Climate Change

The House of Representatives has passed another version of the energy tax package that failed to make it into the energy law passed in December or into the economic stimulus package that became law earlier this month.  (See this and this from June on the Senate’s failure on the tax portion and also see  “Economic Stimulus” under The Business of Renewables below.)  What the legislation, HR 5351, would do, essentially, is rescind $18 billion in tax breaks that the oil and gas industry are presently enjoying and use that money to underwrite advances in energy efficiency and renewables, including extending tax credits to the renewable industry.  This article from CNNMoney.com, House Votes To Repeal Oil Tax Breaks, Finance Renewables, is one of the few of hundreds that characterizes the legislation correctly.  Most of the articles describes “tax hikes” or “new taxes” when, in fact, we are talking about the rescission of tax breaks from which the oil and gas industry are deriving considerable benefit at the same time they are experiencing record profits.  Illinois Congressman Rahm Emanuel said yesterday in the floor debate:  “The American people do not deserve to pay the oil companies twice: once at the pump and once again on tax day.  There are record prices at the pump, and now we have record taxpayer subsidies for the big oil companies. As my mother used to say, ‘such a deal.’”  Taxpayer subsidy.  Good expression. 

Will the Senate pass the same legislation?  I’m not that great at predicting, but I would guess no.  If they do, President Bush will undoubtedly veto it.  There aren’t enough votes to override.  (And yes, it makes me angry.)

New Fund – Agence France-Presse reports G7 calls for investment to fight climate change.  “The United States, Japan and Britain have proposed setting up a multilateral fund involving the World Bank that would administer global aid and investment to help nations fight slash greenhouse gas emissions blamed for global warming.”  This follows on the announcement in January that I reported on here in which Japanese PM Fukuda made a $10 billion commitment and said:  “A carbon-free society can no longer be a mere fantasy.”  His finance minister and those from the U.K. and the U.S. had an op-ed in the “Financial Times” last week in which they called for “a fund to ensure the widespread adoption of clean technologies in the developing world.”  An eminently practical view is guiding this initiative.  “If energy consumption continues along the current path in developing countries,” the ministers wrote, “future development will have a greater impact on our climate. We have no choice but to help developing countries reduce the carbon footprint of development and make their economies climate change resilient.” 

Renewable Energy Tax Credits – I wrote on February 7 below about the failure of the Senate to include a vital tax credit program in the economic stimulus bill.  Well it appears that this issue is far from dead on The Hill.  In this story from Reuters, I, for one, am delighted to learn that Nancy Pelosi and other House Democratic leaders want to revive the legislation that would extend the existing credits past the end of this year and, at the same time, rescind the billions of dollars that the oil industry is receiving now, in an era of unprecedented profits for them. The “NY Times” unequivocally endorsed the idea of renewing the credits in this editorial from this past Sunday.  See No Surprises (Unfortunately) – Part Deux from December for more on the tax issue.

Congressional Investigation – Meanwhile, in another part of the House, and further to the story of the investigation I mentioned here early in January, House Oversight and Government Reform Committee Chairman Henry Waxman has issued subpoenas.  The “L.A. Times” reports here that Waxman “…wants the EPA to hand over documents related to its rejection of California’s request to impose stricter emission standards.”  Henry Waxman is a bulldog, make no mistake.  He’s also a hugely smart member of Congress and doesn’t go off half cocked.  Oh yeah, and he’s a passionate environmentalist. 

Economic Stimulus – In the U.S. Senate yesterday, they tried to get a vote on the economic stimulus package.  See this from the A.P.  The measure couldn’t get the votes necessary for cloture – the magic 60 necessary for a bill to be fully considered on the Senate floor.

What’s this got to do with climate change you ask?  Good question.  One of the missing components from the energy legislation signed into law in December was the extension of tax credits beyond 2008 for the renewable energy industries.  The Senate Finance Committee heeded the call and included a renewal in the economic stimulus package that was sent to the full Senate.  The American Wind Energy Association has been trumpeting the need for this and has voiced its concern for 75,000 U.S. jobs that would be at risk “…solely as a result of the decline in wind energy investment.”  They further calculate that tens of thousands of additional jobs will be threatened because of similar slowdowns in other renewable energy industries.  See their statement from January 30 lauding the action of the Finance Committee and their release from February 4 of a report calculating the potential for loss of  “116,000 U.S. jobs and nearly $19 billion in U.S. investment” in just one year if the tax credits are not renewed.  I’d say this fits in with the economic stimulus package, wouldn’t you?

