Cross-posted from Roger Pielke Jr.'s blog When the primary issues involved in the U.S. climate bill ares about how much subsidies are going to be devoted to fossil fuel interests such as coal and petroleum, then you can guess that...
When the primary issues involved in the U.S. climate bill ares about how much subsidies are going to be devoted to fossil fuel interests such as coal and petroleum, then you can guess that the bill is not going to do much to decarbonize the U.S. economy. From The Hill:
The climate bill coming this week from Sens. Barbara Boxer and John Kerry will likely leave some big questions unanswered, including the biggest: how to divvy up carbon allowances.
Allowances are permission slips to release emissions, and they function as a currency in the market the cap-and-trade legislation would create. For Boxer (D-Calif.) and Kerry (D-Mass.), they are chits to use to negotiate support for their bill as they attempt to form a winning coalition.
How are those "chits" being used?
The draft is also expected to have "placeholders" for some additional subsidies for coal and nuclear power. . .
Most energy lobbyists expect the bill to pass Boxer's committee but not get much further this year.
That would give President Barack Obama some progress on climate to show off in Copenhagen, Denmark, where world leaders will discuss what to do about global warming, but leave a final push in the Senate for early 2010.
Several Democratic senators are already on record as being uneasy about the climate bill. The distribution of the allowances is one way to ease those concerns.
Some sectors, namely the oil and gas industry, feel like they weren't treated fairly under the allowance system Waxman and Markey eventually settled on. Jack Gerard, the president and CEO of the American Petroleum Institute, said the sector was seeking more "equitable" treatment.
Refiners got 2 percent of the allowances to cover emissions at their own facilities. But the sector is also responsible for the emissions that come from the use of their products -- in total, around 44 percent emitted by human activity in the United States.
The Institute is flying in Hispanic workers this week as part of its grassroots push to change its image from that of the corporate fat cat. The group was preceded by a group of women and African-Americans who work in the industry, and will lobby on taxes and access issues beyond climate.
"We want to show the human face of the oil and gas industry in the United States," Gerard said.
As the Senate's climate and energy bill takes shape, it looks broadly similar to the House-passed Waxman-Markey American Clean Energy and Security Act, with a couple exceptions.
As the Senate's climate and energy bill takes shape, it looks broadly similar to the House-passed Waxman-Markey American Clean Energy and Security Act, with a couple key exceptions, according to E&E News' ClimateWire service.
ClimateWire has obtained an early version of the bill (pdf) being written by Senators Barbara Boxer (D-CA) and John Kerry (D-MA). Key sections are still under development as Senate staffers put the finishing touches on the discussion draft version of the bill scheduled for public release tomorrow, but the early draft appears to mirror closely the structure and content of its House sibling.
Emissions targets in 2020 are stronger than the House-passed version (20% below 2005 levels instead of 17%) and the EPA's authority to separately regulate greenhouse gas emissions from major sources is reportedly preserved. A modest new nuclear title has been added as well. Other major provisions, including the extensive permitted use off offsets and a strategic reserve pool to control allowance prices, appear consistent with the House climate bill.
[Update, 9/29/09, 5:33 PST: additional details are emerging as successive drafts of the legislation are leaked to reporters and bloggers. An 801-page draft bill was leaked this afternoon, which is reportedly more current than the 684-page draft reported by ClimateWire earlier today. This version is still not the final, which we'll have to wait until tomorrow for.
The current draft apparently contains a cost collar on emissions allowance prices backed up by the same kind of strategic allowance reserve in the House bill. The floor price begins at $11 per ton in 2012 and the ceiling at $28 per ton, both rising steadily each year. The House version had a $10 floor price in 2012 and a ceiling that floated at 60% above a rolling average of market prices for allowances, providing little certainty of an upper price on carbon under the bill. E&E News also reports that the new bill contains greater support for research and commercialization of advanced biofuels and greater incentives to replace coal-fired power plants with new natural gas plants.]
Key sections on how the climate bill will divvy up hundreds of billions of dollars in allowance allocation revenue will remain blank, to be filled in later when Senator Boxer releases a "chairmans mark" before formal markup of the bill in the Environment and Public Works Committer, likely sometime in October. However, if theHill.com's observations are accurate, as in the House bill, these billions in new revenue will likely be considered "chits to use to negotiate support for their bill as they attempt to form a winning coalition," rather than a funding source for critical, proactive investments to spur clean energy technologies, industries and jobs.
Joseph Romm warns on ClimateProgress.org that the House's Waxman-Markey climate bill is poised to over-allocate emissions permits, collapsing the carbon price and undermining emissions caps.
For readers of Climate Progress looking for some help sorting through Joe Romm's latest vituperation, here's a cliff-notes version: he agrees with our conclusions showing that climate legislation passed by the House in June would over-allocate emissions permits in the early years of the program, resulting in a collapse of carbon prices to the bill's $10 floor and the banking of excess permits that will undermine the stringency of the emissions cap in future years. He warns readers about precisely the same likely outcomes here.
Breakthrough conducted analysis of the implications of the economic recession and lower-than-expected emissions levels, concluding that the House climate bill would not require regulated firms to reduce emissions at all, either through offsets or actual reductions in their own emissions, until as late as 2018 under likely economic recovery scenarios. With offsets utilized at just 6 to 25 percent of the maximum levels permitted, the bill's cap and trade program would not require any actual reductions in emissions from regulated firms until 2020 or later.
Romm doesn't like these conclusions because it challenges his contention that Waxman-Markey is a strong bill. So, unable to actually challenge our analysis, Romm calls our analysis "crap" -- and then says we "glommed" it from him. He then quotes at length from an egregiously unbalanced E&E article about our analysis.
Cross-posted from Roger Pielke Jr.'s blog In an op-ed in the Washington Post today, Bjorn Lomborg summarizes parts of my Mamizu Climate Policy paper on Japan's emissions reductions targets (here in PDF). [Note to Bjorn, it is appropriate to acknowledge...
