Block’s Indicator of Sustainable Growth

by Ray Block

At the US-China climate and energy conference in Beijing, there was a lot of soothing words, but at this stage at least nothing of matching substance.

Charlie McElwee, an international energy and climate change lawyer based in Shanghai in his blog China Environmental Law (July 30) says the memorandum of understanding (MOU) at the end of the two day talks was the “flimsient and vaguest” you could ever hope to see.

Senator John Kerry, the chair of the US Senate Foreign Relations Committee, while diplomatic was blunt: “I’m not alone in expressing disappointment with the pace and substance of US-China climate change discussions.

“Climate change, perphaps the single greatest challenge we face, more could have and should have been achieved. We did sign a MOU that included the language on climate change.”

“But the dates,timelines and road map towards an agreement – the fully defined mutuality of effort between our two countries-did not materialize.’”

“….Aspirational statements (on clean energy and energy efficiency efforts,) cannot stand in for legal commitments on the international stage. That’s why I went to China this spring- to communicate that America understands that we do have an obligation to lead, and we will. ”

“But China needs to understand that we will not enter into a global treaty without a meaningful commitment from China to be part of the solution. ..The debate we should be having right now is, what schedule and what scale will China act on- and will it be enough.”

“We must persuade China that quick and decisive action is actually in its own interest. To get there, we must build a broad and deep collaboration based on what China can and will do now.”

Charlie McIlwee in his blog quoted the US chief negotiator on climate change, Todd Stern: “What you need to have successful negotiations is a party willing to negotiate. In the absence of that, the dialogues are consumed by presentations on “forest efforts.” (he means wall paper waffling on stuff.)

Stern went on: “…we’re slogging ahead (to a climate change agreement). I think we will get there. I think we will end up with an agreement. But the perspective of the major developing countries like  China, India, and the others is quite different. The issues are difficult. There is a lot of engrained and embedded perspective on this issue that goes back now for 15 years.”

“And you know, I think I’m not going to kid anybody. I don’t think it’s easy, but I do think that we will get there, and I think that there is a lot of interest on the Chinese side fundamentally to arrive at a constructive and successful outcome in Copenhagen…”

“And …..I think it’s going to come one step at a time, one meeting at a time, one conversation at a time, and not in some sudden fell swoop or sudden breakthrough.”

Will patience at the international level win  out in the long run? As you can see, diplomats have to be incredibly patient and never spit the dummy. But with only so  many weeks to the Decmber meetings in Copenhagen, with one meeting at a time, one conversation at a time etc, it’s hard to believe that there will be a Eureka moment when it all comes together.

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

by Ray Block

Nobuo Tanaka, executive director of the International Energy Agency (IEA) spoke on the international energy challenge to the China Energy and Environment Summit in Beijing on July3 2009.

The title of the IEA’s leader’s power point presentation was International Energy Co-operation and Global Energy Security.

The energy challenge, set against the necessity of climate change to a low carbon economy, was premised on the inevitability of crude oil shortages becoming evident in coming years.

Tanaka says just to maintain the current level of crude oil production, there will be a need for gross additions to supply of 45 million barrels a day, or four times the current oil capacity of the world’s largest oil field in Saudi Arabia. This addition to supply will be needed from 2007 to 2030.

Against that background, to achieve reductions in carbon in the 450 policy scenario will require the world to cut CO2 emissions by 65 per cent. That is equivalent to a reduction in CO2 of 9.5 Gt. In other words, a reduction of 9.5 million metric tons. The major countries have tokenly agreed to a 80 per cent reduction in CO2 emissions by 2050.

The 450 scenario is set in terms of  the findings of the UN Iinternational Panel on Climate Change scientists, who are saying that atmospheric emissions must be limited to 450 parts per million (450ppm) by 2100. They are currently around 385ppm.

The IPCC says that  global temperatures must not rise by more than 2 degrees Celsius by 2100. And secondly, for this to be achieved, global emissions will have to peak by 2015, and then rapidly decline to avert the worst consequences of global warming.

