The incoming US president says meeting the challenge of climate change and ensuring America a secure energy supply are top priorities that can both be achieved by weaning the country off its dependence on imports of foreign fossil fuels.

California, where they are already test-driving some of Obama’s plans under the unlikely gaze of Governor Arnold Schwarzenegger. The state legislature has passed a key law to enact emissions reductions programs through regulation and carbon trading. The laws are intended as a model for federal action.

“It has a state plan for renewables; it has the technologists to deliver; and it has the venture capital,”

http://www.onlineopinion.com.au/view.asp?article=8420

Europe’s leadership on fighting climate change seemed unassailable until just a few months ago. It had grabbed that position more than a decade ago, when Germany’s then environment minister, a former East German chemist named Angela Merkel, negotiated the groundwork for the Kyoto Protocol in Berlin in 1995. Two years later, Europe basically pushed Bill Clinton to send Al Gore to Kyoto to sign up to the first emissions targets – which were never ratified by the US Senate and subsequently repudiated by George W Bush.

Early last month, Merkel – now German Chancellor – signalled Europe’s retreat. She successfully lobbied on behalf of her coal-burning and car-making industries to water down European Union plans for carbon emissions trading in a new EU energy package. It is now unclear whether EU promises to cut emissions by 20 per cent by 2020 – and 30 per cent if other developed nations will go along – can be met.
The inauguration of Barack Obama now looks like the world’s best chance to break free of the climate trap. The incoming US president says meeting the challenge of climate change and ensuring America a secure energy supply are top priorities that can both be achieved by weaning the country off its dependence on imports of foreign fossil fuels.

Among the climate cognoscenti, the sense that a really important shift may be about to happen was accentuated when Obama announced in December that he had chosen Steven Chu as his energy secretary.

The Nobel prize-winning head of the Lawrence Berkeley National Laboratory has helped pioneer research on energy efficiency, solar energy, and cellulosic “second generation” biofuels. Last year he announced a US$500 million deal with BP to fund a new Energy Biosciences Institute at Berkeley. “We are seeking industry partnerships,” he said then. “We seek solutions. We don’t seek, dare I say, science papers anymore.”

Chu is also an advocate of a national high-voltage electricity super-grid to distribute renewable energy across the United States. In 2005, he went to Washington to pitch the idea – none too successfully, it seems – to Bush’s energy secretary Samuel Bodman. And now it fits right in with Obama’s campaign promise to establish “a new digital grid … to make effective use of renewable energy.”

It also fits in as part of the new, green, job-creating, economy-reviving, American infrastructure that Obama promises – his 21st century version of the New Deal’s Grand Coulee and Hoover dams.

In September I visited California, where they are already test-driving some of Obama’s plans under the unlikely gaze of Governor Arnold Schwarzenegger. The state legislature has passed a key law to enact emissions reductions programs through regulation and carbon trading. The laws are intended as a model for federal action.

Even more striking are the green energy entrepreneurs tooling up in California. “If Barack Obama wins,” David Mills, the bicycling-mad boss of solar energy pioneers Ausra in Palo Alto, told me, “then it’s going to be boom time here”. He was cheering even louder with the news of Chu’s appointment.

Mills and Ausra are in the vanguard of what many believe will become the critical renewable technology for America – solar thermal energy. Unlike photovoltaics, which convert solar heat directly into electricity, solar thermal concentrates solar energy using mirrors to heat water, which is then used to drive conventional steam turbines. One of the advantages of solar thermal is that it allows the energy to be stored for when it is needed, in the form of hot water.

Mills, a Canadian, developed his system in Australia. But a couple of years ago, frustrated by government indifference there, he shipped out Solargenix to California. “It has a state plan for renewables; it has the technologists to deliver; and it has the venture capital,” he told me. Backers in Silicon Valley have pumped hundreds of millions of dollars already into start-up green tech companies like Ausra. In the fall, Mills opened a robot-run factory outside Las Vegas ready to cover the deserts of the American West with glass mirrors that catch the sun’s energy.

