Category: Events

Green growth or green confusion?

October 14, 2011

I have just been at the inaugural Global Green Growth Forum (3GF) in Copenhagen. This was a high level event, opened by the Crown Prince of Denmark and the new Danish Prime Minister, then following the initial panel discussion there was an introductory keynote by United Nations Secretary General Ban Ki-Moon – in person. The venue was also around the corner from the Copenhagen Tesla dealership!! 

So the event got off to a flying start, but what then? One of the issues for me is that it wasn’t entirely clear what the conference was actually about. Green growth has become one of those new catch phrases that means many things, depending in large part on the listener. Perhaps the best articulation came in a coffee break discussion – “green growth” is the recognition of the type of growth in energy production and the provision of key goods and services that will be required over the coming decades as some three billion people move from a relatively low income status to middle class.

In fact this income shift is well underway and is placing stresses on a number of systems. Rising CO2 in the atmosphere is perhaps the early warning, but little has been done to mitigate that problem. Now there is concern about water, food, energy supply and general resource availability. Unlike the CO2 issue, there is little clarity as to what we might do about these issues. Faced with rising CO2 emissions, economists, the business community and much of civil society have been clear on the course of action to pursue – to put a price on carbon. We know how to do this, we know the timeframe within which it must be done and we have a reasonably clear notion of where it will lead (CCS, renewable energy etc.), but even this seems beyond our collective capacity to act. Instead, we are arguing about science, an otherwise solid bedrock of society.

At its root, the green growth agenda feels like a growing worry that the market structure we have created over the last two centuries isn’t sufficiently robust to take us forward and that somehow market fundamentals like supply, demand and ultimately price won’t work. It’s not exactly a surprise that we might be thinking this today, after all the financial markets have hardly done us any favours over the last two to three years. But does that mean markets in general will let us down? In the 1970s similar worries surfaced – then it was overpopulation, food supply and energy as the primary concerns. It was also a time of deep recession (1974), oil price shocks(1973) and a prevalence of floods (Australia 1974) and famine (Ethiopia 1973-74). But economies grew, the energy system adapted, amazing new technologies surfaced and food supply issues soon faded.

So back to the conference in Copenhagen and two days of leading figures talking about all things green. It was certainly interesting, but I don’t think it got very far. Leadership was identified as a key component, but there was no articulation as to where that leadership should take us. In fact, when one key panelist was answering a question on the agenda for Rio+20 he said that the agenda was currently lacking because there was no leadership. There was also a spattering of business bashing (e.g. “it is the fault of Japanese business that Japan won’t accept a second Kyoto commitment”) and even the assertion that government had sent a clear signal to business that it was serious about addressing climate change because of the agreement on the 2 °C target.

It looks like the green growth agenda is here to stay, even though we may just decide to take our chances with the market system that we have. But we shouldn’t do nothing. The CO2 issue represents a market failure, the Stern Report  made this clear in 2006. Arguably, deforestation is another. There are ways to address these failures within the existing market system, the application of a carbon price as discussed above is one. The development of REDD has the necessary ingredients to tackle deforestation.

A green growth agenda that can propose, clearly define and implement a limited number of such approaches is what we need. Hopefully the meeting in Copenhagen was a forerunner to this, rather than just a taste of more and more discussion forums.

Carbon Nation

February 21, 2011

A new film is currently having it’s cinema release in the USA, aptly titled Carbon Nation. As the name suggests this is a story about carbon dioxide emissions, but not in the space occupied by Al Gore and the science discussion (although it briefly dips its toe in this water for context reasons), rather it talks about the energy issues we face today and how society might begin to tackle them.

 

The film has been around for over a year now, but at film festivals and special screenings. Throughout February and into March it is on general release across the USA. I saw it recently at a private showing in London, led by the incredibly motivated Director Peter Byck. Peter is pretty new on the directing scene but has been involved with such block-busters as The Matrix and King Kong. This is his first widely released film.

Carbon Nation doesn’t profess to offer the big solution, rather it shows through a series of interviews at community and individual level how progress is being made and could potentially be accelerated. The 82 minute film starts with a really excellent description of the sheer size of the energy system, which sets the scene nicely for the track it then follows. From a vast wind farm in Texas to a local community centre being fitted with solar panels, the film explores how a wide variety of people are making a difference. This includes major corporate players such as Virgin Atlantic owner Sir Richard Branson and his quest for a bio-fuel based solution in aviation. The film explores a wide range of CO2 technologies and energy alternatives, in transport, agriculture and electricity generation and also has a major focus on the potential for energy efficiency improvements across the economy. As with all the discussions, the film approaches all these avenues by example, rather than simply pontificating on the possibilities. This is its real strength in terms of delivery.

