Posted by: John Carey on January 15
There’s a simple-minded view that the big battle ahead on climate change is between the ‘green’ crowd (including the upcoming Obama Administration and the Democratic Congress), which wants strong mandatory limits on greenhouse gas emissions, and ‘business’, which opposes such limits.
That view is plain wrong. An astonishingly high proportion of companies are backing the idea of tough limits on carbon emissions. Even the coal-dependent utilities that were among the biggest naysayers, such as Southern Company and Peabody, are on record as supporting the idea of cap-and-trade legislation. “They understand that they can’t be just ‘no, no, no’ anymore,” explains one lobbyist.
In one major example of the growing support, a group of 26 companies (including Alcoa, Caterpillar, BP, PepsiCo, Johnson & Johnson, and Rio Tinto) not only called for Washington to enact strong limits, it also laid out a detailed blueprint for solving the most contentious issues. “Is terribly important we get the cost of carbon into our economy,” argues John Rowe, CEO of Chicago-based utility provider Exelon. Far from being a drag on business, legislation that raises the price of emitting greenhouse gases will put the U.S. economy on a firmer better path, the company executives say. “This will spark a wave of investment and new jobs,” says Lewis Hay III, CEO of the FPL Group (Florida Power & Light).
With that kind of support for a middle ground, the biggest hurdle now to getting climate legislation, ironically, may be environmentalists. Moderate enviro groups, such as the Environmental Defense Fund and the Natural Resources Defense Council have signed on the companies’ blueprint (indeed they helped forge the plan). But many of the others believe the blueprint doesn’t go nearly far enough. Immediately after the announcement of the plan, some of these groups cried foul. The new blueprint “is deeply flawed,” says Brent Blackwelder, president of Friends of the Earth. Adds Emily Figdor, director of the global warming program at Environment America, “the United States must achieve much deeper cuts in the next 10 years than the coalition has endorsed if we hope to stave off the worst effects of global warming.”
Policy wonks who have worked on this issue for years are deeply concerned that opposition from the more left-leaning enviros could derail the progress being made. “I see the left going to the left,” frets one climate policy expect. “I see them looking at Barbara Boxer [the Senate environment committee chairman] and Henry Waxman [the House energy committee chairman] and saying, that’s our Dream Team, so let’s shoot for the moon.” What these groups don’t sufficiently realize, he says, is that any legislation has to get the support of the Blue Dog Democrats and other moderates, while also keeping companies on board. The only way to do that is to include provisions that keep the costs of the legislation from jumping too high, especially at first. But with the left-leaning enviros leading the opposition, the biggest battles ahead may be over these measures.
Posted by: Mark Scott on January 14
As the world's financial markets slide from bad to worse, here's a small silver lining to a pretty big grey cloud. According to European consultancy Point Carbon, the global carbon market actually grew 83% last year. In total, $125 billion of carbon credits -- representing an estimated 4.9 billion metric tons of carbon dioxide equivalent -- were traded from Europe to Australia in 2008. That's not bad for a market that didn't even exist 10 years ago. And with other CO2 schemes, notably some sort of U.S. federal system, expected in the near future, the dollar figure for carbon trading looks set to rise.
Breaking down the numbers, Europe remains the leader of the CO2 markets. Indeed, the European Union's Emissions Trading Scheme (EU ETS) -- the compulsory mechanism designed to lower Europe's emissions in line with its Kyoto Protocol targets -- was worth $90 billion last year, more than double the 2007 dollar value. According to Point Carbon, the EU ETS still represents roughly two-thirds of the global carbon market (by volume of trades) and almost three-quarters of its total worth.
Continue reading "Europe Leads Growing Carbon Markets, For Now"
Posted by: Adam Aston on January 09
With the argument against coal gaining momentum by the day, the last thing utilities and big coal needed was toxic headlines from Tennessee's coal ash spill. A front page NYT article looking into coal ash treatment reveals the industry has managed to keep the toxic stew at some 1,600 sites nation wide pretty much regulation free, by either the EPA (which has been reviewing the issue for nearly 30 years) or at the state level.
Over at Green Inc., Kate Galbraith has a smart post looking past all the dreadful news about the spill, pointing out that one of the best hopes to deal with coal ash is to turn it into a something useful. But there's a twist. First the treatment. Dominion Generation, for example, reprocesses its ash at plant to mix into cement. This is a good approach because it chemically locks up many of the most offending agents in the coal ash and also because it substantially lowers the amount of energy needed to make new cement.
