Climate Change

I went to an interesting confabulation yesterday up at the Earth Institute.  Jeffrey Sachs, director of the Earth Institute, and Yvo de Boer, Executive Secretary of the UNFCC, kicked around the relative merits of the financial architecture of the Kyoto Protocol.  In a nutshell, Sachs thought the way we’ve been doing business in terms of creating a carbon market based on the regulatory regime of the Kyoto Protocol is insufficient to meet the Herculean task of confronting global warming.  He said that a carbon tax would be much more effective.  Mr. de Boer maintained that building out the regulatory scheme in an agreement that will, hopefully, be finalized in Copenhagen next year, will enable further gains than those we’ve already realized from the Kyoto financial mechanisms.  The discussion got worldwide press.  See this, for instance, from Reuters.  (I’ve highlighted some aspects of this debate before, here for one example.)

One of the points that de Boer made regarding the usefulness of the cap-and-trade system is that it generates interest.  It certainly has caught the interest of the financial industry.  A market-based approach was also endorsed in Bali, de Boer reminded the audience.  He also made it clear that the market mechanisms are not the only ones.  He did see a role for taxes, subsidies etc.  For a distillation of the UNFCCC’s views on this, see Carbon market, international offset mechanisms critical in meeting climate change challenge from their latest newsletter.

Sachs articulated a number of faults with the present system.  The existence of two types of participants in the Kyoto Protocol – those subject to regulation and those developing countries who are not – is a big flaw.  In a word, the US won’t sign the Copenhagen agreement if China and India, not to mention South Africa and Brazil, among others, aren’t required to make firm GHG-reduction commitments.  The 1997 Byrd-Hagel resolution in the US Senate is all the proof anyone needs of that.  Another problem is the amount of money available from an international regime.  It won’t be enough, Sachs said.  He also cited the incredible complexity of the regulatory scheme in this.  It would be much simpler to tax the “upstream” sources of the GHGs:  the coal mines and pits or the oil and gas wells.

One of the more salient points made was by one of the commentators, Columbia engineering professor Klaus Lackner, albeit unintentionally.  He is deeply invested in developing CCS technology.  He said that we can choose between CCS and phasing out fossil fuels.  Unfortunately, neither Lackner, nor any of the principals in yesterday’s discussion, nor most other policy makers for that matter, consider the latter a real option.  Witness for instance the emphasis on CCS in Dingell and Boucher’s discussion draft (see the last post below).  From my vantage point, we are wasting precious time and money on CCS and, for that matter, nuclear power.  (See my close encounter with a major proponent of nukes from the last time I attended an Earth Institute event.)  We have the resources to more than meet the transition to a zero-carbon society and we ought to get on with it.

Another thread from yesterday was that taxes are politically unpalatable.  Sachs said Americans are “neurotic” about taxes.  I would say that’s a kind way of putting it.  Another commentator, Henry Derwent, head of the International Emissions Trading Association (IETA), recounted how he’d been briefing a top British official recently and ticked off a number of the very positive aspects of a carbon tax but that the worthy high panjandrum said he’d never be reelected if he supported such a thing.  (Actually, there has been a fair degree of good discussion in the UK on this.  See “Oh, to be in England …”)

What I don’t think does get mentioned in these sorts of high-level policy discussions – on most subjects, in my experience – is the pervasive influence of special interests.  In short, King Coal, the oil and gas majors, and most utilities don’t want a carbon tax.  The cap-and-trade approach gives them not only time and space, but the opportunity to get free allowances, and an ample ability to make money on selling allowances.  The financial industry has many reasons as well to support the market-based approach.  A carbon tax would bring us much faster and surer to a zero-carbon world than these folks might find to their advantage.

Finally, while I’m up on my horse, I have to say that although Sachs and the others talked about the primary importance of carbon financing and technology policy, little was said about lifestyle changes.  The IPCC chairman, Rajendra Pachauri, has begged us to eat less meat.  We can make enormous progress with an ever-greater awareness of energy conservation and mass transit, recycling and teleconferencing.  We can look at low-tech alternatives in housing and energy.  And we can do away with bottled water, as I recommend the Earth Institute and Columbia University do for their events.

By the way, you can see the webcast of this event here.  Check out the many extraordinary programs of the Earth Institute and, if you’re around New York City, get on their events list.  And for more on the Carbon Tax, go to the Carbon Tax Center.  They’ve got an impressive line-up of economists endorsing their program.

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Speaking of events, you might find this program on “Securing Asia’s Energy Future” next week at the Asia Society in NYC of some interest.

