The Nicholas Institute for Environmental Policy Solutions at Duke University
Editor’s Note: The Climate Post will not be circulated next Thursday in observance of the holiday. Look for it again on January 5.
Prices in Europe’s carbon emissions trading scheme have collapsed this year, in part because there were too many allowances in the system starting off, threatening the future of the whole market.
“Without intervention … Europe’s climate policy is over,” one analyst said. Some of Europe’s biggest energy and manufacturing firms also wrote a letter to the European Commission that called for Europe to take “decisive action now” to raise the price of carbon and fix the scheme.
This year, the price of permits has fallen about 50 percent. Emissions allowances are now about 6 euros per ton—a four-year low, and about half what they were when the market began. Denmark, which will take over the presidency of the European Union in 2012, said the current carbon prices are “not sustainable” and vowed to help fix the problem.
Part of the problem is that Europe’s economic crisis is escalating, risking a slump like in the 1930s to which no country will be immune, said Christine Lagarde, managing director of the International Monetary Fund, in a speech at the U.S. State Department. Also, a new energy efficiency effort could also cut the number of permits needed, another reason to issue less in the future.
Paving the Way for De-carbonized Energy
The European Commission presented its long-awaited “Energy Roadmap 2050,” aiming to point the way to meet the European Union (EU) goal of cutting emissions at least 80 percent below 1990 levels by 2050.
A de-carbonized energy system could be cheaper than “business-as-usual,” although de-carbonization would require large up-front spending. The report also said natural gas will be a “critical” fuel during the transition.
The EU soon needs to set renewable energy targets for 2030, said EU Energy Commissioner Günther Oettinger.
Pollution Crackdowns
The European Union moved earlier this year to expand its emissions trading scheme to include flights in and out of Europe, and now the European Court of Justice has backed that law despite protests from the U.S. and others. The new decision, which goes into effect Jan. 1, may trigger a trade war.
Meanwhile, the U.S. Environmental Protection agency unveiled its first limits on emissions of mercury and several other toxic pollutants from power plants. The limits were 20 years in the making, and cover a variety of toxic compounds including arsenic, nickel, selenium, and cyanide.
The new standard gives companies three options: install systems to scrub their emissions, switch to natural gas, or shut down their plants. Some of the nation’s oldest—and generally dirtiest—coal-fired power plants may be forced to shut down, which could also benefit the climate.
Climategate Investigation Widened
The U.S. Department of Justice is apparently working with law enforcement officials in Britain to investigate who leaked climate researchers’ e-mails.
In the U.K., police raided the home of one climate skeptic blogger and confiscated two of his computers.
Flipping the Switch on Incandescents
A ban on the sale of incandescent light bulbs of 100 watts or more in the U.S. is supposed to go into effect Jan. 1, but an emergency spending agreement in Congress removed funds from enforcement of the ban, at least until October 2012. Experts say the lack of enforcement will likely have little effect, since light bulb manufacturers have already retooled and moved on.
Google Subscribers: The Nicholas Institute is transitioning away from sending The Climate Post via Google Feedburner. If you are receiving our new posts Thursday’s at 5 p.m. via Google, please unsubscribe from the feed by clicking the link at the bottom of the e-mail. Forward the e-mail on to nicholasinstitute@duke.edu to re-subscribe using our new service. We apologize for any inconvenience this may cause, and appreciate your interest in our weekly write-ups.
The Nicholas Institute for Environmental Policy Solutions at Duke University
GOP presidential candidate Jon Huntsman expressed skepticism about the science on climate change, so now all GOP candidates are on the record as doubting either that the planet is clearly warming, or that people are responsible for most of the warming.
Of all the GOP candidates, Huntsman had been the most supportive of action on climate change: in 2007, as governor of Utah, he signed up his state for a cap-and-trade system for greenhouse gas emissions.
The deniers haven’t won yet, though, argued Bill Chameides of Duke University. Most Americans accept the basics of climate change, more investment went into green energy than fossil fuels in 2010, and some of the biggest energy companies—such as ExxonMobil—affirm that climate change is real.
Little Agreement in Durban
As the United Nations climate negotiations in Durban, South Africa, come near their close, there is little hope of coming to an agreement. The executive director of the International Energy Agency said the lack of progress is a “cause for concern,” and urged countries: “Don’t wait for a global deal. Act now.”