In an op-ed in the Washington Post today, Bjorn Lomborg summarizes parts of my Mamizu Climate Policy paper on Japan's emissions reductions targets (here in PDF). [Note to Bjorn, it is appropriate to acknowledge sources, even in an op-ed.] In this op-ed Lomborg is defending coal, or attacking those who wish to decarbonize, or defending free trade . . . or something. A few weeks ago Lomborg was championing geoengineering, this week he is defending coal.
Lomborg cited some data from my Mamizu Climate Policy paper, but neglected the conclusions, which are as follows:
If climate policy is to be about more than symbolic exhortation, then it will necessary for goals to be more than aspirational. Japan's Mamizu climate policy targets for 2020 and 2050 announced in mid-2009 were exceedingly ambitious, and if they are to be criticized, it should be for being too aggressive, not too weak. Should Japan actually succeed with respect to a short-term target of the magnitude implied by the Mamizu climate policy, then it will have achieved a carbon intensity of its economy lower than that of France in 2006 by the end of the decade, representing a decrease in emissions per unit of GDP of about 33%. If the world economy were to be as carbon efficient as implied by Japan's 2020 target, then global carbon dioxide emissions in 2006 would have been only 40% of their actual value.
Regardless of the nature of changes to the composition of the Japanese government in the future, there is considerable merit in encouraging Japan to actively seek to achieve its Mamizu climate policy because its successes and shortfalls will provide a valuable body of experience to other countries seeking to achieve similar goals. Should Japan choose to depart from its proposed Mamizu climate policy to one based on (even more) impossible targets and timetables than they may find themselves the subject of international applause rather than condemnation. At the same time such a shift would signify a desire to meet the symbolic needs of international climate politics while sacrificing the practical challenge of decarbonization policy. Conventional approaches to climate policy have thus far borne little fruit, but that is a topic that goes well beyond this brief analysis. Diversity in climate policy should be encouraged.
Paul Krugman has confused an end -- stabilizing concentrations of carbon dioxide in the atmosphere -- with a means to achieve that end -- cap and trade. Krugman writes:
In the absence of government action, the private sector will increase emissions up to the point where there is no further marginal benefit. That is, emissions will rise to whatever level is implied by profit-maximization, paying no attention to the effects on the environment.
Krugman is making a case for limiting emissions, and that argument is pretty solid accordng to basic economic theory. But he goes too far when he says that because a case for reducing emissions makes sense, it necessarily means that cap-and-trade makes sense. The problem with cap and trade lies not in economic theory, but in political realities. Cap and trade cannot work in the real world -- Krugman's means cannot achieve the ends he seeks. He just assumes policy success, which is easy to do in theoretical arguments, but pretty far from the real world where we actually have to live with the policies that emerge from the messy legislative process.
If cap and trade cannot work, then it would be logical that we should be exploring other means to reducing emission. But instead, Krugman tries to shut down any discussion of alternative approaches by saying that if you don't accept his means, then you must not accept his ends. Krugman is ironically contributing to the very policy failure he seeks to avoid. Nothing like some messy facts to trouble an elegant theory.
Nicholas Stern, of the UK Stern Review Report fame/infamy, has published a paper outlining a "new" approach to climate policy (here in PDF). I put "new" in quotes because Lord Stern has adopted many on the most important recommendations that my colleagues and I have been making for several years now. But make no mistake, the approach outlined by Stern is his new paper is a radical departure from that which he espoused following publication of the Stern Review and much more (though not entirely) consistent with the recommendations that I and my colleagues have been making for several years now.
For instance, Stern accepts the need to look at the challenge of stabilization not as an emissions reduction challenge, requiring the use of a counterfactual baseline, but in terms of absolutes:
Thus we propose an approach of using absolute numbers rather than framing targets as a percentage reduction on a particular base year. Absolute numbers are preferable to percentages for two reasons: they allow us to keep a check on the basic arithmetic of the targets (so that they 'add up') and they avoid having to argue a theoretical reference baseline for percentages.
Next, Stern has discovered the simple arithmetic of emissions reductions via the Kaya Identity, both of which have been central to our work over the past few years:
If these emission targets are to be met without affecting the ambitions for growth in developing countries, it is evident that the emission intensity of output will need to change drastically over the next decades. This is a clear and fundamental conclusion from what we might call the 'brutal arithmetic'. If we want to achieve both the strong emissions targets and the desires for growth then simple arithmetical logic requires a large fall in emissions per unit of output. In other words we must break the link between emissions and output. . . unless the USA, EU/Japan, Indonesia/Brazil and China reduce emissions per unit of output by a factor of 4 over the next 20 years, it will not be possible to grow at the desired rates and to reach the emission goals that sensible risk management requires. . . It is important to notice that the targets I have just described, and the implications they have in terms of reductions in emission intensity, have nothing to do with equity: they are just simple arithmetic based on what the science tells us on risk.
All of these concepts and ideas can be found in Prins et al. (2009), among other places. Prins is on the LSE faculty with Stern, so it would be no surprise to see fertile ideas taking root.
Whether Stern was actually inspired by these earlier works is less important that the fact that it seems that a more realistic approach to climate policy is taking hold in the mind of one of the issues most influential public intellectuals. And that is the best news on climate policy I've seen in a while.
An EU court ruling that allows Poland and Estonia to relax emissions quotas may undermine the EU's own climate policy and cast additional doubt on the Kyoto framework that world leaders are relying on to provide the basis for climate negotiations in Copenhagen
Almost as soon as the calls for global cooperative action on climate change finished echoing around the halls of the United Nation Building during the UN Climate Summit in New York on Tuesday, an EU court may have undermined its own climate change mitigation policy by ruling on Wednesday that the governing body overstepped its power when it imposed "excessively strict" emissions quotas on Poland and Estonia in 2007.
Upon hearing the news, the urgent need for climate change action was easily forgotten, and Italy, with other EU members considering following suit, quickly petitioned the EU to increase its carbon emissions quotas - action that is hardly indicative of global cooperation against climate change and demonstrates the unwillingness of countries to submit to any international climate policy that could potentially constrict their economic growth. As Breakthrough Senior Fellow Roger Pielke, Jr. noted on his blog:
"Absent a world government, the ruling should make clear that which should already be obvious -- there is no global set of institutions capable of overseeing any sort of interlocking, multi-national cap-and-trade programs. If it can't work in the EU it certainly won't work in the UN."