It’s not as catchy as “Drill, Baby, Drill” but it’s actually where we’re going in the developed world.  There have been a number of important developments recently entirely worthy of note.  (See observations I’ve made previously in this area under Carbon Markets.)

Energy and Commerce – The US House of Representatives’ Energy and Commerce Committee has issued a discussion draft to its members and the public on climate change legislation.  See this from Bloomberg News and this from Gristmill.

As I noted here in July, this powerful committee seems the likely bet as the principal venue in which cap-and-trade legislation is going to be substantially shaped.  The Senate and the new President will, of course, have their say.  The next President, as you know, be he either of the two candidates, will be considerably more favorable to a substantive climate change package than the present occupant of 1600 Pennsylvania Ave.  The new President will also very possibly go to the table in Copenhagen in December of 2009 armed with a new US law.  This will be a critical element in getting nations emitting even more dangerous amounts of GHG than the US and Europe, namely China and India, to come under an international regulatory umbrella. 

Rich Boucher, chairman of the subcommittee on Energy and Air Quality, and John Dingell, chairman of the full committee, have issued a memo to their members describing the discussion draft.  (For all the relevant Energy and Commerce documents, including the excellent series of white papers they’ve issued, you can go here.)

Let me note what I regard as some salient points from the memo.  It says, for instance:  “Politically, scientifically, legally, and morally, the question has been settled:  regulation of greenhouse gases in the United States is coming.”  There is a repeated emphasis on the importance of energy efficiency and clean energy technology.  There is also a considerable emphasis on the development and deployment of carbon capture and sequestration (CCS) technology.  This appears integral to the program that the draft legislation will create.  Boucher and Dingell note that they “…expect to quickly pass the bipartisan ‘Carbon Capture and Storage Early Deployment Act’” in the next Congress.  The memo also calls for “strict oversight of the carbon market to ensure its efficient operation without market manipulation.”  The Federal Energy Regulatory Commission would be the designated executive agency for this oversight.  (Enhanced regulation of financial markets will be, I daresay, a recurring theme in the next Congress.)  Another noteworthy point is that the draft makes international reforestation and afforestation projects eligible for offsets.  This is going to be a key element in the Copenhagen treaty. 

The memo further notes that some of the groundwork for this initiative has already been done with the passage of the energy bill in December of 2007.  I would note that the energy provisions of the recent “Emergency Economic Stabilization Act of 2008” also move us further down the road to a comprehensive federal climate change policy. 

Europe – I mentioned in my previous post that the EU Environment Committee was gearing up for some critical votes.  Well, they came through a little better than might have been expected yesterday.  See Europe backs carbon capture with €10bn in today’s “FT.”  The money to finance CCS projects will come from the auction of permits in an expanded European Trading Scheme (ETS).  In this release from the European Parliament, some of the details of the proposed expanded ETS are laid out.  This release talks about the CCS plan.  It says “The Environment Committee wants all larger power stations built from 2015 onwards to be equipped with the new carbon capture and storage technology (CCS) …”  

I’ve noted my skepticism about CCS a number of times, the last time here.  I am entirely willing, however, to be proven wrong.  Certainly, the most promising approach in this regard is the gasification of coal and then using the gas for combustion.  Gas can be much more easily “cleaned” of the carbon dioxide and other pollutants.  Integrated Gasification Combined Cycle (IGCC) could prove the way forward.  See this from GE, for example, this from Siemens or this from DOE.

In any event, the deepening of GHG-emission reductions in Europe and the institution of a federal regulatory regime in the US will certainly drive these technological innovations.

RGGI – Ten Northeastern and Mid-Atlantic states have decided not to wait for a federal law.  The Regional Greenhouse Gas Initiative has a more modest framework, certainly, than the federal scheme that is coming or the ETS.  Nevertheless, it will require a cap on carbon dioxide emissions from power plants.  See this from the NY State Department of Environmental Conservation (my old employer) for a look at how the program will be managed.  The RGGI has just had its first auction of allowances and realized $38,575,783 for the six states participating this time around.  The press release quotes NYSDEC Commissioner Pete Grannis:  “The first RGGI auction has successfully used market forces to set a price on carbon, and this will send a clear market signal to support the investment in clean energy technologies.”  There was a better-than-expected demand for the allowances according to this article from the “FT.”  For more on the RGGI, go to their website and this recent “NY Times” article.

Not to be outdone, the Western Climate Initiative, a compact of seven Western states and four Canadian provinces, is well along in creating its own robust regulatory regime. 

