on an Obama administration move to allow higher concentrations of ethanol in gasoline.
In a lawsuit filed with an appeals court, the American Petroleum Institute, the oil industry's main lobbying arm in Washington, and a coalition of food and restaurant industry trade groups challenged the Environmental Protection Agency's decision to allow up to 15% ethanol in gasoline, up from 10%.
The EPA last month said it would allow the higher ethanol blend only for vehicles manufactured in the 2007 model year or later. The agency is still considering a proposal to allow the 15% ethanol blend for older vehicles.
The API said in a statement the EPA action "puts consumers at risk" because tests of whether the higher concentrations of ethanol could damage cars aren't complete.
The food-trade groups, including the Grocery Manufacturers Association, the American Meat Institute and the National Council of Chain Restaurants, said increasing the use of ethanol in cars will increase corn prices and make food more expensive.
The lawsuit was filed in the U.S. Court of Appeals for the District of Columbia Circuit.
The EPA defended its action, saying it relied on the testing conducted on 19 cars by the U.S. Energy Department.
"This decision is sound, and the agency is confident that it will withstand legal challenge," said EPA spokeswoman Betsaida Alcantara.
It's possible that still more groups emerge in coming weeks to challenge the 15% ethanol blend.
Auto makers have opposed the decision, saying older could be damaged by the higher concentration of alcohol fuel. Auto makers produce so-called flexible-fuel vehicles capable of using up to 85% ethanol, but that technology is not available in many new cars, and comparatively few older vehicles.
"Our primary concern is still what impact this decision will have on consumers—we want to be sure they have a safe and positive experience with any new fuel," said Wade Newton, a spokesman for the Alliance of Automobile Manufacturers.
Makers of power equipment, such as lawnmowers and chain saws, meanwhile, have expressed concern over the liability they might assume if higher ethanol levels damage their equipment.
Regardless of the outcome of the lawsuits, the decision to offer the higher ethanol blend often rests ultimately with gas stations. And gas stations have balked at the cost of installing new equipment to offer it.
"We don't think many stores will decide to sell E15 based on the initial EPA announcement," said National Association of Convenience Stores spokesman Jeff Lenard.
Write to Tennille Tracy at tennille.tracy@dowjones.com
WASHINGTON—Major oil and food industry trade groups launched an attack Tuesday on an Obama administration move to allow higher concentrations of ethanol in gasoline.
In a lawsuit filed with an appeals court, the American Petroleum Institute, the oil industry's main lobbying arm in Washington, and a coalition of food and restaurant industry trade groups challenged the Environmental Protection Agency's decision to allow up to 15% ethanol in gasoline, up from 10%.
The EPA last month said it would allow the higher ethanol blend only for vehicles manufactured in the 2007 model year or later. The agency is still considering a proposal to allow the 15% ethanol blend for older vehicles.
The API said in a statement the EPA action "puts consumers at risk" because tests of whether the higher concentrations of ethanol could damage cars aren't complete.
The food-trade groups, including the Grocery Manufacturers Association, the American Meat Institute and the National Council of Chain Restaurants, said increasing the use of ethanol in cars will increase corn prices and make food more expensive.
The lawsuit was filed in the U.S. Court of Appeals for the District of Columbia Circuit.
The EPA defended its action, saying it relied on the testing conducted on 19 cars by the U.S. Energy Department.
"This decision is sound, and the agency is confident that it will withstand legal challenge," said EPA spokeswoman Betsaida Alcantara.
It's possible that still more groups emerge in coming weeks to challenge the 15% ethanol blend.
Auto makers have opposed the decision, saying older could be damaged by the higher concentration of alcohol fuel. Auto makers produce so-called flexible-fuel vehicles capable of using up to 85% ethanol, but that technology is not available in many new cars, and comparatively few older vehicles.
"Our primary concern is still what impact this decision will have on consumers—we want to be sure they have a safe and positive experience with any new fuel," said Wade Newton, a spokesman for the Alliance of Automobile Manufacturers.
