“If the question is whether India will take on binding emission reduction commitments, the answer is no. It is morally wrong for us to agree to reduce when 40 percent of Indians do not have access to electricity,” said a member of the Indian delegation to the recently concluded U.N. conference in Bonn, Germany, which is a prelude to a Copenhagen summit in December on climate change.

Days after the Obama administration unveiled a push to combat climate change, Indian officials said it was unlikely to prompt them to agree to binding emission cuts, a position among emerging economies that many say derails effective action.

 ”Of course, everybody wants to go solar, but costs are very, very high.” India’s position goes to the heart of the vexing international debate over how quickly nations should try to phase out carbon-spewing fuels such as coal and switch to renewable energy sources such as wind and solar.

In India, the debate has been cast as a choice between pursuing urgently needed economic growth to reduce poverty and addressing climate change. More than 60 percent of India’s power is generated from coal. As India rapidly climbs the list of global polluters, analysts say coal will continue to fuel the economic demands of the country’s 1.1 billion people for two decades. But India has repeatedly said that it will not compromise on growth by committing to emission reduction goals set by developed nations, which it deems bigger culprits when it comes to pollution.

http://www.washingtonpost.com/wp-dyn/content/article/2009/04/12/AR2009041202452.html?hpid=sec-world

It’s understandable why the developing nations are reluctant to cut emissions — it means higher energy costs and reduced growth. China and India are more concerned with growing their economy, expanding access to electricity, and reducing poverty.

Last summer, China and the developing world announced the price for their cooperation on a global-warming treaty: up to 1% of the developed world’s gross domestic product. For the U.S., this would mean sending $140 billion a year to China, Iran, North Korea and Cuba, among other countries. This is in addition to the $28 billion we already distribute each year in foreign aid.

For a U.S. family of four, China’s demand comes to nearly $1,900 in yearly taxes. And that’s just the beginning.

The tenor of international climate negotiations has emboldened the Indian government to claim in a February filing with the United Nations that the West owes it billions of dollars in compensation for climate change. These payments, it said, should be mandatory and not “subject to decisions of developed country governments and legislatures.”

A November 2008 study by the MIT Joint Program on the Science and Policy of Global Change forecasts the international costs could be as much as $3 trillion by 2050 for developing nations to make the significant reductions in greenhouse gas emissions that scientists say are necessary. The MIT report says that the U.S. share would total nearly $1 trillion of these “international financial transfers of unprecedented scale.”

President Barack Obama recently unveiled a budget blueprint that called for a $646 billion climate tax through a carbon-trading system. Already, White House officials are saying this tax could be three times larger. That means a family of four could have to shell out nearly $45,000 in climate taxes during the coming decade.

For beleaguered U.S. taxpayers in a troubled economy, these numbers are disastrous.

The U.S. cannot reduce the growth of greenhouse gases in the earth’s atmosphere without the developing nations cutting their emissions as well. A 2007 study by the Battelle Memorial Institute found that if China, India and the other developing countries keep growing at current rates, they will emit nearly three times as much carbon dioxide as will the developed countries by the end of this century. But will China and India join in the effort to reduce CO2 emissions?

http://online.wsj.com/article/SB123871985916184973.html

“Now, the experience of a cap-and-trade system thus far is that if you’re giving away carbon permits for free, then basically you’re not really pricing the thing and it doesn’t work, or people can game the system in so many ways that it’s not creating the incentive structures that we’re looking for,” Obama said.

“The way that the allowances are distributed matters hugely for the success of the program,” Burtraw said. “But for the most part, it does not matter directly for the kinds of emission reductions you’re going to see. The primary influence is the existence of an emissions cap.”

President Obama’s comments yesterday in support of climate change legislation included two errors on the fundamental design and history of the cap-and-trade approach that his new administration intends as the centerpiece of its global warming policy, according to several experts tracking the Capitol Hill debate.

Appearing before CEOs at the Business Roundtable in Washington, Obama fielded a question about his campaign pledge to distribute allowances for emissions of greenhouse gases via a 100 percent auction.

The president replied with a warning against giving away too many free allowances to industry for compliance with a cap-and-trade system.

“Now, the experience of a cap-and-trade system thus far is that if you’re giving away carbon permits for free, then basically you’re not really pricing the thing and it doesn’t work, or people can game the system in so many ways that it’s not creating the incentive structures that we’re looking for,” Obama said.

