China's next gold - FT.com

Summary:
China's rise as a manufacturing powerhouse should be no cause for hysteria. Above all, it is a story of human progress: millions of Chinese are being lifted out of poverty each year by the country's rapid economic growth. Furthermore, consumers in developed countries benefit from the "China price". Competition from China may lead to job losses, but so can competition from across the street or new technology. This merely reinforces the need for the governments of rich countries to help workers who have lost their jobs, just as they should also be providing business-friendly regulations and infrastructure, and an excellent education system. Bankruptcies and job losses are part of the incessant process of economic change. The developed world needs to continue to increase the quality and sophistication of its manufactured products. The true challenge posed by China as the workshop of the world is likely to be environmental: by buying so many products from China, we have moved greenhouse gas emissions to a place where they will not be curbed by the schemes of western regulators, and where they make a wonderful excuse for western inaction. China must be persuaded to play its part in global efforts to cut emissions. (Published: 12/08/08)

Notes:

• China is poised to overtake the US as the world's largest producer of manufactured goods
• no cause for hysteria
• good news far outweighs the bad
• e.g. in China itself:
  
• millions of people are being lifted out of poverty each year by the country's rapid economic growth
• a story of human progress
  
• too rarely acknowledged by those who fear China
• e.g. developed world
  
• citizens benefit from the "China price" as consumers
• competition from China can drive businesses under and destroy jobs
• but: so can competition from across the street, or from new technologies
• China's success reinforces the long-standing need for the governments of rich countries to help workers who have lost their jobs
• just as they should also be providing business-friendly regulations and infrastructure, and an excellent education system
• bankruptcies and job losses are part of the incessant process of economic change
• they would only be cause for a systemic worry if there was evidence that the developed world could not adapt to Chinese competition
• so far, there is little sign of that
• instead, the developed world continues to increase the quality and sophistication of its manufactured products
• the US willingly pays four times the Chinese price for electronics and machinery from other developed countries
• 15 years ago it would pay only three times
• suggesting that developed-country manufacturers are shifting towards ever more sophisticated goods

• true challenge posed by China as the workshop of the world is likely to be environmental
• by buying so many products from China, we have moved greenhouse gas emissions to a place where they will not be curbed by the schemes of western regulators, and where they make a wonderful excuse for western inaction
• China must be persuaded to play its part in global efforts to cut emissions;
  
• that task will be far harder than meeting the challenge of Chinese competition
  

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Our Electric Future - The American

Summary:
Andy Grove calls for a strategy that can deflect our march toward persisting conflict by strengthening our energy resilience. The strategy includes a policy that favors sticky energy (i.e. electricity) with multiple sources and aggressively moving vehicles first toward dual-fuel mode and ultimately to running on just electricity. Focus in the past on energy independence was misguided: talking about “independence” in terms of one product in an otherwise seamless global economy is a contradiction. Energy resilience is what's needed instead, i.e. strengthening our ability to adjust to such changes. Because electricity is the stickiest form of energy (it stays in the land where it is produced), and because it is multi-sourced, it will give us the greatest degree of energy resilience. Shifting to electricity has the added advantage of helping to mitigate a major environmental threat. However, we can't rely on market forces alone: absence of common interests among the industry players is a major obstacle to action. (Published: 01/08/08)

Summary:

• significance of US first a supplier, and later as a consumer of oil has decline
• relative decline as a supplier accelerated in the 70s, after OPEC was formed, and again when it flexed its muscles by precipitating the oil shock
• significance as a customer started to decline in the early 90s as some of the developing Asian economies started to grow at a rapid rate, requiring prodigious amounts of petroleum
• OPEC has enormous control over its customers
• energy is the lifeblood of all economies
• availability of petroleum determines whether an economy grows or declines
• availability of petroleum determines employment levels
• in turn determines national political stability
• Project Indepedence
• kicked of by Nixon in early 70s
• goal
• “At the end of this decade, in the year 1980, the United States will not be dependent on any other country for the energy we need to provide our jobs, to heat our homes, and to keep our transportation moving.”
• dramatically failed to meet that goal
• after Nixon, president after president set similar gboals
• every target was missed
• became more and more dependent on imported petroleum
• net energy imports doubled between 1970 and 1980, and then again by 1990
• goals were unwise
• faulty goals lead to the wrong actions
• problem:
• US became more and more integrated into a global economy
• goods, information, and oil move unimpeded across national boundaries
• oil flows toward the highest bidder, just like all other goods
• talking about “independence” in terms of one product in an otherwise seamless global economy is a contradiction
• correct goal
• to strengthen our energy resilience
• we must protect the U.S. economy from interruptions in the supply of such a critical commodity
• whether those interruptions are related to natural or political causes.
  
• the appropriate aim is to strengthen our ability to adjust to such changes
• how? by increasing our reliance on electricity
• electricity: energy that sticks
• oil
• moves to the highest bidder
• Fleets of tankers carry it across oceans day and night
• natural gas
• can also move around, but with extra difficulties
• on land, it can be transported in pipelines
• to carry it across oceans requires liquefaction and expensive, high-tech ships that can carry this liquid in strong, deeply cooled containers
• electricity
• it is “sticky”:
  
• it can be transported only over land
• i.e. it stays in the continent where it is produced
• it is a multi-sourced form of energy
• petroleum, coal, wind, hydroelectric, nuclear and solar
• if one source suffers a shortage, we can produce electricity from another
• because electricity is the stickiest form of energy, and because it is multi-sourced, it will give us the greatest degree of energy resilience
• nation will be best served if we dedicate ourselves to increasing the amount of our energy that we use in the form of electricity
• transportation: hardest nut to crack
• transportation uses more than half of all the petroleum consumed in this country
• conversion will not be easy
• requires substantial growth in generation capacity as well as in the capacity and reach of the transmission infrastructure
• requires that vehicles be able to run on electric power
• with the size and weight of ordinary automobiles, current technology allows electric cars to run only 100 miles or so before their batteries need to be recharged
• many drivers can live with this limitation most of the time
• but few will find the condition satisfactory all of the time
• new technology
  
• often shows up in this manner: it is not completely satisfactory in the beginning, but good enough to get going
• such approaches are known as “disruptive technologies.”
• starting low and moving up
• waiting game
• automobile industry,
• has been waiting instead for batteries to improve until they can allow electric cars to enter the marketplace with the same driving range as gasoline-fueled cars
• battery developers
• have been waiting for demand from the automobile industry to develop before fully committing the resources required to do the job
• generation and transmission infrastructures
  
• have not been built up to service the potentially explosive demand from transportation
• our exposure to the vagaries of oil supply is growing by the month
• must accelerate conversion to electricity in a major way
• U.S. government should lead the way by requiring that a growing percentage of new cars be built with dual-fuel capability
• dual fuels
• dual-fuel cars would have both an electric engine and an auxiliary gasoline engine to augment it
• dual capabilities are often built into machines to help with technology transitions
• e.g. laptops with both wired and wireless connection
• forces of disruptive technology would eventually bring about improvements in battery technology, ultimately allowing the production of an all-electric car with satisfactory driving range
• process won’t happen quickly enough on its own
• no matter how fast the production of dual-fuel cars is ramped, replacing the bulk of the approximately 250 million cars on the roads in the United States with new cars will take a decade or more
• retro-fitting
  
• need to retro-fit the low-mileage part of the fleet first
• estimates show that converting these vehicles to dual-fuel operation, even with electricity providing no more than 50 miles of driving range between daily recharging, could cut petroleum imports by 50 to 60 percent
• a stunning opportunity
• task requires major effort and investment
• may need to apply tax incentives to offset the cost of the retrofit and couple them with deep discounts on the cost of electricity used by the vehicle over some initial period, such as one to two year
• environment
• shifting to electricity has the added advantage of helping to mitigate a major environmental threat
• shift from petroleum-based vehicles to electricity-based ones would move the locus for addressing carbon emissions from millions of individual vehicles to far fewer centralized electricity-generating plants
• controlling emissions thus becomes an industrial task, easier technologically.
• estimates indicate a potential reduction of carbon emissions of around 50 percent through such a shift
• can't rely on market forces
• automobile manufacturing, battery production, and the generation and transmission of electricity are all represented by different industries
• each with its own financial aims
• absence of common interests is a major obstacle to action
• requires the coordinated commitment of several industries
• startups and new ventures, not limited by the economic rules of established industries, can break the gridlock in time
• but: we don’t have the time
• Condi Rice: “The politics of energy is warping diplomacy in certain parts of the world”
• oil has been a major factor in many wars, and it could be again
• Kissinger: “Today’s relationship between China and the United States is very similar to that of Germany, a rising country at the turn of the 20th century, and Britain, an established one. Their conflict over resources eventually led to war.”
  