As a film to go and see, it is worth paying the money at the box office. I thought it had a first class script which sits between and nicely joins together the many interviews making up the bulk of the time. It also tells a good story. But in watching the film, some viewers might come to think that energy services are an entirely local issue and that therefore the problem of CO2 emissions can also be managed locally. This is perhaps the one drawback of the interview approach taken. But another way of interpreting this and hopefully the one that most leave the cinema with is that energy provision and use should in fact be an issue that individuals think about. This is not to say that everyone should climb on their roofs to fit solar panels, but to the extent that they engage with the political and information processes in our society, energy should at least be a part. That of course includes the ballot box. There are very real choices that can be made there and this film serves as a good point to start the journey to become a true energy citizen.

Last but not least, I should admit to a minor bias in all of this – I was one of the many people interviewed for this film and if you are patient and get to the end then you can hear me discuss the role of a carbon price in the economy. Thanks to Peter Byck for not leaving me on the cutting room floor.

Trouble “down under”

December 3, 2009

As an Australian living in London and subject to the market forces that an emissions trading system brings to the economy, I watch with great interest as Australia wrestles with the Carbon Pollution Reduction Scheme (CPRS), or “cap-and-trade” by another name (or emissions trading by another).

Since Kevin Rudd became Prime Minister just days before the Bali UN Climate Change Conference in 2007, he has ratified the Kyoto Protocol and tabled legislation to introduce an economy wide cap-and-trade system. The legislation has passed through the House of Representatives but is now stuck in the Senate where the Rudd government does not have a working majority. Over recent weeks the government has been negotiating with the leading opposition party to try and find a workable consensus and deliver the bill before Copenhagen.

This week that failed spectacularly. The nature of the legislation has also split the conservative opposition, with the result that the parliamentary leader of the party was deposed by a one vote majority and the new leader, Tony Abbott, has now made it clear that no immediate deal will be done and as expected, the legislation has now been rejected by the Senate. This potentially paves the way for a double dissolution of parliament and what could truly be the world’s first “climate change” election, although the government has indicated that it will reintroduce the legislation in February after Copenhagen and the summer recess of parliament. Abbott has also been labelled by some media outlets as a “climate sceptic” .

Australia has seen a number of weather extremes in recent years. A prolonged drought has brought despair to much of the rural sector, water restrictions are now common in places such Adelaide, temperatures in Melbourne hit a record 47 degrees C last February, the list goes on. Whilst all or none of these may be related to a changing climate (and Australia is a country of climate extremes), there is little doubt that they have raised the awareness of the issues we may all face in the decades to come. Both party leaders now claim the ear of the public on the issue, with the government arguing that the majority of Australians want to see the country act on climate change and the opposition leader claiming that the majority of Australians are opposed to the cap-and-trade legislation. Contrast all this with the reality that, according to the International Energy Agency, Australia has the highest per capita emissions in the world (apart from a handful of countries with small populations and a particular concentration of industry). It is also a country with huge solar resources, significant wind opportunity, ample uranium and over the last few years a very aggressive development programme for carbon capture and storage.

Whilst there will doubtless be short term political winners and losers in Australia, the real issue here is that there may be significant impairment to the long term policy solution set for managing emissions – with cap-and-trade at the heart of it. In turn, the environment itself suffers as widespread policy action is weakened. The development of a global carbon market, built by linking together various national trading schemes, is arguably where the world needs to go. Energy pricing is global, so injecting a carbon price into the mix will, over time, deliver change at a global level. Whilst there are many ways of creating a carbon price, cap-and-trade is designed to do it through a market based approach at lowest cost to the economy – things that should be attractive to legislators in market based economies.  It’s really that simple, although as Australia is showing, simple is not always as simple as it seems.

 

ETS in Australia

This “Energy Citizen” also wants a word

August 24, 2009

Last week saw the launch of a new initiative in the United States, “Energy Citizens”, which aims to create a significant lobby against the passage of climate change legislation in the USA and most specifically the recent House bill, the American Clean Energy and Security Act of 2009, or “Waxman-Markey” as it is more widely known. “Energy Citizens” kicked off with a well attended rally in Houston last Tuesday, has its own website and is strongly supported by an organisation that Shell US belongs to, the American Petroleum Institute. More rallies, events and advocacy initiatives are planned.

Whilst I am not an American, nor do I have any issue with the democratic process in the USA, what is at stake in this debate goes far beyond American shores and will have a profound impact on the global response to climate change for at least a decade and possibly a great deal longer. So, as an employee of the energy sector for nearly 30 years this “world Energy Citizen” also wants a word.