Makers of power equipment, such as lawnmowers and chain saws, meanwhile, have expressed concern over the liability they might assume if higher ethanol levels damage their equipment.
Regardless of the outcome of the lawsuits, the decision to offer the higher ethanol blend often rests ultimately with gas stations. And gas stations have balked at the cost of installing new equipment to offer it.
"We don't think many stores will decide to sell E15 based on the initial EPA announcement," said National Association of Convenience Stores spokesman Jeff Lenard.
Write to Tennille Tracy at tennille.tracy@dowjones.com
US researchers fight to reclaim climate science message
Two initiatives will provide information for journalists as elections bring strong sceptic presence to new Congress
• Scientists have a duty to engage with the public on climate change
• Monckton takes scientist to brink of madness at climate talk
Suzanne Goldenberg, US environment correspondent guardian.co.uk, Monday 8 November 2010 11.18 GMT
Hundreds of scientists have signed up to two new campaigns that seek to regain control of the message about climate science.
The two separate efforts come barely a week after midterm elections produced a new Congress that tilts strongly towards climate sceptics.
The American Geophysical Union (AGU), the leading climate science organisation, is due to launch a new web service offering journalists accurate scientific information about climate change. The AGU is also working on an iPhone app.
In a separate effort, scientists have recruited 40 colleagues for a "rapid response unit" whose members will give interviews or go on air to relay the science on climate change.
Those involved in both initiatives deny a political agenda, and say their projects were in the works before the Republicans took the house of representatives.
"AGU's climate science Q&A service addresses scientific questions only. It does not involve any commentary on policy," Peter Weiss a spokesman for the AGU said. "There is no campaign by AGU against climate sceptics or congressional conservatives."
But with the new conservative majority in Congress threatening to investigate climate scientists and to block the Obama administration from regulating greenhouse gas emissions, the effort will inevitably touch on politics, said John Abraham of St Thomas University in Minnesota.
"Our goal is not to become partisan. But if we are going to respond to denialists' claims which are unfounded in science then perhaps we are going to be viewed as going toe-to-toe with critics," he said.
The AGU initiative is a re-run of the service offered last year in the run-up to the Copenhagen climate change summit. This year, the project, which will be staffed by about 700 volunteers, is intended to run for two to three months.
The effort is a reflection of the enormous complexity of climate science and the difficulties of communicating with the public, said Katharine Hayhoe, a professor at Texas Tech University who is on the committee steering the AGU effort.
"You can't be an expert in one area and be able to understand all of climate science. It is such a complicated topic nowadays," she said. "What the AGU is trying to do, because it is the premier scientific organisation in this field, is to translate the very latest science into terms people can understand."
It is also an effort to overcome scientists' traditional reluctance to operate in the public arena.
Abraham set up the rapid response unit with Scott Mandia of Suffolk County Community College in New York, and Ray Weymann of Carnegie University. The three say they will serve as a conduit for media seeking contact with climate experts.
"The scientists I talk to are really scared. We are scared because we see a window for opportunity closing and it may be too late. I am not going to say the window is closing because of the election though. It's a physics problem," Abraham said. He has previously countered inaccuracies in lectures and congressional testimony from the Ukip deputy leader, Viscount Monckton.
News of the initiatives, first reported in the Chicago Tribune on Sunday, brought strong reaction from climate sceptic websites. "Bring it on!" said Climate Depot.
Democrats, especially those from coal states or the midwest, who voted for climate change bill in the house lost heavily in the elections. A majority of the Republican newcomers deny the existence of man-made climate change or oppose regulation of greenhouse gas emissions, according to an analysis by Think Progress.
The new make-up of Congress has alarmed climate scientists such as Michael Mann, who have been targeted by sceptics. "There are legitimate uncertainties," Mann told a meeting of science writers at the weekend, "but unfortunately the public discourse right now is so far from scientific discourse."
