Tuesday, 1 July 2008

Forth Ports in renewable power projects joint venture

Alistair Osborne, Business Editor
Last Updated: 1:20am BST 01/07/2008

Forth Ports unveiled a renewable power joint venture with Scottish and Southern Energy and said it was seeing no impact on volumes from slowing economic growth.
The owner of seven UK ports said the first project for the new venture, called Forth Energy, would be a £12m investment in four 2MW wind turbines at Tilbury.
Charles Hammond, the ports group's chief executive, said Forth Energy had identified possible projects with a total installed capacity of more than 150MW.
They are all located on the Forth port estate, which also includes Dundee and Leith, Rosyth and Grangemouth in the Firth of Forth.
"There's a lot of potential on our sites and there's a good fit between energy and some of our core businesses," Mr Hammond said, adding that future investment could run to "tens of millions of pounds".
More on energy
He said the joint venture was also looking to participate in a project by Tilbury Green Power to develop a "multi-fuel" plant in the docks, where a planning application is under way.
The new joint venture was unveiled alongside a bullish first-half trading statement, flagging that interim results were likely to show "strong growth". The shares rose 72p to £17.35.
Mr Hammond said problems in the banking and financial services markets were yet to feed through into lower volumes on the quayside.
"There is still a need for importing and exporting basic commodities. We are not seeing any downturn in demand," he said.
Ro-ro traffic and containers through Tilbury are ahead of last year, while piped cargoes through the Scottish ports were at their highest level for four years.
Containers at Grangemouth rose 10pc from the first six months of 2007.

India announces a climate change plan

By Heather Timmons
Published: June 30, 2008

NEW DELHI: The Indian government pledged Monday to devote more attention to renewable energy, water conservation and preserving natural resources in the country's first-ever climate change plan, but it did not set any concrete goals or pledge to cap harmful emissions.
Prime Minister Manmohan Singh acknowledged that climate change was a dangerous problem during a speech in New Delhi on Monday, but the plan he introduced reinforced India's long-held stance that developed nations created the bulk of the mess and should be responsible for cleaning it up.
"There is a real possibility of catastrophic disruption of the fragile life-sustaining ecological system that holds this world together," Singh said. India traditionally "treats nature as a source of nurture and not as a dark force to be conquered and harnessed to human endeavor. There is a high value placed in our culture to the concept of living in harmony with nature," he said.
India is the fourth-largest emitter of carbon dioxide, the main gas linked to climate change, after the United States, China and Russia, according to the most recent World Bank data. On a per person basis, though, Indians emit far less carbon dioxide than people in those countries and European nations.
How much the Indian government will spend on these missions, who will staff them and how they will be evaluated was unclear. A spokesman reached in Singh's office said he could not answer questions about the plan.

"Every citizen of this planet must have an equal share of the planetary atmospheric space," Singh said. Therefore, he said, "long-term convergence of per capita emissions" is the only equitable base for a global plan on climate change. According to the report, the average Indian generates about one-tenth the amount of carbon dioxide as someone in Japan or Europe, and one-twentieth that of an American.
Blistering economic growth and huge populations in India and China mean these countries are contributing more to the growth of emissions than developed countries. But, on a per-person basis, these nations still produce far fewer pollutants and gasses than developed countries, and China and India argue that this is how their contribution to climate change should be judged.
Scientists in the West and international bodies set up to address climate change say that meaningful change can not happen without the robust participation of India and China, which needs to come well before per capita emissions reach those of developed countries.
In April, President George W. Bush pledged that the United States would halt the growth of greenhouse gas emissions by 2025, without giving any specifics about how that would happen. The promise was an about-face for the current U.S. administration, which has long resisted emission caps and refused to join the Kyoto Protocol on limiting such emissions.
India's climate change plan comes weeks before the government attends a meeting of the Group of 8 in July in Japan. Climate change is expected to be a main topic of the talks.
India will pursue eight national "missions" for sustainable development, Singh said Monday. These include: solar energy, energy efficiency, creating a sustainable habitat, conserving water, preserving the Himalayan ecosystem, creating a green India, creating sustainable agriculture and, finally, something establishing what he called a "strategic knowledge platform for climate change."
Singh particularly emphasized the solar mission, saying that in India's plan the "sun occupies center stage, as it should, being literally the original source of all energy." The plan will "look beyond" government to try to expand solar power in India, he said, a sign that the country will welcome private companies as well.
The plan "reiterates India's position that the country is looking for technology as a solution, and not any mandatory cuts" in carbon dioxide emissions, said Anshu Bharadwaj, the director of the Center for Science, Technology and Policy in Bangalore. There were no specific targets set for energy efficiency, solar power use or water conservation.
China's first climate change plan, released last year, called for improved energy efficiency and expansion of renewable and nuclear energy sources. China set some goals in areas like energy efficiency, but it has already fallen short of them, some analysts contend.