A pair of leading climate economists say the president’s comments glossed over a key point in the cap-and-trade debate.

So long as the government caps emissions, companies will see a price signal and be forced to act, Harvard University’s Robert Stavins said.

“If you give permits away for free or sell them, either way, allowances will be priced and the system will work,” Stavins said in an interview. “There may be sound arguments that the administration wishes to make for auctioning allowances, but the functioning of the price mechanism and the environmental performance of the system is not one of them.”

Dallas Burtraw, a senior fellow at the nonpartisan Resources for the Future think tank, agreed with Stavins’ assessment.

“The way that the allowances are distributed matters hugely for the success of the program,” Burtraw said. “But for the most part, it does not matter directly for the kinds of emission reductions you’re going to see. The primary influence is the existence of an emissions cap.”

Obama also erred in overstating the role of emissions auctions during the implementation of the sulfur dioxide trading program created through the 1990 Clean Air Act Amendments.

“We put in an auction system and a trading mechanism and, lo and behold, American ingenuity and American entrepreneurship and inventiveness created options that ended up being much cheaper than anybody had imagined — much cheaper than anybody had imagined,” the president said.

But the 1990 law signed by President George H.W. Bush required U.S. EPA to auction about 3 percent of the cap-and-trade credits. Electric utilities got the rest for free based on their historical emission levels.

“I’m not sure that’s the example one wants to give,” Stavins said, citing instead the Northeastern states’ Regional Greenhouse Gas Initiative, which so far has required electric utilities to purchase credits via auction.

http://www.nytimes.com/cwire/2009/03/13/13climatewire-obama-erred-on-key-capandtrade-features-econ-10134.html?pagewanted=print

In proposing mandatory caps on the greenhouse gases linked to global warming and a system for auctioning permits to companies that emit them, President Obama is taking on a huge political and economic challenge.

And while a cap-and-trade approach bears substantial cost, it also brings a benefit whose value is incalculable — a steady decrease in emissions that scientists say will over time reduce the risk of climate catastrophe.

Business lobbies and many Republicans raised loud objections to the cap-and-trade program Mr. Obama proposed as part of his budget this week, saying the plan amounted to a gigantic and permanent tax on oil, electricity and manufactured goods, a shock they said the country could not handle during economic distress.

Green groups and supportive members of Congress applauded, saying the proposal was long overdue after eight years of inaction on climate change under President George W. Bush. The costs, they said, would not begin to bite until at least 2012.

But the full costs and benefits of controlling greenhouse gas emissions remain unknown, and perhaps unknowable. While there is rough consensus on the science of global warming — with some notable and vocal objectors — there is less agreement on the economics of the problem and very little on the policy prescriptions to address it. And while a cap-and-trade approach bears substantial cost, it also brings a benefit whose value is incalculable — a steady decrease in emissions that scientists say will over time reduce the risk of climate catastrophe.

Mr. Obama’s budget estimates $645 billion in cap-and-trade revenue over the next 10 years that will largely be paid by oil, electric power and heavy industries that produce the majority of carbon dioxide and other gases blamed for the warming of the planet. Many of these costs are expected to be passed on to consumers.

But Mr. Obama offered a sweetener in the form of tax relief for lower- and middle-income families and billions of dollars in new spending for renewable sources of power to cut emissions and ultimately, it is hoped, bring down the cost of energy. He also plans to spend billions to weatherize homes to bring down heating costs for the poor.

Congress has debated versions of a cap-and-trade regime for years but never enacted one, in part because it would become so complex. The House is working on such legislation now; Senate leaders promise action later this year. Mr. Obama laid out only broad principles and targets, and his aides admit that revenue estimates are only a rough guess and will depend on whatever emerges from Congress. The White House projects the program to be in place starting in 2012.

http://www.nytimes.com/2009/02/28/science/earth/28capntrade.html

Economic pressure is changing the climate-change policy debate around the world—except maybe in the United States. President Barack Obama came out of his Feb. 19 meeting with Canadian Prime Minister Stephen Harper sounding remarkably similar to his predecessor. Obama resolved to pursue carbon-capture technology, a system that would allow industry to avoid cutbacks in energy use. He also stated that the participation of China and India are “absolutely critical” for the success of any worldwide energy pact, a position that echoes the Bush administration if not the existing Kyoto Protocol. Sagging markets are leaving large Kyoto-adhering European companies with loads of carbon credits to sell off without any need to alter their emitting practices. And the UN has warned that the global credit crunch threatens to dry up funds pledged from wealthy nations.

http://www.worldmag.com/articles/15081

Dr. Chu said a “revolution” in science and technology would be required if the world is to reduce its dependence on fossil fuels and curb the emissions of carbon dioxide and other heat-trapping gases linked to global warming.