• We are in a period of time in the world today where there is a shortage of resources.
• we will face “an era of persisting conflict.”
• need for a strategy that can deflect our march toward this “persisting conflict” by strengthening our energy resilience
• policy that favors sticky energy with multiple sources and that aggressively moves vehicles first toward dual-fuel mode and ultimately to running on just electricity provides the answer.

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33% of China's Carbon Footprint Blamed on Exports - abc News

Summary:
A Carnegie Mellon study finds that one third of China's carbon dioxide emissions are a direct result of the manufacture of goods destined primarily for developed countries. These "export goods emissions" account for 6% of the global emissions. International policy at the moment tends to penalise the country which produces goods rather than the one that consumes them. China has a point arguing that the US and Europe should bear the burden of responsibility for the emissions as they demand and consume the products. How to fairly apportion the liability for China's exported emissions is the million-dollar question. (Published: 29/07/08)

Notes:

• scale of China's emissions
  
• hot topic since it was forecast that they could surpass US emissions as the world's leader in 2007
• may have already happened

• Carnegie Mellon study:
  
• 2005: one-third of China's carbon dioxide emissions are pumped into the atmosphere in order to manufacture exported goods
• many of them "advanced" electronics goods destined for developed countries
• i.e. developed countries import many of the products that contribute to China's greenhouse gas emissions
• "export goods emissions" account for 1.7 billion tonnes of China's carbon dioxide
• represents 6% of total global emissions
  
• equivalent of Germany, France and the UK's combined emissions
• compare 1987: exports accounted for just 230 million tonnes
• 12% of China's total emissions
• China very aware that much of its carbon footprint is export emissions
• has used this as an argument against adopting Kyoto-Protocol-like emissions caps
• argues that other major emitters, including the US and Europe, should bear the burden of responsibility for the emissions as they demand and consume the products
• International policy at the moment tends to penalise the country which produces goods rather than the one that consumes them
• How to fairly apportion the liability for China's exported emissions "is the million-dollar question"
• Benito Müller of the Oxford Institute for Energy Studies, UK
• "It's just like narcotics," says Müller. "Who is responsible, the drug baron or the junkies?

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A silver lining to high oil prices - FT.com

Summary:
Arnoud de Meyer and Matthias Holweg anticipate a trend of "back-sourcing" due to rising energy and commodity costs: manufacturing will increasingly move to where the markets are, including back to the UK. Few companies that have gone global have so far achieved the full cost efficiencies they had envisaged, and this will get worse. Two common mistakes that companies make when deciding to source components from abroad are: they tend to only calculate the static costs of a supply chain, and they assume that costs will remain stable. Furthermore, global supply lines might be cost-competitive but they certainly are not carbon-competitive, which is gaining in importance. As a result, narrowly defined production costs will become less important in deciding where to locate manufacturing. This presents an opportunity for Western manufacturing, provided the skills and tacit knowledge that is needed for manufacturing are preserved. Companies may also have to learn how to efficiently operate smaller flexible units that produce the customised products for the local market. (Published: 30/07/08)

Notes:

• Increased transport costs resulting from higher energy prices and carbon taxes
  
• may create an opportunity for a revival in western manufacturing
• Most strategic decisions in companies are influenced by new "paradigms"
• path-breaking new concepts
• globalisation was certainly the paradigm of the past decade
• application of such paradigms tends to behave like a pendulum
• swinging towards one extreme, and eventually swinging back
• Is it possible that the pendulum may swing back for global manufacturing?
• premise of global sourcing and exploiting lower labour costs for manufacturing in eastern Europe and the Bric countries
  
• largely built on the cost of transport
• dropped by a third between 1960 and the turn of the millennium
• result of introduction of containers and the rise of third-party logistics providers
  
• shipping goods reliably from one end of the world to the other without owning any of the transport assets in between
• with further help from
• trade liberalisation and agreements
• stable currencies that reduced the risks in establishing global supply lines
• research shows that few companies that have gone global achieved the full cost efficiencies they had envisaged
• some even found that "offshoring" their operations was more expensive than sourcing or manufacturing locally
• subsequently returned to their home country
• cost of logistics may be a lot more important than originally estimated
• others found that product cost was indeed much lower, yet this cost reduction was traded off with much reduced quality
• e.g. recent highly publicised product recalls
• companies commit two common mistakes when deciding to source components from abroad
• tend to only calculate the "static" cost of a supply chain
• basically adds the unit cost ex-supplier factory and the transport cost together
• lower labour cost reduces the unit cost of the product
• generally offsets the higher transport cost of bringing it into the UK from China
• other costs are often not considered or underestimated
• e.g. the additional cost for buffer stocks
• supply chain becomes inherently less able to respond to swings in demand or changes in technology
• e.g. risk of obsolescence or running out of stock
  
• drastically increases, yet often is not factored into the calculation.
  
• e.g. cost of quality defects
  
• rises tremendously when a defect is discovered in a shipped batch arriving in Europe and costly air freight has to be used to refill the supply line
• e.g. co-ordination cost of working over long distances
  
• often taken for granted
• tend to assume that costs remain stable, not account for "dynamic" costs
• perception is that countries in eastern Europe, China and India have inexhaustible labour pools that one can tap into at low cost
• and that all these workers are trained to the needed level
• recent experiences
• Eastern Europe
  
• car manufacturers find that local labour pools of trained workers have been virtually exhausted
• inflation in the cost of trained labour is in double-digits as manufacturers are competing for labour
• India
• trained staff will change jobs several times per year if they see the prospect of higher salaries elsewhere
• annual turnover of 20 per cent being normal
  
• labour cost inflation rising to 25 per cent a year in some regions, such as Bangalore or Pune.
  