(Fun fact of the day: cement production is among the biggest greenhouse gas producing industries, responsible for 5% of the earth's carbon dioxide emissions, even though by revenue it accounts a tiny fraction of global GDP. Because the use of coal ash lowers the GHG emissions from conventional cement.)
Now the twist. Utilities are keen to have the carbon reductions created by using coal ash in cement counted in any targets to lower GHG emissions. Galbraith writes:
Dominion wants its reprocessing of coal-ash to generate credits for carbon-emissions reduction, which it hopes to use in the Northeast’s carbon-reduction scheme, called the Regional Greenhouse Gas Initiative. But the Conservation Law Foundation, a Northeast environmental group, rejects this idea, saying that the carbon-reduction benefits of using coal-ash to reduce emissions from cement production are questionable.
This is a question, like so many in carbon policy, that centers around hard-to-prove intentions. Would or should the utility be doing this without of such an incentive? If so, then the credit should not be offered. I'm inclined to think later, since the need for regulation of this waste predates any GHG debate. The industry should have been responsibly disposing of this stuff for decades, and if using the fly-ash to do so were the most economic approach, let that method win out over sealed dumps or some of the other alternatives.
Galbraith reports the Massachusetts Department of Environment is leaning towards approval of this credit play, but is awaiting public comment. No matter what, it's a case where the industry has to take responsibility, environmentally and financially, for the risk and harm done by this waste stream. Thoughts?
Posted by: Adam Aston on January 06
No one has ever called nuclear energy cheap. Well, okay, it was once -- apocryphally perhaps -- dubbed potentially "too cheap to meter." The reality has been anything but. The first building boom in nuclear energy collapsed in the late 1970s, as much because of the mounting price of new plants as from all the bad juju from the Three Mile Island near meltdown. This time around, nuclear planners were careful to make no pledges about nuclear energy's low cost. The new appeal is huge volumes of carbon free energy. Never mind that nukes are not really carbon free, given fuel processing and the energy needed to make the fuel.
It was at least hoped to be more be affordable, and offered as a way to build the sort of big "base load" plants that are getting harder and harder to build using coal. Yet the price tag for nuclear energy 2.0 is headed off the charts. In Time magazine, Michael Grunwald points out, "The first detailed cost estimate, filed by Florida Power & Light (FPL) for a large plant off the Keys, came in at a shocking $12 billion to $18 billion. Progress Energy announced a $17 billion plan for a similar Florida plant, tripling its estimate in just a year." Over at Grist.com, Joseph Romm puts these figures in perspective. With such high up front construction costs, according to a new study, the price of the power they produce will be very high -- 25 to 30 cents (in nominal future dollars) per kilowatt hour -- a multiple a current average costs.
This may have you scratching your head, thinking: "aren't high costs the argument against many renewables, such as wind and solar?" At Treehugger, Matthew McDermott summarizes how Lester Brown dismantles the economic argument for nuclear power pointing out that wind power, at 7 cents per kwh, is half the price of nuclear energy, which he estimates at 14 cents per kwh (about half the price in the figures Romm is using). The cost trend for renewables, Romm adds, is falling: solar and wind have fallen in price linearly over the past few decades and face zero future fuel costs. It's the opposite for nukes, which are encountering rising fuel and construction costs as nuclear plants proliferate around the world.
For me the coupe de grace may be Brown's arguments that wind mills and other renewables will generate more green jobs, in more geographies, with lower environmental risk than nukes.
Remind me again: what's the argument for new nukes?
Posted by: Adam Aston on January 06
The Christian Science Monitor is reporting the demise of Dongfan, China's much publicized eco-city, a twice-Manhattan sized island near Shanghai planned to evolve into a high-tech, self-sustaining city for 500,000, opening by 2010. The drought in capital markets might be blamed for the demise of this costly project, but the CSM piece also goes on to explain how a more modest eco-town of small, efficient bungalows, designed by William McDonough + Partners, went awry when the Chinese developer super-sized the homes. Meanwhile, one has to wonder how, even in the energy-rich economy of the Persian Gulf, giga-billion projects like Masdar, slated to be the largest carbon neutral city in the world, can stay on track with oil under $50 per barrel.