China showed signs of softening its stance on a climate agreement, saying it may “shoulder responsibilities” for cutting emissions, as long as it is not held to the same standards as richer countries—a move an Oxfam climate campaigner called “really encouraging.”
Meanwhile, a new study reported greenhouse emissions from the developing world have surpassed those of the developed world (using the Kyoto Protocol’s definitions for each group)—and it happened much earlier than expected.
The president of the Worldwatch Institute, Robert Engelman, proposed a “shadow climate regime”—an alternative approach that erases divisions between developed and developing countries as well as caps on emissions, and taxes all emissions, regardless of where they originate.
Because of the slow progress on climate treaties, scientists have been looking increasingly at geoengineering—global schemes for cooling the planet—and a collaboration between Britain’s Royal Society and two other groups called for more research into these methods.
Nuclear Decline, Stormy Rise of Renewables
The world’s nuclear power dropped in 2011, as plants were knocked out by Japan’s tsunami, shut down, or those under construction canceled or postponed. The International Energy Agency (IEA), in its recent World Energy Outlook, detailed how the world might get by in a scenario with declining nuclear power, but said meeting the climate change targets under discussion at Durban would require “heroic achievements in the deployment of emerging low-carbon technologies,” in particular for countries like Japan.
The growth of China’s solar industry has been a source of contention with America, leading the U.S. International Trade Commission (ITC) to launch an investigation into China’s support for its solar industry. The ruling said U.S. companies had been harmed by China’s policies, but China’s Commerce Ministry argued the reaction smacks of protectionism. The ITC voted to continue its investigation.
Editor’s Note: The Nicholas Institute is transitioning away from sending The Climate Post via Google Feedburner. If you are receiving our new posts Thursday’s at 5 p.m. via Google, please unsubscribe from the feed by clicking the link at the bottom of the e-mail. Forward the e-mail on to nicholasinstitute@duke.edu to re-subscribe using our new service. We apologize for any inconvenience this may cause, and appreciate your interest in our weekly write-ups.
The Nicholas Institute for Environmental Policy Solutions at Duke University
After a unanimous vote by the California Air Resources Board, the state adopted the most comprehensive cap-and-trade system in the country, a key part of a 2006 global warming law that had yet to be implemented. The system will cover 85 percent of greenhouse gas emissions in the state, and allows businesses to counterbalance up to 8 percent of their emissions by buying offset credits.
The state is making itself a guinea pig for climate legislation and hopes to inspire other states to follow suit—a precedent the state has set with other environmental legislation.
After the economic crash of 2008, the growth of clean energy slowed—and the outlook for the rest of the decade is single-digit growth, according to analyses by IHS Emerging Energy Research and others. A major factor has been that cash-strapped governments have cut back on subsidies that helped drive the growth in renewables.
The U.K. reshuffled its renewable subsidies, taking away from onshore wind and hydro power, and giving more to tidal and biomass power plants. Scotland—which sets its subsidies separately from the rest of the U.K., and which boasts some of the world’s best wind and tidal resources—also made subsidy support adjustments.
Industry experts fear the U.K. may soon slash solar subsidies by half—after already cutting them earlier this year—so they are encouraging people to install solar systems now.
In the U.S., solar industry jobs grew about 7 percent in the past year—much faster than job growth in the whole economy, but only about a quarter of the rate that the industry had expected, according to the Solar Foundation’s newly released National Jobs Census.
High-Tech Efficiency
In Europe, “business as usual will not be an option for most energy utilities,” according to McKinsey analysts who argued that energy demand is reaching a peak, and existing technologies could drastically cut consumption. In response, utilities should look to other services to keep their revenue up, such as selling solar panels, insulation, or central control units that track and manage a building’s electricity consumption.
One company is already trying to make such products cool. Nest Labs, a well funded start up founded by former Apple employees, have created a thermostat that studies your habits to help adjust the temperature to save energy.
University of Washington Professor of Philosophy Stephen Gardiner argued in Yale Environment 360 that humanity’s institutions aren’t up to the ethical challenge presented by environmental change. As these problems get worse, he argues, we might see apush for technological fixes such as geoengineering.