But, surprise, surprise, the Senate Republican leadership pulled out all the stops and killed the package.  To be fair, the target was not the tax credit extension per se, but based on past experience such as keeping the Renewable Portfolio Standard out of the energy bill as well as keeping the rescission of tax breaks for the oil & gas industry and renewable tax credits out, I’d say the Republican leadership was perfectly happy to have the tax credits go down with the ship.  (For further background, see Senate Energy Update and any number of other posts from December on the legislation.) 

Green Energy Industry – The “NY Times” had a good story recently on how the industry’s doing in California.  The short answer:  very well, thank you.  The boom is  “…the product of billions of dollars in investment and mountains of enthusiasm.”  I’ve written about this boom any number of times here, including how venture capital is seeking projects all over the place.  One of the students in my climate change class was opining that there are no good environmental stories.  I told her and will continue to tell you that there are hundreds of good stories, with more every day. 

Trillions for Renewables! – Trillion has a nice ring to it, don’t you think?  An article in the “S.F. Chronicle” – Trillions likely to boost clean energy technology - Rising fuel costs, global warming spur investment – is about a new report from Cambridge Energy Research Associates, a consultancy headed by Daniel Yergin, a longtime energy expert who has done some very solid work over the years.  Yergin, quoted in the article, says:  “We are seeing a major shift in public opinion.  This is providing a vital impetus that is moving clean technology across the great divide of cost, proven results, scale and maturity that has separated it from markets served by mainstream technologies.”  There is, according to CERA, a worldwide “bubbling” of clean energy activity.  CERA’s press release on the study, “Crossing the Divide: The Future of Clean Energy,” quotes Robert LaCount, head of CERA’s Climate Change and Clean Energy Group.  “The rapidly advancing new paradigms of climate change, energy security, and policy implementation and cooperation among the United States, the European Union, China and others will produce a broad range of opportunities, risks and pitfalls as the modern energy industry increasingly moves to adopt clean technologies that will be part of the alternative, low-carbon pathway to the energy future.” 

Pinch me.  Am I dreaming?

And one has to wonder how soon will the people so desperately trying in Congress and elsewhere to block this kind of progress be swept away by history?  Not soon enough for me.

The UN Process – As you know, the United Nations Framework Convention on Climate Change (UNFCC), located in Bonn, is the governing body for the Kyoto Protocol, its Clean Development Mechanism (CDM), and much of the work that the UN does on climate change.  Its executive secretary, Yvo de Boer, has this perspective on the road after the Bali meetings. Aside from the enormous international media exposure that the conference received and the setting out of a timetable, there were, de Boer notes, immediate results in “the areas of adaptation funding, technology transfer and reducing emissions from deforestation.”  He calls for a global “Climate Change Marshall Plan” in which the industrialized countries will help the developing world with energy efficiency and other measures. 

Hawaii – The White House is hosting a get-together this week in Hawaii as a follow-up to the meetings it held in Washington in late September.  I mentioned those talks here and how bad the reviews were here.  As Reuters reports in World’s big polluters meet in Hawaii over climate, the 15 largest GHG-emitting nations will meet, along with reps from the UN and the EU.  One skeptic of these talks, Angela Anderson of the non-partisan Pew Environment Group, is quoted here:  “The question back in September was, ‘Does the fact that they’re launching this process indicate some change in the position of this administration?’  There has been no change in position whatsoever in this White House. They were hoping to sell their position to the rest of the world and that’s not working.”

Reuters further reports, however, that the Bush administration has made a $2 billion pledge for a clean technology fund. 

Japan – Meanwhile, the Japanese government has made a $10 billion commitment, and they expect to make a 20% reduction in carbon dioxide emissions by 2020.  See Tokyo sets emissions cut target from the “Financial Times” and also this op-ed from the Japanese Prime Minister.  Yasuo Fukuda.  This statement, from the leader of the world’s second-largest economy remember, jumped off the page at me:  “We all know we must change our ways of living. A carbon-free society can no longer be a mere fantasy.  It is the shining house on the hill for which we must all reach.”  Carbon-free society!  You go, Yasuo!

Energy Islands – I couldn’t resist this item on what might or might not be a fantastical approach to renewable energy:  archipelagos of artificial islands that will produce electricity, clean water and even food.  See Energy islands could use power of tropics from “The Guardian.”  The architect Alex Michaelis is vying for Richard Branson’s $25 million prize for a big, innovative GHG-reducing project.  The article reports:  “At the heart of each island is an ocean thermal energy conversion plant which can create electricity from sea water where the difference between the temperature of the surface water and the deep is 20C or more.”  Here’s an excellent graphic showing how the system would work.  

The EU’s Thrust on Energy and Climate – Today the EU announced its comprehensive renewables plan.  Go here for a wealth of information from them, including releases, video, speeches, key documents etc.