• China
• trained middle manager in the car sector, fluent in English and Mandarin, will earn more in Shanghai than in Wolfsburg or Birmingham
• carbon footprint gaining in importance
• global supply lines might be cost-competitive but they certainly are not carbon-competitive
• rising consumer conscience about the impact of patterns of consumption
• manufacturers with offshored operations will find it increasingly hard to justify sending products half-way around the globe if they can be made as easily close by
• recovery of competitiveness in the manufacturing sector
• long been dismissed as an obsolete part of a "service economy"
• "backshoring" trend
  
• manufacturing will increasingly come back to where the markets are
• does not mean that all of it will come back
• emerging countries are also enormous markets and local production will serve local consumption there
• but: companies will have to think increasingly in terms of networks or portfolios of plants
• narrowly defined production costs will become less important in deciding where to locate manufacturing
• developing the opportunity
• UK will need to preserve the skills and the tacit knowledge that is needed for manufacturing
• may have to learn how to efficiently operate smaller flexible units that produce the customised products for the local market
  

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High oil prices spur demand for low energy electronics - Reuters

Summary:
With oil at around $145 a barrel and electricity costs jumping, consumers are becoming preoccupied with keeping down their power bills. Electronics makers that develop energy efficient product lines and market them effectively to customers may get an edge in a gloomy global economy. Going green is not only eco-friendly but crucial for business, going beyond just products, extending throughout the development and manufacturing process, according to LG Electronics. These energy-efficient products, however, carry a hefty price premium to reflect the cost of developing new technologies, which in turn hampers faster adoption. A survey has found that found that green consumers are more brand-loyal than average consumers. A green-technology product that establishes new benchmarks and appeals to concerned consumers will have an iconic market presence if done right, according to Forrester Research. (Published: 05/07/08)

Notes:

• With oil at around $145 a barrel and electricity costs jumping, consumers are becoming preoccupied with keeping down their power bills.
• Electronics makers that develop energy efficient product lines and market them effectively to customers may get an edge in a gloomy global economy
• Kim Jik-soo, a spokesman at LG Electronics Inc.
• "Going green is not only eco-friendly but crucial for business. This goes beyond just products, extending throughout the development and manufacturing process."
• electronics firms are furiously developing energy efficient products and heavily promoting lines already on the market that use less electricity than competitors' brands
• from washing machines that use steam instead of hot water, to fridges that use low energy compressors, to low power computer screens
• washing machines
  
• using steam instead of hot water, cuts water and power use by more than 70 percent compared with some top-load models
• LG Electronics Inc and Whirlpool Corp
• refrigerators
• consume 30 percent of overall power in a typical home
• traditional compressors are giving way to linear compressors that use up to 40 percent less power and make less noise
• computing industry
• replacing screens lit by conventional cold cathode fluorescent lamps (CCFLs) with light emitting diode (LED) displays
• "LED saves up to 40 percent of the power used in traditional backlights. Next year they will be commonly found in notebook screens, and will be increasingly used in TV panels from 2010."
• Market researcher DisplaySearch expects LED-backlit displays to account for 50 percent of notebook panels in 2010, up from 12 percent this year.
  
• By 2015, all laptop displays will use LEDs, generating sales of $6 billion.
• building and street lighting
• Samsung Electro-Mechanics Co recently replaced lighting in the South Korean parliament building with new LED products and reported LED consumed just one sixth the power of incandescent bulbs.
• these energy-efficient products carry a hefty price premium to reflect the cost of developing new technologies
• in turn hampers faster adoption
• e.g. Whirlpool's washing machines with steam feature are sold at $1,300-$1,500, compared with a traditional machine priced at $700.
• makers argue that the lifetime savings from green products could amount to the price of the appliance itself
• Sometimes a little incentive helps.
• Japanese electronics retailer Bic Camera Inc is running a campaign in which buyers of eco-friendly products get extra credit points that can be used for future purchases
• U.S. survey by Forrester Research, 2007
  
• found that green consumers, who agree to pay extra for electronics that use less energy or come from an environmentally friendly maker, are more brand-loyal than average consumers.
• Christopher Mines, Forrester analyst:
• "More than 25 million U.S. adults fall into this segment, enough for even the largest consumer electronics marketers to target,"
• "Green-targeted PCs and other electronics will evolve as part of the consumer electronics industry's move to go beyond 'beige box' design," he said. "Apple certainly leads the way here."
• "A green-technology product that establishes new benchmarks and appeals to concerned consumers will have an iconic market presence if done right."

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Clean Energy Investments Charge Forward Despite Financial Market Turmoil - UNEP Press Release

Summary:
Overview of the "Global Trends in Sustainable Energy Investment 2008" report by New Energy Finance for UNEP's Sustainable Energy Finance Initiative. 2007 was a record year for investment in renewable energy and energy efficiency industries. Wind energy was most popular with investors, although the fastest growing sector is solar energy. Investment in energy efficiency technology also reached a record. Sustainable energy accounted for 23% of new power capacity added globally in 2007. The EU remained the leading region for investment, while in the US acceptance of sustainable energy is becoming more widespread. Mood slightly subdued in 2008, although in Q2 most areas of investment rebounded, despite the global turmoil in the financial markets. Also noted was that carbon trading is becoming more accepted, and that private interest in the post-Kyoto market is emerging. (Published: 03/07/08)

Notes:

• 2007:
  
• record-setting year of investment in the renewable energy and energy efficiency industries
• Total sustainable energy transaction volume: $204.9b
• $148.3b in new funding entered the sustainable energy sector globally
• up 60% from 2006
• $98.2b went into new renewable energy generation
  
• wind energy again attracted the most investment: $50.2b
• especially in the US, China and Spain
• installed capacity passed the 100 GW mark
• solar power: $28.6b
• grew most rapidly: at an average annual rate of 254% since 2004
• driven by the advent of larger project financings
• heavy investment to ease the silicon bottleneck and new thin-film technology beginning to reach scale
• $50.1b went into technology development and manufacturing scale-up
• Investment in energy efficiency technology reached a record $1.8 billion
• an increase of 78% from 2006.
• According to the International Energy Agency, each $1 invested in energy efficiency an average avoids more than $2 needed to create new supply.
• $56.6b changed hands through mergers and acquisitions.
• even as a credit crunch began to roil financial markets
• 31 gigawatts of new installed generation
• sustainable energy accounted for 23% of new power capacity added globally in 2007
• about 10 times that of nuclear.
• Sustainable energy companies accounted for 19% of all new capital raised by the energy sector on the global stock markets in 2007.
• EU: remained the leading region for investment
• European asset finance up to record level of $49.5 billion
• 62% of asset finance worldwide.
• particularly later-stage financing
• supportive policies, as well as an investor base that is comfortable with financing renewable energy projects and more intense competition for deals
• US: acceptance of sustainable energy becoming more widespread
• extending beyond its traditional heartland of California
• Texas leading the wind energy charge
• new administration in 2009 is expected to make renewable energy and energy efficiency a political priority
  
• recent uncertainty in the US (particularly over the possible introduction of a CO2 regulations) has put a significant number of coal-fired generation plants on hold
• China: "Beijing Olympic Games (2008) has sharpened the country's political resolve and strengthened programmes to promote cleaner generation and cut energy intensity."
• investment in non-hydro renewables capacity in China increased by more than four times, to $10.8 billion
• new wind capacity doubled to 6 gigawatts.
• surge of Chinese solar companies listing on US and European stock markets
• public market activity is also growing at home
• e.g. Chinese wind manufacturer Goldwind raised $243 million last year in the Shenzhen Stock Exchange's first IPO related solely to renewable energy.
• Brazil: world's largest renewable energy market
• thanks to its long established hydropower and bioethanol industries
• sustainable energy investment in Brazil continued to be dominated by ethanol
• investor interest shifted there from the beleaguered US ethanol market
• investment in sugar cane cogeneration, biodiesel production and wind generation are also picking up.
• India:
• asset financing grew significantly, to $2.5 billion
• mostly for 1.7GW of new wind projects
• these installations place India fourth in the world
• both in terms of new capacity added in 2007 and total installed capacity.
• funds raised on Indian stock exchanges reached $628 million
• although: companies increasingly looked to foreign markets for new capital,
• raised $1.4 billion overseas in 2007
• public market activity was marked by a series of Foreign Currency Convertible Bonds (FCCBs) from established Indian renewable energy companies
  
• e.g. Suzlon($500 million raised) and Moser Baer($150 million).
• 2007 also saw several aggressive cross-border deals involving Indian or Chinese acquirors
• e.g. Suzlon's $1.6 billion acquisition of Repower
• China National Building Material Group's purchase of German turbine blade manufacturer NOI Rotortechnik.
• $13 billion invested in carbon funds by the end of 2007
• important source of investment for "Clean Development Mechanism" (CDM) projects in developing countries
• most new investment was into private funds
  
• carbon trading becomes more established.

