If you know me or have been reading this blog with any regularity, you know I’m a skeptic.  Not about climate change but about China.  I made an analysis several years back that, in retrospect, seems mistaken.  I perceived that the economic and political pressures of the liberal democracies would push and pull China toward more openness.  It hasn’t worked out that way.  The Chinese Communist Party, for example, is as dug in on its oppression of the Tibetans as it ever was.  People, around the world, let the Chinese get away with murder.  Thomas Friedman, for instance, showed a shocking lack of perspective recently when he called the Chinese leadership “enlightened.”  My response to that noted, among other things, and in case Friedman hadn’t been paying attention, that China is a police state.

Paul Krugman called China out the other day on one of the most important issues facing the world:  the PRC’s “predatory” mercantilist policy.  Krugman noted that “…the biggest problems with China involve climate change.”  (More about that in a moment.)  However, he devoted his column to describing the impact of their currency policy and trade surplus.  “My back-of-the-envelope calculations suggest that for the next couple of years Chinese mercantilism may end up reducing U.S. employment by around 1.4 million jobs.”  But we let the Chinese get away with this in the name of … what again?  Krugman - a Nobel laureate, lest you’ve forgotten - punctures the two great arguments against confronting the Chinese:  that they’ll dump the trillions of US Treasuries they’ve accumulated and protectionism is always a bad thing.  Read this column to learn why confrontation is good.

Meanwhile, we saw China’s performance in Copenhagen for two weeks.  For one thing, they displayed, in my opinion, a bizarre intransigence on the critical issue of MRV - measurement, reporting and verification.  (I addressed that in this post during the last week of the conference.)  The Chinese also put up procedural roadblocks at every opportunity during the entire two weeks.

To top it off, the Chinese, for all intents and purposes, blew a substantive agreement out of the water at the end.  Mark Lynas had a blockbuster look at this in “The Guardian” recently:  How do I know China wrecked the Copenhagen deal? I was in the room.  Lynas, attached to a foreign delegation, witnessed “profoundly shocking” behavior by Wen Jiabao and the PRC delegation during the intense talks that took place on the last day.  He describes Wen’s attempts to insult the other world leaders and representatives of key constituencies by sending lower-level functionaries to key meetings.  He notes how China blocked mention of the GHG emission targets previously agreed at the MEF and G-8 meetings last July, and mentioned in late drafts in Copenhagen.  There’s more.  China was, to India’s shame, backed in much of this by Manmohan Singh.

How to proceed?  Krugman, regarding the trade imbalance, calls for greater protection from Chinese goods.  I have noted that US climate legislation may well include mechanisms for protection against other countries ignoring necessary GHG-reduction measures.  And why not?  See this recent post, for instance, for more on the “carbon tariff.”

Are we going to roll up our sleeves, here in the US and throughout the world, and finally call for responsible behavior, not only on greenhouse gases but on democracy and predatory economic behavior from China?  John Ikenberry wrote in this brilliant essay at “Foreign Affairs” two years ago, that “The rise of China does not have to trigger a wrenching hegemonic transition. The U.S.-Chinese power transition can be very different from those of the past because China faces an international order that is fundamentally different from those that past rising states confronted. China does not just face the United States; it faces a Western-centered system that is open, integrated, and rule-based, with wide and deep political foundations.”  We simply have to remember, don’t we, that there are rules and China does not get a free pass.

I quoted Christopher Patten here a year ago:  “The suggestion that there is a correct way of dealing with China - humoring China, acceding to Chinese sensitivities, allowing China to rewrite whatever language it is negotiating in, leaning over backward not to provoke or annoy China, playing endlessly to what (as we shall see) are China’s not very awesome strengths - blights the West’s attempts to develop any sort of sensible strategic relationship with Peking. Perhaps as important, it is bad for China; it encourages China to think that it can become part of the modern world entirely on its own terms. Were that to happen, it would make the world a more dangerous and less prosperous place.”

