Block’s Indicator of Sustainable Growth

by Ray Block

There’s many a slip between the cup and lip, so says the old proverb. Friday June 26’s vote in the US House of Representatives for ACES- American Clean Energy and Security was very close.

 

The Congress Daily had suggested a photo finish, which finished up at 219 in favour to 212 against. To get the required numbers, the bill needed 218 votes, so there wasn’t much in it.

 

Henry Waxman, chairman of the House Energy and Commerce Committee, which with subcommittee chairman Ed Markey, described the  measure as “this landmark bill will revitalize our economy by creating millions of new jobs, increase our national security by reducing  our dependence on foreign oil, and preserve our planet by reducing the pollution that causes global warming.”

 

Now the hard bargaining commences all over again, with the Senate intending to move forward with their own bill going through the committee stages in September for a floor vote in October. Hopefully, the conference process of reconciling the two houses’ bills will be a short one, and the final measure will emerge for presentation at Copenhagen in December.

 

To move things forward at a faster rate, Senator Barbara Boxer, the California Democrat who is chairman of the Senate Environmental and Public Works Committee said that her committee will not “differ that much” from the ACES legislation, and that she will “take into account” many of the compromises made to pass the bill.

 

ACES in its House’s version is weighty 1,201 pages, and there’s a further 49 page amendment from the Agriculture Committee. The vote was on party lines, with Republicans opposed and some Democrats defecting.

 

The main provisions of the legislation are:

Ø      Requires electric utilities to meet 20 per cent of their electricity demand through renewable energy sources and energy efficiency by 2020.

Ø      Invests $190 billion in new clean energy technologies and energy efficiency, including energy efficiency and renewable energy ($90 billion in new investments by 2025), carbon capture and sequestration ($60 billion), electric and other advanced technology vehicles ($20 billion), and basic scientific research and development ($20 billion).

Ø      Mandates new energy saving standards for buildings, appliances, and industry.

Ø      Reduces carbon emissions from major US sources by 17 per cent by 2025, and over 80 per cent by 2050 compared with 2005 levels. Complementary measures in the legislation, such as investments in preventing tropical deforestation, will achieve significant additional reductions in carbon emissions.

Ø      Protects consumers from energy price increases. According to recent analyses from the Congressional Budget Office and Environmental Protection Agency, the legislation will cost each household less than 50 cents per day in 2020 (not including energy efficiency savings).

 

Fiona Harvey, the environmental writer in the Financial Times (June 26 2009) said the heavily modified bill now includes “major sops” to farmers, including agricultural credits based on the sequestration of carbon in soils.

 

 “Such credits are notoriously hard to do properly. It is extremely difficult to quantify how much carbon is being released from soils, to verify that farmers have followed the correct methods to conserve carbon dioxide in the soils, and to police the award of the credits.”

 

Mitchell Feierstein, the CEO of London based Glacier Environmental Funds, which specialises in buying and selling carbon credits, is quoted as saying “it’s crucial to establish credible base lines and robust methodologies ensuring any credits generated are quantifiable, real, permanent, verified and certified by an independent third party, are given unique serial numbers and stored in a credible custodial registry maintained by a creditworthy counterparty. These criteria are imperative and not flexible.”

 

Otherwise, you are creating a way for farmers to arbitrage the system “and/ or opening the door to green wash.”

 

 

Posted under Carbon Abatement Scheme, Climate Change, Renewable Energies

By Ray Block

 

Just as in 1900 in New York, it won’t be long before we see rows of electric cars, whether hybrids or plug in electric cars.

 

The big news on June 23 was not so much the US Government subsidising Nissan, the Renault affiliate to build electric cars in Tennessee with US$1.6 billion in loans, and $405 million for electric sports car firm Tesla Motors for a new California plant, but the involvement of ExxonMobil behind the scenes.

 

For ExxonMobil to have anything to do with the world of renewable energy is big news. Imagine old man Rockefeller, Standard Oil’s founder, looking down from Heaven in amazement at the upstarts of today supporting the electric car initiative.

 

Next, you’ll find the likes of ExxonMobil, the one time Standard Oil of New Jersey, telling us that the peak oil story is really true and the days of cheap gasoline are gone for ever.

 

Exxon hasn’t gone that far. But at least in 2006,  ExxonMobil Chemical and its Japanese affiliate, Tonen Chemical Corporation had announced that it was developing a prototype microporous film for lithium-ion battery separators, which would dramatically improve lithium-ion battery power and safety performance in hybrid vehicles.

 

As the Wall Street Journal’s environmental capital blog said, if Exxon wasn’t selling you a tiger in the tank, going back to the days of its gasoline ads, there was a tiger in the battery that powers your car.