Wind farms 'repay lost C02 in 3 years'

Published Date: 01 July 2008
By Jenny Haworth
IT TAKES just three years for a wind farm to pay back the carbon dioxide released from peat land damaged during construction, according to a new report.
There have been concerns that draining peat land to build wind farms causes irreversible damage, releasing huge quantities of C02 that has been stored there.Struan Stevenson, MEP, has called for a moratorium on building wind farms on peat land, which he calls Scotland's rain forests because of their importance for storing damaging C02.Now research for the Scottish Government has found that, with good practice, the benefits of building a wind farm will overtake the carbon lost from peat in between 1.8 and 2.6 years.Jason Ormiston, the chief executive of Scottish Renewables, said the research discredits the "myth" that wind farms cannot be built on peat land without releasing carbon. He added: "This research shows that by using good practice we can responsibly develop on peat soils and still slash the emissions that cause climate change."Calls for a blanket moratorium on all peat-land areas have now been shown to be misguided and are blocking effective action on climate change."However, Mr Stevenson hit back, saying it was "fatuous" to think the damage can be reversed within three years. He added: "For anyone to suggest that beggars belief."At a seminar of experts earlier this year, Mr Stevenson said all agreed that wind farms should not be built on peat land.The report, "Calculating carbon savings from wind farms on Scottish peat lands – A new approach", was produced by the Macaulay Institute and Aberdeen University for the Scottish Government.

Electric scooters whizz off the forecourts as fuel prices climb

By Harry Wallop, Consumer Affairs Correspondent
Last Updated: 6:48AM BST 01/07/2008
Hundreds of electric scooters have been sold in the last month, as commuters look to cut their travel costs by investing in rechargeable machines.
This week, Harry and Claudine live the electric dream - whizzing round the streets of London on the Ego Electric Street Scoota. ; http://link.brightcove.com/services/link/bcpid1494875123/bctid1640111350 http://www.brightcove.com/channel.jsp?channel=1139053637

Electric scooters, which run on batteries that can be recharged from a domestic socket, are predicted to take off this year, as the price of fuel leaves many commuters with increasingly high transport costs.
Two companies have entered the market in the last month in a hope to cash in drivers that are being hit by the high price of petrol, combined with the increasing desire to cut down their carbon emissions.
Ego and E-Max, both of whom launched their scooters last month, have had great success since they started selling their vehicles.

Firebox, the website that has the rights to the Ego Electric Street Scoota , has sold out of the £999.95 machine.
Meanwhile, E-Max has sold about 200 of its more powerful £2,760 vehicle in the last three weeks.
Simon Small, a spokesman for the Motor Cycle Industry Association, said: "People are fed up with the price of fuel and sitting in traffic jams.
"As a result, there is a definite trend towards smaller engine bikes, and that includes electric bikes, which have only just really started to come onto people's radar.
"But I think they could take off this year."
In China, electric scooters sell at the rate of 13 million every year.
The benefit of the electric bikes is that they should cost a fraction of the cost of running a car, or even a small engine bike.
The Ego claims that a full 8-hour charge, which should give it enough juice to last 40 miles, costs just 8p from a domestic plug socket – or the equivalent of just 0.5p a mile.
This compares to about 15p a mile for a small engine scooter, according to the motoring group RAC, and about 20p for a small car.
On top of this most cities in the UK have started free parking for electric vehicles, and drivers are exempt from any vehicle excise duty.
Kevin Ash, the Daily Telegraph's motorcycle writer, said that he was sceptical that electric scooters would become mainstream because most can not travel further than 40 or 50 miles on a full charge.
However, at £999, the Ego's bike "looks astonishingly cheap. At that price it could do very well," he said.

You Can't Get There From Here

The problem: Much solar and wind power are generated far from the people who use it
By JONATHAN SHIEBER: June 30, 2008; Page R8
Utilities are moving to harvest more power from renewable-energy sources like the wind and sun. The problem is getting that power to the places that need it.
A series of laws passed in recent years by state legislatures across the country require utilities to generate a certain portion of their power from renewable resources. The standards vary from state to state.

