Tag: china

Posted on

U.S. Rejects Tar Sands Pipeline from Canada—For Now

The Nicholas Institute for Environmental Policy Solutions at Duke University

Under pressure from Congress to make a decision on the Keystone XL pipeline, planned to connect Canada’s tar sands region with the U.S. Gulf Coast, the Obama administration has decided to reject the pipeline proposal.

“This announcement is not a judgment on the merits of the pipeline, but the arbitrary nature of a deadline” that did not allow enough time to finish the environmental impact assessment, said President Obama. Republicans who supported the pipeline say they will continue to fight for it, and have asked Secretary of State Hillary Clinton to testify before Congress on the decision.

The company that wanted to build the pipeline, TransCanada, said earlier this week it was moving ahead with its plans despite the political wrangling. Also, the government of Alberta, the province at the center of Canada’s tar sands activity, had been urging the U.S. Environmental Protection Agency to ignore greenhouse gas emissions and climate change impacts when evaluating the pipeline, according to newly released documents.

But with the decision issued by the U.S. State Department, now the company will have to start over and reapply, and the government might not offer an expedited review. TransCanada may reapply within weeks proposing a new route avoiding Nebraska’s ecologically sensitive Sand Hills region, above a portion of the vast Ogallala Aquifer.

Obama reportedly called Canadian Prime Minister Stephen Harper to explain his decision, and Harper said he hoped the pipeline would eventually be approved. Harper is also supporting another pipeline to Canada’s Pacific coast that would facilitate exports to Asia, in particular to China. However, pipeline approval is more difficult in Canada than the U.S., and there is considerable opposition to a Pacific pipeline, a Reuters analyst said.

The decision was a “brave” call, said Bill McKibben, branded in the Boston Globe as “the man who crushed the Keystone XL pipeline.”

However other commentators—even those who took the decision as good news—argued it won’t stop Canada’s tar sands from flowing, and thus won’t reduce greenhouse gas emissions. Others called the decision “a gift” to the GOP.

Shale Gas Versus Alternatives

Although world oil prices and U.S. gasoline prices were at all-time highs in 2011, in the U.S. natural gas prices have been plummeting, reaching their lowest in a decade in a “classic case of oversupply.” The price has dropped lately because of a mild winter requiring less heating, a boon to consumers and businesses; the longer trend has been driven by the advent of shale gas drilling techniques, which now account for about a quarter of U.S. natural gas production.

There has been limited shale gas development outside the U.S., and prices in most of the rest of the world have remained much higher.

Although several years ago the U.S. was planning to import large amounts of liquefied natural gas and built ports to receive it in tankers, now the country is considering exporting natural gas. But such a move would have wide-ranging impacts that are difficult to unravel, according to a new report from the Brookings Institution; the U.S. Energy Information Administration said exporting natural gas would likely push domestic prices up.

And an MIT study simulated the impacts a steady supply of cheap shale gas would likely have on the U.S. economy and found it would in many ways benefit the economy over the next couple of decades, but that it could boost greenhouse gas emissions and stunt the growth of renewable energy and other alternatives.

Renewables Reach New High

Global investment in renewable energy hit a new record in 2011, reaching $260 billion, up 5 percent from 2010. Wind investment fell 17 percent from 2010, while solar investment grew by a third, so spending on solar was twice the spending on wind. The growth of solar was attributed in large part to plummeting photovoltaic panel prices.

Meanwhile, manufacturers of both solar panels and wind turbines are being squeezed by oversupply, leaving them with low profit margins.

In the U.S., renewables investment grew by a third, to $56 billion, helping the U.S. to reclaim the title of world’s biggest clean energy investor. However, in 2011 the country also saw the end of “green stimulus” money and federal loan guarantees, and its Production Tax Credit will end at the close of 2012, so future investment onward may drop unless new support for renewables is brought in.