The clutch of EU Directives that were passed last year (ETS Phase III, CCS, Renewables) or are in the pipeline (Buildings) pretty much resemble the totality of what is proposed under Waxman-Markey. The two sides of the Atlantic are learning from each other as they move forward with ambitious plans to address energy use and begin the tough task of managing greenhouse gas (GHG) emissions. A key element in both programmes is a GHG cap-and-trade system (a mechanism originally developed and successfully deployed in the USA to reduce sulphur emissions).

Cap-and-trade legislation is now under development or in place in many parts of the developed world (including of course the USA on both counts) and if implemented could cover nearly a third of global fossil fuel CO2 emissions by 2013. In the EU it has been in place since 2005 and although it took a while to establish itself has given rise to a robust and growing carbon market with stakes in many countries through linked projects. It is working, it is beginning to drive change, it is creating new businesses and business models and there is no sign that the EU economy is suffering as a result. New wind projects are appearing across the continent, nuclear power is being given a new life, biofuel investment is rising and there is a major push to bring new technologies such as carbon dioxide capture and storage into the energy mix. A wide range of new financial and service organisations are also being created, including verifiers, (offset) project developers, CO2 consultancies and market participants.

It is also true that electricity prices across much of the EU have risen as a result of the EU-ETS – in the UK this is about 1 pence per kWh (or one and a half US cents) – but equally this is helping drive the new investment that is now taking place. This and the overall hike in electricity cost as a result of generally higher energy prices are also making families more conscious of the need for energy efficiency measures which in turn has led to a wide range of consumer initiatives in response, some developed by government but many created by business to meet that new demand.

I agree that Waxman-Markey is still some way from the right solution, but equally it is not headed in the wrong direction either. For example, it still needs to find a better balance between free allocation and auctioning in the face of international competition, but so too did the EU-ETS as Phase III was thrashed out by the European Parliament last year. There were times last year when stakeholders looked at what was on the table and thought “You must be joking!!”, but reason prevailed in the end and the necessary deals were struck – industry accepted the provisions for trade exposure, the power generators are facing up to the reality of auctioning and individual member states walked away from Brussels happy with the deal they had secured in terms of national burden and state aid provisions. Importantly, the cap-and-trade approach has been shown to be flexible enough to accomodate all of this without underminig the overall environmental goal being sought.

But is the “Energy Citizens” oganisation helping the rally attendees and signatories learn about this or recognise the importance of developed countries taking the lead on emissions mitigation?? Probably not – which of course is the unfortunate side of all this.

There have been similar concerns about jobs and  energy prices in the EU, but this is a two way street – and that is now being recognised. Whilst there will be some shift in energy prices, the resultant investment in efficiency and new energy infrastructure will have a positive benefit for consumers and in the longer term the new industries that are created should offset any job changes that may occur in existing sectors.

What is really required now is positive and proactive bipartisan engagement by industry and others in the development of this relatively new instrument.

Mixed signals in Brazil

August 9, 2009

I have been in Sao Paulo this week at Sustentavel 2009, perhaps the premiere Sustainable Development event in Brazil, if not all of South America. At the opening I represented the World Business Council for Sustainable Development and then on the first day of presentations I participated in the main climate change panel session.

What is clear is that there is a passion in Brazil for sustainability – from the huge issues they face in the Amazon region to the road congestion in Sao Paulo. Talking with delegates at Sustentavel, it is also clear that the country faces an interesting future in terms of greenhouse gas emissions.

According to the IEA, in 2006 fossil energy CO2 emissions in Brazil were 332 million tonnes. Reportedly (from delegates at the conference), this represents some 25% of overall CO2 emissions in Brazil, which puts emissions from deforestation at about 1 billion tonnes per annum and total emissions at some 1.3 billion tonnes. Such a figure, if correct, would put total Brazilian emissions at about the level of Japan and India.

Brazil blog post bubble chart

From an energy perspective (i.e. putting to one side for the moment emissions from deforestation) Brazil is one of a handful of countries globally that is managing a development pathway that is compatible with a 450 ppm trajectory – i.e. keeping emissions below 2 tonnes per capita even as it continues to develop. Although emissions per capita have risen since 1970, there has been a plateau of sorts more recently. Brazil has achieved this through its large-scale use of renewables, namely hydroelectricity and biomass, the latter both as a source for transport fuel (ethanol) and electricity. Although CO2/KWhr jumped from 50 gms to 88 gms between 1990 and 2000, it fell back to 81 gms in 2006.