• See the complete Energy report.
But the best resources for generating large amounts of wind and solar power are located in remote areas. One California utility, for instance, is developing a cluster of wind farms along the Tehachapi mountain range that separates the San Joaquin valley from the Mojave Desert. Across the desert, from California through Arizona and New Mexico, independent power producers are looking to build thousands of megawatts of solar farms that would sit on acres of land.
"There's enough solar potential in the whole southwest of the U.S. to equal the power of all of the oil in Saudi Arabia," says David Hawkins, lead industry-relations representative for the California Independent System Operator, a nonprofit that supervises the distribution of power for the state.
So utilities are embarking on the costly and lengthy process of building or upgrading long-distance transmission lines to get new power to customers in population centers -- and meet an expected rise in demand. New and upgraded lines would facilitate the transmission of power from new remote sources as well as renewable-energy projects that already have been developed. New far-reaching lines also could allow utilities to boost the amount of renewable power available across broader swathes of the country.
"Essentially you need to get a line out of the supplying regions to the consuming regions," says Mike Niggli, chief operating officer of San Diego Gas & Electric and Southern California Gas Co., subsidiaries of Sempra Energy.
Years in the Making
Edison International Inc. has plans for a renewable-energy transmission line that would stretch from the Tehachapi Mountains to the outskirts of Los Angeles. But because of the cost and regulatory oversight involved, it's taking years of planning and development to get the project approved.
FAR FROM HOME A wind farm (left) and transmission lines in the Mojave Desert and a solar farm operated by Southern California Edison
The Rosemead, Calif.-based company first made a deal in December 2006 with Alta Windpower Development LLC, a subsidiary of Australian financial-services firm Allco Finance Group, for 1,500 megawatts of wind power generated from sites in the Tehachapi Mountains over a 10-year period.
Then in March 2007, the California Public Utilities Commission approved plans for Southern California Edison, an Edison International subsidiary, to build the first 82-mile segment of a transmission line that would bring more renewable power to California's grid. That segment is expected to be completed in early 2009. But it still needs final approval from the U.S. Forest Service, which oversees some of the land that would be used for new transmission lines and upgrades.
The full $1.8 billion project, which Southern California Edison has proposed constructing in 11 segments, is slated for completion by 2013 -- the same time the additional 3,000 megawatts of power would be ready.
New and upgraded high-voltage transmission lines will be able to transmit as much as 4,500 megawatts of wind power for northern Los Angeles and eastern Kern counties -- enough to power approximately three million homes.
While states like California look to transport power from new sources, others are planning to install new transmission lines to cope with the massive amount of power coming from existing renewable-energy projects.
In 2005, the Texas Senate directed the state's Public Utility Commission to designate what it called Competitive Renewable Energy Zones, which would concentrate the wind-power projects within certain resource-rich areas. The thinking was that once the zones were established, developers could begin planning projects, and transmission and distribution providers would know where to begin planning transmission infrastructure development.
The Electric Reliability Council of Texas, which manages the state's utility grid, offered up several plans in April to address the bottleneck of power created by all the wind projects producing power in West Texas and the Texas panhandle.
The plans address how to get 6,903 megawatts of existing wind resources moved to load centers, where power is used, while simultaneously adding transmission capacity for the next 6,000 to 18,000 megawatts of power that might be developed in the region.
The council's plans, which range in cost from $2.95 billion to $6.38 billion, have been submitted to the commission for approval. The cost would be rolled into ratepayers' monthly bills.
'The Green Highway'
Another factor driving the construction of transmission lines is a push from utilities for greater interconnection between regions to boost the amount of renewable power available across the country.