 

The Exxon connection here is with Electrovaya, the Mississauga, Ontario firm which announced  this June that its battery developed from the Exxon affiliate will power the Maya-300 electric cars to be showcased at the 9^th National Motor Vehicle and Aviation Workshops and Exposition to be held July 28-30 in Chicago.

 

Maya Electric launched its first cars at the Maryland Science Centre on June 23. The Maya car is a five door, four passenger emission-free vehicle, with an all electric range of up to 120 miles (192 km). The vehicle is designed for the fleet market.

 

 

Posted under Climate Change, Renewable Energies

by Ray Block

The energy consultancy, New Energy Finance, in a report for the UN environment programme released its report Global Trends in Sustainable Energy Investment 2009 in the beginning of June.

 

Thanks to the environmental capital blog of the Wall Street Journal, I was able to download the report.

 

For the first time ever, investment in renewable power generation, including investment on energy efficiency, outpaced investment in traditional energy sources in calendar 2088, US$ 155 billion, compared to $110 billion for traditional energy investment in fossil fuels. The investment was in both companies and projects globally.

 

The difficult part of the report is the news that the world has to invest “US$500 billion a year by 2020 in renewable energy, energy efficiency, and carbon capture and storage. The annual investment task would rise to $590 billion by 2030, representing an average annual investment of 0.44 per cent of GDP between 2006 and 2030.”

 

It’s good news of a sort to be told that the target of investment “is not impossible to achieve.” But it does seem a difficult task all the same, even with the information that the most recent four year growth in renewable energy rising from $35 billion to $155 billion in 2008 demonstrates what can be done.

 

According to New Energy Finance, investment on this scale would ensure that levels of CO2 would peak by 2020, and rising global temperatures kept to a range of 2.0 to 2.4 degrees Celsius. The intention is to for carbon dioxide in the atmosphere stabilising at no higher than 445 to 490 parts per million.

 

In the renewable energy sector in 2008, Europe contributed $49.7 billion, up 2 per cent. In other regions, North America supplied $30.1 billion, down 8 per cent; China pumped in $15.6 billion, up 18 per cent; Brazil investment rose 76 to $10.8 billion mostly in cane based ethanol; Indian renewables reached $3.7 billion, up 12 per cent; and African investment was $1 billion.

 

Although investment is down in 2009, the first quarter still contributed $13.3 billion, a fall of 53 per cent compared to the same quarter in 2008.

 

In individual sectors, wind power was again first choice at $51.8 billion in 2008, 1 per cent lower than in 2007. The big news was the substantial rise in solar energy at $33.5 billion, a rise of 49 per cent. Biofuel investment faded in 2008 at $16.9 billion, down 9 per cent; while biomass and waste-to-energy at $7.9 billion showed a decline of 25 per cent over 2007.

 

The 49 per cent rise in solar energy was made up of two sectors- solar PV and concentrating solar, also known as solar thermal. Currently installations in PV (photovoltaics) is ahead, but concentrating solar is about to rise very strongly.

 

The global concentrating solar power (CSP) outlook 2009 prepared by IEA SolarPACES, ESTELA and Greenpeace has an outstanding vision. The report believes concentrating solar can be expected to contribute 7 per cent of power generation by 2030, and as much as one quarter of energy supply by 2050. As much as two million people world wide could be employed in CSP projects by 2050.

 

CSP installations provided only 436 MW of electricity by the end of 2008. New projects mostly in Spain will add another 1,000 MW by 2011. In the United States, CSP projects totalling a further 7,000 MW are under planning and development, along with another 10,000 MW in Spain. In all, 17,000 MW is expected to come online by 2017.

 

 

 

 

 

Posted under Carbon Abatement Scheme, Climate Change, Economies

by Ray Block

The Wall Street Journal’s environmental capital blog (June 3 2009) asked the question- Will the US go it alone on climate change? The issue rises as a result of a difference of opinion by two key officials in the Obama Administration.

 

Steven Chu, the1997 Nobel Physics Prize winner, who is Energy Secretary said in London last week, “that even if China and other developing countries are reluctant to make commitments at December’s UN climate change conference in Copenhagen, ‘President Obama has made it clear that the US should act first.’”

 

Mr Chu, the son of Chinese immigrants to the US said, “Using China as a reason not to act is no longer an option…..China’s leadership knows well what the consequences of climate change will be for their country.” (Financial Times May 27 2009)

 

Meanwhile, Bloomberg reporter Catherine Dodge (June 3 2009) reported that US climate envoy Todd Stern said in Washington that the US must meet China halfway and develop a “genuine, collaborative partnership. If the two goliaths on the world stage can join hands on a climate and energy partnership, it will truly change the world.”