It’s time for Obama, Brown, Merkel, and the others to heed this quintessential wisdom.

I know a Tibetan whose name is Monlam Gyatso.  That means Ocean of Prayer.  We have an ocean of opportunity before us.  What I and others, not the least of whom is McKinsey & Company, see bashing down our doors to bang us on our thick heads is an ocean of GHG abatement opportunities by the bucketful, many of which are cost-negative. Got that?  We do this, we curb our GHGs and we make money doing it.  Refer to this McKinsey slide show, particularly slides 4,5 and 6.  This looks at the now-famous global greenhouse gas abatement cost curve (slide 4) as described in their report, Pathways to a low-carbon economy.  The report dispels some important myths (slide 5) and identifies five areas of focus (slide 6) to maximize GHG abatement.

The “FT” published another stunning interactive graphic a couple of weeks ago that describes “the scope for cuts” based on McKinsey’s work.  You can see the immense possibility, both by country and by sector.

What, please tell me, is not to love here?!

I wrote here recently about what the initial stakes of various big players are for Copenhagen.  Lord Nicholas Stern, author of the Stern Review on the Economics of Climate Change, and one of the world’s leading experts on the economics of climate change and energy, says, in this “FT” op-ed piece yesterday, that with what’s on the table now, we are in easy striking distance of keeping the earth’s temperature rise at or below 2 degrees Celsius, a figure agreed upon at the G-8 Summit in July.  “The intentions expressed over the past few months and weeks have moved us towards these goals.”

Others are not quite as hopeful about the impact of what’s being said by the EU, the US, China, India and the others.  The good folks at Climate Interactive, the climate program of the Sustainability Institute, have put up a “scoreboard” for Copenhagen.  They’re saying that what we’re seeing now in commitments keeps us at only a 3.8 degree rise.  That will likely cause truly catastrophic change.  Here’s the scoreboard itself.  (You can click on a link for a video further explaining their approach and you can explore their analysis here.)  They will keep the scoreboard updated during the conference.

Whatever the predictive power of this scoreboard, or Lord Stern’s analysis for that matter, it is important to get a sense of the inputs that are under such intense scrutiny now.

Several recent posts here have looked at the state of play leading up to the 15th Conference of the Parties (COP 15) to the United Nations Framework Convention on Climate Change (UNFCCC).   I’ve been generally optimistic about prospects - although the title of my last post may belie that.  There are several reasons why I’m hopeful about things.

One of these has been expressed a fair number of times here:  We are seeing progress on renewables and energy efficiency that, if you’d asked me ten years ago, I would’ve said I thought wasn’t going to happen - at least not in my lifetime.  I continue to be delighted at how wrong I was.  Today’s special section in the “NY Times” for instance, on the Business of Green, has a number of stories relevant to this theme, among them this one on what would really make clean tech companies happy.  An agreement in Copenhagen is not high up the list.  “What matters far more in the near term, the companies say, are national governments’ efforts to provide incentives for developing technologies like wind and solar power or cellulosic ethanol.”  Further, this industry “…has already begun to find its footing, both in the United States and abroad, without any recent international action on climate - although concerns about emissions as well as energy security are clearly the driving force.”  I would not hesitate to add that money - spelled s.a.v.i.n.g.s. - is another huge impetus.  Green economic stimulus in the US and elsewhere are yet another positive factor.

This special “NYT” section has other great articles including on how successful energy efficiency initiatives may well have flattened out our consumption for the long run.  It is precisely the following sort of perspective that absolutely makes my heart sing:  “In April, Jon Wellinghoff, the chairman of the Federal Energy Regulatory Commission (FERC), said that because of the combination of renewable energy and energy conservation, the United States might not need to build any coal or nuclear plants to meet the base-load capacity that runs around the clock and is supplemented by natural gas and other sources at peak periods.  ‘We may not need any, ever,’ he said.”  The Smart Grid is going to further drive that devoutly wished for outcome.