The viability of Europe's emissions trading scheme, which allows firms that exceed their carbon emissions allowances to purchase permits from firms that have successfully reduced theirs, may be threatened by the EU's ruling. In addition to Italy's written request to have its emissions quotas re-considered, the EU court is now facing similar cases involving Bulgaria, Romania, Latvia, Lithuania, and the Czech Republic, according to Deutsche Welle.
A Japanese think tank recently released a paper commenting on the recently-elected DPJ's adoption of aggressive emissions reduction targets and discusses the international implications of such bold climate policy
Akihiro Sawa of the 21st Century Public Policy Institute, a think tank in Japan, has written an interesting paper on the new Japanese government's (the DPJ) proposed climate policies. The paper also has some interesting views on how the United States is viewed in Japan. The paper has just been translated into English as is available here in PDF.
Here is what Prof. Sawa says about Japan's policy, (note that "clear water" refers to Japan's Mamizu climate policy that I discuss in this paper in PDF):
The DPJ has forgotten (or perhaps, are not aware?) that many major developing countries appreciated Prime Minister Taro Aso‟s genuine "clear water" target of reducing 15% compared with 2005 levels (which would be achieved solely by domestic efforts, not employing overseas credits, or offsets), and that these countries have also criticized the EU for including offsets and other developed countries such as Australia for "cheating." Councilor Fukushima mentioned the possibility that "the 25% target may not be a "clear water" target." If this is true, Japan may have disappointed South Africa and Bangladesh, which were supportive of Japan‟s "clear water target" as a criterion proving the sincerity of its reduction efforts, and government authorities of China and India, which have been critical of the excessive use of offsets by developed economies. We would hope that a leader of government charged with severe international negotiations would be more prudent of what he says, as any statement he makes, even domestically, is bound to eventually reach all governments via their embassies.
Perhaps the DPJ's intention was to impress developing countries by setting out the 25% reduction initiative as a sign of Japan‟s enthusiasm towards large reductions. However, at the current global negotiation table, developing countries led by China and India are not ready to give up their demands for reductions in developed economies by 40-80％ - far beyond 25%. Although Councilor Fukuyama mentioned that reduction efforts are meaningless without the participation of China and India, saying that the government would "strongly urge" their involvement, it is hard to conceive that two countries which have maintained a hard-line stance so far in global negotiations, which are not always based on good intentions, would be so easily "urged" to assume a reduction target.
They are, however, very likely to escalate their demands, applauding Japan's competence - its unprecedented declaration of a high reduction target exceeding the capacity of all other countries and its positive outlook that the more stringent the target is, the more innovation is promoted, and hence a stronger economy. They would suggest that in order to accelerate economic recovery, Japan might seek an even higher target which would fulfill their demands of reductions by 40% or more. Would the DPJ be ready to accommodate such demands? Or, would they respond that 40% would be impossible even in their best efforts? If so, what makes 25% a viable figure, and 40%, not? If in turn, China and India should insist on a 40% reduction target as a nonnegotiable condition for their involvement, would the DPJ assent to the 40% reduction target alone, regardless of US and EU resistance? If not, the DPJ would leave developing countries in great despair.
The major problem with the 25% reduction initiative is that it was announced without any diplomatic strategies to convince developing countries to abandon their severe demands and has unnecessarily raised their expectations.
Japan's new government has set forth a strong goal for emissions reductions by 2020, but admits that it really doesn't know how it is going to meet that goal:
Environment Minister Sakihito Ozawa said Sunday that Japan's new goal for cutting greenhouse gas emissions will put the country in a strong position at international negotiations on climate change. But details of how the government will achieve the ambitious goal of reducing emissions by 25 percent from 1990 levels by 2020 has yet to be crafted within the new government, Ozawa admitted.
Meantime, my paper evaluating Japan's Mamizu climate policy has been provisionally accepted for publication. I'll post up the final pre-publication version by tomorrow once I finalize and submit. Meantime, here is how I conclude the paper:
If climate policy is to be about more than symbolic exhortation, then it will necessary for goals to be more than aspirational. Japan's Mamizu climate policy targets for 2020 and 2050 announced in mid-2009 were exceedingly ambitious, and if they are to be criticized, it should be for being too aggressive, not too weak. Should Japan actually succeed with respect to its short-term target then it will have achieved a carbon intensity of its economy lower than that of France in 2006 by the end of the decade, representing a decrease in emissions per unit of GDP of about 33%. If the world economy were to be as carbon efficient as implied by Japan's 2020 target, then global carbon dioxide emissions in 2006 would have been only 40% of their actual value.
Regardless of the nature of changes to the composition of the Japanese government in coming months and years, there is considerable merit in encouraging Japan to actively seek to achieve its Mamizu climate policy because its successes and shortfalls will provide a valuable body of experience to other countries seeking to achieve similar goals. Should Japan choose to depart from its proposed Mamizu climate policy to one based on (even more) impossible targets and timetables than they may find themselves the subject of international applause rather than condemnation. At the same time such a shift would signify a desire to meet the symbolic needs of international climate politics while sacrificing the practical challenge of decarbonization policy. Conventional approaches to climate policy have thus far borne little fruit, but that is a topic that goes well beyond this brief analysis. Diversity in climate policy should be encouraged.
Pielke, Jr., R.A., 2009 (provisionally accepted). Mamizu Climate Policy: An Evaluation of Japanese Carbon Emissions Reduction Targets, Environmental Research Letters.
Robert Stavins explains why capturing energy efficiency opportunities are actually costly to the economy despite numerous studies that have touted them as a "free lunch" in the effort to reduce carbon emissions
Robert Stavins, Director of the Harvard Environmental Economics Program and a leading proponent of cap and trade, acknowledged in an op-ed for the Huffington Post last week that capturing energy efficiency opportunities is more challenging and costly than many have predicted.
In his recent report entitled, "Too Good To Be True? An Examination of Three Economic Assessments of California Climate Change Policy," Stavins found that three separate studies of the California Global Warming Solutions Act of 2006 - all reporting that emissions reductions targets were achievable at no, or negative, cost to the economy - grossly underestimated the economic burden through errors of omission.