With the drop in wind energy investment, Vestas, the world’s largest turbine manufacturer, is laying off more than 2,000 employees globally, about 10 percent of its workforce. It said it may layoff another 1,600 in the U.S. if the Production Tax Credit is not extended.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Posted on

Now All GOP Presidential Candidates Express Climate Skepticism

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.

There has been an increase in climate skepticism in the past year and a growing reluctance to say anything about climate, especially among Republicans. The turning point—argued the National Journal’s cover story, “Heads in the Sand“—was the 2010 Supreme Court decision that lifted restrictions on campaign spending and boosted so-called super political action committees (super PACs) that can take unlimited funds.

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.

China’s wind and solar capacity will soar in the next decade, adding the equivalent of 180 nuclear power plants, the IEA forecast.

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.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

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.

Posted on

Pleas, Hard Lines, and Accusations of Bad Faith Negotiations at Climate Talks

The Nicholas Institute for Environmental Policy Solutions at Duke University

In Durban, South Africa, the latest round of United Nations climate negotiations opened with a plea from South Africa’s president, Jacob Zuma, for countries to look beyond national interests. So far, however, the talks have been marked by many of the same divisions that plagued earlier meets.

A coalition of environmental groups—including the Natural Resources Defense Council and the Union of Concerned Scientists—accused the U.S. of negotiating in bad faith. At the conference, the United States, Saudi Arabia and Venezuela stalled on decisions about a Green Climate Fund to pay for clean energy and climate change adaptation in poorer countries.

In response, the European Union (EU) urged a conclusion on the fund, and took the hardest stance it ever has in such negotiations, insisting on stiff conditions for China and developing countries and demanding a road map for moving forward.

Meanwhile, Canada’s environment minister called the country’s decision to sign on to the Kyoto Protocol “one of the biggest blunders” an earlier administration made since they had no intention of meeting the pledge. This led a group of African leaders to plead Canada to reconsider.

Climategate 2.0

A week before the climate talks began, a new collection of 5,000 e-mails from climate researchers surfaced, apparently part of the same set obtained and then leaked in 2009 in the so-called “Climategate” affair. Despite widespread accusations of bias and manipulation of data, the researchers involved were cleared of wrongdoing.

But the new release of the second batch of e-mails led U.S. Rep. Ed Markey to state: “This is clearly an attempt to sabotage the international climate talks for a second time.” Markey called for more intense investigation into how the e-mails were hacked. While U.K. police investigated the apparent crime before, a Freedom of Information Act request revealed the police spent little on this effort.

To try and get clues of who may have been responsible, the Guardian reached out to readers to help troll through the files and uncovered an encrypted file apparently created by the hacker.

Emissions Warning

The latest Greenhouse Gas Bulletin from the World Meteorological Organization recorded an unusually large increase in the CO2 level in the air in 2010—a jump of 2.3 parts per million over the year, compared with the average over the preceding decade of 2.0 parts per million each year.

If this trend continued for the rest of the century, the world would warm some 6 degrees Celsius, warned Fatih Birol, the chief economist of the International Energy Agency (IEA).

However, this forecast is at odds with other warnings the IEA has made, argued Chris Nelder of SmartPlanet—in particular, Birol’s warning that the world has reached the peak of conventional crude oil production, and that high oil prices are hampering economic growth.

Threat of “Oil Armageddon”

Oil-importing countries continued to feel the bite of high oil prices; nonetheless, this year renewable energy spending passed a milestone, topping investment for fossil power plants.

Oil prices may spike again, many analysts warned, after France urged many countries to halt Iranian oil imports, and the U.S., Britain and Canada teamed up to apply new sanctions against Iran over its nuclear program.

However, the EU, poised to overtake the U.S. as the world’s biggest oil importer, can’t afford to refuse Iranian oil, the Wall Street Journal argued. Likewise, the U.S. had been considering sanctions, CNN reported, but hesitated because of the toll an oil price spike would likely have on the global economy. With relations between Iran and the West quickly worsening, Reuters reports oil consuming nations, hedge funds and refineries are preparing for an “oil armageddon.”