I’ve talked about and will be talking more about the EU’s plans.  Reuters’ very useful “Planet Ark” has this “factbox” on what the EU intends to be doing.  Here’s one pretty significant overall goal:  20 percent reduction in emissions of greenhouse gases in 2020 compared to 1990 level. The cut would be increased to 30 percent if there is an international agreement on the issue.

Tax Credits for Renewables – In the final energy bill from Congress from December (see It’s A Wrap… and numerous other posts), one pretty important component was left out, along with the 15% Renewable Portfolio Standard for electric utilities:  the extension of tax credits for renewables.  Without action by Congress, these tax credits will expire at the end of 2008.  Without them, investment in renewables will plummet.  See Groups See Dim Renewable Energy Future from the A.P. and Renewable Energy Leaders Urge Congress, Bush to Extend Tax Credits Quickly from RenewableEnergyAccess.com. The four major renewable trade associations, American Wind Energy Association (AWEA), Solar Energy Industries Association (SEIA), National Hydropower Association (NHA) and the Geothermal Energy Association (GEA), are spearheading a drive to get the credits renewed.  They think that this should be part of the economic stimulus package that Treasury Secretary Hank Paulson and Congressional leaders are negotiating now.

Wind Power – I wrote recently about the healthy growth of wind power in China and Australia here, and now there’s a story from “USA Today” about the burgeoning of American wind generation:  Wind power growth gusts strongly in USA in 2007.  The AWEA said that the industry installed 5,244 megawatts in 2007, accounting for 30% of all new electricity-generating capacity.  See their release.

Hydrogen – I wrote in July about Abu Dhabi’s exciting and ambitious green building project at my special article for the FPA:  Great Decisions Analysis: The Green Building Movement.  Now Abu Dhabi has announced another important initiative – a $15 billion clean energy program with a significant hydrogen component.  Here’s how the BBC describes it in their article: “Hydrogen will be manufactured from natural gas by reactions involving steam, producing a mixture of hydrogen and carbon dioxide.  The CO2 can be pumped underground, either simply to store it away permanently or as a way of extracting more oil from existing wells, using the high-pressure gas to force more of the black gold to the surface.”

British chemical engineer, consultant and academic Keith Guy said:  “It’s important because it shows that you can generate hydrogen without carbon release from fossil fuels.”  Guy, in another BBC article worth noting, lays out a grand plan for hydrogen. 

Insurance Losses – I’ve written about the insurance industry’s concerns about climate change several times before – see “Insurance Industry” here for instance.  See also the webpage on climate change for Lloyd’s of London.

Here’s an article from “Forbes” that hits the point home further.  “Natural disasters wrought by climate change have a staggering price tag, and it’s growing.”  The story cites a report from Munich Re, the world’s second-largest reinsurer. They have a comprehensive accounting of the past year and losses internationally.  In their release, Munich Re quotes one of their board members:  “All the facts indicate that losses caused by weather-related natural catastrophes will continue to rise. As a leading reinsurer, we are ready to deal with this. Ultimately, however, it is society as a whole which bears the cost – in the form of higher insurance premiums or infrastructure repairs financed by taxes. That is why speedy international action is needed. In addition, climate protection can bring huge economic opportunities, thanks to new technologies and increased energy efficiency.” Opportunity – that’s a word that I continue to love.

Important fact to remember:  You don’t get more hard-nosed when it comes to the bottom line than these folks.  It doesn’t hurt to keep the bottom line in mind while we keep pushing for progress.

Wind Power – Here are two reports worth noting, the first echoing what I reported about China’s burgeoning renewables manufacturing sector in the last post below.  The head of the Global Wind Energy Council (GWEC) told Reuters here:  “We’d expect that the domestic Chinese manufacturers will have an annual production capacity of about 10 gigawatts per year…by the end of 2009.” 

Meanwhile, German Company to Build Massive Wind Farm in Australia is the story from the German news service “DW-World.”  This complex will “…generate enough electricity for 400,000 homes and save greenhouse gas emissions of three million tons of carbon dioxide annually.” 

Global Climate Change and U.S. Law – That’s the title of a new book from the American Bar Assn.  The book “…provides comprehensive coverage of the country’s law as it relates to global climate change.”  It’s edited by Michael Gerrard, one of the most knowledgeable and experienced environmental lawyers in the country.  Here’s a blurb from Bruce Babbitt, former governor of Arizona, Interior Secretary under President Clinton, and a candidate for President himself in 1988.  (I had the chance to work on that campaign and, let me tell you, he would’ve been a fantastic President.)  But Babbitt’s review of the book:  “Creative legal engineering will be needed to address this problem. This book, written by many of the country’s leading environmental scholars and practitioners, provides an invaluable start on this process. It’s a must read for any serious lawyer or policymaker in the field.”  Go here at the ABA website for much more information about the book. 