• Scientists have a duty to engage with the public on climate change
• Monckton takes scientist to brink of madness at climate talk
Suzanne Goldenberg, US environment correspondent guardian.co.uk, Monday 8 November 2010 11.18 GMT
Hundreds of scientists have signed up to two new campaigns that seek to regain control of the message about climate science.
The two separate efforts come barely a week after midterm elections produced a new Congress that tilts strongly towards climate sceptics.
The American Geophysical Union (AGU), the leading climate science organisation, is due to launch a new web service offering journalists accurate scientific information about climate change. The AGU is also working on an iPhone app.
In a separate effort, scientists have recruited 40 colleagues for a "rapid response unit" whose members will give interviews or go on air to relay the science on climate change.
Those involved in both initiatives deny a political agenda, and say their projects were in the works before the Republicans took the house of representatives.
"AGU's climate science Q&A service addresses scientific questions only. It does not involve any commentary on policy," Peter Weiss a spokesman for the AGU said. "There is no campaign by AGU against climate sceptics or congressional conservatives."
But with the new conservative majority in Congress threatening to investigate climate scientists and to block the Obama administration from regulating greenhouse gas emissions, the effort will inevitably touch on politics, said John Abraham of St Thomas University in Minnesota.
"Our goal is not to become partisan. But if we are going to respond to denialists' claims which are unfounded in science then perhaps we are going to be viewed as going toe-to-toe with critics," he said.
The AGU initiative is a re-run of the service offered last year in the run-up to the Copenhagen climate change summit. This year, the project, which will be staffed by about 700 volunteers, is intended to run for two to three months.
The effort is a reflection of the enormous complexity of climate science and the difficulties of communicating with the public, said Katharine Hayhoe, a professor at Texas Tech University who is on the committee steering the AGU effort.
"You can't be an expert in one area and be able to understand all of climate science. It is such a complicated topic nowadays," she said. "What the AGU is trying to do, because it is the premier scientific organisation in this field, is to translate the very latest science into terms people can understand."
It is also an effort to overcome scientists' traditional reluctance to operate in the public arena.
Abraham set up the rapid response unit with Scott Mandia of Suffolk County Community College in New York, and Ray Weymann of Carnegie University. The three say they will serve as a conduit for media seeking contact with climate experts.
"The scientists I talk to are really scared. We are scared because we see a window for opportunity closing and it may be too late. I am not going to say the window is closing because of the election though. It's a physics problem," Abraham said. He has previously countered inaccuracies in lectures and congressional testimony from the Ukip deputy leader, Viscount Monckton.
News of the initiatives, first reported in the Chicago Tribune on Sunday, brought strong reaction from climate sceptic websites. "Bring it on!" said Climate Depot.
Democrats, especially those from coal states or the midwest, who voted for climate change bill in the house lost heavily in the elections. A majority of the Republican newcomers deny the existence of man-made climate change or oppose regulation of greenhouse gas emissions, according to an analysis by Think Progress.
The new make-up of Congress has alarmed climate scientists such as Michael Mann, who have been targeted by sceptics. "There are legitimate uncertainties," Mann told a meeting of science writers at the weekend, "but unfortunately the public discourse right now is so far from scientific discourse."
Forced use of biofuels could hit food production, EU warned
Area the size of Ireland could be lost to conventional farming as global warming accelerates, says environmental study
John Vidal guardian.co.uk, Tuesday 9 November 2010 15.32 GMT
Plans to make European motorists use more biofuels could take an area the size of Ireland out of food production by 2020 and accelerate climate change, a study has found.
The report by the independent Institute for European Environmental Policy (IEEP) is based on plans that countries have submitted to the EU detailing how they intend to meet their legal requirement to include 10% of renewable energy in all transport fuels by 2020.
IEEP calculations suggest that the indirect effect of the switch will be to take between 4.1m and 6.9m hectares out of food production. In addition, say the authors, opening up land to compensate for the food taken out of production will lead to between 27m and 56m tonnes of additional CO² emissions, the equivalent of putting nearly 26m more cars on the road.