Brazil blog post line chart

Looking forward, continued expansion of hydroelectricity is under pressure. Although only 30% of theoretical capacity has been utilised, new projects are taking some 10 years to complete owing to increasingly stringent permitting requirements. Meeting future electricity demand may mean that the country needs to draw increasingly on alternative sources, particularly natural gas which is being discovered offshore. CO2 emissions from natural gas use more than doubled between 2000 and 2006.

In the transport sector, ethanol and now bio-diesel use is continuing to grow. Between 2000 and 2006 oil demand was flat despite a nearly 20% increase in both GDP and overall energy demand. Brazil still has a formidable potential for increasing ethanol and bio-diesel production, even as it grapples with the issue of deforestation. Brazilian ethanol also has a very low CO2 footprint owing to the use of bagasse as a fuel in the ethanol plants, many of which also produce electricity for the local community. But Brazil is also on the verge of becoming a new petro-economy. Offshore discoveries now amount to some 70 billion barrels of oil equivalent. If consumed this will result in emissions of 25 billion tonnes of CO2 or the equivalent of an additional 1-1.5 ppm in atmospheric CO2. In addition, there may be further CO2 emissions after removal from contaminated offshore natural gas.

What solutions lie in Brazil’s future? The first priority is of course to address deforestation, but one option that doesn’t immediately jump out of the page but could be pivotal for Brazil is the application of carbon dioxide capture and storage. Whilst Brazil is a low CO2 economy, CCS could help it remain so whilst letting the country make best use of the resources it has. For example, CCS applied offshore is a potential solution to the CO2 that will be removed from any contaminated natural gas.

Longer term, CCS could be tied in with the nations huge biomass potential (even after deforestation is addressed) to possibly deliver a negative CO2 economy by 2050. Gasification of biomass is a technology gaining ground today. As in the gasification of coal it produces syngas, which can then be used for electricity generation, with a high purity CO2 stream remaining. When sequestered, with biomass as the original feedstock, the process is effectively removing CO2 from the atmosphere. Most biofuel processes (e.g. manufacture of ethanol) also produce bio-CO2 that could be captured and stored. These approaches may be pivotal in the quest for atmospheric stabilisation at safe levels.

So although Brazil has real sustainability challenges ahead, particularly in the area of deforestation and the further expansion of hydroelectricity, it also offers tremendous opportunity for managing emissions on a very large scale. Certainly the willingness is there, you could feel it at the conference. Now that needs to be turned into political action to drive the solutions forward.

Health check in Bonn

April 9, 2009

The first of a series of United Nations Framework Convention on Climate Change (UNFCCC) meetings in the lead-up to Copenhagen took place in Bonn over the last ten days. The next meeting will also be in Bonn in June. In total there will now be five meetings prior to Copenhagen itself.

There are some observers who spend every waking moment over the whole period of a meeting attending every workshop (but many run in parallel), furiously taking notes and becoming completely absorbed within the process. I am not one of them, but if that is the sort of report you are looking for then I can highly recommend the Earth Negotiations Bulletin. I spent just a day in Bonn this time although one colleague was there for quite a bit longer. Nevertheless, with some targeted meetings and attendance at one or two of the formal gatherings it is possible to get a feeling for what is going on. Reading some of the excellent summaries on ENB helps as well.

Taking the pulse of the UNFCCC negotiations isn’t easy. To start with, it’s difficult to know exactly where to find it but when you do, the diagnosis is weak but racing. The first question to ask is “Where are the actual negotiations taking place?“. Whilst country after country will stand and make declarations of some sort or other in the formal meetings, outside of this some important bilateral meetings are underway. These discussions are perhaps paving the way for the difficult deals that have to be done, such as between the USA, the EU and China. But equally, these deals will probably not be consumated by the people attending this UNFCCC meeting – more powerful hands are going to have shake on these. These are the deals that will set the stage for the next 10-20 years;

  • What reductions will developed countries make and by when? See my previous posting for some thoughts on this.
  • How long before big developing countries start adopting real targets?
  • How much help (i.e. money) will developed countries have to put on the table to encourage the rapid global take-up of big play technologies such as carbon capture and storage?
  • What is fair and equitable when it comes to responsibility for emissions?
  • . . . . and a big one – how to combine the dual track discussions going on – Track 1 looking at the next round of commitments under the Kyoto Protcol, which the USA cannot participate in (as they are not a signatory) and Track 2 looking at the nature of the long term action that needs to take place, which the USA is now very much re-engaged in. Having the USA sign the Kyoto Protocol is almost certainly a non-starter (simply not deliverable domestically), but chucking the whole thing in the bin would undo years of work that needs to move forward – not in emissions reduction per se, but in the global institutions needed to support large scale reductions.