There doesn’t appear to be any turning back from cap-and-trade.  ‘Tis a consummation devoutly to be wished I might add.

Here are some items to begin to pick up some of the slack from the past two weeks.  We’ve been away – and there’s some interesting stuff to say about that in a day or two.  For now, here are some morsels, I hope, for your delectation.

More Renewable Stories – I wrote last week about some renewable projects around the world.  (See the last post below.)  Now here are two more items, this time from the Pacific.  In this story from the AFP (via the WBCSD), Indonesia’s President, Susilo Bambang Yudhoyono, announces an initiative to increase both energy efficiency and the country’s use of renewables, including geothermal.  One has to think that Indonesia has a plentiful resource in the geothermal department.  See this recent article, for instance, from the IHT.  As of now, “Indonesia supplies just 850 megawatts of an estimated 27,000 megawatt potential from geothermal sources, or about 3 percent of its current power output.”  The pace of development seems sure to increase rapidly with the new government focus.

Meanwhile in Brunei, Mitsubishi and the government have agreed to build a pilot solar facility.  See this from Reuters, also via the WBCSD. 

Sun, wind, geothermal, ocean power!  Every nation in the Pacific ought to be on a renewables development spree.  Having just come back from a more southerly clime, I can testify that the sun alone could power these countries.  Throw in the other modes, as appropriate, and you would never have to so much as think about oil or gas prices again. 

Very Green Development in British Columbia – There’s an exciting project in Canada, Dockside Green, that will, when it’s all phased in, be a 26-building, 1.3-million-square-foot mix of apartments, restaurants, stores and offices.  See this article from Bloomberg News.  I’ve written a fair bit about Green Building at the blog and I can say this is one more very exciting project. 

The project will feature, among other things, a biomass gasification plant, an onsite sewage treatment plant that will have effluent clean enough to serve as water for gardens, and a passive cooling system. 

I do take exception to one sentence in the article:  “Conservation and efficiency have generally been treated condescendingly in the U.S. energy debate, like the bright but annoying student whose hand always shoots up first.”  If you look at the new federal energy bill from December of 2007, developments in energy efficiency in many areas, not the least of which in green building, and the trends, the truth of the sentence pretty much evaporates.  (See Renewable Energy and Energy Efficiency here.)

Perceptions – I’ve had a few items over time about Public Opinion.  Here’s an article from ABC News about a recent poll of theirs.  This is a mixed bag.  Although a surprising number, 63%, of those polled “favor oil drilling in coastal waters where it’s currently prohibited,” most of the respondents also “support higher taxes on oil company profits” and “stricter fuel efficiency rules for cars.”

On climate change, many Americans, it seems, are concerned about the issue and are taking some action, such as reducing energy use.  The reduction in energy use, of course, may well be more of a pocketbook issue than environmentally driven.  The disparities in concern and desire for action are quite striking between Democrats and Republicans and between men and women.  Look at charts and more information here.  See also the video segment. 

Going a little deeper, the American Psychological Association discussed climate change at its recent annual convention in Boston.  In this APA release, we get a taste of what some researchers have been seeing on the public perception of climate change.  “With climate change in the news and on peoples’ minds, psychologists have been studying human behavior and attitudes to determine how people feel about global warming, what psychological changes might result from a hotter planet and what would best motivate people to conserve.”  There’s contact information at the release for getting more information on the various studies.

Two Great Opinion Pieces – The peerless Betsy Kolbert wrote about the continuing American cultural and political obsession with gas prices in “The New Yorker” recently.  See Changing Lanes in which she notes John McCain’s recent emphasis on offshore drilling as a panacea for high prices at the pump.  Sadly, Barack Obama, seems to have succumbed to this same short-sighted political tomfoolery.

The “Financial Times” calls both of their cards in this terrific piece from today’s paper, Strategic choice for US energy policy.  The bottom line here:  a price on carbon is critical to averting the worst of the climate change crisis.  The next administration can face that reality and get on with the work at hand or it can choose to “disguise or deny the vital role of prices, and be forced to rely entirely on fiscal and regulatory micro-management – with the limitless opportunities for picking losers and falling prey to special interests that this path entails.”  For some basic insight on what the American people, among others, and their political candidates must recognize and acknowledge, read these two pieces.

Green Dancing – Last but certainly not least, my colleague, Cassandra Clifford flagged this compelling article from Der Spiegel.  (Cassie writes passionately and well about Children for the FPA.)  Dutch Club to Recycle Dancers’ Energy is about how a dance floor, through “electromagnetic induction,” can convert movement into energy.  Beyond that, it’s about the Sustainable Dance Club (SDC) initiative being coordinated by Dutch-based Enviu, “innovators in sustainability.”