One of my favorite writers, Andrew Leonard over at Salon.com, had this essay yesterday about how renewables can sneak right up on you.  (I cited Leonard’s take on the virtually limitless potential for renewables here a while back.)  He’s talking here about how the windpower industry in Texas has just exploded over ten years, from 180 MW to 6.223 GW just this month.  Worldwide, windpower capacity is burgeoning.  The World Wind Energy Association (WWEA) says that wind energy continued its growth in 2008 at an increased rate of 29%.  See this chart.

A few more thoughts, if I may.  I quoted Amory Lovins here recently saying that “The Renewable Revolution has been won.”  This was echoed by Peter Löscher, the head of Siemens, in this recent “FT” article:  “The green revolution has started and by 2020, green technology will have surpassed the car industry as well as the engineering sector in Germany.”  Sweet.

That’s what the overwhelming verdict is because of new extraction methods for accessing natural gas from shale.  I’ve written recently about the rising star of natural gas as a powerful tool in battling the climate crisis:  see  Natural Gas - to Cut GHG Emissions, Natural Gas in the Senate and The Gas Industry at the “FT”.

Now we’ve got natural gas at the “NYT” as well.  In this article from yesterday, we read about the gas rush all over the world, and particularly in areas that can use it relatively near to where it can be extracted from shale.  The US, Europe, China and India for instance.  “It’s a breakout play that is going to identify gigantic resources around the world that will change the geopolitics of natural gas,” is how Amy Myers Jaffe, an energy expert at Rice University, is quoted in the article.

Daniel Yergin - The Man when it comes to energy economics - is also quoted:  The new gas extraction methods are “…the biggest energy innovation of the decade.  And the amazing thing is there was no grand opening ceremony for it. It just snuck up.”  (Like wind, solar, and geothermal as well, for that matter.)

For much more on the natural gas scene, see the “NY Times” comprehensive coverage, alongside its other coverage of major energy topics, and the website for America’s Natural Gas Alliance (ANGA).

Think California and its Governator aren’t dead serious about renewables?  DOE’s weekly newsletter, “EERE Network News,” has this story:  California Accelerates its Pursuit of Clean Energy.  A new executive order requires the Golden State’s utilities to get a third of their electricity from renewable energy sources by 2020.  This is in addition to robust energy efficiency programs that make California consistently one of the leaders, worldwide, in creating negawatts.

Who else is on it?  Some of the world’s biggest construction firms, like Bechtel.  See Engineering giants follow the money to green power from Reuters.  There’s new construction in play here and retrofits.  This is being partly driven by exactly the sort of Renewable Portfolio Standards that California and others have mandated - and the US Congress may enact.  As one CEO is quoted in the Reuters article, “We don’t see the onslaught of environmental regulation as necessarily a negative.”

Further evidence that the smart money is on clean tech, is that Pacific Gas and Electric and Exelon have quit the US Chamber of Commerce and Duke Energy has left the National Association of Manufacturers.  (See The Business Community is Speaking Out - Loud and Clear.)  It’s “a major reframing of the climate narrative” according to consultant David Brodwin.

How about the VC folks?  (Smart money, I’d say.)  Clean-tech VC investments overtake IT and biotech is the story from the good folks at “Environmental Finance.”  “‘The billions in government funding being allocated globally in clean-tech have begun emboldening private capital, which has in turn helped propel clean-tech to the leading venture investment sector, now eclipsing biotech and IT,’ said Dallas Kachan, managing director of the Cleantech Group.”

Take one sector, offshore wind.  Outlook for US Offshore Wind Projects: Favorable with High Gusts reports RenewableEnergyWorld.com.  “Now that the Cape Wind project is considered more likely than not to proceed and with the favorable political climate towards renewables, it is not a question of whether U.S. offshore wind farms will get built but how many.”  (See my review of the excellent book, Cape Wind.)