• 2008: picture somewhat subdued across the sector
• only mergers and acquisitions up
  
• several substantial wind developers sold their portfolios
• many realising that with the tightening up of the credit markets they could not finance the growth themselves
• US ethanol industry undergoing restructuring
• But: Q2 2008: most areas of investment rebounded
• even as global financial markets remained in turmoil
• sustainable energy venture capital and private equity in Q2 2008 was up 34% on Q2 2007
• new build asset finance was up 8%
• public market investment showing a strong recovery with the IPO of Portuguese utility EDP's renewable energy business, EDP Renovaveis
• Q1 2008: emergence of private interest in the post-Kyoto market
• investors beginning procuring post-2012 CDM credits eligible for trading in the EU Emissions Trading Scheme.

• "Investment in the sustainable energy sectors must continue to grow strongly if targets for greenhouse gas reductions and renewables and efficiency increases are to be met"

• "Investment between now and 2030 is expected to reach $450 billion a year by 2012, rising to more than $600 billion a year from 2020. The sector's overall performance during 2007 and into 2008 sets it on track to achieve these levels."

• "Carbon Capture and Storage(CCS) is the only sector where we did not see as much progress as we had expected, with the regulatory and funding environments for these projects remaining murky and timelines for the first commercial projects being extended."

• Source: "Global Trends in Sustainable Energy Investment 2008" by New Energy Finance (UK) for UNEP's Sustainable Energy Finance Initiative

• Achim Steiner, head of UNEP, UN Under-Secretary General

• "Just as thousands were drawn to California and the Klondike in the late 1800s, the green energy gold rush is attracting legions of modern day prospectors in all parts of the globe. A century later, the key difference is that a higher proportion of those looking for riches today may find them. With world temperatures and fossil fuel prices climbing higher, it is increasingly obvious to the public and investors alike that the transition to a low-carbon society is both a global imperative and an inevitability. This is attracting an enormous inflow of capital, talent and technology. But it is only inevitable if creative market mechanisms and public policy continue to evolve to liberate rather than frustrate this clean energy dawn. What is unfolding is nothing less than a fundamental transformation of the world's energy infrastructure."

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Summary only...

Carbon standard 'to renew trust' - BBC News

Summary:
The Carbon Trust has introduced a new benchmark, the "Carbon Trust Standard", for companies that show "real reductions in carbon footprint year-on-year." The goal is to rebuild public trust in the green claims made by firms as well rewarding companies that can demonstrate ongoing improvements. Companies that paid a third party to offset emissions on their behalf do not qualify. Three rules underpinning the standard: measurement, management and reduction of the carbon footprint. Trust is looking to see that an organisation has the appropriate governance, senior management involvement, appropriate policies and good carbon accounting processes. (Published: 24/06/08)

Notes:

• new Carbon Trust benchmark
  
• goal: to rebuild public trust in the green claims made by firms
• in response to the public's growing mistrust of companies' claims to be cutting their greenhouse gas emissions
• by highlighting businesses which have made genuine cuts in emission
• Carbon Trust Standard will only be issued to UK organisations that show "real reductions year-on-year"
• companies that paid a third party to offset emissions on their behalf would not qualify
• Tom Delay, CEO Carbon Trust
• "What businesses and consumers both share is a desire for one, credible way to prove that an organisation has not only measured, but actually reduced their carbon emissions year-on-year without the use of offsetting."
• offsetting industry
  
• has become a key player in the effort to reduce emissions
• businesses or individuals wanting to offset their emissions pay a third party, who then invests the money in clean energy projects or tree planting programmes
• In theory: the payment ensures that the emissions are offset by an equivalent carbon saving
• But: a number of schemes were criticised for failing to deliver on their promises
• Harry Morrison, Carbon Trust: "We want businesses to focus on taking action themselves and reducing their own emissions"
• standard was underpinned by three rules:
  
1. measurement of the carbon footprint
2. management of the carbon footprint
3. reduction of the carbon footprint
• Harry Morrison:
• "In order to pass the scheme, you need to have an actual numerical and quantified carbon footprint."
• "The second thing is that you need to be reducing the footprint over time."
• "Management is important because it shows whether an organisation actually has the processes in place to drive the reductions over the coming years."
• "So we are looking to see that an organisation has the appropriate governance, senior management involvement, appropriate policies and good carbon accounting processes."
• "All of that has to happen in-house."
• Twelve organisations have been awarded the Carbon Trust Standard to date
• six companies and six public bodies
• Once accredited, holders of the standard have to deliver year-on-year reductions in carbon emissions.
• Harry Morrison:
• "We think it is the first scheme in the world that rewards companies that can demonstrate ongoing improvements."
• "It is true that this is robust, and it will become even more challenging for organisations, but we are living in a time where we have to keep driving down emissions."

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Saving Resources to Save Growth - Project Syndicate

Summary:
Jeffrey Sachs: reconciling global economic growth, especially in developing countries, with the intensifying constraints on global supplies of energy, food, land, and water is the great question of our time. Investments in new resource-saving technologies are not being made at a sufficient scale, because market signals don’t give the right incentives, and because governments are not yet cooperating adequately to develop and spread their use. Cannot leave fate to the markets and leave governments to compete with each other over scarce oil and food. We we will be able to continue to achieve rapid economic progress only if the world cooperates on the research, development, demonstration, and diffusion of resource-saving technologies and renewable energy sources. (Published: 28/06/08)

Notes:

• great question of our time:
  
• Reconciling global economic growth, especially in developing countries, with the intensifying constraints on global supplies of energy, food, land, and water
• commodity prices soaring worldwide
• not only for headline items like food and energy, but for metals, arable land, fresh water, and other crucial inputs to growth
• because increased demand is pushing up against limited global supplies
• worldwide economic growth is already slowing under the pressures of $135-per-barrel oil and grain prices that have more than doubled in the past year
• new global growth strategy is needed to maintain global economic progress
• basic issue is that the world economy is now so large that it is hitting against limits never before experienced
• many poor countries have achieved extraordinary economic growth in recent years by harnessing cutting-edge technologies
• As a result, the world economy has been growing at around 5% per year in recent years.
• continuation possible only if the key growth inputs remain in ample supply, and if human-made climate change is counteracted
• if the supply of vital inputs is constrained or the climate destabilized, prices will rise sharply, industrial production and consumer spending will fall, and world economic growth will slow, perhaps sharply
• free-market ideologues:
• ridicule the idea that natural resource constraints will now cause a significant slowdown in global growth
• say that fears of “running out of resources,” notably food and energy, have been with us for 200 years, and we never succumbed
• Indeed, output has continued to rise much faster than population
• view has some truth.
  
• better technologies have allowed the world economy to continue to grow despite tough resource constraints in the past
• simplistic free-market optimism is misplaced for at least four reasons:
1. history has already shown how resource constraints can hinder global economic growth
• After the upward jump in energy prices in 1973, annual global growth fell from roughly 5% between 1960 and 1973 to around 3% between 1973 and 1989
2. the world economy is vastly larger than in the past
• demand for key commodities and energy inputs is also vastly larger
3. we have already used up many of the low-cost options that were once available
• Low-cost oil is rapidly being depleted
• same is true for ground water
• Land is also increasingly scarce
4. our past technological triumphs did not actually conserve natural resources, but instead enabled humanity to mine and use these resources at a lower overall cost
• thereby hastening their depletion
• world economy will need to introduce alternative technologies that conserve energy, water, and land, or that enable us to use new forms of renewable energy (such as solar and wind power) at much lower cost than today
• Many such technologies exist, and even better technologies can be developed
• key problem: the alternative technologies are often more expensive than the resource-depleting technologies now in use.
  