An older but similar study, often referred to as the Five Labs Study (executive summary), conducted by the DOE's Interlaboratory Work Group, also reported that efficiencies to reduce emissions could be captured at no economic cost. These findings, published in the late 1990s, were used to bolster support for the Kyoto Protocol despite the fact that the authors readily acknowledged that the study had not "analyzed specific policies to achieve the cases, identified the political feasibility of policies, or described a pathway to achieve the cases." According to Stavins' critique:
"Those studies were terribly flawed, which was what led to their faulty conclusions. I had thought that such arguments about massive "free lunches" in the energy efficiency and climate domain had long since been laid to rest. The debates in California (and some of the rhetoric in Washington) prove otherwise."
Specific policies, the feasibility of policies, and the effectiveness of policies, asserts Stavins, all have cost implications that are egregious to ignore. By omitting them in the early Five Labs Study and the later California studies that Stavins analyzes in his report, only the cost of specific actions to reduce emissions are accounted for, not the often considerable costs associated with policy implementation.
The global recession is likely to drive an oversupply of emissions permits in the early years of the House cap and trade program, collapsing carbon prices and allowing regulated firms to continue business as usual without cutting their own emissions or purchasing any offsets through as late as 2018. With only a fraction of the offset utilization permitted by the bill, U.S. emissions in capped sectors could rise for much--if not all--of the next two decades.
By Jesse Jenkins, Ted Nordhaus and Michael Shellenberger
The large decline in U.S. emissions in 2008 and 2009 due to the economic recession ensures that if the House-passed Waxman-Markey climate legislation becomes law, the bill's emissions reduction cap will require no reduction of carbon emissions over the first two to five years of the program. The resulting oversupply of emissions permits will allow regulated firms to continue business as usual emissions through as late as 2018, according to a new analysis by Breakthrough Institute based on new Energy Information Administration emissions projections that take into account the impacts of the global recession.
The analysis further establishes that very modest utilization of the offset provisions of the Waxman-Markey bill, as little as one-tenth to one-quarter of the levels of offset utilization projected by the Congressional Budget Office and the Environmental Protection Agency respectively, will allow emissions in regulated sectors of the U.S. economy to proceed at business as usual levels through 2020 or beyond. Depending upon how quickly U.S. emissions recover over the next decade, firms would need to purchase on average as few as 124 million tons of offsets annually in order to comply with the emissions reduction caps through 2020, substantially less than the 526 million and 1,223 million tons of average annual offset utilization between 2012 and 2020 projected this summer by CBO and EPA respectively.
In conjunction with the free allocation of a high percentage of emissions allowances under Waxman-Markey, and lower global demand for offsets from recession-hit EU and U.S. firms, substantial over-allocation of emission allowances in the early years of the program will likely lead to a cap and trade program awash in both cheap emissions allowances and offsets during at least the first decade of implementation. Under such conditions, the functional carbon prices for the first decade or more under Waxman-Markey are likely to hover at or even below the $10 per ton floor on allowance auction prices (rising slowly each year) established by the bill.
Considering the country already has reduced its economy's energy intensity by 20 percent over the past five years, the shift to carbon intensity with a meaningful goal attached "would be significant and impressive," says Reid Detchon, vice president for energy and climate at the United Nations Foundation in Washington.
"This suite of policies [alluded to today at the UN] will take China to be the world leader on addressing climate change," he said. De Boer told reporters: "It will be quite ironic to hear that tomorrow expressed in a country (the United States) that is firmly convinced that China is doing nothing to address climate change."
The Breakthrough Institute and Third Way are proud to accept the Global Accelerator Award from the Health Strategy Innovation Cell and Longwoods Publishing for their joint report, "Jumpstarting a Clean Energy Revolution with a National Institutes of Energy."
This honor is given to "organizations or people who have helped propel into action an idea that holds the promise of dramatically improving..human health anywhere in the world," including, "the promotion of clean energy initiatives, of the sort imagined by the joint proposal from the Breakthrough Institute and the Third Way."
The award-winning report - which proposes the creation of a National Institutes of Energy (NIE) based on the National Institutes of Health, with goal of funding developments in clean, cheap energy - was selected by a systematic research methodology that gauges what people around the world think is valuable via "buzz" generated on the internet.
The Health Strategy Innovation Cell is a health policy think tank based in Toronto whose work has been cited in the Economist and BusinessWeek. Longwoods Publishing is a highly respected publisher of academic journals in healthcare policy and global health.
International leaders were anxious for the U.S. and China to announce binding emissions targets at the UN Climate Summit, but critics of both countries may be seeking "magical" solutions instead of acknowledging that both countries' clean energy investments are direct action in the fight against climate change
Speeches made today at the UN's climate summit may have left much to be desired in the eyes of countries eagerly hoping for the U.S. and China to make specific commitments to emissions reductions in the run-up to climate negotiations in Copenhagen. Yet, willingness on the part of both nations to invest in clean energy technology may signify more direct action to mitigate climate change than any potentially empty emissions promises.
In his speech this morning, China's President Hu Jintao did not agree to binding carbon emissions targets, however, according to the New York Times, he did outline a four step plan that includes reducing the carbon intensity of the economy to 2005 levels by 2020, boosting nuclear and renewables to account for 15% of China's power, increasing forest cover, and furthering action to develop a green economy. According to the UN Climate Change Conference website, Hu promised to cooperate on climate change efforts so long as they aligned with China's ambitious development goals:
"Climate change is an environment issue, but also, and more importantly, a development issue. We should and can only advance efforts to address climate change in the course of development...Out of a sense of responsibility to the world...China has taken and will continue to take determined and practical steps to tackle this challenge,"
While international leaders have put considerable effort into cajoling China, not to mention India, to accept binding emissions reductions targets by the time climate negotiations commence in Copenhagen this December, China's planned stimulus investment of $440-$660 billion in clean energy over the next ten years is far more indicative of China's willingness to mitigate climate change as it simultaneously grows its own economy.