Some scientists are looking into such methods, and a U.K. group had planned a test flight of a balloon tethered to a hose—the kind that could shoot reflective aerosols into the atmosphere, scatter sunlight and potentially cool the planet. But that group postponed its test until spring to allow “more engagement with stakeholders”—which New Scientistargued is crucial.
A study led by a self-described climate change skeptic—physicist Richard Muller of the University of California, Berkeley—released results from a re-analysis of temperature records. The “biggest surprise,” Muller said, was how closely his study matched earlier assessments, such as those by NASA and the U.K.’s Hadley Centre. Muller’s study had been hailed by climate change skeptics since it took seriously many of their criticisms.
But in a Wall Street Journal op-ed, Muller said “global warming is real,” and argued no one should be a skeptic about this warming any longer.
The planned carbon tax will start in 2012 and apply first to the 500 worst polluting companies responsible for about 60 percent of the country’s emissions, making it the largest carbon market outside of Europe. Rates will start at 23 Australian dollars per tonne of carbon (US$24.20 per ton), higher than prices have been on the European emissions market for the past couple of years.
The carbon prices would gradually rise, and then the government would transition in 2015 into a cap-and-trade system, aiming for emission cuts by 2050 of 80 percent compared with 2000 levels.
Taxes Redefined
Australia’s plan was generally hailed by environmentalists and those working on renewable energy, and economists generally support it. But it was panned by many in big industry, and Prime Minister Julia Gillard’s administration, already suffering low approval ratings, saw ratings drop further after announcement of the new plan.
To avoid the carbon tax penalizing the poor, about half of the new revenues will be returned to citizens in the form of tax breaks for the lowest earners, part of an effort toward “reducing taxes on desirable things (work and income) … and replacing them with a charge on something undesirable (carbon pollution).”
The carbon tax is part of a package of new policies on climate and energy, which also include the creation of a new Australian Renewable Energy Agency, which will oversee more than $3 billion in funding, primarily for solar, wind, and geothermal energy. The funding boost will put “solar on steroids,” said John Grimes, chief executive of the Australian Solar Energy Society, aiding large-scale solar installations.
Nuclear Power Continues to Polarize
Meanwhile, the U.K. is embarking on a huge restructuring of its electricity market, which is outlined in a new white paper. The Guardian’s Damian Carrington argues the “sprawling and complex maze of measures … has the central aim of getting new nuclear power stations built.”
Since Japan’s Fukushima disaster, the U.K.’s Secretary of State for Energy and Climate Change, Chris Huhne, and others in the U.K. government have supported expanding the country’s nuclear power. Within days of Japan’s disaster, the U.K. government began drawing up a public relations strategy to downplay the disaster, according to a recent report on a leak of government e-mails.
The restructuring proposed in the new white paper would require spending £200 billion ($320 billion) on new infrastructure, but this won’t necessarily lead to higher electricity prices than customers would face otherwise, argues Huhne, since customers now are vulnerable to rising oil and gas prices.
After the announcement by the International Energy Agency that the world’s richer countries would tap into their emergency oil reserves, oil prices initially fell. For the U.S. portion of the release, many bidders vied for the oil, offering about $105 to $110 a barrel—which would raise more than $3 billion for the government.
The high number of bidders “shows there are concerns in the marketplace over just how much oil is going to be out there,” said David Pumphrey, deputy director of energy and national security for the Center for Strategic and International Studies.
After an acrimonious meeting of the Organization of Petroleum Exporting Countries in which members disagreed about whether to boost production, some countries decided to go it alone. The most significant is Saudi Arabia, which raised its output to about 9.5 million barrels a day—the same rate as before the global recession.
The company Groupon offers big discounts as long as a bunch of people will sign up to a particular deal, and now San Francisco is emulating this model to boost solar power installations. By forming buyers’ groups, they hope to get around some of the barriers to small-scale solar, such as high transaction costs and availability of credit.
In another effort to finance small-scale solar, some firms are emulating Wall Street’s bundling of mortgages, by creating “asset-backed securities”—bundles of leases on residential solar panels.
The Nicholas Institute for Environmental Policy Solutions at Duke University
In a move that caught many by surprise, the world’s richer oil-importing countries will soon tap into emergency oil reserves, the International Energy Agency (IEA) announced, arguing: “Greater tightness in the oil market threatens to undermine the fragile global economic recovery.”