• with greater investments, it will be possible to raise farm yields, lower energy use to heat and cool buildings, achieve greater fuel efficiency for cars, and more
• with new investments in research and development, still further improvements in technologies can be achieved.
  
• Yet investments in new resource-saving technologies are not being made at a sufficient scale
• because market signals don’t give the right incentives
• and because governments are not yet cooperating adequately to develop and spread their use.
• cannot leave fate to the markets and leave governments to compete with each other over scarce oil and food
• global growth will slow under the pressures of resource constraints
• But: if the world cooperates on the research, development, demonstration, and diffusion of resource-saving technologies and renewable energy sources, we will be able to continue to achieve rapid economic progress
• rich world should commit to
• financing a massive program of technology development at current climate change negotiations
  
• renewable energy, fuel-efficient cars, and green buildings
  
• and to a program of technology transfer to developing countries
• such a commitment would also give crucial confidence to poor countries that climate-change control will not become a barrier to long-term economic development

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Summary only...

Major Progress In Technology Needed For 25 Percent Renewable Energy Use To Be Affordable - ScienceDaily

Summary:
A RAND Corporation study finds that dramatic progress in renewable energy technology is needed if the United States desires to produce 25 percent of its electricity and motor vehicle fuel from renewable sources by 2025, without significantly increasing consumer costs. Finds that biomass resources and wind power have the greatest potential to contribute toward reaching the 25 x '25 goal. A large, inexpensive and easily converted biomass supply is essential if it is to be used as a renewable resource and still have a limited impact on consumers' wallets. Developing such a supply would require harvesting energy crops at a scale that greatly exceeds current production. Significant increases in the use of wind power are possible, but only with substantial technical advances to facilitate greater use of less-productive locations. (Published: 26/06/08)
Notes:

• currently renewable energy provides:
• 9.5 percent of total U.S. electricity supply
• mostly hydroelectric power
• and 1.6 percent of motor vehicle fuel
• study by the RAND Environment, Energy and Economic Development program
• requested by the Energy Future Coalition, a nonprofit environmental organization
• study considered technological and economic factors that would affect the costs of renewable energy as well as non-renewable fossil fuels
• provides a "snapshot" of the nation's potential energy expenditures if a requirement was imposed that 25 percent of electricity and motor vehicle fuels used in the United States by 2025 would come from renewable resources
  
• a goal activists have described as "25 x '25"
• finds that biomass resources and wind power have the greatest potential to contribute toward reaching the 25 x '25 goal
• Michael Toman, director of the RAND Environment, Energy and Economic Development program:
• "Expanding the use of renewable fuels will lower the long-term price of crude oil and reduce carbon dioxide emissions that are contributing to global warming."
• "However, to reap these benefits will require a major investment in improving and increasing the use of renewable energy technology."
• Biomass resources
  
• e.g. stalks from food crops, wood material and grasses
  
• can be turned into ethanol or gasoline that can power motor vehicles.
• study finds, however, that a large, inexpensive and easily converted biomass supply is essential if it is to be used as a renewable resource and still have a limited impact on consumers' wallets
• Developing such a supply would require harvesting energy crops at a scale that greatly exceeds current production.
• Toman: "Without increased biomass availability, expanded renewable energy use could impose economic burdens and result in environmental setbacks due to land conversion."

• Among the study's other key findings:

• Renewable energy technology will have to improve at the very significant pace envisioned by some renewable energy supporters in order to enjoy low-cost impacts.
• Significant increases in the use of wind power are possible, but only with substantial technical advances to facilitate greater use of less-productive locations.
• More moderate renewable energy targets -- such as 15 or 20 percent -- reduce expenditure impacts more than proportionately, though carbon dioxide reductions also are less significant.
• The federal government's policy approach to pricing of renewable motor fuels will significantly affect fuel demand and society's total energy expenditures.

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Summary only...

Green energy push planned for UK - BBC News

Summary:
As many as a quarter of British homes could be fitted with solar heating panels under new government plans for a "green revolution". Solar panels, wind turbines and household energy efficiency central. Price tag: £100b. Plan acknowledges green energy will cost more, will have transform large areas of British landscape and may have negative impacts on living standards. Plans due to be unveiled in coming week. (Published: 21/06/08)
Notes:

• plans due to be unveiled next week
• Malcolm Wicks, energy minister:
• the new proposals are "the most ambitious" such strategy that Britain has seen
• goal is to meet the EU target of 15% of energy from renewables by 2020
• call for 3,500 new wind turbines to be erected across the UK
• 30-fold increase in off-shore wind power generation
• quarter of British homes to be fitted with solar heating panels
  
• new loans and grants for businesses to increase green energy supply
• compulsory measure on households to boost efficiency
• total price tag: £100 billion.
• plan concedes that green power will cost more
• at a time of consumer anger over fuel prices
• plans recognise that the new energy policy could transform large areas of Britain's landscape and have a "significant impacts on all our lives...not all of these positive"
• Wicks:
  
• there is now a "huge momentum" in renewable energy provision;
  
• government would ensure that carbon emission reduction was the "core concept behind our energy strategy
• Britain currently gets less than 5% of its electricity from renewables, mainly wind.
• John Sauven, Greenpeace:
• "the plans for solar panels on seven million roofs and other steps to reduce the use of fossil fuels make sense regardless of the price of oil or the state of the climate"
• "We'll create jobs, reduce our dependence on foreign oil and use less gas, and in the long run our power bills will come down. Even if climate change didn't exist these proposals would be sensible."

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Summary only...

Business chiefs urge carbon curbs - BBC News

Summary:
A coalition of 99 companies is for the Kyoto protocol's successor to include targets for cutting greenhouse gas emissions and to establish a global carbon market. Coalition argues that cutting emissions must be made to carry economic advantages. Following Stern review and IPCC data, CEOs conclude that a responsible risk management approach to the issue requires political and business leaders to take action now. Government needs to create right environment. Environmentalists criticise lack of short-term targets and aspirational nature of targets, rather than being set in stone. Some companies are clearly in it for economic opportunities arising from climate change solutions. (Published: 20/06/08)

Notes:

• coalition of 99 companies
• includes: Alcoa, British Airways (BA), Deutsche Bank, EDF, Petrobras, Shell and Vattenfal
• companies involved span all of the G8+5 countries and virtually every major industrial sector
• ask political leaders to
  
• set targets for cutting greenhouse gas emissions and
  
• to establish a global carbon market
• argue that cutting emissions must be made to carry economic advantages.
• coalition believes that taking climate action now would be prudent
• based on scientific and economic evidence assembled by the Intergovermental Panel on Climate Change (IPCC) and the Stern Review
• "While recognising that there are still some uncertainties in the scientific and economic evidence available, these CEOs conclude that a responsible risk management approach to the issue requires political and business leaders to take action now"

• some key recommendations:

• All major economies, including developing ones such as China and India, should be included in the post-Kyoto deal, with richer countries committing to deeper and earlier emissions reduction
• Governments should aspire to halve global greenhouse gas emissions by 2050
• Governments and businesses should urgently explore bottom-up approaches to reducing emissions
• A global carbon trading system should be established as soon as possible
• Emissions caps should be applied flexibly across industry, with some sectors allowed leeway to preserve competitiveness.
• Willie Walsh, CEO BA
• "It's important that the business community demonstrates a desire to work with governments to tackle the challenge that climate change represents. But the report makes it clear that business can't operate in a policy vacuum - we need strong leadership from governments."