With just ten weeks until the world's nations meet in Copenhagen this December to try to hammer out a global consensus on efforts to reduce greenhouse gas emissions and build a global clean energy economy, Breakthrough's Jesse Jenkins returned to KPFA radio Monday to discuss the coming climate and energy policy debates in the U.S. Senate and on the international stage. Jenkins joined host Mitch Jeserich and Dan Jacobson of Environment California on this week's segment of "Letters to Washington," which aired Monday on KPFA radio in the Bay Area and was syndicated throughout the country this week.
You can listen to the segment below, which begins at 1:25:25...
Letters to Washington - September 21, 2009 at 10:00am
SGS UK becomes the second of Europe's largest offsets auditors to be suspended by the UN for irregularities in its project approval process, casting additional doubt on offsets markets whose efficacy at producing verifiable carbon emissions reductions has been repeatedly challenged
The two largest carbon offset auditors have been suspended in the last year, the most recent one, SGS UK, was suspended by UN inspectors this past week. A fifth of the $100 billion worth of emissions credits are sourced from offset projects funded by the CDM, whose veracity is called into question by these developments.
By effectively putting a price on carbon, the EU's carbon offsets market is the centerpiece of Europe's commitment to reduce emissions and is a model for the one that stands to be enacted in the U.S. should pending climate legislation (ACES) pass through the Senate. But according to the Times Online, the legitimacy of this market, which would be reliant on the large scale availability of international emissions offsets, is cast into doubt.
"SGS UK had its accreditation suspended last week after it was unable to prove its staff had properly vetted projects that were then approved for the carbon-trading scheme, or even that they were qualified to do so... SGS is the second such company to be suspended - Norway's DNV was penalised last November for similar infractions."
While performing the obligatory spot check, UN inspectors found six irregularities in projects that SGS UK staffers vetted for approval. Although the firm has since corrected the errors, it will remain suspended until further notice from UN.
Written by Joshua Freed, Senior Policy Advisor for the Clean Energy Initiative at Third Way. Cross posted from The Huffington Post
In 1798, a new federal agency began its life in a one-room laboratory to provide health care for merchant sailors. It covered the costs of this service by sending a single clerk from across the country to collect 20 cents per month from each sailor. This agency, originally the Merchant Health Service, gave birth to what today is the National Institutes of Health. And the NIH should serve as a model for where we need to go on energy research and development in America.
The NIH is extremely effective at what it does. A new report by Northwestern University's Kellogg School of Management says the NIH plays a "central role" in medical innovation. According to the Congressional Joint Economic Committee, the NIH was "instrumental" in funding 15 of the 21 major breakthrough drugs from 1965 to 1992.
Fifteen of 21 major medical breakthroughs - that mean 71% of our medical progress has come through NIH. That's a terrific investment.
In every policy debate in Washington, it is vital that the public appreciate what's in it for them, how a program will work, and why it will be successful. The NIH is well-known and highly regarded because it is easy for the public to understand:
As the JEC study shows, funding goes out; very smart people use it; we get good results.
The reality is that the current scheme of funding for energy R&D alone is not enough to drive innovation at the pace or scale required to spark a clean energy revolution. Despite the very good work many of our national energy labs conduct, the reality is that the Department of Energy was not intended to conduct energy R&D that is connected to commercial development and consumer use. DOE was born from disparate nuclear weapons and energy agencies. Sixty-three percent of its funding in the FY08 budget and almost 50 percent in FY09 was for nuclear weapons management and clean up. Simply put, this department is not currently set up to spend the $15 billion in new R&D funding we believe is necessary to transition to clean energy.
Senator Joins Experts from Third Way, Breakthrough Institute in Unveiling New Report, Hasten Call to Increase Federal Investment in Clean Energy Research and Development
WASHINGTON, D.C. - U.S. Sen. Sherrod Brown (D-OH) today joined experts from Third Way and the Breakthrough Institute in unveiling a new clean energy report that calls for increased investment in clean energy research and development. Brown led the panel discussion to outline the urgent need for Congress to strengthen support for clean energy technology innovation.
Ohio Senator Sherrod Brown joined Third Way and the Breakthrough Institute today to unveil a new report calling for both the creation of a "National Institutes of Energy" and a dramatic increase in federal funding for energy research and development to jumpstart a clean energy revolution.
Senator Sherrod Brown (D-OH) and leading DC-based think tank Third Way are the latest political figures to issue a call for significantly increased public investment to catalyze clean energy innovation. The Ohio Senator and the moderate progressive think tank joined the Breakthrough Institute today to unveil a new report calling for both the creation of a "National Institutes of Energy" and a dramatic increase in federal funding for energy research and development. The report, titled Jumpstarting a Clean Energy Revolution with a National Institutes of Energy, argues that these two measures are necessary to make clean energy cheap and get America running on clean energy.
"Clean energy is the future of our nation, but it can also create jobs now - in Ohio and across the Midwest," Senator Sherrod Brown said. "Done right, increased research and development of new clean energy technologies will drive innovation and reduce our dependence on foreign energy. Already in Ohio entrepreneurs and workers are leading the way."
"Our nation has a history of rising to meet pressing challenges by investing the resources necessary to overcome them," said Jesse Jenkins, Director of Energy and Climate Policy at the Breakthrough Institute and one of the report's authors. "Now, America must dramatically increase our investment in clean energy research and development and employ new and effective models to put that money to work. Clean, cheap energy technologies are needed to revitalize our economy, secure the nation's energy independence, and avert the risks of climate change," Jenkins added.
Modeled after the National Institutes of Health, a New National Institutes of Energy (NIE) would be designed to most effectively channel R&D funding toward the development of new, low-cost commercial clean energy technologies. The NIE would function as a nationwide network of regionally based, commercially focused, and coordinated innovation institutes. Alongside other effective research institutions, the new NIE would critically strengthen the nation's energy innovation capacity.
The report also calls for a sustained increase of $15 billion in annual federal energy R&D funding, consistent with President Barack Obama's proposals. This would result in a total annual R&D budget of roughly $20 billion per year. The purpose of both the R&D increase and the establishment of a new NIE is to close what the authors call "the clean energy price gap" - the difference between the current low price of carbon-intensive energy production like coal and the comparatively higher price of today's non- or low- carbon emitting technologies.