He said that while President Obama and Congressional Democratic leaders had endorsed a so-called cap-and-trade system to control global warming pollutants, there were alternatives that could emerge, including a tax on carbon emissions or a modified version of cap-and-trade.

http://www.nytimes.com/2009/02/12/us/politics/12chu.html?_r=2&pagewanted=print

Steven Chu, the new secretary of energy, said Wednesday that solving the world’s energy and environment problems would require Nobel-level breakthroughs in three areas: electric batteries, solar power and the development of new crops that can be turned into fuel.

Dr. Chu, a physicist, spoke during a wide-ranging interview in his office, where his own framed Nobel Prize lay flat on a bookcase, a Post-it note indicating where it should be hung on the wall.

He addressed topics that included global warming, renewable energy sources like solar and wind power, the use of coal and a proposed repository for nuclear waste at Yucca Mountain in Nevada.

Dr. Chu said a “revolution” in science and technology would be required if the world is to reduce its dependence on fossil fuels and curb the emissions of carbon dioxide and other heat-trapping gases linked to global warming.

Solar technology, he said, will have to get five times better than it is today, and scientists will need to find new types of plants that require little energy to grow and that can be converted to clean and cheap alternatives to fossil fuels.

Dr. Chu, who once called coal “a nightmare” in the way it is currently used, said the United States must also lead the world in finding a way to burn the fuel cleanly, because other countries with big coal reserves, like India and China, will not turn away from coal.

But Dr. Chu said such developments were not impossible. At the turn of the last century, he noted, scientists like Fritz Haber and Carl Bosch made Nobel-winning discoveries that allowed the development of cheap nitrogen fertilizers, saving Europe from starvation.

“I think science and technology can generate much better choices,” Dr. Chu said. “It has, consistently, over hundreds and hundreds of years.”

Dr. Chu said members of Congress who are drafting legislation to limit emissions of global warming gases had not yet sought his advice, although he added, “I would expect that they might.”

He said that while President Obama and Congressional Democratic leaders had endorsed a so-called cap-and-trade system to control global warming pollutants, there were alternatives that could emerge, including a tax on carbon emissions or a modified version of cap-and-trade.

Dr. Chu said reaching agreement on legislation to combat climate change would be difficult in the current recession because any scheme to regulate greenhouse gas emissions would probably cause energy prices to rise and drive manufacturing jobs to countries where energy is cheaper.

“The concern about cap-and-trade in today’s economic climate,” Dr. Chu said, “is that a lot of money might flow to developing countries in a way that might not be completely politically sellable.”

But, he said, he supports putting a price on carbon emissions to begin to address climate change.

On September 18-19, 2008, the Belfer Center’s Energy Technology Innovation Policy (ETIP) research group convened leaders from academia, research centers, government, business, and non-governmental organizations for a major conference on U.S. energy policy, titled Acting in Time on Energy Policy. The conference was co-sponsored by the Consortium for Energy Policy Research at Harvard and the Harvard University Center for the Environment. Conference attendees discussed future energy policy directions in six main areas: global climate change, carbon capture and storage technology, oil and transportation, energy technology innovation, electricity, and leadership.

This seven-minute video captures the essence of the event and highlights recommendations given by participants during each of the six panels. A book, also titled Acting in Time on Energy Policy, edited by Kelly Sims Gallagher, Director of ETIP, and to be published by Brookings Institution Press this spring, will offer readers a comprehensive summary of the conference and versions of the presented papers. More information about the book can be found on the Brookings Institution Press website at: http://www.brookings.edu/press/Books/…

For more information and press inquiries, please visit the Belfer Center website: http://belfercenter.org

ClimateChangeExplained

“The president has his hands full…..”

Steven Chu, point man for his new green team, should begin moving the energy department into the 21st century. He will innovate in a host of areas given short shrift by the previous administration, including solar, wind and biofuel development, which is essential because the freefall in energy prices will not erase the prospect of eventual fossil fuel shortages.