Set against these goal posts, the IEA is assuming that renewables and biofuels will have to supply 23 per cent of world energy. The successful deployment of carbon capture and storage to develop clean coal would supply 14 per cent of world energy, and nuclear energy to contribute 9 per cent.

This adds up to 46 per cent. The balancing 54 per cent would come from greater energy efficiency, which would include the employment of a smart grid in electricity transmission and distribution, smart meters and so on.

Renewables would include electric and hydrogen fuel cell vehicles, solar and wind energy, biomass, energy efficiency in buildings, energy efficient motor systems, and efficient industry processes starting with cement.

One small advantage of the global recession could see a drop of as much as 3.5 per cent in 2009 global electricity consumption.

To achieve the 450 policy scenario, the IEA is saying that the incremental investment in the low carbon economy will require governments to increase funds committed to a four-fold increase in investment relative to their recent stimulus packages.

That indeed is a big ask.

The IEA says that the economic and financial crisis has sharply reduced global investment all the way down the energy support chain, from production to end use.

However, the crisis is an opportunity to place a clean energy new deal at the heart of economic stimulus packages globally. Long-term clean energy strategies must be at the heart of these packages.

The Chinese leadership is alive to the growth opportunities thrown up  by Nobuo Tanaka. My concern is whether the European, American and other developed nation leaders, who talk the talk, are equally capable of walking the walk.

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

by Ray Block

Yves de Boer, executive secretary of the UN framework convention on climate change doesn’t expect getting a new global treaty to replace the Kyoto Protocol at the Copenhagen climate change conference in December (7th to 18th).

You have to be an eternal optimist to believe that there will be a firm solution in December acceptable to the majority of the 192 nation conference delegates. But you have to give top marks to the UN representatives who appear to have the patience of Job.

In an interview, de Boer expressed the hope of broad agreement on four key issues:

• How much are the developed countries willing to reduce their emissions of greenhouse gases?
  
• How much are major developing countries such as China and India willing to do to limit the growth of their emissions?
  
• How is the help needed by developing countries to engage in reducing their emissions and adapting to the impacts of climate change going to be financed?
  
• How is that money going to be managed?

De Boer is expecting at the end of the December talkfest, some sort of agreement, without dotting the eyes and crossing the ts, which in the following year would be formalised into a treaty to take the place of the Kyoto Protocol.

He wants the US Administration to have sufficient support in the US Senate by that time for a binding treaty to be agreed. That means having 67 votes in the Senate majority, which is a tough ask.

Senator John Kerry, the chairman of the Foreign Relations Committee has made clear in talks with Chinese leaders that “America understands that we have an obligation to lead. But you need to understand that, politically speaking, America will not enter into a global treaty without a meaningful commitment from China to be part of the solution” (July 4 2009).

Well before the December meeting, the major countries need to flesh out how much money they are prepared to put on the table, and how many technologies they are prepared to commit for new joint ventures in carbon reduction projects. De Boer is suggesting US$10 billion, but that is too low for what developing countries would find acceptable.

On June 25 2009, UK Prime Minister Gordon Brown suggested that the developed countries put US$100 billion as a price tag on climate adaptation. The developing countries would need to document which projects would be prioritised when funds become available.

Brown suggested that rich countries be prepared to hand over $100 billion each year to help the developing world cope with the effects on global warming in mitigation and adaptation to global warming. While the European Union collectively will reach a decision on climate action dollars in October, Brown is suggesting a time staggered approach.

Under the plan, funding would begin in 2013 and rise to $100 billion a year by 2020. “The money would be raised from private and public sources, such as levies on international carbon trading schemes.”

“Developing countries would be able to apply for funds for specific projects. I would urge the leading developing countries to bring forward ambitious and concrete propositions…that could be financed by these sources,” said Brown.

At the July meeting of the 17 major economies in L’Aquila, Italy, the leader of WWF Global Climate Initiative, Kim Carstensen said $100 billion isn’t enough. “We need more funds- up to $160 billion by 2017.”