"Getting America running on clean energy is the defining challenge - and opportunity - of our time," said Josh Freed, a co-author of the paper who runs Third Way's Clean Energy Initiative. "Establishing a National Institutes of Energy and fully funding R&D will drive the research that will lead to the next generation of clean technologies. These not only will fight global warming, they will allow the United States to be the energy leader in a carbon-constrained world."
The dispute between the US and Europe is over the way national carbon reduction targets would be counted. Europe has been pushing to retain structures and systems set up under the Kyoto protocol, the existing global treaty on climate change. US negotiators have told European counterparts that the Obama administration intends to sweep away almost all of the Kyoto architecture and replace it with a system of its own design.
The US distanced itself from Kyoto under President Bush because it made no demands on China, and the treaty remains political poison in Washington. European negotiators knew the US would be reluctant to embrace Kyoto, but they hoped they would be able to use it as a foundation for a new agreement.
If Kyoto is scrapped, it could take several years to negotiate a replacement framework, the source added, a delay that could strike a terminal blow at efforts to prevent dangerous climate change. "In Europe we want to build on Kyoto, but the US proposal would in effect kill it off. If we have to start from scratch then it all takes time. It could be 2015 or 2016 before something is in place, who knows."
The goal for the climate conference in Copenhagen is to reach a deal that can actually be implemented, rather than agreeing on binding high targets for reducing carbon dioxide emissions, US Energy Secretary Steven Chu said Tuesday in Vienna. The United Nations' International Panel on Climate Change (IPCC) is calling for countries to make firm commitments to reduce emissions that cause global warming by 25 to 40 per cent below 1990 levels.
"Let's not make that one particular time the be-all and end-all, and if it doesn't happen, oh, we are doomed," Chu told reporters in Vienna, where he was attending the International Atomic Energy Agency's annual general conference.
Expect more trial balloons, pronouncements of negotiating doom and confusing reports in the months ahead.
A growing consensus of experts, including the Breakthrough Institute and Third Way, advocate for a dramatic increase in federal investments in clean energy R&D and for new models of federal innovation in order to spur a prosperous clean energy economy and overcome the greatest challenge of our time
Today, the United States faces a nation-defining challenge and opportunity - getting America running on clean energy. In the past, the United States has confronted other significant obstacles by making a national commitment to invest the resources necessary to overcome it. In light of the clean energy, climate, and economic challenges we now face, the Breakthrough Institute and Third Way will release a report detailing why the U.S. must make just this sort of national commitment, once again, by scaling-up clean energy R&D on the order of $15 billion per year and creating a National Institutes of Energy to expand our clean energy innovation capacity and jumpstart a clean energy revolution.
This Thursday September 17, the Breakthrough Institute, Third Way, and U.S. Senator Sherrod Brown (D-OH) will be holding a forum on Capitol Hill to reveal, Jumpstarting a Clean Energy Revolution with a National Institutes of Energy, and to discuss how a focused innovation program will lead to a prosperous clean energy economy by making promising clean energy technologies a reality.
The Breakthrough Institute and Third Way report is the latest among a growing chorus of expert voices advocating the importance and urgency of both a dramatic increase in federal investments in clean energy R&D and the implementation of new models for federal innovation. The following is a selection of recent reports and recommendations, all part of the gathering consensus that the U.S. currently lacks both the structure and the financial commitment necessary to spur the dramatic clean energy innovation necessary to meet critical national economic, energy and climate objectives.
Last Saturday, a truly great American died. Norman Borlaug, known throughout the world as the father of the green revolution, was 95. A farm boy from Iowa, Borlaug revolutionized modern agriculture by developing new seeds, pesticides, and fertilizers that exponentially increased agricultural yields and today sustain more than 6 billion of us globally.
One of the great stains on the modern environmental movement was its opposition to Borlaug's work. Stanford professors Paul Ehrlich and current White House science adviser John Holdren famously argued in the late 1960s that halting food aid and sterilization would be more humane than new agricultural technologies. In Silent Spring, Rachel Carson warned that pesticides would be humankind's downfall. And many prominent environmental groups remain largely hostile to Borlaug's work, for which he won the 1970 Nobel Peace Prize.
There's little doubt that chemical fertilizers and pesticides have been abused. But to focus exclusively on the unintended consequences of those technologies while ignoring the extraordinary accomplishments of a revolution that virtually ended famine and malnourishment in most parts of the world is ingratitude at its worst. And Borlaug's innovations, along with those of other agricultural pioneers who came before him, did more than save lives.
If you make your living today doing something other than agricultural labor, as virtually all of us do, you can thank Norman Borlaug, and thousands of others like him, for the innovations that make such lives possible. Three hundred years ago, when virtually the entire human population devoted its labors to growing enough food to sustain themselves, such lives would have been unimaginable.
"Jumpstarting a Clean Energy Revolution with a National Institutes of Energy," a policy memo co-authored by the Breakthrough Institute's Director of Climate and Energy Policy, Jesse Jenkins, and Third Way's Joshua Freed and Avi Zevin, is a joint effort by both think tanks to jumpstart American energy research and development.
In September 2009, Senator Sherrod Brown (D-OH) and Congressman Rush Holt (D-NJ) joined the Breakthrough Institute and Third Way to release the report and issue a call for significantly increased public investment to catalyze clean energy innovation.
You can watch the video of the release event below or click here.
The memo calls for a national commitment to energy innovation that includes direct support for the research and development of new and existing clean technologies and creates a structure for energy research, modeled on the National Institutes of Health, capable of coordinating large scale R&D efforts.
The memo acknowledges that the U.S. faces a "defining challenge" in its effort to transition to clean energy. Based on historical evidence of national commitments made to confront significant challenges, the authors suggest two key components of a national effort to address the clean energy challenge in the United States.
1) Increase federal investment in energy R&D by $15 billion per year: In line with President Obama's 2009 budget request, the scale of investment for comparable national priorities, and the recommendations of innovation experts, the authors propose a sustained $15 billion per year increase in federal clean energy R&D to approximately $20 billion per year. This level of funding is necessary to both create new breakthrough technologies and drive improvements to existing technology, enabling the production of clean energy at significantly higher efficiencies and lower costs.