The study says European countries have chosen to meet the EU renewable energy targets by importing so-called first generation biofuels from African countries or from Indonesia and Brazil, rather than by promoting the use of advanced biofuels, electric vehicles or energy efficiency to reduce the environmental impact of transport.
"The renewable energy directive was adopted to help combat climate change, however, through promoting the use of conventional biofuels with no consideration of indirect land use change impacts it has the potential to actually increase the EU's greenhouse gas emissions.
"It is vital that this situation is rectified and these impacts are urgently addressed within EU law," said David Baldock, director of IEEP.
Development groups which commissioned the report said the effect of the EU legislation would be felt around the world and urged the EU to drop the 10% biofuels goal.
"Making space for biofuel production will force other farming activity in producer countries deeper into forests," said a spokesman for ActionAid. "This displacement of farming activity will cause loss of wildlife habitats, and carbon dioxide emissions – as well as increasing food prices, hitting some of the world's poorest people hardest."
Friends of the Earth's biofuels campaigner, Kenneth Richter, said: "Using more biodiesel in our cars won't help to green transport – this research shows that when the full impact of their production is taken into account, biofuels cause more emissions than the fossil fuels they replace."
"Trees will be cleared, wetlands will be under threat and a range of species will be pushed to the brink if these proposals go ahead," said RSPB director of international operations Tim Stowe.
Europe's move to biofuels compares with a 7.6% target by 2022 in the US. Last week the US agriculture secretary, Tom Vilsack, said a further $500m (£310m) would be made available in subsidies to grow biofuel crops over the next 15 years . Most of the money would go to extracting fuel from non-food plants.
ActionAid claimed this year that European biofuel targets could result in up to 100 million more hungry people, increased food prices and landlessness.
The United Nations has singled out biofuel demand as a major factor in what it estimates will be as much as a 40% increase in food prices over the coming decade.
John Vidal guardian.co.uk, Tuesday 9 November 2010 15.32 GMT
Plans to make European motorists use more biofuels could take an area the size of Ireland out of food production by 2020 and accelerate climate change, a study has found.
The report by the independent Institute for European Environmental Policy (IEEP) is based on plans that countries have submitted to the EU detailing how they intend to meet their legal requirement to include 10% of renewable energy in all transport fuels by 2020.
IEEP calculations suggest that the indirect effect of the switch will be to take between 4.1m and 6.9m hectares out of food production. In addition, say the authors, opening up land to compensate for the food taken out of production will lead to between 27m and 56m tonnes of additional CO² emissions, the equivalent of putting nearly 26m more cars on the road.
The study says European countries have chosen to meet the EU renewable energy targets by importing so-called first generation biofuels from African countries or from Indonesia and Brazil, rather than by promoting the use of advanced biofuels, electric vehicles or energy efficiency to reduce the environmental impact of transport.
"The renewable energy directive was adopted to help combat climate change, however, through promoting the use of conventional biofuels with no consideration of indirect land use change impacts it has the potential to actually increase the EU's greenhouse gas emissions.
"It is vital that this situation is rectified and these impacts are urgently addressed within EU law," said David Baldock, director of IEEP.
Development groups which commissioned the report said the effect of the EU legislation would be felt around the world and urged the EU to drop the 10% biofuels goal.
"Making space for biofuel production will force other farming activity in producer countries deeper into forests," said a spokesman for ActionAid. "This displacement of farming activity will cause loss of wildlife habitats, and carbon dioxide emissions – as well as increasing food prices, hitting some of the world's poorest people hardest."
Friends of the Earth's biofuels campaigner, Kenneth Richter, said: "Using more biodiesel in our cars won't help to green transport – this research shows that when the full impact of their production is taken into account, biofuels cause more emissions than the fossil fuels they replace."
"Trees will be cleared, wetlands will be under threat and a range of species will be pushed to the brink if these proposals go ahead," said RSPB director of international operations Tim Stowe.