• What's Happening: Utilities are looking to harvest more wind and solar power. But they lack a way to easily transport that renewable energy from its remote sources to population centers.
• The Fix: Utilities are planning to build or upgrade long-distance transmission lines for both new and existing renewable-energy projects.
• The Burden: The proposed lines are costly and will take years to build.
A loose confederation of Western utilities from Washington State through Southern California -- including Portland General Electric Co., Avista Corp., Pacifcorp, PG&E, and British Columbia Transmission Corp. -- are considering building and upgrading transmission lines that would potentially link renewable power generated in Canada through the Western region of the U.S.
"You could think of it as the green highway," says Mr. Hawkins of the California Independent System Operator.
The $3.2 billion plan is being led by PG&E, which would like to use the line to meet its renewable-portfolio standards. The utility has received partial approval from the Federal Energy Regulatory Commission to recover some costs in the form of rate increases. The commission cited in its decision the need to encourage companies to explore new ways of delivering power from renewable resources.
Utilities involved in the project say that given all the players the challenge is daunting. "It's difficult to do really large projects involving multiple utilities because the question of which customers support the line and with how much is very difficult," says David Eskelsen, a spokesman for Pacificorp.
Some Opposition
Environmentalists have problems with some transmission projects, saying utilities are using the popularity of renewable power to get projects approved.
Sempra Energy wants to build a more-than-100-mile transmission line from California's Imperial Valley region to San Diego, through its San Diego Gas and Electric subsidiary. The energy firm says the Sunrise Powerlink project, estimated to cost as much as $1.4 billion, will transmit renewable power from new sources like the solar thermal power plant it has entered into a power-purchasing agreement with.
But the Sierra Club opposes construction of the line, contending it would be used mainly to bring electricity generated at natural gas-fired plant that Sempra owns in Mexicali, Mexico.
"It appears to be a bait and switch," says Micah Mitrosky, an organizer for the Sierra Club in San Diego. "They talk about this line as a renewable-energy project. But when you peel away the PR, it is designed to tap into Sempra's liquefied natural-gas terminal in Mexico."
Sempra says electricity from its Mexico facilities are being delivered to California using existing transmission lines. It said in public statements earlier this year that it can't meet the California clean-energy mandate without the power line.
The Sierra Club also opposes a project proposed by Sierra Pacific Resources Group, which operates utilities in Nevada. The project combines a new 250-mile transmission line to connect planned and existing wind and solar plants and a new 2,500-megawatt coal-fired power plant. The Sierra Club says new coal generation is unnecessary and the development of solar and wind power meet the needs of most communities.
Sierra Pacific says the project, called the Ely Energy Center, needs to combine renewable- and fossil-fuel plants because it can't pay for the transmission piece with solar and wind power alone.
"This is the catch-22," says Roberto Denis, senior vice president of energy supply for Reno, Nev.-based Sierra Pacific. "Yes, we need the line. But no, we can't justify the line by economics. The way the line becomes economical is by siting this coal project between the two utilities."
--Mr. Shieber is a reporter in Jersey City, N.J., for Clean Technology Investor, a newsletter published by Dow Jones & Co.
Write to Jonathan Shieber at jonathan.shieber@dowjones.com

Power Plays

The latest on alternative-energy deals from Dow Jones Clean Technology Investor
Moving Beyond Corn
Investors are pouring new money into companies developing alternative ethanol-production technologies.
Sources like paper pulp and barley are gaining attention as the merits of corn-based ethanol as an alternative fuel source is being questioned by environmentalists and politicians because of the fuel's link to rising food prices.

• See the complete Energy report.
In May, oil-and-gas giant Marathon Oil Corp. led an $81 million debt-and-equity funding round for Mascoma Corp., a Boston-based company making ethanol from cellulosic plant material. General Motors Corp. is among the investors in that round and it also has partnered with Mascoma to test biofuels. It was the second investment this year by the auto maker in a cellulosic-ethanol company.
Mascoma uses various feedstocks such as woody biomass, corn stover, and paper pulp to make ethanol.
Cliff Cook, Marathon's senior vice president of supply and distribution planning, says the investment stemmed from the need to comply with a federal mandate requiring the use of ethanol, biodiesel, cellulosic ethanol, and advanced biofuels in fuels. Mr. Cook will take a seat on Mascoma's board as a result of the investment.
All major U.S. refiners are required to blend about 78% of their gasoline with ethanol at the E10 level, which has 10% ethanol blended into gasoline, by 2008. That proportion is set to increase to 91% in 2009.
Bruce Jamerson, Mascoma's chief executive, says the new funds would support a demonstration plant under construction in Rome, N.Y., scheduled to begin production by year end. Future plans include a small commercial facility near Knoxville, Tenn., that will produce less than 10 million gallons of ethanol from cellulosic feedstock. The firm also is developing a larger project in Michigan, he says.
Meanwhile, Osage Bio Energy LLC is using barley as the feedstock to produce ethanol. The Glenn Allen, Va.-based company recently received a $300 million investment from First Reserve Corp., the first ethanol investment by the private-equity firm. Using barley means Osage Bio Energy can sidestep the cost pressures of rising corn prices and the food vs. fuel debate, says Glenn Payne, a director at First Reserve.