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Posted on

Only Five Years Left to Make Transition to Low-Carbon Infrastructure

The Nicholas Institute for Environmental Policy Solutions at Duke University

The infrastructure built over the next five years could “lock in” enough emissions to push the world past its target for limiting warming to 2 degrees Celsius, according to the International Energy Agency’s (IEA) latest annual update of energy trends, World Energy Outlook.

The Agency is “increasingly pessimistic” about the prospect for dealing with climate change, said deputy executive director Richard Jones.

To stay below 2 degrees Celsius of warming, the world has a budget of greenhouse gases it can emit, equal to about 1 trillion tons of CO2. Infrastructure already in place, or in the process of being built, will emit about 80 percent of that, the IEA estimated.

Unless there is a binding international agreement soon to ensure a swift transition to low-carbon infrastructure, “the door to 2 degrees will be closed forever,” said IEA Chief Economist Fatih Birol. So, investment in cleantech can’t wait until economic good times, argued the Guardian’s Damian Carrington.

This transition away from fossil fuels will require that annual subsidies for renewable energy continue rising, reaching $250 billion by 2035—four times today’s level—the IEA estimated, but this would still be considerably less than today’s fossil fuel subsidies.

The IEA foresees oil prices remaining high for decades to come, with a tight market with risks of price spikes if there is a cut-off due to war or soaring prices if there is insufficient investment in oil fields.

Because of these climate and security risks, Birol argued, “We have to leave oil before it leaves us.”

Solar Trade War?

The boom in Chinese production of low-cost solar panels has hit U.S. manufacturers hard, making it difficult for them to compete.

Subsidies for renewable energy in China have sparked accusations of a trade war with the United States, prompting a U.S. Department of Commerce investigation.

Some U.S. manufacturers launched an official complaint against China, and have called for a duty on Chinese panels imported into the U.S.

Another group of U.S. solar manufacturers and installers banded together to form the Coalition for Affordable Solar Energy to oppose the complaint. This led China’s largest solar power plant developer to shelve plans for a $500 million U.S. project.

Despite China’s large exports of solar panels, they’re also using many at home—and may install as much solar capacity as the U.S. this year.

Carbon Tax Approved

Australia will impose a large tax on carbon emissions, after the country’s Senate passed the legislation. The tax will kick in next July, and the country is pursuing linking its carbon market with others in New Zealand and Europe.

The system will be tax-and-dividend in which households will be compensated for higher energy prices, with payments of about 10 Australian dollars per week scheduled to start in May, before the tax hits.

Pipeline Controversy

The proposed Keystone XL pipeline to carry tar sands from Canada to Texas faced its biggest opposition yet with a revival of protests in Washington, D.C., in which thousands of protesters encircled the White House.

Canada is also considering another tar sands pipeline called Northern Gateway to reach a port on the Pacific coast, sited for export to Asia.

Oil historian Daniel Yergin argued opposition to the Keystone XL pipeline is misguided because if the U.S. doesn’t buy the fuel, China will.

Either way, the large store of tar sands in Canada could reshape world oil markets, said the Organization of Petroleum Exporting Countries (OPEC), which represents large exporters such as Saudi Arabia, but does not include Canada.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Posted on

Cutting Oil Use Should Be Focus of U.S. Energy Research, New Roadmap Says

The Nicholas Institute for Environmental Policy Solutions at Duke University

A major study modeled after goal-setting reports from the Departments of Defense and State, the first Quadrennial Technology Review by the U.S. Department of Energy (DOE), called for a shift in energy research and development priorities to reduce America’s dependence on oil.

“Reliance on oil is the greatest immediate threat to U.S. economic and national security and also contributes to the long-term threat of climate change,” the report said.