Europe's move to biofuels compares with a 7.6% target by 2022 in the US. Last week the US agriculture secretary, Tom Vilsack, said a further $500m (£310m) would be made available in subsidies to grow biofuel crops over the next 15 years . Most of the money would go to extracting fuel from non-food plants.
ActionAid claimed this year that European biofuel targets could result in up to 100 million more hungry people, increased food prices and landlessness.
The United Nations has singled out biofuel demand as a major factor in what it estimates will be as much as a 40% increase in food prices over the coming decade.
Coal India IPO shows the mountain we have to climb
Company's prospectus did not mention climate change once in 510 pages of exhortation to invest
Jeremy Leggett guardian.co.uk, Tuesday 9 November 2010 13.30 GMT
In the largest ever initial public offering on the Indian stock exchange, Coal India, a huge government-owned coal company, recently offered 10% of its shares to investors at home and abroad.
What was at stake was essentially a $35bn (£21bn) bankrolling of enhanced global warming by the capital markets. Yet Coal India's prospectus, crafted with the help of a clutch of big-name investment banks, did not mention climate change once in 510 pages of exhortation to invest.
And invest the fund managers did, unfettered by risk regulation or any meaningful requirement to place a value on the climate consequences of their scramble for short-term profit. The offering was oversubscribed 15 fold, and the stock soared on the first day of trading, 4 November, valuing Coal India at $49bn.
Those ending up owning stock include 484 foreign funds, 195 mutual funds, 44 insurance companies, and many banks. Many of these investors were using ordinary citizens' money, and this would have included the nest eggs of people worried about global warming and its dire impact on the world by the time they retire. But those people are mostly allowed no say in where their pension funds, insurance premiums, and banking deposits are invested.
In Cancún, later this year, the world's governments will return to their annual climate summit completely stymied on even the smallest cuts in greenhouse emissions. At the same time, investment bankers will be back in their casinos with barely a light slap on their wrists after nearly plunging the world into depression in 2008.
They are permitted to gamble once again with the global economy in the course of their routine investment business, this time knowing that the citizenry will be there to bail them out again. They are also permitted – as the Coal India IPO shows – to gamble with the global climate in the course of their routine advisory business, bringing coal to the markets by the gigatonne, without the requirement for a single item of liability accounting on the global balance sheet.
Indeed, in this case it is not so much a gamble as a known outcome, if you believe the vast majority of climate scientists. As floods and wildfires have shown Pakistanis and Russians this summer, a few extreme events can visit ruinous setbacks on economies. Keep burning coal at anything like the rate we do today, and such events will compound until they destroy wealth faster than it can be created.
Whither even basic risk assessment? Whither fiduciary responsibility? So long as you are targeting high profits in the very short-term, you can feel free to fry our childrens' future and to use our citizens' money to bankroll the cooking fat. This in essence is the default licence that governments and regulators have handed to the financial-services sector. How much more suicidally dysfunctional can modern capitalism get?
On the same day Coal India shares started trading so too did Enel Green Power's. Enel, the Italian energy giant, had floated its renewables arm at the same time as Coal India, but its IPO was a flop. Institutional shareholders were particularly unsupportive. Some cited long-term fears for the viability of renewables generally. Shares duly fell on the first day of trading. Again, this spectacle involved fund managers investing and trading for people who, given a say, might well have chosen to factor climate change into the decisions taken.
In a civilisation intent on ensuring its own survival, much less prosperity, we would be using home-made sources of renewable energy, with great efficiency and fairness, and investing our own money to roll out ever more green infrastructure with which to build resilient local and national economies, so creating worthwhile jobs for our children.
Opinion polls consistently show that this is the kind of world most of us would like to be living in, and the particularly galling thing is that we already have the technologies and strategies with which to deliver it. They involve things like zero-carbon homes, electric cars used as mobile energy storage plants, smart grids to optimise power use, and green bonds for financing the whole thing.