• Environmentalist criticisms
  
• EU's ambition is to make cuts of 20% from 1990 levels by 2020
• shorter term targets are needed
• progress towards them is easier to gauge and backsliding more obvious
• business coalition decided against setting a short term figure
• promoting a 2050 target that is "aspirational," not set in stone
• will allow wiggle-room for high-emitting industries
• may lead to a relatively weak post-Kyoto deal

• Steve Lennon, managing director of the South African energy giant Eskom
• "Creating an environment that will encourage people to do things differently is more important than setting a global target."

• some of the companies see economic opportunities arising from climate change solutions
• Caio Koch-Weser, vice chairman of Deutsche Bank
• "We see enormous opportunities for the financial industry, beyond the challenge we face as global citizens. If leadership is there to create a Kyoto successor that is based on cap and trade, then it creates a global carbon market - and then we are in business."

• blueprint for tackling climate change handed to Japanese Prime Minister Yasuo Fukuda
  
• ahead of next month's G8 summit in Japan
• aim of which is to produce a successor to the Kyoto Protocol
  
• current targets expire in 2012

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Summary only...

Sustainable Energy: Without the Hot Air - David J.C. MacKay

Summary:
Book on the scale of the energy channels. Not sufficient to know that a source of energy is "huge". We need to know how it compares with another "huge", namely, our huge consumption. Comparing numbers for demand with numbers for supply using renewables. Because renewable energy is so diffuse (between 0.1 and 14 W/m^2), it takes an enormous area of land (or sea) to provide the required 125 kWh/day per person. Provides four different energy plans to meet this need, each with different emphases (no carbon emissions, strong nuclear, no nuclear, etc.).

Currently reading.

Notes:

Preface

• Three different motivations drive today’s energy discussions
• fossil fuels are a finite resource
• seems possible that cheap oil (on which our cars and lorries run) and cheap gas (with which we heat many of our buildings) will run out in our lifetime
• given that fossil fuels are a valuable resource, useful for manufacture of plastics and all sorts of other creative stuff, perhaps we should save them for better uses than simply setting fire to them
• security of energy supply
• using fossil fuels changes the climate
• Climate change is blamed on several human activities, but the biggest contributor to climate change is the greenhouse effect produced by carbon dioxide (CO2).
• Most of the carbon dioxide emissions come from fossil-fuel burning.
  
• main reason we burn fossil fuels is for energy. So to fix climate change, we need to sort out a new way of getting energy
• climate change motivation runs in three steps:
  
• one: human fossil-fuel burning causes carbon dioxide concentrations to rise;
  
• two: carbon dioxide is a greenhouse gas;
  
• three: increasing the greenhouse effect increases average global temperatures.
• fact: the burning of fossil fuels is the principal reason why CO2 concentrations have gone up
• critics: burning of fossil fuels sends about seven gigatonnes of CO2 per year into the atmosphere, but biosphere and the oceans send about 1900 gigatonnes and 36 000 gigatonnes of CO2 per year into the atmosphere!
• misleading because only quantifies the natural flows of CO2 into the atmosphere, not mentioning that approximately the same amount flows back out of the atmosphere into the oceans and biosphere
• the natural flows cancel themselves out; burning fossil fuels creates a new flow that is not cancelled
  
• consensus of the best climate models seems to be that doubling the CO2 concentration would have roughly the same effect as increasing the intensity of the sun by 2%, and would bump up the global mean temperature by something like 3 deg C
• there is no doubt that such a rise is a bad thing
• such temperatures on earth have not been seen for at least 3 million years
• conceivable that the ecosystem will be so significantly altered that the earth stops providing some of the goods and services that we currently take for granted
• In the year 2000, world greenhouse gas emissions stood at about 34 billion tons of CO2 equivalent per year
• about 5 or 6 tons per year per person
• equivalent to every person burning one and a half tons of coal per year
• but: We don’t all emit 6 tons per year
• US: ~25 ton/year/person; UK: ~12 ton/year/person; China: ~ 4 ton/year/person
• i.e. US: ~4 times average; China
• Historical cumulative emissions
• UK nr. 2!
  
• Some countries like Britain have committed to a 60% reduction in greenhouse-gas emissions by 2050
• with such a reduction, climate scientists reckon it’s more likely than not that global temperatures will rise by more than 2 deg C
• global emissions need to fall by 70% or 85% by 2050 to avoid such a rise
• means Britain needs to get down from its current 10 or so tons of CO2 per year per person to roughly 1 ton per year per person by 2050
• This is such a deep cut that the best way to think about it is ‘no more fossil fuels’
• Yardstick #1: average current emissions are 1 ton of carbon per year per person
• or roughly 4 tons of CO2
• note: a round-trip intercontinental flight emits nearly two tons of CO2 per passenger (which is about half a ton of carbon), i.e. half of the average person’s annual carbon emissions
  
• Yardstick #2: we need average emissions to be 1/3 ton of carbon per year per person
• i.e. more than one intercontinental round-trip
• Debates about energy policy are often confusing and emotional because people mix together factual and ethical assertions

1. The balance sheet

• energy and power - units used in book
• energy: kWh
• aka ‘one unit’ on electricity bills
• cost ~10p in 2007
• individuals typically use a few kWh/day
  
• power: kWh/d; occasionally Watt or kiloWatt
  
• rate at which we use or produce energy
• 1 kWh/d is roughly the power you could get from one human servant
  
• 40 W ~ 1 kWh/d
• i.e. a 40W light bulb left switched on all day uses about 1 kWh/d, costing the consumer about 10p/day
• i.e. a 1000W toaster uses 1 kWh/h, or costs about 10p/hour, or 240p/day
  
• 1kW ~ 25 kWh/d
• Joule: standard international unit of energy
• too small to work with: 1 kWh ~ 3.6 MJ
• 1 W = 1 J/s
• most commonly used units in public documents
• terawatt-hours per year (TWh/y)
• 1000TWh/y per United Kingdom is roughly equal to 45 kWh/d per person
• gigawatts (GW)
• 2.5GW per UK is precisely 1 kWh/d per person
• million tonnes of oil equivalent per year (Mtoe/y)
• 2 Mtoe/y per UK is roughly 1 kWh/d per person

2. Cars

• power consumed by daily car user
• energy used (50km) = 40 kWh/d
  
• km travelled per day * energy per litre of fuel / km per litre of fuel
  
• energy per litre of fuel, or calorific value of petrol
• 10 kWh per liter
• km per litre of fuel
• 12 km/l (33 mpg)
• km travelled per day
• e.g. 50 km

3. Wind

• maximum conceivable wind power per person = 200 kWh/d
  
• assuming 100% coverage
  
• = wind power per area x area per person
• power per unit area of windfarm is about 2W/m^2
• for average windspeed of 6m/s (22km/h)
• population density
• 4000 m^2 per person
  
• 8 kW per person = 200 kWh/d per person
• more realistic: maximum conceivable wind power = 20 kWh/d per person
  
• assuming 6m/s and 10% filling
• conclusions:
• if we covered the windiest 10% of the country with windmills, we might be able to generate half of the energy used by driving a car 50 km per day each
• Britain’s onshore wind energy resource may be “huge,” but it’s not as huge as our huge consumption
  
• windmills required to provide the UK with 20 kWh/d per person are
  
• fifty times the entire wind hardware of Denmark;
  
• seven times all the windfarms of Germany;
• double the entire fleet of all wind turbines in the world
• Whitelee windfarm being built near Glasgow in Scotland
• has 140 turbines with a combined peak capacity of 322MW in an area of
  55 km2
• that’s 6W/m2, peak
• if we assume a capacity (load) factor of 33% then the average power production per unit land area is 2W/m2

4. Planes

• assuming one intercontinental round-trip per year (2 x 10,000 km):
• average energy consumption per person per day = 30 kWh per day
• i.e. flying once per year has an energy cost slightly bigger than leaving a 1 kW electric fire on, non-stop, 24 hours a day, all year
• would air travel consume much less energy if we travelled in slower propellor-driven planes?’
  