Growth in renewables have been consistently blowing nuclear power and fossil fuels out of the water.  See this from Grist.  This echoes what I heard Amory Lovins say recently:  “The Renewable Revolution has been won.  Sorry, if you missed it.”  Hyperbole?  Perhaps.  I’ve said this before here, but I’ll say it again:  I’ve been around this stuff for nearly 40 years and I never thought I’d live to see the day when a massive, global, seemingly inexorable push to Renewable Energy and Energy Efficiency would be everywhere so much in evidence.

In yet another useful special report at the “Financial Times” - this one today on the gas industry - there are two articles on the theme of what I was talking about recently in which natural gas is being positioned as a “transition” fuel to the low-carbon future.  (See Natural Gas - to Cut GHG Emissions and Natural Gas in the Senate.)

One of the FT articles is Climate change: Transition fuel or true low carbon option? One major energy company top executive says that he would like to set a target of “…raising US gas consumption by 1,000bn cubic feet a year - a 4 per cent increase - to make it possible to close 150,000 megawatts of old coal-fired plants.”  The argument increasingly being made by the gas industry folks is that long made by environmental activists:  coal is the most GHG- intensive fuel for electricity production and its use needs to be radically curtailed.  (Politics and strange bedfellows?)

The other article here of interest in this context is about the industry trying to get the US government to pay attention to the potential here.  The newly formed industry group, America’s Natural Gas Alliance (ANGA), has come out swinging.  As I noted recently, the Kerry-Boxer bill in the US Senate incorporates language on natural gas that the Waxman-Markey had not.  ANGA seems to be making itself heard.  Better late than never.

For a PDF of the whole report, go here.

By the way, I am not intrinsically against business and other special interests being heard in the halls of power.  I just think they should not have undue influence.  If good public policy happens to coincide with some commercial interests, then so be it.  It just would be a lot better for everyone at the end of the day if the public policy part of the equation always came first.  (Did I hear a snicker out there?  Or was that me?)

Are the US Chamber of Commerce and the National Association of Manufacturers listening?

It’s pretty plain at this late date that many, many leading companies in manufacturing, mining, finance, insurance and other industries recognize the threat of climate change to their businesses and the opportunities for growth with sustainability.  The World Business Council for Sustainable Development (WBCSD) is a good example of major corporations putting their shoulders to the wheel.  The United States Climate Action Partnership and Business for Innovative Climate and Energy Policy show that many Fortune 500 companies want a cap-and-trade scheme here and they want it sooner, rather than later.

There’s a pretty big story in the fact that a growing number of companies are pulling out of the US Chamber of Commerce because of their denial of climate change and their opposition to cap-and-trade.  The latest declaration of independence from the tunnel vision of the Chamber is Exelon, a major US utility.  Reuters had this story yesterday in which they quoted an Environmental Defense Fund climate spokesman, speaking of the Chamber:  “They’re lagging behind where their members actually are and I think what we’re seeing now is companies that have already made up their minds (on climate change) are losing patience.  Lots of companies want a bill to get the uncertainty out of the process.”

Duke Energy, the nation’s third-largest utility, made a pretty big splash when they pulled out of the National Association of Manufacturers and they’ve also bailed out of the “American Coalition for Clean Coal Electricity.”  So have Alstom Power and Alcoa, among others.

For more on this, see the story in today’s “FT” - Industry gets heated over stance taken by lobby groups.  Dan Weiss, director of climate strategy at the Center for American Progress (and an old comrade-in-arms of mine from the acid rain wars) is quoted:  “The chamber has signalled it is far outside the mainstream.”

Exelon’s head, John Rowe, said in a company statement “The carbon-based free lunch is over. But while we can’t fix our climate problems for free, the price signal sent through a cap-and-trade system will drive low-carbon investments in the most inexpensive and efficient way possible.  Putting a price on carbon is essential, because it will force us to do the cheapest things, like energy efficiency, first.”