In total, over the next 30 days, IEA member countries plan to release 60 million barrels of crude—less than one day’s worth of global consumption. Half that oil would come from the U.S., and the rest from a dozen other countries, including many European Union members, Turkey, Korea, and Japan. The IEA has coordinated a release of oil from its members’ reserves only twice before, in response to the 1991 U.S.-Iraq war and to Hurricanes Katrina and Rita in 2005.
Some speculators, it seems, may have gotten a jump on it: oil started trading suspiciously in the hours before the IEA announcement, driving prices down and prompting an investigation by the Commodity Futures Trading Commission. In fact, oil prices fell more than 5 percent in the day of the IEA announcement, but the following day rebounded, in part because of fears about supplies getting tighter later this year.
OPEC members in the Persian Gulf—such as Saudi Arabia and Kuwait—are widely considered to hold most of the world’s spare capacity for oil production. But oil expert Euan Mearns noted that despite a sharp rise in drilling activity in Gulf nations in February 2011, their production hasn’t risen much. He interprets this as a sign of goodwill, and as an indication that “usable spare capacity does not exist”—or that it must be of relatively undesirable heavy, sour crude.
A Natural Gas Bubble?
In the U.S., “fracking” to get natural gas out of underground shale has been booming—but the vast majority of fracking wells are “inherently unprofitable” and the fast-growing industry is a “Ponzi scheme,” according to industry e-mails obtained by the New York Times. Much of the shale gas activity has been financed by a rush of investment money into the sector, rather than by profits from production, the e-mails say.
California’s legislation for a cap-and-trade system for many of the state’s largest greenhouse gas emitters had faced a legal battle—but the court hearing the case ruled the state can go ahead. The project was scheduled to start in January 2012, but Air Resources Board Chairwoman Mary Nichols, who oversees the program, announced enforcement for major polluters would will be delayed until 2013.
Efficiency from Detroit to Afghanistan
The Obama administration is trying to cut demand for oil by boosting vehicle efficiency. In closed-door talks with Detroit’s big three—General Motors, Ford and Chrysler—officials called for average mileage for cars and light trucks to reach 56.2 miles per gallon by 2025.
The Nicholas Institute for Environmental Policy Solutions at Duke University
“Recent comments from top White House and congressional contenders suggest an awkward mix of outright hostility or, at best, ambivalence toward the widespread scientific consensus that humans are responsible for the warming planet,” reports Politico.
Colorado’s tight race for U.S. Senate is turning into a referendum on the power of views on climate change to sway voters, at least in that state: Sen. Michael Bennet (D-Colo.) is attacking his opponent, Tea Party favorite and Republican Ken Buck, for saying climate change is a “hoax.” It’s a stance that earned a sharp rebuke from Colorado’s climate scientists (the state hosts one of the country’s premier centers for the study of climate change, the National Center for Atmospheric Research).
On Tuesday, Jimmy Carter opined the Tea Party is backed by anti-green “hard-right oligarchs who want to prevent the oil companies and major corporations from having to pay their share of taxes or to comply with environmental laws.”
Which Will Characterize the Next Two Years on the Hill: Compromise or Gridlock?
Stephen Spruiell at National Review argues emissions regulations issued by the U.S. Environmental Protection Agency will make emissions for certain industries expensive without letting them trade for those emissions, as they would have under cap-and-trade. He also argues it may be nearly impossible to prevent the EPA from regulating emissions in this way.
Outlets on the left agree with Spruiell and argue, more or less, “see, we told you this would happen.”
Emissions Regulations Will Knock Out up to 7 Percent of U.S. Generating Capacity, says Study
A huge debate has erupted over a North American Electric Reliability report arguing in a worst-case scenario, the shutdown of coal-fired power plants will, as a result of emissions regulations, significantly impact U.S. generating capacity.
Spending money on greenhouse gas mitigation efforts in developing countries could make up the shortfall in domestic commitments to existing Copenhagen pledges, says a new paper.
… But New Challenges to a Livable Climate Continue to Arise
China’s chronic dependence on coal is still a monumental problem, reports Scientific American, and Chicago’s two coal-fired power plants cost neighboring communities $127 million in health-related expenses.