• no: planes are already almost as efficient as they could possibly be

5. Solar

• 
  

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Summary only...

Carbon nanotubes interfere with protozoan function - R&D Magazine

Summary:
Study by a Canadian group found that carbon nanotubes may be toxic to microorganisms. When cultures of a certain key protozoan, a single-cell organism, were exposed to the nanotubes their ability to ingest and digest bacteria was hindered. Protozoa exhibited clumping. If such exposure ever occurred in the wild, there is a possibility that the nanotubes move up the food chain, with impossible to forsee ecological effects. Study illustrates need for research into the health and environmental impact of nanoparticles. (Published: 19/06/08)

Notes:

• Nature Nanotechnology link
  

• Univ. of Waterloo group exposed Tetrahymena thermophila to single-walled carbon nanotubes
• exposed to different concentrations of nanotubes in solution and monitored them for three days using video microscopy
• found that the protozoa unnaturally clumped together initially and then ingested SWNTs and bacteria alike
• additionally, the protozoa's ability to ingest and digest their prey bacteria species was compromised
• control cultures remained healthy while the nanotube-exposed cultures exhibited various negative responses depending on the concentration
• ranging from diminished mobility to death, with the most prevalent effect being cell clumping
• one potential positive effect of Tetrahymena thermophila nanotube uptake
• the protozoa released extra “exudates,” fluids rich in proteins and cellular debris
• help solidify impurities in the wastewater
• could make the protozoa more efficient water-cleaners.

• implication: if such exposure ever occurred in the wild, the nanotubes could move up the food chain
• additionally, because the protozoa's ability to ingest and digest their prey bacteria species was compromised, certain bacteria populations could balloon
• could have untold ecological effects
• pressing need for research into the health and environmental impact of nanoparticles
• Part of the reason for the lack of studies on carbon nanotubes effects on microorganisms is that scientists generally believe that the nanotubes are insoluble in water.
  
• However, at least one recent study challenges this belief.
  
• “We hope that our work will stimulate a line of research towards better understanding of the effects of nanomaterials on diverse organisms, especially on single-cell organisms that are ecological important,” says Tang.

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Summary only...

All Biofuels Are Not The Same - Washington Post

Summary:
Vinod Khosla arguing that a ban on all biofuels would be a mistake. There is room for biofuel crop production without affecting food supply or the environment. E.g. waste from forestry operations, agricultural crop waste, municipal organic waste and sewage. Winter cover crops would use land that sits idle during winter. Reducing the renewable fuel mandates would reduce investment in these alternatives and in improving the quality of cellulosic biofuels. Instead he proposes a policies and an impact rating to incentivise the production of biofuels that are environmentally beneficial. (Published: 16/06/08)

Notes:

• biofuels: refers to a variety of products that vary dramatically in their environmental impact and effects on food prices
• cellulosic ethanol production can reduce carbon emissions 75% while producing ethanol at a lower cost than corn ethanol and gasoline
  
• concerns about amount of water and corn required to produce a gallon of ethanol
• 16-ounce steak takes about the same amount of corn and more water
• ban steaks?
• cellulosic fuels mandate:
  
• congress has required oil refiners and fuel blenders to use up to 36billion gallons of renewable fuels produced in America annually
• attacked by critics
• but: reducing it could be disasterous for energy security and the environment
• better: build flexibility into the standard related to price and availability of cellulosic biofuels
  
• sufficient biomass exists as waste from forestry operations to meet the cellulosic fuels mandate (21 billions) in the 2007 energy bill
• if we include agricultural crop waste, municipal organic waste and sewage, all 36 billion gallons could be produced within 10 years
  
• approaching $1/gallon
• adding winter cover crops to land that sits idle during winter (about half of the land used for agriculture)
• could replace most of our gasoline imports
• could produce 450 million tons of biomass a year within 10 years, and more than 750 million tons by 2030
• not an additional acre of land being used for biofuels
  
• Ed Shafer (US Agriculture Secretary):
• "On the international level, only 3% of the more than 40% increase we have seen in world food prices this year is due to the increased demand on corn for ethanol"
• LECG analysis:
  
• Oil prices affect the US consumer price index for food two to three times as much as corn prices
• Merril Lynch:
• If biofuels were taken off the market, oil prices would climb 15%, putting further upward pressure on food prices
• source of corn and cellulosic ethanol matters
• if ethanol is produced on lands that displace food production into rain forests, its environmental effect will be negative
• need national and international policies that create incentives for countries such as Brazil and Malaysia to preserve their rain forests through carbon credits while banning biofuels from countries that do not meet rain forest deforestation reduction targets
• incentivise production of biofuels that are environmentally beneficial
• e.g. carbon/land/air quality/water impact rating
• if we reduce renewable fuel mandates, we are likely to reduce investment in next-generation cellulosic biofuels
• need to focus on improving the quality of biofuels and reducing our oil dependence
  

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Summary only...

The Manhattan Project Is Underway - Energy Tribune

Summary:
Robert Bryce noting that a Manhatten Project appears to be underway, except that there are no government mandates: huge investments are made in renewable technologies by private investors. Two main difference between previous energy crisis (70s) and now: huge amount of venture capital available, and the amount of new technologies that are being brought to the market as a result. Far better that these risk be taken by the private sector. No government agency can react as quickly as the private sector can. Markets, not governments, are going to determine the pace of our transition to alternative and renewable fuels. (Published: 12/06/08)

Summary:

• Manhatten Project underway as a result of higher energy prices
• huge investments in renewable energy technologies
• but without government mandates
• New Energy Finance Ltd., London-based research firm:
• 2007: $148.4b invested globally in "clean energy technologies, companies and projects"
• four-fold increase over 2004 levels
• Mark Mills, Digital Power Capital (PE fund)
• two critical differences from the 1970s:
• huge amount of venture capital now available to energy entrepreneurs
• several thousand firms providing venture capital or private equity
  
• "the phenomenal new suite of technologies that are being brought to the market that can address the problem"
• from nanotechnology to high-bandwidth wireless communications
• energy technology companies booming with oil selling for more than $130
• First Solar Inc.
• makes thin-film solar panels
  
• best-performing stock in US in 2007
• up nearly 800% last year
  
• stock has increased some 12 fold in value since IPO in 2006
• trading at $300/share, P/E of about 124, market cap of $25b
• Broadwind Energy
  
• builds towers and other equipment for the wind energy
  
• June 2006: shares selling for about $1.30
• May 2008: $26/share
• whether current investment trend is a bubble remains to be seen
• but: far better that these risk be taken by the private sector
• no government agency can react as quickly as the private sector can
• Carlos Ghosn, Nissan CEO in New York Times: "the shifts coming from the markets are more powerful than what regulators are doing"
• central point: markets, not governments, are going to determine the pace of our transition to alternative and renewable fuels
• the length of that transition, which will likely last several decades, depends almost exclusively on how quickly those new sources can become cost-competitive with fossil fuels

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Sustaining growth is the century's big challenge - FT.com