No concrete dollar numbers were put up by the major economies, with the result that the financial commitment is to be thrashed out at a G-20 meeting in Pittsburgh to be held in September.

Posted under Carbon Abatement Scheme, Climate Change, Renewable Energies, World Inflation

by Ray Block

This is Part 2 of a study of Green Job Growth in Europe and the US.

The US study, “The Clean Energy Economy” by the Pew Charitable Trusts was released in June 2009. Prepared with the assistance of research consultants, Collaborative Economics, the authors are upbeat about the green job growth in the US.

Pew counted actual green jobs, companies and investments in every state and Washington DC. The count was in jobs developing clean, renewable sources of energy, increasing energy efficiency, reducing greenhouse gas emissions that cause global warming, and conserving water and other natural resources.

The count was based on 2007 actual employment. “More than 68,200 businesses accounted for 770,385 jobs” that “achieve the double bottom line of economic growth and environmental sustainability.”

The green job numbers may seem small against the current US recession, with unemployment is moving towards 10 per cent. Three quarters of a million green jobs represent only half a per cent of all jobs in the US to-day. But Pew’s research shows that between 1998 and 2007, clean energy economy jobs- a mix of white and blue collar positions grew by 9.1 per cent, while total jobs grew by only 3.7 per cent.

Signalling new market opportunities, venture capital investment in clean technology crossed the US$1 billion threshold in 2005, and continued to grow substantially, totalling about $12.6 billion during the past three years.

Between 2006 and 2008, 40 states and the District of Columbia  attracted venture capital investments in technologies and industries aimed at economic growth and environmental sustainability. Every state has a piece of America’s clean energy economy.

Texas as the No1 wind energy state had more than 55,000 clean energy economy jobs in 2007, and attracted more than $716 million in venture capital funds for clean technology between 2006 and 2008.

Tennessee has succeeded in cultivating jobs in recycling waste investment and water management. These jobs grew more than 18 per cent between 1998 and 2007, compared with 2.5 per cent a year for all jobs in the state.

Colorado has raised the amount of power electricity utilities must supply from renewable energy sources to stimulate job growth in solar and wind power, and other forms of clean energy generation.

Ohio ranked among the top five states, with the most clean energy, energy efficiency, and environmentally friendly production in 2007. All told, in the 10 years to 2007, average annual growth of jobs in the clean energy economy outperformed traditional industry job positions in 38 of the 50 states and DC.

Pew’s actual count of jobs in all 50 states and DC is the first of its kind in the US. “Our numbers are conservative based on a stringent definition of the clean energy economy.”

The Pew data show that 65 per cent of today’s clean energy economy jobs are in conservation and pollution mitigation, reflecting the need to recycle waste, conserve energy, and mitigate emissions of greenhouse gases and other pollutants.

Three other job categories-clean energy, energy efficiency and environmental friendly production are growing at a much faster rate than conservation and pollution control. In 2008, about 80 per cent of venture capital investments were in the sectors of clean energy and energy efficiency.

Clean energy initiatives on a regional basis include 23 states participating in three major schemes to increase renewable energy generation and reduce carbon emissions from power plants.

14 states and Washington DC., with three additional states set to join are in the process of adopting stringent vehicle emission standards.

On Pew’s count, there were in 2007, 68,201 clean businesses employing 770,385 clean jobs, with a clean job growth rate over the 10 years of 9.1 per cent a year. This compared to the overall job growth in that period of 3.7 per cent. Venture capital in the two years to 2008 was $12.57 billion.

With the rapid decline in US manufacturing employment over the decade to 2007, as globalisation in goods and services with outsourcing to China and India took place at a rapid rate, there is growing interest in all US states in developing green jobs and new manufacturing services.

The five job categories of the clean energy economy comprise:

Clean Energy requires large numbers of electricians, electrical   engineers and plumbers to install new energy systems, while plant operators ensure that renewable sources, such as wind and solar are being converted to electricity.

Mechanics rebuild ailing energy infrastructure by installing sensors and controls that monitor and distribute clean energy more effectively, such as making the grid smarter.