2) Create a National Institutes of Energy: Modeled on the National Institutes of Health, a new National Institutes of Energy (NIE) would effectively apply R&D funding to the development of new, low-cost commercial clean energy technologies. The NIE would function as a nationwide network of regionally based, commercially focused, and coordinated innovation institutes. Alongside other effective federal energy R&D agencies, an NIE would critically strengthen the U.S. clean energy innovation system.
Clean energy technology hubs seem to be sprouting up all over the globe - except in the United States - and business leaders are pointing to massive public investment as the missing link preventing the U.S. from leading the clean energy race
Clean energy technology hubs are rapidly developing all over the world, except in the United States. Business leaders who met at the Reuters Global Climate and Alternative Energy Summit acknowledged that massive government investment has created vibrant clean energy markets in countries around the world, but unfortunately the U.S. has not taken part in this trend. As The Business Insider reports, Google Green Energy Czar, Bill Weihl noted:
"Other countries, China being one of the major examples, are investing very heavily in this space across the whole innovation pipeline...from shower to power, from the idea in the shower to generating the power (in a) commercial scale enterprise."
Just yesterday, the China Greentech Initiative released a report describing how large-scale government investment is driving a clean energy market that could be worth upwards of US$1 trillion annually.
While China is home to some of the fastest growing clean energy centers, particular in the solar industry, Denmark, Japan, South Korea, India, North Africa, Singapore, and Abu Dhabi are all directly investing in creating domestic clean energy hubs.
The China Greentech Initiative, a group of over 80 Western companies, released a report today projecting massive growth in China's "greentech" markets, largely spurred by direct government policies and public investment in clean energy
The China Greentech Initiative, a partnership of more than 80 largely Western companies and organizations, released a hefty report (registration required) today projecting that China's massive government investment in its "greentech" industry will drive follow-on private sector investment that could create a national market worth up to US$1 trillion annually.
According to the report:
"Chinese government policies are positive drivers for greentech market development and...stakeholders have clear opportunities to accelerate market development..."
The report evaluates the market potential of a variety of "green" technologies including renewable energy and low carbon transportation, which are expected to be two of the largest growth sectors.
Through strong policies and financial support, the Chinese government has been a major driver of China's clean energy markets. In addition to numerous fiscal incentives and subsidies for clean energy, China's economic stimulus plan allocated 37% of its US$586 billion ($4 trillion yuan) to "greentech" sectors. China is also planning a new stimulus to invest $440 to $660 billion over 10 years focusing specifically on renewable energy.
A recent RAND Review offers the Tianjin Binhai New Area (TBNA) seven recommendations to help it become an economic powerhouse, including making solar energy cheap. But thanks to a stimulus that funds "indigenous innovation," China is already ahead of the game, particularly in the clean energy sector.
A recent RAND Review provides a slew of recommendations to help China expand the Tianjin Binhai New Area (TBNA) and turn it into a driver of economic progress. As a result of an enormous stimulus package (second only to that of the U.S.) with significant allocations for "indigenous innovation" in science and technology, China may already be well on its way to taking those suggestions to heart, particularly in the clean energy sector.
Tianjin Binhai New Area (TBNA), located in China's Bohai Rim region, has been a strong center for modern industry and manufacturing. But in 2006, the Chinese government mandated that TBNA become the next "regional engine for economic growth." To that end, the area has been the beneficiary of significant government support aimed at making the area the country's next "economic powerhouse" and orienting it towards leadership in providing solutions to national problems: among them, rising energy demand.
According to RAND:
"The goal of TBNA is to present an alternative to the traditional industrial economy, offering China a model of sustainable development and eco-friendly industry. Innovation in science and technology lies at the core of this vision of economic and environmental development."
In the report, RAND offers TBNA guidance in its endeavor to meet China's growing technology needs, both domestically and internationally, by recommending that it pursue seven emerging technologies including cheap solar energy and electric-hybrid vehicles.
The UN's World Economic and Social Survey reveals the need for a massive global investment, financed by rich developed nations, to fund a green new deal - one that is focused on mitigating and adapting to climate change by helping developing nations create high-growth economies sustainably powered by clean energy
The 1947 Marshall Plan seems to be referenced whenever it becomes clear that an overwhelming social problem can only be solved through large scale government spending. The results of the UN's World Economic and Social Survey 2009 (WESS) revealed the need for just that type of federal investment in order to manage the global climate and energy crisis. And, according to Reuters, the head of Development Policy and Analysis division at the UN department of Economic and Social Affairs (UNDESA), Richard Kozul-Wright, believes it may be time to call on the Marshall Plan framework, yet again, this time to fund a green new deal.
Regardless of past global policy, the UN's WESS enhances the climate debate leading up to the negotiations set to take place in Copenhagen this December, by pointing out the need for a global investment push in clean energy technology, energy efficiency, transportation, and forest-management. Thus far, much of the debate has centered on coercing developing nations to agree to carbon emissions targets - even as rich nations' carbon "commitments" skew towards symbolism over substance. But as WESS explains:
"[M]itigation and adaptation efforts can move forward effectively only if they are part of a consistent development strategy built around a massive investment-led transformation along low-carbon, high-growth paths."
That means giving up on Kyoto's tired call for empty promises to cut emissions. While reducing global carbon intensity was, and is, a primary goal of climate negotiations, targets are not only too narrow a focus to be a viable solution to the climate crisis, they have been shown to be ineffective. As has been explained by the Breakthrough Institute and most recently by Michael Levi, in Foreign Affairs, the Kyoto Protocol is failing because the too weak carbon emissions targets it set are not even being met by the participating countries.
Realizing the economic benefits of a thriving clean technology sector, the new Japanese government seems likely to make its clean energy investment proposals the centerpiece of its energy policy - a potential boost to the nation's competitiveness in the clean energy race
Elected less than a week ago, the Democratic Party of Japan (DPJ) may be new to power but according to a recent Bloomberg piece, it has already acknowledged the urgency of the clean energy race. Centered on an aggressive target to reduce carbon emissions 25% by 2020 from 1990 levels and increasing the share of renewables to 10% of its energy mix by 2020, the DPJ has set forth a proposal to achieve those cuts that is on course to outdo its predecessor, the Liberal Democratic Party (LDP), in both promise and execution.