The DOE spends about $3 billion annually on research and development, with about three-quarters of that going toward “stationary energy” technologies—such as power plants and buildings—and one-quarter allotted for transportation. The report’s release could shift the funding balance more toward transportation, in particular more efficient cars and electric cars.

It will likely shape the 2013 fiscal year budget request from the Obama administration, due to be sent to Congress in February 2012.

Big Dreams

But a longer-term view isn’t synonymous with funding blue-sky ideas, as in the DOE’s Advanced Research Projects Agency-Energy (ARPA-E), which Time dubbed “the Department of Big Dreams.” The Quadrennial Technology Review criticized the DOE for placing too much emphasis on technologies “multiple generations away from practical use.”

Instead, the report called for greater focus on integrated energy systems and deployment over the medium to long term. The Obama administration has no choice but to focus on the longer term, argued Jeff Tollefson of Nature, because the weak economy and political stalemates have stymied progress in the shorter term.

The report sticks close to President Obama’s goals: getting one million electric cars on the road by 2015 and cutting oil imports by one-third by 2025. It also focuses on modernizing the electric grid and deploying clean energy, in line with Obama’s goal for 80 percent for America’s electricity to come from clean sources by 2035.

Carbon Credit Controversy

WikiLeaks has once again stirred up controversy, this time by releasing a diplomatic cable sent by the U.S. embassy in India, revealing discussions about questionable projects there that earn carbon credits through the United Nation’s Clean Development Mechanism (CDM).

Most of the CDM projects in India should not have been certified, the cable said, because they did not achieve emissions cuts beyond what would have happened without the sales of carbon credits.

The cable shows “the CDM is basically a farce,” said a group critical of the program, but officials involved in the program said it has been improved since the cable was sent in 2008.

However, an investigative series last year by the Christian Science Monitor found many instances of fraud and exaggeration. And last week Oxfam published a report alleging 20,000 people were evicted from their land in 2010 to make way for a tree plantation that would earn carbon credits.

Superconductor Espionage

American Superconductor, which designs magnet systems for wind turbines, alleges that Chinese turbine manufacturer Sinovel, its largest customer, stole trade secrets by bribing a disgruntled employee, one of a handful with access to a crucial bit of software.

A court in Austria is hearing the case, in which Sinovel stands accused of offering the rogue employee an employment contract worth at least $1 million. The employee only received a small fraction of what he was promised, and American Superconductor sent Sinovel many parts also without receiving payment.

Sen. John Kerry said such theft would hurt American investment in China.

Master of the Domain

With the internet opening to new domains, there has been a tussle over who will control the .eco domain, with Al Gore’s Alliance for Climate Protection vying against the Canadian company Big Room, supported by former Soviet leader Michel Gorbachev’s charity Green Cross International.

Al Gore’s group has dropped its bid, after many green groups—including 350.org, Greenpeace, and WWF—backed Green Cross International. The new domain is intended to be a badge of credibility, said the co-founder of Big Room, and may require disclosure about environmental performance when registering to use the domain.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Posted on

Ending Fossil Fuel Subsidies May Be the Way to Jumpstart Climate Finance

The Nicholas Institute for Environmental Policy Solutions at Duke University

A leaked World Bank document, due to be presented at the G20 meeting in November, proposes that rich countries eliminate their fossil fuel subsidies and instead contribute the money to climate aid for poor countries to help with green energy and adaptation measures. The paper also said donor countries are unlikely to come up with the money they had pledged to give during 2011 and 2012.

Just five years ago, climate change adaptation was a taboo subject among many environmentalists—as a feature in Earth Island Journal recounts—but things have changed a lot in recent years. Now the Global Adaptation Institute has released a new ranking of how prepared countries are, weighing the likely impacts of climate change in a country against its ability to adapt.

In general, wealthier countries came out on top, with Europe, North America and Australia occupying most of the top 20 spots, and at the bottom were many of the poorest countries that receive the bulk of the world’s development and aid money. Overall, the countries to be hardest hit are also the least able to adapt.