Researchers and technicians perfect and implement battery technologies that improve how we store and distribute clean energy.

Energy Efficiency involves engineers developing energy efficient lighting, meters, software programs that monitor energy usage, while electricians and technicians install them in homes, businesses and government buildings.

Environmentally Friendly Production requires multiple job opportunities.

Transportation jobs are involved in the production of hybrid diesel buses, traffic  monitoring software, and liquid biofuels; industrial chemists and technicians who produce environmentally sound packaging equipment, and surface cleaning products, that are less caustic than traditional products.

Construction workers who produce and install green building materials, such as alternative cement and manufactured wood products made from offcuts, and consultants who provide green building designs and construction services.

Agriculture requires plumbers and technicians, who install smart irrigation systems, as well as chemists, who design alternative pest controls, and consultants who provide agricultural sustainability planning.

Energy Production includes jobs that design and apply      cleaner technologies to coal, such as gasification, pyrolysis, and carbon capture and storage.

New Materials includes product designers and engineers, who develop biodegradable products and chemical engineers, who research new chemical catalysts to break down wastes and reduce toxins naturally.

Conservation and Polllution Mitigation

Skilled workers who safely remediate hazardous materials from industrial sites; scientists and technicians who develop, install and supply products to capture and treat noxious greenhouse gases and pollutants; machinists and system operators to treat water and waste; and environmental consultants to help companies and government agencies to improve emissions monitoring, water conservation.

Training and Support

Financial analysts and consultants specialising in clean tech investments; lawyers and paralegals; researchers and engineers who develop new energy generation technologies; and vocational teachers who train new workers for the clean energy economy.

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

by Ray Block

Two recent studies of the job creation potential in the new era of a low carbon economy have been completed for both Europe and United States.

Part 1 deals with Europe

WWF (World Wide Fund for Nature) in its study “Low Carbon Jobs for Europe” June 2009 is hopeful that by 2020, the European Union as a whole will have reached a goal of a 30 per cent domestic greenhouse gas (GHG) reduction target.

“Europe now has close to 400,000 jobs in the renewable energy sector, with good prospects that the numbers will mushroom to a few million in the next decade.”

In transport, the “one-sided concentrated policies of the past now look like a dead-end strategy.” A new transport orientation is needed, both in regard to a smaller carbon footprint in greater fuel efficiency, and new propulsion systems including electrification of transport.

This “may require an almost unprecedented conversion of auto industry capacities and job skills, and a strategic commitment to a smart grid and other forms of public infrastructure.”

WWF say that an estimated 150,000 people are directly involved in producing efficient autos. Close to 2 million people are working in urban transport, railway operations, and manufacturing railway rolling stock. Including indirect jobs, these numbers would at least be doubled.

Energy efficiency holds “enormous” promise to cut carbon emissions and to create jobs in smart buildings and lighting, appliances and office equipment, industrial processes etc. “We have only seen modest beginnings.” WWF makes the point that the only way of being certain in keeping industries and jobs in Europe in the light of global competition is to pursue energy efficiency opportunities.

Once you add the “400,000 renewable energy jobs (direct and indirect), 2.1 million in efficient transport, and more than 900,000 in energy efficiency goods and services, you come to 3.4 million green jobs in Europe today. Indirect jobs not included above are likely to add another 5 million to the employment figure.”

The 3.4 million green jobs in Europe compares favourably with the 2.8 million jobs in traditional industries – mining, electricity, gas, cement, iron and steel, and other polluting heavy industries. Currently, only a small number of countries, with Germany and Spain in the lead, account for the bulk of the green jobs.

WWF say the job estimates are conservative, since they do no include additional green jobs in manufacturing efficient appliances, lighting, other equipment and industrial machinery. Compared to United States, a much lower per capita electricity and fuel consumption is likely to generate additional employment in the service industries.

European stimulus funds in billion of euros are in the order of 490.1 billion, of which Green funds are 41.9 billion, 8.5 per cent of the total. The make up of the stimulus funds include 2.7 billion euros in renewable energy and 9.7 billion in carbon capture and storage initiatives.

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