Party on!

The big news from Down Under from last week was Pope Benedict XVI’s visit.  The Vatican has elevated climate change as a concern recently.  See this from the “Voice of America.”  (For something a bit more substantive from The Holy See, see this speech from February at the UN.)

The Pope would be preaching to the choir, as it were, in Australia.  The “Sydney Morning Herald” wrote today that a recent poll revealed that “… 77 per cent believe Australia should press ahead and cut its greenhouse gas emissions, regardless of what other countries do.”  The government released its Carbon Pollution Reduction Scheme last week to acclaim and opposition.  I wrote last year about the momentous change in government and how it would impact the climate change debate there and internationally.  See Australia Has New Leadership and New Tack on Global Warming.  Australia and Australians are moving ahead. 

Meanwhile, elsewhere in the Commonwealth, so are some Canadian provinces.  Ontario is the fourth province to join the Western Climate Initiative.  See Canada’s Ontario Joins US Carbon Initiative from PlanetArk.  The drumbeat for interstate, national, regional and international cap-and-trade continues.  (See last paragraph of “Gore on Energy” below.) 

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On low-cost, sustainable housing, I wrote about some ways to skin that cat at Habitat a few months ago.  See this now from the venerable and still-cutting edge Worldwatch Institute.

Al Gore made an important speech today in Washington:  In it he challenged the US to become carbon free in its electricity production in ten years time.  See this from CNN.  Regarding surface transportation, the article quotes him as saying “The way to bring gas prices down is to end our dependence on oil and use the renewable sources that can give us the equivalent of $1 a gallon gasoline.”  (For much more on Gore’s speech, see the blisteringly hard-working Andy Revkin’s piece, The (Annotated) Gore Energy Speech, at his Dot Earth blog.)

Is Gore’s challenge technologically feasible?  Absolutely!  I have written about scores of ways of doing this, including reducing the amount of energy we use in the first place.  Politically do-able?  That’s a maybe, but it’s looking better every day.   

But there’s one more driver, folks, and we’ve been examining it here on a regular basis:  economics.  The cost of not radically cutting our carbon output down is astronomical, according to the Stern Review on the economics of climate change and the Intergovernmental Panel on Climate Change, among others.  The Stern Review likens the economic impact of an unaltered, “business-as-usual” energy and development path to be tantamount to another Great Depression or World War II.  Are you on for that?  Me neither. 

With the maturing of the European Trading System, the coming regional American cap-and-trade regimes (Regional Greenhouse Gas Initiative and the Western Climate Initiative), the federal cap-and-trade scheme we’ll see come into being in 2009, and the post-Kyoto regime that will be born in Copenhagen in December of 2009, there’s no turning back.

As Kevin Parker, global head of Deutsche Asset Management, says in a really fine op-ed in today’s “FT” the Carbon emitters’ free ride is about to end.  “The effects of a repricing of carbon will be profound. Carbon will take its place alongside oil, coal and gas as one of the most closely followed commodities in the world. This will mark the beginning of externalities at last being priced into the cost of production. [my emphasis]  It will signal that carbon emitters have had a free ride for long enough. Governments – the US’s in particular – will have to join Europe to create a global market for pricing carbon and businesses around the world will have to accept the price the market sets.”

I wrote a couple of weeks ago here on clean coal technology.  First of all, let me explain that I am not rooting against the possibility of finding some way to capture and sequester carbon dioxide from coal-fired power plants and other sources.  It’s just that there is so much reliance on coal now, and it appears for the foreseeable future, and we still have no reliable technology on hand that utilities and others see as cost-effective, that it seems the much more intelligent choice to phase coal and other fossil fuels out.  That’s what it comes down to at this point.  We will do much better, environmentally and economically, if we move away now from the massive reliance on coal.

Now when I say we, I mean the US which still relies on coal for 50% of its electricity.  I also mean the Europeans who, believe it or not, are looking to build new plants.  I, of course, also mean the Indians and especially the Chinese.  See China Increases Lead as Biggest Carbon Dioxide Emitter from today’s “NY Times.”  Elisabeth Rosenthal, their international health and environmental reporter, looks at the new study from the Netherlands Environmental Assessment Agency and writes:  “China is heavily dependent on coal and has seen its most rapid growth in some of the world’s most heavily polluting industrial sectors: cement, aluminum and plate glass.”  Listen to Rosenthal’s interview at this terrific podcast.  You can also see the discussion at the blog “Dot Earth.”  