For new adaptation spending, there is a “sweet spot in the middle” for getting the most bang for the buck, investing in countries that are not very wealthy, but also don’t get international aid, said Ian Noble, chief scientist at the Global Adaptation Institute’s council of scientific advisers.

Some countries are already receiving aid for climate change adaptation and emission cuts—but donor countries are not being transparent about their contributions, said a new report from the International Institute for Environment and Development. Norway ranked the highest in transparency, whereas the U.S. was in the middle of the pack, and New Zealand got the lowest score. Of major concern is that donors may be redirecting funds from other development efforts, rather than giving additional aid for climate efforts.

In response to such concerns, the World Bank has launched an Open Data Initiative to allow easier access to more information.

Earlier this month, U.N. Secretary-General Ban Ki-moon also called for transparency on the part of climate aid recipients—in particular, small island nations.

Grim Energy Forecast

The U.S. Energy Information Administration (EIA) released what may be its final International Energy Outlook, a report it has published annually, but that was canceled after the EIA’s budget was slashed 14 percent this year.

Some of its highlights include the projection in its reference scenario that global energy use will rise about 50 percent over the coming quarter-century, with half the increase coming from China and India.

The reference scenario also projects renewables (including hydroelectricity) will be the fastest-growing energy source, growing close to 3 percent a year and more than doubling in production over 25 years. But natural gas, coal, and oil all register significant increases as well in this scenario, and the world’s fossil fuel mix shifts increasingly toward coal.

As Time‘s Bryan Walsh comments on the EIA’s scenario, “If you care about climate change, that’s a pretty grim forecast.”

In the near term, debt crises around the world may slow the growth of economies and energy use—including in India and China—said Harold Gruenspecht, acting administrator of the EIA.

China’s Environmental Movement

As a reminder that not every aspect of cleantech is necessarily clean, in China hundreds of protesters camped outside a solar panel factory they accused of polluting a river. After protesters broke into the facility and destroyed offices and overturned cars, the factory closed. Following the protests, the company, JinkoSolar, did pledge to clean up its operations.

Last month, a mass demonstration about a chemical plant in northeast China led the government to close it and promise to relocate it. An increase in such protests in recent years, said an Agence France-Presse article, marks a rising environmental awareness in China.

Sensor Genius

The Macarthur Foundation announced this year’s batch of “Genius awards.” The youngest winner was 29-year-old Shwetak Patel, an assistant professor in computer science at the University of Washington. He won for work on sensor systems that can allow people to track, among other things, energy and water use from individual appliances. He invented a device that plugs into a socket and, by measuring noise in a house’s circuits, figures out when a fridge is running or a TV is on, and, over time, tracks the consumption from each product.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Posted on

Scrambling to Head Off Power Outages Caused by Heat Waves, Rapid Growth, and Disaster

The Nicholas Institute for Environmental Policy Solutions at Duke University

Texas has suffered through the worst drought and one of the worst heat waves on record, pushing electricity use to a record high in an attempt to cope.

Texas is the state with the largest installed wind capacity, and recently installed wind farms came through to boost the state’s electricity generation just in time. However, even this jump was not enough to meet demand, and four mothballed natural-gas plants will be fired back up. Thermostats that power companies can automatically adjust also helped ease demand.

The state suffered through blackouts earlier this year, and the mere threat of more outages recently has boosted home energy audits and efficiency measures, as well as calls for more renewable energy.

Texas may also beat Massachusetts to the punch, installing America’s first offshore wind farm before the long-delayed (but finally approved) Cape Wind project. The 600-turbine, 3-gigawatt project may have its first turbine up and spinning by year’s end.

Shortages Boost Fossil Fuels

China also had to ration electricity earlier this year, and is facing a power crunch over the next few years as it struggles to keep up with fast-growing demand.

To meet the demand, China’s coal use is soaring, and the country became a net importer of coal in 2009. In July, the country’s coal imports broke a new record, possibly driven by worries of outages, and by the government’s decision to allow power companies to charge more.