Environmentalists, after finally electing one of their own, worry that the green agenda will be delayed by global warming sceptics eager to use the slow economy as an excuse to do nothing. Growth-focused economists fear that Obama’s green team believes that high-cost environmental change is more important than stabilising jobs and reviving markets.

http://www.ethicalcorp.com/content.asp?ContentID=6313

President Obama’s sustainability remake of the US economy must confront harsh commercial and scientific realities, argues Jon Entine

Barack Obama’s initiatives face a host of complicating factors, from plummeting oil prices to the changing dynamics of climate change science.

The encouraging news is that Steven Chu, point man for his new green team, should begin moving the energy department into the 21st century. He will innovate in a host of areas given short shrift by the previous administration, including solar, wind and biofuel development, which is essential because the freefall in energy prices will not erase the prospect of eventual fossil fuel shortages.

One of Chu’s most notable achievements as director of the Lawrence Berkeley National Laboratory was the Helios Project, aimed at using synthetic biology and nonomaterials to make efficient, low-cost solar panels. He also has a nuanced view of biofuels, advocating cellulosic ethanol – fuel made from corn cobs and grasses – rather than focusing only on corn and soybeans.

Chu also has a healthy respect for nuclear energy. When asked if nuclear power should be made a bigger part of the energy portfolio, he responded: “Absolutely.” As the technology quickly advances to address the waste problem, “the risk-benefit equation looks pretty good for nuclear”, Chu has said.

It remains to be seen whether the rest of Obama’s energy advisers shares Chu’s pragmatism. The wild card is global warming. Chu favours putting a price on greenhouse emissions through a cap-and-trade scheme, but he also recognises the potentially devastating costs to the economy of sharply raising energy costs to reduce carbon output. It is not clear whether he might be amenable to a revenue-neutral carbon tax, which some experts believe might be more effective than trading carbon credits, because many of the world’s biggest polluters, including China, have not agreed to cut emissions.

It is also not clear whether Obama’s other two key energy gurus – former Harvard physicist John Holdren, his science adviser, and Carol Browner, a former Environmental Protection Agency (EPA) administrator as energy adviser – carry similar priorities.

Big guns

Browner is an apparatchik of the climate change school. She’s expected to push the EPA to regulate greenhouse gases under the Clean Air Act, which the Supreme Court ruled is within its province. If the EPA succeeds, it could open the door to a slew of new energy taxes and mandates at exactly the wrong time. It would stunt the stimulus benefit of falling gas prices, which economists believe pumped roughly $200bn into the US economy last quarter alone.

Holdren introduces a different set of concerns. He was one of the experts whom Paul Ehrlich enlisted in his famous bet against the economist Julian Simon in 1980, when environmentalists were predicting an “age of scarcity”. Simon disagreed, and offered to pay $1,000 if any selected natural resource became more expensive. Ehrlich and Holdren bet that chrome, copper, nickel, tin and tungsten would become scarcer. They were wrong on all five metals, and paid up when the bet came due in 1990.

Hopefully, Holdren’s judgment has improved. He is a strong proponent of the view that global warming can be blamed mostly on human-created carbon emissions. Yet the data remains controversial. Arctic sea ice unexpectedly expanded dramatically at the end of last year to levels last seen in 1979, according to the University of Illinois’s Arctic Climate Research Center. And NASA says solar variations confirm that the Pacific Decadal Oscillation had shifted to its cool phase as predicted by past climate changes, which typically leads to several decades of global cooling.

It remains to be seen whether these are natural variations temporarily offsetting a long-term warming trend or a more fundamental shift toward global cooling. It is a reminder of the inexactness of atmospheric science, which is something to consider when politicians urge dramatic policy shifts costing trillions of dollars that at best affect temperature change by a few degrees over many decades.

The correlation between economic growth and energy costs is high and negative; when energy costs go up, productivity takes a nosedive. In these extraordinary times, arguably the top priority must be to ensure that a secular financial downturn doesn’t turn into a worldwide structural depression. If that happens, both the economy and the environment will be losers.

Considering the strong economic headwinds, the political infighting within the new administration over Obama’s stated support for a cap-and-trade scheme could be intense. Environmentalists, after finally electing one of their own, worry that the green agenda will be delayed by global warming sceptics eager to use the slow economy as an excuse to do nothing. Growth-focused economists fear that Obama’s green team believes that high-cost environmental change is more important than stabilising jobs and reviving markets. The president has his hands full.

“Selling allowances would not be happening if they’d had to pay for them in the first place,” he says.