Cellulosic ethanol may be the cold fusion of biofuels, and fundamentally unsustainable, to boot, argues Grist’s Tom Philpott. Your next bottle of bioplastic might be made from plants, but in a world where cheap ethanol comes from cleared Brazilian forests, the move away from oil may not be all good.
Nicholas Institute for Environmental Policy Solutions
First Things First: IBM will ask its 28,000 suppliers to monitor and disclose their energy use, heat-trapping gas emissions, waste, and recycling. Spread across 90 countries, the suppliers are compelled to install software designed to help firms understand their impact–if they want to continue working with the computing and services giant. “Ultimately, if a supplier cannot be compliant with requirements on the environment and sustainability, we’ll stop doing business with them,” said IBM’s John Paterson.
In Washington, the policy community anticipates in the next week or so the first public draft of a new Senate climate and energy bill. The bill will not surface on Earth Day, April 22, according to Sen. Lindsey Graham (R-S.C.). “We don’t want to mix messages here,” he said, “I’m all for protecting the Earth but this is about energy independence.”
Capping It All off: The New York Times declared “cap-and-trade” dead several weeks ago, only to quietly run a sort of non-correction correction last weekend. The draft Senate bill is expected to create a market in which regulated companies can buy and sell permits to emit heat-trapping gases.
Leaks from the Senate suggest that the bill, written by Senators John Kerry (D-Mass.), Graham, and Joe Lieberman (I-Conn.), would impose limits on the industrial pollution of heat-trapping gases and allow regulated companies to buy and sell emissions permits. The utility sector would initiate the program in 2012, followed by heavy industry in 2016. The Senate bill will treat transportation fuels differently, requiring a “fee” levied after products are refined, and before drivers pump it into their vehicles. This sector-by-sector approach to climate policy has been greeted with some openness from a few Republican lawmakers, including Senators Lamar Alexander (R-Tenn.) and Scott Brown (R-Mass.). Would new support offset a loss of support among Democrats angered by President Barack Obama’s recent announcement to expand offshore oil exploration?
When the troika introduces the bill, responsibility for moving it into the Senate goes to Majority Leaders Harry Reid. “His challenge could not be tougher,” writes Darren Samuelsohn in ClimateWire. Reid will try to navigate the bill to the Senate floor at the same time he’s juggling a new Supreme Court nomination, financial reform, and a rough re-election campaign. Graham and Kerry modestly disagreed on the possible implications for the climate bill of the Supreme Court confirmation process.
The Senate bill will reportedly also contain a provision that eliminates both the Environmental Protection Agency’s new greenhouse gas regulations, and state and regional climate programs. That would halt development of programs including the Western Climate Initiative. The WCI this week previewed a new analysis that projects an average price of about $33 to emit a ton of carbon dioxide in 2020. States could continue programs that improve energy efficiency or set renewable energy standards.
Down-to-Earth Business: Is most discernable “movement” in the environmental arena to be found this year in the private sector? Reuters finds supporting evidence. The still-tough economic climate encourages firms to cut waste and inefficiency, and sustainability offers a common approach. Strained consumer budgets discourage spending on premium “clean” products. (The consumers who are interested in shelling out a little bit more for a greener product might note that the EPA and Department of Energy’s Energy Star label just became stricter.) The trend calls to mind a catch-phrase of Gregory Unruh, a corporate sustainability expert affiliated with the Thunderbird School of Global Management: “Embed it and forget it.” He writes in his new book, Earth, Inc.: “We’ll reach the sustainability destination when we embed the principles that account for the biosphere’s sustainability to business practice in profitable ways” [pdf introduction].
Energy efficiency is the fastest path to sustainability for many companies, and by extension the least intrusive way for policymakers to push climate-and-energy goals forward. This week Nicholas Institute Senior Policy Associate Etan Gumerman co-authored an ambitious, widely received study with Professor Marilyn Brown of Georgia Tech that concludes smart policy should bring vast energy and financial savings. The modeling study shows that a suite of nine policies could result in $41 billion in energy bill savings, the creation of 320,000 new jobs, and a water savings of 8.6 billion gallons in 2020. “We looked at how these policies might interact, not just single programs,” Gumerman said. “The interplay between policies compounds the savings. And it’s all cost-effective. On average, each dollar invested in energy efficiency over the next 20 years will reap $2.25 in benefits.” The study was picked up by numerous major and trade media outlets across the country, and is available here.