Earlier this month, it was reported that China is planning to create a national cap on energy use as part of a plan to limit greenhouse gas emissions.

China is not the only one boosting coal imports. The U.K. is buying increasing amounts of coal from the U.S., and the European Union’s demand for coal may increase.

Likewise, Japan has coped with a drop-off in nuclear power mainly by using more liquefied natural gas, but was able to boost its total electricity generation higher than last year, before the Fukushima disaster.

The increased cost of energy in Japan, said some experts, risks pushing the country into a third “lost decade” of economic stagnation.

Making Fracking Friendlier

The push to produce more natural gas through fracking needs further examination to reduce any environmental risks it could be causing in the U.S., according to a task force organized by U.S. Secretary of Energy Steven Chu. Companies are failing to follow best practices, and the explosive growth of fracking has left regulators behind, the task force said, prompting the need for stronger regulations. However, the panel made few specific recommendations of how to improve the situation, focusing mainly on collecting more data on the effects of fracking and sharing the data publicly.

While there are state regulations on fracking practices, the U.S. Environmental Protection Agency proposed earlier this month its first air pollution standards aimed at cutting smog and greenhouse gas emissions from these wells.

Renewables’ Attraction

While many economies are struggling, large investors are finding renewable energy looks more favorable, with insurance giants such as Allianz and Munich Re putting billions into wind and solar and  big banks funding large installations.

The world’s biggest solar power plant, to be built in California, will use photovoltaics rather than concentrated solar, its developer announced, because of the drop in solar panel prices.

Although U.S. residential solar power has not grown as quickly as in some other countries, such as Germany, do-it-yourself kits and innovative installations are making the investment more attractive.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Posted on

Australia’s Ambitious Scheme Sets World’s Highest Price on Emissions

The Nicholas Institute for Environmental Policy Solutions at Duke University

Australia, with the highest per capita greenhouse emissions of any large developed country, will soon take on one of the most ambitious schemes to tackle climate change, with a new carbon-trading system.

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.

Elsewhere, there are a growing number of countries planning or weighing a nuclear retrenchment. Most recently, Kuwait’s Deputy Prime Minister said the country is no longer interested in developing nuclear energy, and Japan’s Prime Minister urged his country to phase out nuclear.

France, the most nuclear-reliant country, is embarking on a new study of the country’s future energy mix that will consider the possibility of phasing out nuclear by 2040 or 2050.

Saudi Oil Peak?

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.

Meanwhile, major Wall Street firms warned of rising oil prices over the rest of this year and into 2012. Goldman Sachs, for one, raised its forecast prices, and said “it is only a matter of time before inventories and OPEC spare capacity become effectively exhausted” and prices soar. A major reason for the gloomier outlook, Goldman Sachs said, is Saudi Arabia won’t be able to pump as much oil as many had expected.

Solar Purchasing

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 Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Posted on

Ethanol Tax Breaks Survive, but Vote May Have “Broken the Dam”

The Nicholas Institute for Environmental Policy Solutions at Duke University

While a bill to slash $6 billion in annual tax breaks for ethanol fuel failed to pass the U.S. Senate, it was still hailed by some lawmakers and analysts as a major break from the past.

It raises a philosophical quandary, says the Christian Science Monitor: “If Congress takes away a tax subsidy, should that count as a tax hike?” Nearly all Republican representatives have signed on to “The Pledge,” an agreement to never vote to raise taxes.

The bill to end ethanol tax breaks attracted votes from both sides of the aisle, with 34 Republicans and 6 Democrats voting for it—but it fell 20 votes short of passing. Nonetheless, some Democrats said the vote broke the dam, opening the way for the repeal of other tax breaks, such as larger ones for the oil industry.