“If everybody had to pay for the allowances on a pay-as-you-go basis, like other commodities they consume, the price for carbon allowances would have fallen anyway as a result of this recession,” he says.

David Victor, head of Stanford University’s Energy and Sustainable Development Program, says that between a third and two-thirds of CDM offsets do not represent actual emission cuts.

http://newsvote.bbc.co.uk/mpapps/pagetools/print/news.bbc.co.uk/1/hi/business/7857771.stm?ad=1A crucial scheme to control greenhouse gases is under threat due to the recession. Under the Kyoto Protocol adopted in 1997, since ratified by 183 countries, industrialised nations agreed to reduce their emissions of gases such as carbon dioxide (C02) which cause global warming.

Among the measures introduced was the European Carbon Trading System, whereby governments put a price on the amount of greenhouse gases that can be emitted by any company.

By forcing companies to pay for the right to pollute, it was hoped they would be more inclined to clean up their act.

Companies are issued emission permits and are required to hold an equivalent number of allowances (credits) which represent the right to emit a specific amount.

The total amount of allowances and credits cannot exceed the cap, limiting total emissions to that level.

Companies that need to increase their emission allowance must buy credits from those who are willing to sell.

In effect, the buyer is paying a charge for polluting, while the seller is being rewarded for having reduced emissions by more than needed.

Three-quarters of the main polluting greenhouse gas, carbon dioxide, comes from burning fossil fuels – oil, gas and coal.

The environmental group Carbon Trade Watch complains about imbalances in the sources of the burning of fossil fuels, as the world’s richest countries consume more per capita than countries with larger populations.

For instance the USA produces 24% of the world’s CO2 emissions yet has only 4.5% of the world’s population. Conversely India has 16.7% of the world’s population yet only produces 4% of the CO2 emissions.

It seemed like a market solution to global warming in Europe, but initially many of these permits were given away for nothing.

Now, as recession bites, industries like steel, cement and glass may be polluting less, but only because they’re producing less.

So companies are desperately selling off the carbon credits they no longer need to bolster their faltering balance sheets

That has led to a big drop in the market value of carbon permits, and as the right to pollute becomes cheaper, there is less incentive for companies to stop polluting.

Mark Lewis, a carbon analyst at Deutschebank, told World Business News that the recession has cast a spotlight on the frailties of emissions trading.

“Selling allowances would not be happening if they’d had to pay for them in the first place,” he says.

“Getting them free allows them to be sold on a risk-free basis and that is exacerbating the fall in the price of credits,” he adds.

Each year the cap on emissions gets tougher, but the price of the credits would have come down anyway as a result of the financial downturn.

“If everybody had to pay for the allowances on a pay-as-you-go basis, like other commodities they consume, the price for carbon allowances would have fallen anyway as a result of this recession,” he says.

In the past, Russia has managed to achieve its Kyoto targets without any pain because its industrial output has declined so sharply.

Critics of carbon trading maintain this proves the inherent weakness of such systems, but Mr Lewis does not think a straight tax on fossil fuels would provide a better solution.

“It might be simpler on one level,” he says, “you would know in advance what the price was but you wouldn’t get any certainty on the level of emissions reduction.”

Another measure introduced under the Kyoto Protocol to curb greenhouse gases is also coming into question.

This is the clean development mechanism (CDM), which allows industrialised countries to invest in projects that reduce emissions in developing countries – as an alternative to what would undoubtedly be more expensive emission reduction programmes in their own country.

However, in recent years, criticism against the mechanism has increased.

Offset projects under Kyoto are only supposed to qualify for carbon financing if they represent emissions reductions above and beyond what would have happened anyway.

In practice, large numbers of projects that were already well under way, are presenting themselves as CDM projects in order to gain an extra revenue stream, and these projects do not represent additional emissions reductions, Carbon Trade Watch maintains.

David Victor, head of Stanford University’s Energy and Sustainable Development Program, says that between a third and two-thirds of CDM offsets do not represent actual emission cuts.

If an offset project does not represent reductions and is being used to justify increased emissions at some other point, it actually represents a net increase in emissions.

If a high number of CDM projects are not additional, there is a real danger of a “carbon bubble”.

Scientists are adamant that CO2 emissions must be sharply cut in the next 10 years otherwise there will be irreversible damage to the planet.

Otherwise, it might be too late to repair the damage the planet has already suffered.