Earth to America.  The US Chamber of Commerce and National Association of Manufacturers, not to mention the US Senators who are dead fearful of the transition to a low-carbon economy, need to hear these corporations.

Paul Krugman had a couple of columns, today and Friday, with some complementary posts at his blog, “The Conscience of a Liberal,” on the economics of cap-and-trade as well as the dire situation in which we find ourselves relative to warming and its impacts.  To refute some of the nonsensical - and false - claims relative to job loss, Krugman offered this column on Friday:  It’s Easy Being Green.  “It’s important, then, to understand that claims of immense economic damage from climate legislation are as bogus, in their own way, as climate-change denial. Saving the planet won’t come free (although the early stages of conservation actually might).But it won’t cost all that much either.”

Krugman further explores the faulty economics and the politics that drive it at his blog:    Pigou, Glenn Beck, and the false case against cap-and-trade.  Following up, he writes on The textbook economics of cap-and-trade.  In the lucid manner that many of us have come to so greatly respect from this Nobel economist - and on which we so often rely to cut through lies and confusion - Krugman lays out the case for why cap-and-trade will benefit not only the planet and its climate system, but the businesses who engage in optimizing their operations to meet the cap, as well as the businesses that will profit from capturing the value of the offset system.

Today he writes in his column on the Cassandras of Climate.  You must remember that although a “Cassandra” usually has a negative connotation, she was right when she predicted the fall of Troy.  And, like Cassandra, climate scientists are “…gifted with the ability to prophesy future disasters, but cursed with the inability to get anyone to believe them.”  It’s a characteristically hard-hitting column.  He points out what’s too painfully obvious:  “Responding to climate change with the vigor that the threat deserves would not, contrary to legend, be devastating for the economy as a whole. But it would shuffle the economic deck, hurting some powerful vested interests even as it created new economic opportunities. And the industries of the past have armies of lobbyists in place right now; the industries of the future don’t.”

Let’s hope that Washington can overcome its propensity for catering to special interests and gets the public policy work done that must be done in order to move us out of the climate red zone.  Barbara Boxer and John Kerry will introduce their climate and energy package in the Senate this week.  Let’s see how it fares.

Barry Commoner wrote The Politics of Energy in 1979.  In it, he called for a transition to renewables - with natural gas as the bridge to the future.  30 years later this still sounds pretty good.  One difference, of course, is that we’re so much farther along on renewables than perhaps even Dr. Commoner could’ve dreamed. 

A recent article in ”The Economist” discussed how much more natural gas there is, in the US anyway, than we thought just a few years ago.  See The economics of natural gas - Drowning in it.  There’s 39% more than assessed in 2006.  The article references a new paper from John Podesta and Tim Wirth.  This abundance “…creates an unprecedented opportunity to use gas as a bridge fuel to a 21st-century energy economy that relies on efficiency, renewable sources, and low-carbon fossil fuels such as natural gas.” 

Sean Casten has written convincingly of how we should be transitioning our electricity generation from coal to natural gas.  Here’s a recent article from “Grist” in which he notes the yawning chasm of difference in GHG emissions from gas and coal-fired plants.   Robert F. Kennedy Jr, in an op-ed in July in the “FT” titled How to end America’s deadly coal addiction notes “Of the 1,000 gigawatts of generating capacity currently needed to meet national energy demand, 336 are coal-fired. Surprisingly, America has more gas generation capacity - 450 gigawatts - than it does for coal.”  What’s the problem?  The gas plants are most often dedicated to peak demand, the coal to baseload.  What to do?  Switch to the gas for baseload, reduce demand, and build out the renewable capacity.  (See also my article on the smart grid to see how this enters it.)

For more on natural gas, see the American Natural Gas Assn.

The natural gas boom is not without its difficulties.  In Canada, there is some violence springing up as a result of development in pristine wilderness.  See this, also from “The Ecoomist.”  This certainly evokes the same feelings as the nightmare of the tar sands.  The environmental damage, though, is, as yet, nowhere near the same scale.