Meanwhile, LexisNexis has opened an impressive Environmental Law & Climate Change Center.  There’s a very well done webinar available on “Evaluating Global Warming Impacts under NEPA and State Environmental Review Statutes,” lots of news items, and a cornucopia of resources on environmental law.

Quick hitter:  Try this podcast from the excellent folks at Renewable Energy Access.  China’s surge as a renewable energy equipment manufacturer and rapidly growing consumer is one of a number of upbeat insights here.

Also, here’s a story on the growth of investment activity internationally from “Business Week.”  From the article:  “Around the world, investment in renewable energy projects is skyrocketing and will only increase further as calls grow for tighter restrictions on emissions of carbon dioxide and other greenhouse gases.”

Energy – The American Council for an Energy-Efficient Economy has a concise summary of the new energy legislation here.  As I’ve said a number of times, there’s a whole truckful of good stuff in this package.  

One big part of the pie is geothermal and the Geothermal Energy Association (GEA) has a summary here of what’s in the bill for R&D in this critically important area.  On geothermal, in January last year a major new report found enormous “… potential for geothermal energy within the United States” and “… that mining the huge amounts of heat that reside as stored thermal energy in the Earth’s hard rock crust could supply a substantial portion of the electricity the United States will need in the future, probably at competitive prices and with minimal environmental impact.” See this from the M.I.T. news service and the report itself. (Big file – 14.5 mb!) 

In addition to the new energy law, the DOE Office of Energy Efficiency and Renewable Energy (EERE) notes in its weekly newsletter that the omnibus appropriations act passed in late December provides a 17% increase in funds for them.  This is not, as the saying goes, chopped liver. 

Lawsuit – California, 15 other states, and five major nonprofits have filed suits challenging EPA’s recent denial of California’s request to implement its landmark law limiting global warming pollution from new automobiles.  See this from the A.P. and also this from “Wired Science” that reports on the investigation launched by House Oversight and Government Reform Committee Chair Henry Waxman of undue political influence on EPA’s decision.  (Waxman’s a hero of mine going way back to the Acid Rain Wars of the 1980’s when he was chair of the Health and Environment Subcommittee.)

Another old hand, Jim Tripp, general counsel of Environmental Defense, had this to say about the EPA’s decision:  “The agency’s decision defies the law, the science and the will of states representing nearly half of the U.S. population.”  Come on, Jim, say what you mean.  Environmental Defense is one of the five nonprofits involved in the suit.  See their release.

The gloves are off, folks.

Green Building – I’ve written about the fascinating subject of Green Building a number of times here, including this special article I did for the FPA website.  The “Financial Times” had a useful update the other day, Greener bricks on the old block, focused on the retrofitting of existing buildings.  JPMorgan Chase, for instance, one of the largest financial services firms in the world, is renovating its 1.3 million square foot headquarters on Park Ave., an arduous task.  (They are also building a new building in the World Trade Center that will seek Platinum LEED certification.)  I also wrote about the Clinton Climate Initiative’s $5 billion program to retrofit buildings worldwide at More Climate Summit in May.

Smart Grids – Here’s an informative article from Forbes - Juicing the System which maintains, among other things, that “As the industry shifts from large central plants to a diverse collection of windmills and biogas generators, managing the complex balance of supply and demand will require fat communications pipes and complex calculations.”  If distributed generation is to be, as many of us devoutly hope, the wave of the future, then in order for it to be effective, there are many policy and technology changes that will be necessary.  Title XIII of the new energy bill is devoted to a considerable upgrading of smart grid research and development.  (This title begins at page 777.)  There’s a newsletter devoted to the smart grid concept, a U.S. Department of Energy Office of Electricity Delivery & Energy Reliability which, among other things, was created “… to lead national efforts to modernize the electric grid,” and an industry-government association called GridWise that’s devoted to “… an entirely new way to think about how we generate, distribute and use energy.”  See also this from the BBC on microgrids.

Renewables – What’s going to feed the smart grid?  A lot more Renewable Energy, “the Good Lord willin’ and the crik don’t rise,” as my old mother used to say.  Even in the absence of a Renewable Electricity Standard (or Renewable Portfolio Standard if you prefer) in the new federal energy bill, we are going to continue to see an expansion of these technologies in this brave new world.

By the way, if you want to look back at where we’ve been, try my Year in Review.  Not incidentally, Happy New Year to one and all.