While many nations' emissions targets end up as nothing more than empty promises, the DPJ's proposal outlines plans that include direct investment in clean energy technology that could have a variety of positive impacts on Japan's clean energy sector and ultimately improve its ability to compete in the clean energy race.
With the intent to expand and improve upon the LDP's clean energy deployment initiatives and grow the share of renewables in its energy mix, the DPJ is offering increased subsidies for solar photovoltaics as well as planning to extend Japan's soon-to-be feed-in tariff system, to include all renewables, instead of just solar.
On September 17, Breakthrough Institute, Third Way, and Senator Sherrod Brown (D-OH) will hold an event where they will discuss the findings of a new BTI/Third Way paper calling for an increase in investment in clean energy R&D and the creation of a new National Institutes of Energy in order to create a clean and prosperous energy economy.
The Breakthrough Institute and Third Way have prepared a new report detailing how the United States can jumpstart a clean energy revolution through investing in research and development and creating a National Institutes of Energy (akin to the NIH) to spur the development of innovative clean energy technologies.
Breakthrough Institute, Third Way, and U.S. Senator Sherrod Brown (D-OH) will be holding a forum detailing the findings of Third Way and the Breakthrough Institute's new paper and describing how a focused program of innovation will help make promising clean energy technologies a reality and create a clean and prosperous energy economy.
Please see the event details below. We hope you can join us for this exciting event!
Event:
A National Institutes of Energy: The Clean Energy Revolution Needs R&D
Date:
Thursday, September 17th
Time:
10:00 - 11:00 am
Coffee will be served
Location:
Dirksen Senate Office Building
SD-G-11
Washington, DC 20002
Please RSVP to rsvp@thirdway.org and indicate this event or reply to this email If you have any questions, please contact Jen Pengelly at 202-775-3768 ext. 214 or jpengelly@thirdway.org.
ABOUT THIRD WAY: Third Way is the leading think tank of the moderate wing of the progressive movement. We work with elected officials, candidates, and advocates to develop and advance the next generation of moderate policy ideas. For more information about Third Way please visit www.thirdway.org.
ABOUT THE BREAKTHROUGH INSTITUTE: The Breakthrough Institute is one of America's leading think tanks developing climate and energy policy solutions. Since 2002 Breakthrough has been a pioneering advocate of an innovation-centered approach to the nation's energy and climate challenges, calling for major federal investments to make clean and low-carbon energy technologies cheap and abundant, strengthen America's economic competitiveness and energy security, and slow global warming. For more information, please visit www.thebreakthrough.org
Wall Street and the wind industry are overjoyed by the uplifting impact of ARRA-backed cash grants, but the boom caused by this short-term stimulus program could be setting the wind sector up for yet another bust without a long-term deployment strategy focused on making clean energy cheap
That's what Ethan Zindler, head of New Energy Finance Ltd, proclaimed to the Wall Street Journal in response to emerging evidence that the government's $3 billion dollar cash grant renewable energy stimulus program is successfully incentivizing private investment in the wind sector.
After falling into the doldrums for the past six-months, the wind industry is roaring back to life thanks to direct public investments enacted in the American Recovery and Reinvestment Act (ARRA), also known as the stimulus bill. A DOE and Treasury-funded cash grant incentive program is helping to grease the pipeline for private investors looking to finance renewable projects, particularly wind farms, slated to begin construction in 2009 or 2010. According to the WSJ, just four weeks into the program $800 million in grants have already been submitted and Wall Street bankers predict that figure to reach $10 billion by the end of 2010.
The cash grant program was created to rescue the clean energy industry, a critical American growth sector, from the malaise of the credit crisis. The tax credits (PTC and ITC) that usually incite clean energy development are worthless in an economic climate where the big financial firms that typically absorb them, on behalf of project developers, are in crisis.
The solution: Congress tucked a two-year cash grant into ARRA worth 30% of qualifying wind, solar, and geothermal project costs, replacing the normal production and investment tax credits. With the money from the program officially flowing since August, the grants are breathing new vigor into clean energy investment, speeding America's economic recovery.
With big players like Morgan Stanley and Citigroup investing $120 million each to finance new wind farms, the wind sector is generating more than clean energy - it's producing clear evidence that public investment really does drive private investment. By covering 30% of a new project's cost, the cash grant program will spur more than two dollars in private investment for every public dollar, successfully leveraging taxpayer money to drive significant private investment in cleaner energy, greater energy security, and accelerated economic recovery.
The projected success of the cash grants, which bankers calculate will lead to 9-15% annual returns per deal, suggests that perhaps, public investment is even more effective at driving private investment than setting an economy-wide carbon price, an oft-suggested strategy to motivate private financing in renewable RD&D.
The figure above from Reuters shows a proposed set of emissions paths for China from a recent report released by a government think tank in China (previously mentioned here). The Chinese report was heralded by some as marking a significant change of tone from the Chinese, perhaps even making a meaningful international agreement more likely.
In this post I present the assumptions of the rate of decarbonization implicit in the emissions trajectories summarized in the graphic above (I cannot locate the full 900 page report, anyone with a link, please share!). First, here are the annual rates of emissions increases implied by the scenarios above:
BAU
LOW
eLOW
2010
5.7%
2.5%
2.5%
2020
3.4%
1.8%
1.5%
2030
2.5%
1.2%
0.9%
2040
2.1%
0.9%
0.3%
2050
1.5%
0.7%
-0.6%
I want to call attention to the figures for business-as-usual, which represents a trajectory for emissions increases assuming that no additional policies are implemented beyond those in place today. Does anyone really believe that China's emissions growth will be 3.4% per year to 2020 (much less 1.5% per year to 2050)?
"We need a public investment program to drive this shift into cleaner energy resources. The major obstacle is to convince political leaders and their constituencies to go in that direction."
--Rob Vos, Director of Development Policy, United Nations Department of Economic & Social Affairs, speaking to the New York Times about the UN's report calling for $500 to $600 billion per year for renewable energy in the developing world