 

The US and China, now the world’s biggest producer of heat-trapping gases, together are responsible for more than 40 per cent of global greenhouse gas emissions. US officials are scheduled to be in China June 6 to work toward a partnership, with the trip designed to lay the foundation for future pacts, said Todd Stern.

 

The climate envoy said, “No deal will be possible if we don’t find a way forward with China.”

 

The way diplomacy works these days, the US will be blinking first, as Barack Obama is determined to be a positive world leader, the architect of a global climate change alliance between the developed and developing world. 

 

The Chinese story on carbon emissions and renewable energy is quite positive. The Chinese are saying that by 2020, “the country’s electricity capacity would double by 2020 to about 1,600 gigawatts, and 35 per cent of that would come from “low emission” power sources.

 

The WSJ’s environmental blog (May 21 2009) said that the Chinese clean energy numbers don’t add up. Maybe they don’t. But although there has been a substantial increase in greenhouse gases- sulphur as well as carbon- in China over recent years, there has been at the same time a closure of large numbers of small inefficient plants in power stations, steel works, cement plants etc.

Posted under Carbon Abatement Scheme, Climate Change, Economies, Renewable Energies

by Ray Block

 The second of six meetings of the UN Climate Change agenda in 2009, with the last of these to take place in Copenhagen in December is meeting this and next week (June 1-12) in Bonn, Germany.

 Preliminary discussions in telephone calls with leading participants highlight the wide areas of disagreement between the “richer” and “poorer” countries.

 

China, as the fourth largest world economy and a claimant as a “poorer” nation in terms of the low per capita income of its population is taking an aggressive approach. It is demanding on behalf of the developing world, that the richer nations not only agree to a 40 per cent reduction in their carbon emissions by 2020, but also to make good on substantial investments in green projects in developing countries. 

 

Alister Doyle, the environment correspondent for Reuters (May 19 2009) pointed out that over 120 pages of draft texts put together by the UN Climate Change Secretariat indicate a sharp deadlock between the two halves of the world in richer versus poorer nations.

 

The core disagreement is over how to share out the necessary cuts to be made to curb greenhouse gases in coming years, and particularly in carbon reductions.

 

The Reuters report based on the UN climate change officials is that to avoid the standoff, “finance could be an area to build confidence.”

 

Yves de Boer, head of the UN climate change secretariat said that “working out how funds could be mobilised for developing nations would be a huge positive influence on the negotiations.”

 

Seventeen major emitters are said to have made rapid progress in Paris last week on how to find cash to help developing nations rein in emissions. A Mexican proposal is for a green fund to raise at least US$10 billion a year.

 

All countries would contribute based on factors such as historic and present level of emissions, along with levies based on differentials of gross domestic product- making the European Union and United States the largest contributors.

 

Cash would go to wind and solar projects, along with other renewables, and also for methods to alleviate major changes in weather patterns leading to floods, droughts, heatwaves, species extinctions, and rising sea levels.

 

There is realism that with time running short ahead of Copenhagen, many details of the new deal to succeed the existing Kyoto Protocol after 2012 will end up in December still in very inadequate form.

 

“Everyone agrees that there is going to be a lot of work to be done after Copenhagen, no matter what,” said Aiden Mayer of the Union of Concerned Scientists.

 

Options in some of the draft texts- such as whether to allow credits for investments in carbon capture and storage from coal-fired power plants in developing nations-will simply mean putting off decisions until 2010 or even 2011.

 

The US Special Envoy for Climate Change, Todd Stern, said that “I don’t think you are going to see a 25-to 40 per cent aggregate number” for cuts by rich nations below 1990 levels by 2020. It’s possible when you add everything up, that you won’t be that far away from it.”

 

US emissions have risen sharply in recent years, so the Congress’s goal of a 17 per cent cut in emissions from 2005 levels by 2020, and by 83 per cent by 2050 works out, says the UN climate change officials, at only a 4 per cent cut relative to 1990.

 

European Union emissions have fallen since 1990. So the EU goal of a 20 per cent cut in emissions by 20 per cent from below 1990 levels by 2020, and by 30 per cent, if other rich nations follow suit, works out expressed in 2005 levels, as cuts of carbon reductions of 14 per cent by 2020, and 24 per cent by 2030 respectively.

 

So, after Copenhagen in December, there will still be a long road to go before post-Kyoto is secured. Hopefully, it will all be wrapped up in 2010.

 

 

 

 

  

Posted under Carbon Abatement Scheme, Climate Change, Economies, European Emission Trading Scheme, Global Warming, Low Carbon Economy, Renewable Energies, World Inflation