“Angela Merkel…said that jobs come first and then climate — and this is the wrong message,” says Lindlahr. “It’s her responsibility to keep the jobs through progressive and innovative climate strategy.”

Chancellor Merkel has been lambasted by climate scientists and activists for weakening the framework and allowing certain industries a free pass. Other members of the business community say that Merkel has not gone far enough in changing the targets — a stance that could damage the competitiveness of the largest exporting country in the world. Merkel has bounced back and forth, trying to appease both sides.

http://www.renewableenergyworld.com/rea/news/story?id=54409

German Chancellor Angela Merkel, the head of a country that has long been considered a leader in climate and renewable energy policies, is causing a stir by announcing that Germany is pulling back from earlier commitments to the structure of a carbon cap and trade program. In order to protect Germay’s large industrial base from higher carbon prices, Merkel is urging the EU to give away more allowances than originally proposed.

Without additional protections, argues Merkel, steel manufacturers, chemical producers and shipping companies could lose their competitive edge, thus shedding jobs. Her position has steadily shifted over the last year as the EU works out the details of its carbon reduction plan.

Both climate protection advocates and detractors have criticized the German government for its inconsistent message to the international community.

Back in Hamburg, sitting in an office overlooking the city, Peter Lindlahr, head of central coordination on climate issues for the

City of Hamburg

, reflects on the direction of the European climate negotiations, partly driven by Germany’s evolving stance on giving away emissions permits to companies in the industrial sector.

“Angela Merkel…said that jobs come first and then climate — and this is the wrong message,” says Lindlahr. “It’s her responsibility to keep the jobs through progressive and innovative climate strategy.”

It’s also Lindlahr’s job to keep the jobs in Hamburg through climate protection efforts. He helps manage a yearly budget of €25 million that funds renewable energy and energy efficiency projects around the city, with a goal of reducing emissions 40 percent by 2020. So far, the program has helped create new jobs, bringing total employment in the city’s renewable energy sector to 3,500.

Chancellor Merkel has been lambasted by climate scientists and activists for weakening the framework and allowing certain industries a free pass. Other members of the business community say that Merkel has not gone far enough in changing the targets — a stance that could damage the competitiveness of the largest exporting country in the world. Merkel has bounced back and forth, trying to appease both sides.

“As long as we have no clear position toward the mechanisms of emissions trading, it’s very difficult to establish something meaningful,” Lindlahr says. “We need to have a clear message as we move into the Copenhagen climate conference next year.”

Despite the backtracking at the Poznań talks, Germany is still recognized as one of the most progressive countries in addressing climate change, especially compared with the U.S. stance over the last eight years. As part of its commitment to the EU 20 percent target, Germany has a goal of reducing carbon emissions 30-40 percent by 2020, depending on how effective other EU countries are at reaching their targets.

Lindlahr recognizes the important role that Germany will play as developed countries debate how aggressively to tackle climate change. But the election of Barack Obama as the next U.S. president will dramatically change the dynamics of negotiations, he says.

“We cannot say we are the opinion leader [in climate change]…I think America will have a very dominant role in the next few years, or in the next few months. I mean, the new administration, they will have a strong approach on the whole debate,” says Lindlahr.

One week later in Brussels, European leaders sign a 20 percent emissions reduction agreement that seems to have struck a balance between the competing interest groups. But this is only the beginning — in one year the

United Nations Framework Convention on Climate Change

will take place, marking one of the most important and complicated negotiations the global community has ever seen.

The next step for Germany and other European countries will be to forge a close relationship with the U.S. and craft a meaningful climate protection strategy that satisfies all parties. That goal, says PIK’s Knopf, may be more difficult than figuring out any of Einstein’s theories.

The European Parliament approved a cut in carbon dioxide emissions to 20 percent below 1990 levels by 2020, heeding warnings of severe weather, famine and drought as the atmosphere heats up.

World leaders will meet in Copenhagen next December to try to agree a global deal, but preparatory talks in Poland ended last week with deep divisions between rich and poor nations.

http://www.reuters.com/articlePrint?articleId=USTRE4BG2SH20081217

The European Union finalized plans for its battle against global warming on Wednesday, seeking to lead the way toward a broad alliance including other big polluters like China and the United States.