But in the real world, today, such a vision can be glimpsed only in oases. Tomorrow might perhaps be different and better, given the growth rates of renewables industries, notwithstanding the languishing share prices of many renewables companies. But for now the Coal India IPO illustrates the enormity of the mountain we have to climb in order to arrive there.
Jeremy Leggett is executive chair of the solar power company Solarcentury, He also publishes a blog at www.jeremyleggett.net
Jeremy Leggett guardian.co.uk, Tuesday 9 November 2010 13.30 GMT
In the largest ever initial public offering on the Indian stock exchange, Coal India, a huge government-owned coal company, recently offered 10% of its shares to investors at home and abroad.
What was at stake was essentially a $35bn (£21bn) bankrolling of enhanced global warming by the capital markets. Yet Coal India's prospectus, crafted with the help of a clutch of big-name investment banks, did not mention climate change once in 510 pages of exhortation to invest.
And invest the fund managers did, unfettered by risk regulation or any meaningful requirement to place a value on the climate consequences of their scramble for short-term profit. The offering was oversubscribed 15 fold, and the stock soared on the first day of trading, 4 November, valuing Coal India at $49bn.
Those ending up owning stock include 484 foreign funds, 195 mutual funds, 44 insurance companies, and many banks. Many of these investors were using ordinary citizens' money, and this would have included the nest eggs of people worried about global warming and its dire impact on the world by the time they retire. But those people are mostly allowed no say in where their pension funds, insurance premiums, and banking deposits are invested.
In Cancún, later this year, the world's governments will return to their annual climate summit completely stymied on even the smallest cuts in greenhouse emissions. At the same time, investment bankers will be back in their casinos with barely a light slap on their wrists after nearly plunging the world into depression in 2008.
They are permitted to gamble once again with the global economy in the course of their routine investment business, this time knowing that the citizenry will be there to bail them out again. They are also permitted – as the Coal India IPO shows – to gamble with the global climate in the course of their routine advisory business, bringing coal to the markets by the gigatonne, without the requirement for a single item of liability accounting on the global balance sheet.
Indeed, in this case it is not so much a gamble as a known outcome, if you believe the vast majority of climate scientists. As floods and wildfires have shown Pakistanis and Russians this summer, a few extreme events can visit ruinous setbacks on economies. Keep burning coal at anything like the rate we do today, and such events will compound until they destroy wealth faster than it can be created.
Whither even basic risk assessment? Whither fiduciary responsibility? So long as you are targeting high profits in the very short-term, you can feel free to fry our childrens' future and to use our citizens' money to bankroll the cooking fat. This in essence is the default licence that governments and regulators have handed to the financial-services sector. How much more suicidally dysfunctional can modern capitalism get?
On the same day Coal India shares started trading so too did Enel Green Power's. Enel, the Italian energy giant, had floated its renewables arm at the same time as Coal India, but its IPO was a flop. Institutional shareholders were particularly unsupportive. Some cited long-term fears for the viability of renewables generally. Shares duly fell on the first day of trading. Again, this spectacle involved fund managers investing and trading for people who, given a say, might well have chosen to factor climate change into the decisions taken.
In a civilisation intent on ensuring its own survival, much less prosperity, we would be using home-made sources of renewable energy, with great efficiency and fairness, and investing our own money to roll out ever more green infrastructure with which to build resilient local and national economies, so creating worthwhile jobs for our children.
Opinion polls consistently show that this is the kind of world most of us would like to be living in, and the particularly galling thing is that we already have the technologies and strategies with which to deliver it. They involve things like zero-carbon homes, electric cars used as mobile energy storage plants, smart grids to optimise power use, and green bonds for financing the whole thing.
But in the real world, today, such a vision can be glimpsed only in oases. Tomorrow might perhaps be different and better, given the growth rates of renewables industries, notwithstanding the languishing share prices of many renewables companies. But for now the Coal India IPO illustrates the enormity of the mountain we have to climb in order to arrive there.
Jeremy Leggett is executive chair of the solar power company Solarcentury, He also publishes a blog at www.jeremyleggett.net