Summary:
Martin Wolf on Jeffrey's Sachs new book. Sach's sets three goals for humanity: elimination of mass poverty, population control and environmental sustainability. First goal, according to Sachs, can only be achieved through a massive aid effort. Wolf is sceptical of effectiveness but believes there is no moral/credible alternative. Biggest question of all, however, is whether global prosperity and economic growth can be maintained. Sachs: requires latter two goals to be achieved. Sach's calls current era the "Anthracene:" world dominated by human activity. Environmental sustainability. Achievable, provided incentives are put in place (less than 2% of global GDP). (Published: 10/06/08)

Notes:

• Jeffrey Sach's new book
• Common Wealth: Economics for a Crowded Planet (Allen Lane, 2008)
  
• arguably, the biggest question confronting humanity in the 21st century:
• Is it possible for the vast mass of humanity to enjoy the living standards of today's high-income countries?
• challenge is stark:
• world real incomes per head could rise 4.5 times by 2050 and world population by 40 per cent
• would mean a sixfold increase in global output, concentrated in the developing world
  
• Is such an increase feasible?
• Jeffrey Sachs: yes and no
• yes and no
• yes, because changes in incentives, technology and social and political institutions would make a benign outcome feasible;
  
• no, because the path we are now on is unsustainable.
  
• Sachs's 3 goals:
1. "the end of extreme poverty by 2025 and improved economic security within the rich countries as well"
• i.e. prosperity for everybody or elimination of mass poverty
  
2. "stabilisation of the world's population at 8bn or below by 2050 through a voluntary reduction of fertility rates";
   
• i.e. population control
  
• related to prosperity because the world's poorest people are burdened by the costs of rearing its largest families
  
3. "sustainable systems of energy, land and resources use that avert the most dangerous trends of climate change, species extinction, and destruction of ecosystems".
   
• i.e. environmental sustainability
  
• only by managing the global commons will it be possible to sustain rising living standards
• to achieve these ends, he recommends
  
• "a new approach to global problem-solving based on co-operation among nations and the dynamism and creativity of the non-governmental sector".
  
• Sach's "anthropocene"
• the era in which human activities dominate the world
  
• ways in which humanity has appropriated the bounty of the earth for its own use (Peter Vitousek, Stanford University):
  
• human beings now exploit 50 per cent of the terrestrial photosynthetic potential;
  
• they have put up a quarter of the carbon dioxide now in the atmosphere;
  
• they use 60 per cent of the accessible river run-off;
  
• they are responsible for 60 per cent of the earth's nitrogen fixation;
  
• they are responsible for a fifth of all plant invasions;
  
• over the past two millennia they have made extinct a quarter of all bird species;
• they have exploited or over-exploited more than half of the world's fisheries.
• how can growth in developing countries catch-up?
• Sachs:
  
• recommendation of an aid-supported, big-push investment strategy, aimed at lifting the world's poorest people, predominantly Africans, out of the poverty traps into which, in his judgment, they have fallen
  
• Martin Wolf: more sceptical than Prof Sachs of the returns to the big-push strategy
  
• In many cases, it will fail.
  
• But: it has to be tried, because there is no morally tolerable or credible alternative.
  
• Agrees, too, that huge efforts must be made to accelerate the fertility decline in the world's poorest countries, albeit on a voluntary basis.
• can economic growth once spread across the planet be sustainable?
• Jeffrey Sachs:
  
• optimistic on direct resource inputs into growth
• his view is that fossil fuel resources, renewable energy and availability of fresh water should be sufficient to support continued growth over the next half century
• would almost certainly require a transition from oil-based energy technologies to ones based on coal and renewables
• energy would, almost certainly, be much more expensive than in the 1985-2000 period, but not prohibitively so
• challenge: to make growth compatible with sustaining the global commons:
• species survival and, above all, climate change
• believes climate change can be dealt with at modest cost
• provided suitable incentives are put in place
• less than 1 per cent of global income
• believes we can achieve all the goals he has set for less than 2 per cent of global incomes
• Martin Wolf:
• One might not be quite as optimistic about the cost of the solutions. But one must recognise the salience of the challenges.
  
• If economic growth halted, conflict among the world's people would risk becoming unmanageable.
  
• If the environmental consequences proved overwhelming, the costs of growth would become unbearable.
  
• We are the masters of our planet now. The great question for the 21st century is whether we can also become masters of ourselves.
  

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Summary only...

Solving Pump Pain - New York Post

Summary:
Jerry Taylor (Cato Institute) suggesting four things the US Congress could do in order to bring down the price of oil: 1) Opening up key areas for oil and gas exploration and development; 2) Opening up the West to oil-shale development; 3) Emptying out the Strategic Petroleum Reserve; and 4) Suspending (or ending) federal rules that force refiners to use only low-sulfur oil to make gasoline and diesel. (Published: 02/06/08)


Notes:

• skyrocketing energy prices:
  
• gasoline price at pump, now: $3.94/gallon; 5 years ago: $1.43/gallon
• home electricity, now: 10.31c/kWh; 5 years ago: 5.43c/kWh
• "we'll keep on finding ways to save as prices stay high"
• driving less, buying fuel-efficient cars, ...
• demand side: should government mandate more conservatism?
• No
• too much" conservation is as economically harmful as "too little"
• only thing government should do is ensuring that prices are "right"
  
• ie. reflecting total costs
• mainly an issue for electricity, where retail power prices typically bear little relation to wholesale prices
• governments need to encourage real-time pricing of electricity - so that consumers will get the signal to, for example, run the clothes dryer at night, when power is cheaper.
• supply side: four things government could do:
1. Open up key areas for oil and gas exploration and development.
• Arctic National Wildlife Refuge and 85 percent the outer continental shelf are currently stated "off-limits" by Washington
• absurd and hypocrytical for our politicians to fulminate about the need for more oil production from OPEC when they won't lift a finger to increase oil production here at home
• will take years to get these fields on-line: all the more reason to start now
  
• by the time those new fields would be producing, global oil production will probably be about 100 million barrels per day
• optimistically, the fields would yield about 3 million more barrels a day - for a long-run cut in the price of crude of about 3 percent.
• however, will do more for natural-gas prices than for oil
• gas prices are highly sensitive to regional (rather than global) supply and demand issues, so we'd likely see far greater reductions in electricity prices
2. Open up the West to oil-shale development.
• US has three times more petroleum locked up in shale rock than Saudi Arabia has in all its proved reserves
• costly to extract
• oil prices need to be at at about $95/barrel to allow a reasonable profit from extracting oil from Rocky Mountain shale
• probably profitable now
• problem: mostly on federal land; Washington has so far said, "Hands off!"
• Environmentalists object to both these first two ideas
• insist that the wilderness that would be despoiled by energy extraction is worth more than the energy itself
• nonsense - faith masquerading as fact
• How much something is worth is determined by how much people are willing to pay for it
3. Empty out the Strategic Petroleum Reserve.
• holds 700 million barrels of oil
• draining it could add add up to 4.3 billion barrels of crude a day to the market for about five months
• if the theories of a speculator-created "oil bubble" are true, it would pop the bubble and send prices tumbling
• national-security risk is myth
• as long as we're willing to pay market prices for crude oil, we can have all the oil we want - embargo or no embargo.
4. Suspend (or end) federal rules that force refiners to use only low-sulfur oil to make gasoline and diesel.
• best short-term fix for high gas prices
• refiners once relatively free to use heavy crude to make transportation fuel
• today: environmental regulations make it difficult and costly
• there's a (relative) glut of heavy crude right now
• light-crude oil markets are incredibly tight, with no real excess production capacity.
  
• heavy-crude markets are robust, with plenty of crude going unsold for lack of buyers
• suspending low-sulfur rules would bring those heavy crudes into the transportation fuels

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