Meanwhile, a bipartisan group of Midwestern senators introduced an alternative to ending ethanol subsidies. Instead of a flat-rate tax credit of 45 cents per gallon of ethanol-gasoline blend, the new bill would introduce a variable subsidy that would increase when oil prices drop, and fall when oil prices climb.

On Thursday, a wide majority in the Senate did vote in favor of another piece of legislation that would end tax breaks for U.S. ethanol as well as tariffs on foreign ethanol. However, the change is unlikely to go into effect immediately, Bloomberg reports, because the repeal of the subsidies and tariffs is attached to another piece of legislation that is unlikely to become law.”

Fuel Woes Cause Ripple Effects

A report by the United Nations Food and Agriculture Organization, the World Bank, the World Trade Organization, and seven other international agencies called for an end to subsidies for biofuels because they are driving up food prices. Prices for both food and fuel have been rising fast in India and China, leading the Chinese government to adjust banking rules to try to quell inflation.

Meanwhile, if oil prices remain high—above the current level of $120 for Brent crude—there is a risk of derailing the economy, into a double-dip recession, said Fatih Birol, chief economist of the International Energy Agency. “We all know what happened in 2008. Are we going to see the same movie?”

U.S. Secretary of Energy Steven Chu also warned high fuel prices are taking their toll. “We’re very cognizant of … the fact that higher gasoline prices so impede the economic recovery,” Chu said. One of the measures the Obama administration considered for bringing down gasoline prices, he said, was to tap the government’s Strategic Petroleum Reserve, intended for emergencies.

More details came in a report from Reuters, with anonymous sources saying that in the weeks before a recent, fractious OPEC meeting, U.S. and Saudi officials met to discuss “an unprecedented arrangement” of oil trades. In the proposed deal, the U.S. would send Europe low-sulfur, “sweet” crude from the strategic reserve, and in return receive more high-sulfur, “sour” crude from Saudi Arabia. The deal fell through, the sources said, because Saudi Arabia was unwilling to sell the oil at a discount.

Another Kind of Military Power

The U.S. military—the world’s single largest user of oil, and responsible for 80 percent of the U.S. government’s energy consumption—has now created an Operational Energy Strategy. “Before, it was assumed energy would be where you needed when you needed it,” a Pentagon official told National Journal. “The new strategy is to say that energy is a strategic good that enables your military force.”

Earlier this month, Gen. David Petraeus, the top U.S. commander in Afghanistan, called on the Army to use fuel more efficiently. In addition to efficiency, renewable energy will be a major priority for investments by the military over the next 20 years, according to a study by clean tech group Pike Research.

Nuclear Risks Still Weigh Heavily

Nuclear plants and nuclear waste disposal have been under increased scrutiny since Japan’s Fukushima disaster, which the government recently confirmed had led to a meltdown of three of the six reactors at the site.

Republicans called for Gregory Jaczko, head of the U.S. Nuclear Regulatory Commission, to step down after it was revealed he had “unilaterally” moved to stop work on the Yucca Mountain nuclear waste dump—a project for a long-term disposal site that has been in the works for decades, but that President Obama vowed in 2009 to end.

An independent review of temporary waste storage sites in the U.S. indicated that the threat of a release of radioactivity dwarfs the risk Japan faced. The report’s lead author, Robert Alvarez, said, “The largest concentrations of radioactivity on the planet will remain in storage at U.S. reactor sites for the indefinite future.”

Meanwhile, China’s nuclear power plants all passed a recent safety review by government inspectors, paving the way for the country to move ahead with its ambitious plans for expanding atomic energy.

Germany’s decision to phase out nuclear power by 2022 has turned the country into “a multibillion-dollar laboratory experiment” on how to roll out alternatives quickly to replace the quarter of Germany’s electricity that came from nuclear prior to Japan’s disaster. To enable renewables to take on a larger share of the load will likely require huge investments in expanding the grid and add a few thousand miles (several thousand kilometers) of additional power lines.

Are We Headed for a New Ice Age?