The European Parliament approved a cut in carbon dioxide emissions to 20 percent below 1990 levels by 2020, heeding warnings of severe weather, famine and drought as the atmosphere heats up.

The deal takes on a greater importance coming just before Barack Obama assumes the U.S. presidency, amid hopes in Europe he will cooperate more on tackling climate change than incumbent George W. Bush.

“Happily Bush is going,” said European Environment Commissioner Stavros Dimas. “Everybody knows what Mr. Obama has set as priorities — energy security and climate change.”

World leaders will meet in Copenhagen next December to try to agree a global deal, but preparatory talks in Poland ended last week with deep divisions between rich and poor nations.

The advancing economic crisis had at times threatened to derail the EU’s climate negotiations.

A myriad of concessions to water down the costs for industry helped pin down a deal, although this fueled criticism from environmental groups.

DISSENT

Chancellor Angela Merkel and Prime Minister Silvio Berlusconi had fought successfully for industries like German steel, chemicals and cement and Italian glass and ceramics, as well as their powerful auto sectors.

Lawmakers approved measures on Wednesday to cut CO2 emissions from new cars by 18 percent by 2015, after intense lobbying by the industry won it a three year reprieve.

“There was an explosion in dissent and manufacturers were at loggerheads,” said Italian socialist Guido Sacconi, who led the rules for cars through parliament.

“Trying to secure a conclusion came when the car industry found itself at the epicenter of the economic crisis and this heightened difficulties,” he added.

Green group politicians branded the rules as a sell-out to industry, while industry group ACEA repeated calls for billions of euros in EU support to help manufacturers meet the targets.

The biggest threat to a deal was the opposition of nine former communist nations, which feared the deal would ramp up costs for their highly polluting coal-fired power sectors.

To buy their support, the EU has offered a partial exemption and agreed to give them 12 percent of revenues from the EU’s flagship emissions trading scheme (ETS), which makes industry buy permits to pollute.

The European Commission, which originated the climate laws in January, demonstrated its appetite for further action by adopting rules on eco-friendly design on Wednesday, which would cap the energy consumption of televisions on standby mode.

Environmentalists vented their anger over the dilution of the EU’s ambition, most of them criticizing the high levels of carbon offsets, which allow member states to pay for most of their emissions cuts in developing nations rather than at home.

“People will look back at 2008 and ask…knowing what they knew then, why did they not do more to save all of us from the unbearable impacts from a warming planet?” said British Green group politician Caroline Lucas.

http://www.nytimes.com/2008/12/11/business/worldbusiness/11carbon.html?_r=1&ref=science&pagewanted=print

The case of Germany, Europe’s largest economy, illustrates the many problems in Europe’s approach. For instance, RWE, a major German power company and Europe’s largest carbon emitter, received a windfall of about $6.4 billion in the first three years of the system, according to analyst estimates. Regulators in that country have accused utilities of charging customers for far more permits than was allowable.

This week, leaders of the European Union are meeting in Brussels to shape the next phase of their system, and find ways to cut greenhouse gas emissions by 20 percent by 2020. They also seek to close loopholes worth billions to various industries, while confronting the same tug of war between long-term environmental goals and short-term costs that proved so vexing the first time around.

The European summit meeting coincides with a round of negotiations among 190 nations to establish a new global treaty limiting greenhouse emissions, a treaty the Obama administration might seek to join.

Pressure From Lobbyists

During long negotiations on the landmark Kyoto climate treaty more than a decade ago, the Clinton administration pushed to include emissions trading as a means of achieving the goals, favoring that approach over energy taxes or traditional regulatory limits on emissions.

Even after the Americans backed out of ratifying Kyoto, Europe decided to set up the world’s first large, mandatory carbon-trading market. “I was eager to put it in place as soon as possible,” said Margot Wallstrom, the European Union’s environment commissioner then.