So, if we stick with coal, it’s going to cost us dearly, either with an inexorable slide to real climate change catastrophe – see the IPCC’s projections – or, if we face the challenge of CCS, with astronomical costs.  “Trading Carbon,” ” which is published by Point Carbon, the excellent news and information service on energy and environmental markets, had a story in their May issue on CCS.  Robin Lancaster, the editor, and the writer of the story, says in his lead editorial in the magazine “… the technology is available to capture carbon dioxide at its source, transport it, and then store it underground.  However, the extra cost of putting this technology in place is currently one of the main stumbling blocks to project development.”  You can read Going Underground here.  It’s a great, comprehensive look at the forces working for and against a commercially viable CCS technology.   

Here’s another recent story, from the “FT” - BP axes plan for carbon capture plant in which we learn that the canceled project in question, for a coal-fired plant in Australia, follows on the heels of another cancellation in Scotland.

For more perspective on CCS, you can visit the website for European Technology Platform for Zero Emission Fossil Fuel Power Plants (ZEP), an industry group, and this from Shell.   

(I’ll have some more on CCS in the next day or two, so stay tuned.)

Senate on Climate Change – In the US, the Senate began debate yesterday on legislation to address climate change. The “SF Chronicle” reports here that the opponents and proponents were so eager to start bare knuckling over the bill that they voted 74-14 to proceed to debate. The bill “…would require about 2,100 major U.S. emitters - mostly coal-fired power plants, oil refineries and chemical plants - to pay for the right to emit carbon dioxide and other greenhouse gases. Proceeds from selling or trading those permits could total over $6 trillion over the next 40 years, and would be reinvested in renewable energy and rebates to consumers.” Here’s a graphic from the “NY Times” illustrating the geography of carbon emissions in the US.

S.3036 has been the focus of much debate already, both on the Hill and off. Here’s one analysis of some of the policy and politics from the Center for American Progress. Another CAP, the US Climate Action Partnership (USCAP), a grouping of industry and environmental groups, agrees on six principles, but differs internally on critical issues such as to what extent permits will be given away or auctioned to industries.

As I’ve noted recently, we’re not going to have a climate change law in the US this year. The debates on this legislation now are important, though, for staking out various positions, and putting the issue out before the public.

Solar Power Economics – The “FT” had a nice story the other day on the Silver lining in solar power storm clouds. (Remember, you may have to register, but it’s free and otherwise painless.) The line that caught my eye was that, according to one industry analyst, “…the global capacity for production of photovoltaic equipment - the biggest section of solar power technology which converts sunlight directly into electricity - is set to increase ‘dramatically,’ from 3 gigawatts last year to 15 to 20 gigawatts of production in 2010. Much of the growth is coming from China.” 2010 is right around the corner!

Take note also that “Abu Dhabi’s Masdar Initiative intends to spend more than $2 billion to build a thin-film solar manufacturing subsidiary,” according to the Dow Jones news service here. (I wrote about the Masdar project here last month.)

Two Important Conferences – The first of these is the meeting in Bonn that began yesterday. “More than 2,400 participants, including government delegates from 172 countries and representatives from business and industry, environmental organizations and research institutions are attending the two-week meeting of the United Nations Framework Convention on Climate Change (UNFCCC),” reads this release. The AP reports “The Bonn talks are to go into the details of an agreement to be concluded in December 2009 and signed in Copenhagen, Denmark. The talks are based on an accord reached in Bali last December when the United States, India and China indicated they would take part in a post-2012 arrangement,” said the AP here. You can follow all the proceedings at the UNFCCC website and at the International Institute of Sustainable Development (IISD) here. (I highlighted the IISD’s “knowledge management project,” Climate-L.org, on May 29 below.)

The other conference is the UN Food and Agriculture Organization (FAO) that began today in Rome. Billed as the “World Food Security Summit,” there were more than 40 world leaders gathered at the emergency meeting and UNSG Ban Ki-Moon told them hunger breeds “social disintegration, ill health and economic decline,” according to the “LA Times” here. See also this release from the FAO with details of their Director-General Jacques Diouf’s impassioned speech. Diouf said “The structural solution to the problem of food security in the world lies in increasing production and productivity in the low-income, food-deficit countries.” (I referenced the new, comprehensive report, “OECD-FAO Agricultural Outlook 2008-2017,” in the context of the food-biofuel controversy on May 30 below.) In the context of issues that we’re looking at here, Diouf also said: “Nobody understands how a carbon market of 64 billion dollars can be created in the developed countries to offset global warming but that no funds can be found to prevent the annual deforestation of 13 million hectares, especially in the developing countries whose tropical forest ecosystems act as carbon sinks for some 190 gigatonnes,” and “Nobody understands how 11 to 12 billion dollars in subsidies in 2006 and protective tariff policies have had the effect of diverting 100 million tonnes of cereals from human consumption, mostly to satisfy a thirst for fuel for vehicles.”