All this isn’t to say that meetings such as the one that has just finished in Bonn are a waste. They are not. Slowly but surely the infrastructure around which the big deal must operate is being agreed upon. The delegates are working hard on this, putting in long hours, hence the racing pulse.

So where to from here? The meeting in June will see the first real negotiating text put on the table, so the pace will quicken and the stakes will be raised even higher.

By year end we will have had a G8 meeting and possibly a second G20 meeting (mentioned by President Obama in his closing address at the G20 last week). Gordon Brown made a clear reference to a comprehensive deal in Copenhagen in his G20 statement. The Major Economies Meeting, initially a Bush side-show on climate change will almost certainly have new life breathed into it under Obama. This much smaller group of countries represent about 80% of global emissions, so the right people will be in the room. The next meeting is scheduled for April 27-28 in Washington.

So it remains a wait and see game. But if the G20 outcome is any guide, we might just have a set of leaders at the table at this particular moment in time who can pull this off.

Let’s hope so!

More focus on Antarctica

January 28, 2009

Whilst we hear much about the rapidly vanishing sea ice in the Artic, Antarctica seems to go relatively unnoticed. Until recently that is. The following BBC articles point to the growing problems there as well. Don’t forget the rule of thumb that warming at the poles is about twice that of the global average (i.e. 1 deg.C globally translates to 2 deg.C polar).

http://news.bbc.co.uk/2/hi/science/nature/7843446.stm

http://news.bbc.co.uk/2/hi/science/nature/7843170.stm

http://news.bbc.co.uk/2/hi/science/nature/7851276.stm

4000 Days and Counting

December 17, 2008

Last week saw two major events in the climate change calendar – the UNFCCC meeting in Poznan (COP 14) and the meeting of heads of state of the European Union where the final compromise text for the EU Energy and Climate package was agreed. The UN climate change conferences also have something of a trade-fair atmosphere to them. Sitting in one of the many meeting areas doing e-mail or talking with colleagues, it isn’t long before a young environmental idealist thrusts a flyer in your hand advertising a side event or bringing your attention to an important issue. One such flyer alerted the reader to the need for developed countries to take on a 40% reduction target by 2020 (followed up by a zero emissions target for 2050). It is no doubt true that such a target is needed for 2020 to robustly respond to the scientific findings on climate change, but the question must be asked if we have even the remotest of hopes of achieving such a massive reduction. The young lady distributing the flyer couldn’t answer that question when I posed it.

This then takes us back to what is happening in Brussels, where a 20% reduction by 2020 is the cornerstone of the deal. The 20% reduction in emissions by 2020 (compared to 1990) represents a huge challenge for the EU. As of 2006, EU CO2 emissions stood at 4.02 billion tonnes, compared to 4.13 billion tonnes in 1990 (IEA data), or a 2.7% reduction.

Today, the EU has some 500 big power plants, several thousand industrial facilities, 250 million cars and upwards of 30 billion m2 of not very efficient building space. To reach the 2020 EU emissions reduction goal and continue to meet EU energy needs, all of the following will need to happen (as an illustration of the scale  – other pathways are also possible):

1. Near doubling of year on year energy efficiency improvement across the economy (i.e. Mega-Joules/€ of GDP), shifting from 1.5% p.a. for the period 1990/2006 to 2.7% p.a. from this year forward.

2. Retire (or convert – see below) some 40 big coal fired power stations.

3. Build (or convert existing) 20 big coal fired power stations with carbon capture and storage and establish this as a fully commercial technology. Today, not one such facility exists anywhere in the world.

4. Build another 25 large natural gas power stations.

5. Ensure no drop in nuclear power as many existing stations come due for retirement – a small expansion (4 more plants) is probably desirable, paving the way for further growth in this industry.

6. Establish a large-scale solar power generation sector utilising widespread solar PV and concentrated solar thermal.

7. Install ~100,000 2 MW wind turbines (or equivalent – e.g. the tidal barrage in the UK).

8. Improve average vehicle on-road (i.e. entire stock on the road in 2020) efficiency by ~35%. Given a vehicle life of >12 years, this means a ramp up in efficiency starting now.

9. Introduce low CO2 footprint sustainable biofuels and expand their use to ~10% of the vehicle fuel mix. Add to this some 14 million electric (or hydrogen) vehicles.

10. Increasingly use electricity as the end-use energy source of choice – i.e. instead of burning natural gas or heating oil at home and in office buildings.

11. Replace as required other retiring energy infrastructure.

Now consider that we have just 4000 days in which to do all of this!