From the start, Ms. Wallstrom, now a vice president of the European Commission, said she was lobbied heavily by governments and by companies seeking to limit the financial burden.

The initial idea of charging for many of the permits never got off the ground. Many politicians feared that burdening European industries with extra costs would undercut their ability to compete in a global marketplace. In the end, the decision was made to hand out virtually all the permits free.

With European Union oversight, individual countries were charged with setting emissions levels and distributing the permits within their borders, often to companies with strong political connections.

Jürgen Trittin, a former Green Party leader who was the German minister of environment from 1998 to 2005, recalled being lobbied by executives from power companies, and by politicians from the former East Germany seeking special treatment for lignite, a highly polluting soft brown coal common around central Europe.

The framework of the European system put governments in the position of behaving like “a grandfather with a large family deciding what to give his favorite grandchildren for Christmas,” Mr. Trittin said in an interview.

The debates on what limits to set for carbon dioxide emissions were particularly arduous. Mr. Trittin recalled a five-hour “showdown” in March 2004 with Wolfgang Clement, then the economy minister, in which he lost a battle to lower the overall limit. It was eventually set at 499 million tons a year, a reduction of only 2 million tons.

In a recent e-mail message, Mr. Clement did not challenge the details of his former colleague’s account, but he characterized as “just nonsense” Mr. Trittin’s claims of undue industry influence. He said the Greens were unrealistic about what could be achieved.

“I reproached them — and I’m doing this still today — that at the end of their policy there is the de-industrialization of Germany,” Mr. Clement said. “That’s our conflict.”

Eberhard Meller, the president of the Federation of German Electricity Companies, which represents companies like RWE, said, “Good sense triumphed in the end.” For his part, Mr. Clement eventually joined the supervisory board of RWE Power, in 2006.

The benefits won by German industry were substantial. Under the plan that the European Union originally approved for Germany, electricity companies were supposed to receive 3 percent fewer permits than they needed to cover their total emissions between 2005 and 2007, which would have forced them to cut emissions.

Instead, the companies got 3 percent more than needed, according to the German Emissions Trading Authority, the regulatory agency, a windfall worth about $374 billion at the peak of the market. German lawmakers also approved exemptions and bonuses that could be combined in dozens of ways and allowed companies to gain additional permits.

“It was lobbying by industry, including the electricity companies, that was to blame for all these exceptional rules,” said Hans Jürgen Nantke, the director of the German trading authority, part of the Federal Environment Agency.

Higher Bills Draw Inquiry

After the system kicked off, in 2005, power consumers in Germany started to see their electrical bills increase by 5 percent a year. RWE, the power company, received 30 percent of all the permits given out, more than any other company in Germany.

The company said its price increases from 2005 to 2007 predominantly reflected higher costs of coal and natural gas. But the company acknowledged charging its customers for the emission permits, saying that while it may have received them free from the government, they still had value in the marketplace.

The German antitrust authority later investigated. In a confidential document sent to RWE lawyers in December 2006, that agency accused RWE of “abusive pricing,” piling on costs for industrial clients that were “completely out of proportion” to the company’s economic burden, according to the document, which was obtained by The New York Times.

Without admitting wrongdoing, RWE last year agreed to a settlement that should provide lower electricity rates to industrial customers in Germany from 2009 through 2012.

Meanwhile emissions have risen at RWE’s German operations since the trading system began. The company emitted nearly 158 million tons of carbon dioxide in 2007, compared with 120 million tons in 2005, according to its annual reports.

The company said its emissions rose in part because one of its nuclear power stations, which emit no carbon dioxide, was off line for a while.

Jürgen Frech, the chief spokesman for RWE, said that charging customers for the carbon permits was “beyond reproach,” and added that the company will spend more than $1 billion this year to comply with the emissions trading system. RWE also said it is investing $41 billion over the next five years in projects including renewable energy and developing cleaner ways to generate electricity from coal mined in Germany.

For all the problems with the European system, some experts say it is simply too early to judge whether it will succeed. As the region that went first with mandatory carbon trading, Europe was bound to make some initial mistakes, they said.