The somewhat ubiquitous IISD is also in Rome. See their coverage here. Their coverage, by the way, can be found not only in English, but in French, Spanish and Arabic as well.

REDD – I referenced the movement for “reducing emissions from deforestation and ecosystem degradation” in my last post below. Here’s a little more insight from “The Economist” going back to March. They mention projects that are trying to prevent rainforest destruction through various approaches to “voluntary” credits.

The smart money, though, is on a post-Kyoto, UN-administered system that will grant offset credits for forest projects. I wrote in my review of an important new book, Earth: The Sequel, “A post-Kyoto international regime that set a reasonable price on carbon ($30 a ton) would allow Brazil alone to realize $168 billion profit from protecting its rainforests while preventing emissions of six billion tons of carbon dioxide, according to the Woods Hole Research Center. (Pop quiz: After the US and China, which two countries are the biggest contributors to global warming? Brazil and Indonesia - because of rainforest destruction.)”

I sat in on the last day of this event in New York City on Friday, hearing two fascinating panels discuss “Corporate Strategies For Carbon Reduction” (in the context of federal cap-and-trade legislation) and Clean Tech’s role in getting GHG’s down.  The main sponsors of the summit were EcoSecurities, one of the world’s largest developers and suppliers of emission reductions, and Baker & McKenzie, a law firm with a well-developed practice in renewable and carbon offset projects.  The event was run by Infocast.  They’re covering an awful lot of ground these days on energy, the carbon markets, renewables, and other things. 

The focus of the first panel was how industry sectors are going to respond to federal climate change legislation.  The panelists represented the power production, transmission and distribution industry; the natural gas production and distribution industry; and insurance.  There has been a lot of analysis done in these industries, as you would expect, on the implications of a cap-and-trade regime in the US.  (See my notes on May 29 on the vehicle that’s going to be discussed this week in the Senate, “Cap-and-Trade Bonanza” from May 16 below, and also Good Grief, More Carbon Markets from a year ago.)

The director of AIG’s Office of Environment and Climate Change, Alice LeBlanc, was supportive of the idea of including reforestation and agriculture initiatives as eligible offsets in a US law, these areas accounting for nearly 40% of GHG emissions.  Bruce Braine, the Vice President for Strategic Policy Analysis of American Electric Power, talked about carbon capture and storage.  AEP is, by Braine’s own admission, the largest coal-fired producer of electricity and carbon dioxide emitter in the US – so CCS would be high on their agenda.  See Braine’s powerpoint on this from last fall at a UN meeting.  Nate Hanson, Florida Power & Light’s VP in charge of renewables, noted that there is no real CCS system available now and so public service commissions are looking askance at new coal-fired projects.  FPL has, not incidentally, the largest portfolio of renewables in the US power sector.  (Go here for information on their environmental and sustainability programs.)  CCS – or more precisely the lack thereof – was the subject of the “NY Times” lead article I cited in my previous post below. 

The discussion of the climate change bill in the Senate by the panel revealed what seemed to me to be an alarming disconnect on the Hill between what the bill offers now and both what the international community has already created via the Kyoto Protocol and what’s being negotiated now for a post-Kyoto regime.  I noted the other day that nobody realistically thinks legislation is going to be passed by this Congress, and that they’re gearing up for a bill in 2009, but I was a bit shocked to see the lack of conformity to where the international community has already been and where we’re going.  Witness LeBlanc’s comment, for example, on the need to incorporate principles being ironed out on REDD – “Reducing emissions from deforestation and ecosystem degradation.”  The critical UN meetings in Bali in December accepted the principle and there continues to be a lot of activity.  Let’s hope the next Congress and the next President figure out the considerable bang for the buck in this.  They need, clearly, to think about all the international ins and outs of climate change. 

During the break, I asked EcoSecurities’ US director, Eron Bloomgarden, about this.  He said that there were Congressional staffers who’d gone to Bali and they are aware of the international initiatives.  He also flagged the Presidential Climate Action Project to me.  The PCAP, modestly, “… has developed a bold, comprehensive and non-partisan plan for presidential leadership rooted in climate science and designed to ignite innovation at every level of the American economy.”  In talking to LeBlanc privately, she noted that the international community is itself very closely watching what’s happening now on the Hill.