Universities are stepping up their training of America’s future workforce. Engineering students increasingly seek programs that specialize in sustainability, drawn by renewed interest in industry and pushed by current and expected new government policies. US News and World Report writes, “Today’s engineering students are reacting to having grown up in environmentally ‘perilous times.’” [Duke’s Pratt School of Engineering includes an environmental engineering initiative as one of its four academic pillars.]
In the Clear: A panel dismissed charges of scientific fraud and other accusations levied against researchers affiliated with the Climate Research Unit at the University of East Anglia. Ron Oxburgh, an earth scientist, former defense adviser, and former Shell chairman, and colleagues pinged the climatologists for not consulting closely with top statisticians when they conduct their statistics-driven analysis of temperature records and proxy records. A statistician on the review panel said it was unlikely statistical errors undermine the basic science.
Cat Exits Open Bag: The Guardian publishes a memo detailing U.S. communications strategy in international climate talks. The document was found “on a European hotel computer and passed to the Guardian,” which doesn’t offer much of a clue for pinpointing who might have left it there. At the top of the list: “Reinforce the perception that the US is constructively engaged in UN negotiations in an effort to produce a global regime to combat climate change.”
Genie Exits Bottle:A volcanic eruption in Iceland has grounded aircraft in the U.K. and Europe, but early reports suggest it’s too small to have a noticeable short-term cooling effect globally. Sulfate aerosols released in volcanic explosions tend to have a cooling effect on the atmosphere. One controversial idea to manage climate change is to mimic eruptions by spraying aerosols into the high atmosphere from aircraft. For more on this and other “geoengineering” ideas, see (both!) of two great new books on the topic, Hack the Planet, by Eli Kintisch of Science, and How to Cool the Planet, by Jeff Goodell of Rolling Stone. I happily “blurbed” the former, and reviewed the latter recently in BusinessWeek.
Social media, such as Facebook and Twitter, are making previously obscure monthly data dumps from NOAA and NASA into regular conversation pieces among observers to the climate arena. The March numbers came out this week and zipped across blogs and news sites:
The combined global land and ocean average surface temperature for March 2010 was the warmest on record at 13.5 deg C (56.3 deg F), which is 0.77 deg C (1.39 deg F) above the 20th century average of 12.7 deg C (54.9 deg F). This was also the 34th consecutive March with global land and ocean temperatures above the 20th century average.
It’s worth asking, particularly as Earth Day queues up next week, will climate data eventually make it big as an economic indicator?
Why Isn’t the Keeling Curve More Famous?: For a couple of weeks, I’ve had a tiny bee in my bonnet along these lines and I finally figured out why. It’s this sentence in the Washington Postreview of Ian McEwan’s new novel, Solar (I mentioned this in this space two weeks ago). Here:
The subject, though, is hot. Whether or not carbon dioxide is accumulating in the atmosphere, there’s no denying that novelists are warming up to the subject. [Emphasis added]
Initially I was just hung up on how someone hoping to come across as an informed person, or who is supposed to be an informed person, could string together these words with a straight face. The larger problem is that this is just one signal–anecdotally reinforced elsewhere–that many smart, educated, successful people don’t know that carbon dioxide is increasing in the atmosphere.
If Earth Day has any singular goal at all, and I’ve never been convinced, it should be this: Make the Keeling curve more famous. Deutsch Bank recently bought a huge billboard across the street from Madison Square Garden in New York City. It has a running tally of the tons of carbon dioxide humans have put into the atmosphere, in the spirit of the famous National Debt Clock. But what would happen if instead it were the Keeling Curve? With other Keeling Curves in Times Square, at the New York Stock Exchange, in Parisian art installations, projected on clouds on Earth Day like the Bat signal. What do the neuroeconomists and behaviorists say about this? Is there a Keeling Curve app yet for the iPad?
Eric Roston is Senior Associate at theNicholas Instituteand author ofThe Carbon Age: How Life’s Core Element Has Become Civilization’s Greatest Threat. Prologue available atGrist. Chapter about Ginkgo biloba and climate change available atConservation.