The Sun may go into hibernation for decades, a few new studies suggest, with a dramatic drop in the number of sunspots. Previous drops in the number of sunspots have been linked to cooler times on our planet, such as the “Little Ice Age” that struck medieval Europe.

Although some newspapers trumpeted that we’re approaching a “second little ice age,” New Scientist says the effect would actually be more like “a slightly less severe heatwave.” In fact, even if sunspots do go quiet, it would lower the Sun’s heating of Earth by at most 0.3 watts per square meter, whereas theman-made greenhouse effect is now about six times larger, at 1.7 watts per square meter.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.

Posted on

After Fukushima, Japan Vows to Boost Renewables

The Nicholas Institute for Environmental Policy Solutions at Duke University

In the wake of the nuclear disaster at Fukushima, Japan’s Prime Minister Naoto Kan pledged to boost renewable energy to at least 20 percent of its consumption in the next decade. This would double the share of renewable electricity in Japan, which gets most of its electricity from nuclear, coal, and oil. Nuclear power had supplied 30 percent of Japan’s electricity, and before the nuclear disaster, the country had planned to build more nuclear plants to boost that share to 50 percent.

“We will do everything we can to make renewable energy our base form of power, overcoming hurdles of technology and cost,” Kan said at a G8 meeting in France. In another speech in France, to the Organisation for Economic Co-operation and Development, Kan also questioned ongoing growth of energy consumption: “we must ask ourselves … whether it is appropriate for society to increase energy consumption without any limits.”

Kan was expected to announce a new “Sunrise Plan” that would make it compulsory by 2030 for all new buildings to include solar panels. Japan’s richest man, telecoms mogul Masayoshi Son, also threw his weight behind renewables, announcing plans to build 10 large solar power plants and a partnership with local officials from around the country to launch a “Natural Energy Council.”

Alternative Federal Fleet

The federal government’s vehicle fleet should be cleaned up, a memorandum from President Obama ordered. The memo directs federal agencies to switch to purchasing only “alternative fueled” passenger cars and light-duty trucks by 2015. The “alternative fuel” category would include electric vehicles and hybrids, as well as those powered by biofuels or compressed natural gas. To kickstart the switch, a pilot project is purchasing more than 100 electric vehicles.

To help consumers understand their cars’ fuel costs and environmental impacts, fuel efficiency labels have gotten an overhaul. The U.S. Environmental Protection Agency (EPA) called the change “the most dramatic overhaul to fuel economy labels since the program began more than 30 years ago.” The new labels are not as simple as those proposed last year by the EPA and the U.S. Department of Transportation, which would have given letter grades to cars.

Meanwhile, richer countries—such as the U.S., Germany and Japan—have reached “peak travel,” according to a new study, with miles traveled per person flattening off in recent years.

China’s Blackouts

In China, now the world’s biggest consumer of electricity, power companies are cutting their production. They are balking at government regulations that are raising the price of coal, while keeping the price of electricity down—policies that the companies say are threatening to push them into bankruptcy. The State Grid, the country’s largest electricity distributor, warned that this summer blackouts could be the worst since the early 1990s.

With power shortages already, Chinese stocks fell on concerns the country would not be able to keep up its high rates of growth. Nonetheless, China widened its lead as the most attractive place to invest in renewable energy, according to consultancy Ernst & Young LLC.

Globally, more money is pouring into renewable energy—but according to a new survey, some investors fear a green bubble may be forming.

Shale Gas Redemption?

A study last month by Cornell University researchers estimated power plants burning natural gas from fracking shale formations cause more global warming than burning coal.  A new assessment from the U.S. Department of Energy’s National Energy Technology Laboratory rebuts the Cornell study, finding that, watt for watt, such “unconventional” natural gas contributes only about half as much to global warming as does coal.

The Climate Post offers a rundown of the week in climate and energy news. It is produced each Thursday by Duke University’s Nicholas Institute for Environmental Policy Solutions.