The other panel I heard had some fascinating insights on clean tech.  (See Green Tech, Low Tech, Clean Tech, New Tech and any number of posts on Renewable Energy and Energy Efficiency.)   One of the panelists was Frank Alix, the CEO of Powerspan, a company that has advanced pollution control technologies for power plants.  They’re developing a carbon dioxide control technology, not surprisingly.  Mitch Tyson is the CEO of Advanced Electron Beams.  AEB deploys its clean energy technology across a wide range of industrial applications, including pollution control.  Tyson is also involved in a number of regional initiatives including the New England Clean Energy Council and the Massachusetts High Technology Council.  He’s extremely knowledgeable, as you’d imagine, about his industry, and passionate.  So is Al Forte, Director of Carbon Practice for Nexant, a high-tech provider to the energy and petrochemical industries.     

Forte talked about what he characterized as the best Renewable Portfolio Standard program in the country – Connecticut’s.  It very effectively fosters renewables and energy efficiency, including the issuing of energy efficiency credits for eligible projects.  See the Connecticut Clean Energy Fund and the Connecticut Energy Efficiency Fund.  In the same vein, Tyson talked about the Cambridge Energy Alliance.  These folks are also fostering a considerable effort on reducing energy use.  This is all on the general theme of demand-side management.  Tyson pointed out that Massachusetts is moving to “decoupling” in which utilities are given incentives to promote energy efficiency.  I pointed out that New York State used to have it and it lapsed.

Another nugget:  Forte at one point said that there’s 800 GW of generating capacity in the US and it’s operating at an average of 28% efficiency.  He more or less characterized this as criminal and wondered why there isn’t more use of cogeneration.   

For more, see Energy Efficiency and Energy Efficiency for Fun and Profit, items I’ve had here recently on this subject.

Not only is the planet heating up, but, as we’ve seen here, so is the intensity and the seriousness of the debate on how to get GHG’s down.  One persistent theme is the necessity of “setting a price on carbon.”  We’ve heard this from the Stern Review, the IPCC, Lehman Brothers in their reports on the Business of Climate Change, and numerous economists.  The US Senate will shortly begin debate – as early as next week – on a vehicle for a comprehensive federal approach, with a cap-and-trade system at its core.  (See A Summary of the Boxer Substitute Amendment To the Lieberman-Warner Climate Security Act and this look at the state of legislation in Congress from the Pew Center on Global Climate Change.)  Realistically, nobody expects a bill to be passed by this Congress and signed into law by this President.  However, the lessons we will learn as legislation progresses this year in Congress will serve as the foundation for the law that will emerge from the next Congress and that will be signed by the next President.  Beyond an American cap-and-trade regime, of course, there is the international agreement that will be finalized in December of 2009 in Copenhagen.

So, as the pace quickens over the next few months and into next year, there will be more and more analysis emerging from various worthy think tanks and other keepers of the policy flames.  Here, for instance, is a paper on “Economic Incentives in a New Climate Agreement” from Harvard’s Belfer Center for Science and International Affairs.  The paper looks at the “… potential use of market-based or economic-incentive instruments to ensure that polluters face direct cost incentives to mitigate emissions at the lowest possible cost. The first section describes various economic-incentive policy instruments and the second section discusses their potential application in the design of an international climate policy agreement.”  This is the language that the international negotiators on the post-Kyoto agreement are speaking.  (For more on their activities, the UN Framework Convention on Climate Change has comprehensive coverage.) The Belfer Center paper is a good, digestible look at some of the basics of where we’re going.

Another approach to curbing GHG, particularly from newly and rapidly industrializing economies such as China’s and India’s, is to use trade instruments.  How do you do that?  One way was detailed by Yale professor Judith Chevalier in an op-ed from the “NY Times” in December:  a tax on carbon consumption.  I wrote about this here and described it thus:  “So, if you can’t get China or some other recalcitrant to restrain GHG emissions through some international protocol (to which the Bali meetings were supposed to point the way), then take it out of their exchequer by creating barriers to products created in high-GHG economies.”

“Policy Innovations,” a Carnegie Council online magazine, has this recent take:  Can Green Trade Tariffs Combat Climate Change?  The federal legislation under consideration “…would also levy punitive tariffs on greenhouse-gas-intensive products imported from countries that lack comparable action’ to that of the United States, starting in 2020.  Industrial lobbies and labor unions are pushing hard for these sanctions to take effect more quickly.”  So, this is not just some wonks pushing ideas around in space any longer.  This could become one of the keystones of an American approach to the global crisis.  And not just American.  The Carnegie Council article reports that “European Commission President José Manuel Barroso, French President Nicolas Sarkozy, and industrial chambers of commerce strongly advocate a similar tariff system, leading many analysts to predict that the EU will also adopt some sort of green tariff system in the next few years.” 

I’ll give you one more tactic to consider:  feed-in tariffs.  What are FIT laws?  “They place a legal obligation on utilities to purchase electricity from renewable energy installations. The tariff rate is guaranteed, and in the best examples, for a long period — say 20 years. The tariff rate is scientifically determined for each technology, to ensure profitable operation of the installation.”  (This is from an excellent paper by an analyst from The World Future Council, courtesy of RenewableEnergyWorld.com.)  A new report from the Heinrich Böll Foundation North America, Feed-in Tariffs and Renewable Energy in the USA - a Policy Update, looks at how FIT’s have driven growth in Europe, what the experience has been in the six US states where they’re on the books, and the proposal in Congress for a federal law.

Break out your old economics textbooks.  There’s going to be plenty to look at and analyze.

Cap-and-Trade Bonanza – “Fortune” has a Sustainability column authored by Marc Gunther and this week he’s got a story on how we’re going to divvy up the proceeds from the inevitable U.S. cap-and-trade program that will be on the books sometime in 2009.  See A $3 trillion climate change battle.  As Gunther writes, “The issue gets pretty wonky pretty quickly, but it’s worth trying to understand because the stakes are so high.”  The question is who will get the money raised by the permits issued.  That’s the much-more-than-$64,000 question.  Should it go to the taxpayers, the industries effected in the form of some rebate, to help fund renewable energy investments, and/or any of a number of other constituencies and projects?  This will be a big part of the debate as this legislation wends its way through Congress, and in the early days of the next administration.  (As we learned in the last post below, the next President of the United States, whomever he or she will be, will be on board for some sort of cap-and-trade regime.)   

New Study Pinpoints Thousands of Climate Change Impacts – “Nature,” one of the oldest, most revered, and most definitive science journals, published a paper this week, Attributing physical and biological impacts to anthropogenic climate change, from key scientists who were involved with last year’s landmark Fourth Assessment Report from the Intergovernmental Panel on Climate Change.  “Nature’s” superb blog, “Climate Feedback,” said here that “Nearly 30,000 phenomena in the natural world - from the timing of plant flowering to the rate of ice melting - are being influenced by human-induced global warming, according to the first study to formally link trends in biological and physical systems to rising greenhouse gas emissions.”  Here’s the story from NASA where the lead author, Cynthia Rosenzweig of NASA’s Goddard Institute for Space Science, has her day job.

Wind Power – There are two good stories at “EERE Network News,” the weekly newsletter of the US Department of Energy’s Office of Energy Efficiency and Renewable Energy.  Not incidentally, folks, if you haven’t looked at the DOE’s website, there is really a goldmine of great information here, from soup to nuts on energy.  (How’s that for a mixed metaphor?  Sorry, if I’ve offended any particularly delicate sensibilities on these sorts of things.) 

Anyway, the first compelling story here is New DOE Report Analyzes a Path to 20% Wind Power by 2030.  This means the US would move from its current generating capacity of 16.8 gigawatts to 304 GW in 2030.  It would also mean we’d achieve an annual reduction of 825 million metric tons of carbon dioxide emissions in 2030.  The report further calculates “…the accelerated wind power effort would support roughly 500,000 U.S. jobs and add more than $1.5 billion in annual revenues to the coffers of local communities.”  Go to the “20% Wind Energy by 2030” program website for more.

The second story from DOE references a new report from the American Wind Energy Association showing a continuing boom in windpower installations.  The “…industry continued new installations at a breakneck pace in the first quarter of 2008, putting 1,400 megawatts or approximately $3 billion worth of new generating capacity in place,” according to the report from the AWEA.  The first quarter!  Not bad.

However, even though it appeared as of my post from last month, Tax Breaks, Finally, for Renewables, that the deal was done and the extension of tax credits for the renewables industries was at hand, it appears to be not quite yet the case.  The AWEA and her sister renewable energy industry trade groups are still pitching.  See this release.  We’re getting close though.  See this from Reuters’ today:  Renewable Energy Tax Bill Advances In US House.