Here's a look at other recent deals reported by Clean Technology Investor:
• Sapphire Energy, San Diego, Calif., landed $50 million of investment for its "green crude," a direct gasoline replacement produced using genetically altered algae.
• Lehigh Technologies Inc., Naples, Fla., closed a round of financing to build its second rubber-recycling plant. The company aims to capitalize on rising rubber prices by turning old tires into a powder that can be reused in rubber manufacturing.
• Icynene Group Ltd., Mississauga, Ontario, raised $15 million to develop its business making water-blown foam insulation, which it says is more environmentally friendly than traditional fiberglass insulation materials.
Osage plans to use the funding to build four ethanol and protein-feed production facilities in Virginia, North Carolina and South Carolina, he says.

Chasing the Sun

The solar-energy market is getting some new participants.
Memory-chip makers are turning to the manufacture of solar products because of similarities between the products and the ability to reuse raw materials.
Munich-based Qimonda AG says it will branch into making solar cells and expects to begin production in the second half of 2009. Qimonda partnered with Centrosolar Group AG, a German maker of solar modules, to set up a 100-megawatt solar-cell factory in Portugal, where Qimonda already has a semiconductor facility. The companies signed a deal with LDK Solar Co., which will supply 540 megawatts worth of wafers and polysilicon over five years starting in 2009.
"Barriers to entry are quite low, with an expected high return," says Henry Becker, president of Qimonda North America, about getting into the solar business. "That makes for a great business case." The new initiative also could make up for Qimonda's current tough times in the chip market.
Other beneficiaries of the solar boom include makers of parts used in solar cells. GT Solar International Inc. has a $1.1 billion in order backlog for its furnaces and reactors. Ceradyne Inc. expects a fivefold increase in the sales of its ceramic crucibles to the solar industry this year to between $50 million and $60 million. The Costa Mesa, Calif., company makes ceramic materials for such applications as armor on military vehicles. In the solar industry, ceramic crucibles are used to cast solar cells.
"We could sell more if we could make more right now, and so we are expanding both in Atlanta [where the firm has a plant] and in China," Joel P. Moskowitz, Ceradyne's chairman, CEO and president, said on a recent earnings call with investors.
Newport Corp. expects to triple sales of lasers and other tools this year to $30 million, as it struggles to keep overall margins from falling. Prices of other types of lasers have been falling, making the solar market attractive to laser makers. The Irvine, Calif., firm is due this year to open a plant in Germany, focused on instruments for the solar market.
Another maker of solar equipment seeing rapid expansion is MKS Instruments Inc. of Andover, Mass. The firm expects revenue from solar equipment this year to rise to double or triple its 2007 level of $17 million. The move comes as demand for MKS's products is declining in the semiconductor market because of decreased spending in the industry.
--Ms. Chernova and Mr. Shieber are reporters in Jersey City, N.J., for Clean Technology Investor, a newsletter published by Dow Jones & Co. They can be reached at yuliya.chernova@dowjones.com and jonathan.shieber@dowjones.com.

Solar Industry Gets Aid to Fight Shade

By DON CLARKJune 30, 2008; Page B6
Shade is a perennial problem for the solar-power industry, but a Silicon Valley chip maker thinks it can help.
National Semiconductor Corp. on Monday plans to announce technology that is designed to sharply reduce the impact of partial shading on solar panels, which generate electricity from sunlight.
National Semiconductor
National Semiconductor says these devices recoup power lost when solar panels are partially shaded.
The technology, dubbed SolarMagic, is being tested by REgrid Power Inc., a company in Campbell, Calif., that installs solar panels. Tom McCalmont, REgrid's chief executive officer, estimates SolarMagic can recoup as much as 40% of the power that otherwise would be lost to partial shading. "We've seen a really dramatic difference," he said.
Partial shading -- often caused by trees, nearby buildings or other obstacles -- has a pronounced impact because of the way solar panels are arrayed. A string of panels is typically attached to a device called an inverter that converts the direct current the panels generate into the alternating current used by appliances in the home and required to return power to the utility grid, said Mark Culpepper, vice president of enterprise solutions at SunEdison LLC, a solar-energy-services provider based in Beltsville, Md.
Inverters typically require a minimum threshold of voltage to operate. Partial shade on just one panel of a string of them can bring their combined output below that minimum threshold. "It can effectively knock out an entire string of panels," Mr. Culpepper said.
National -- a Santa Clara, Calif., company that makes chips that manage power in cellphones and other products -- is developing small modules that attach to each solar panel and compensate for variations in voltage caused when shade or dirt block light from hitting parts of panels. The company isn't disclosing many details about how the technology works.
Brian Halla, National's chief executive, said he expects the modules to cost about 10% of the price of a solar panel. He expects to begin selling the modules in early 2009, assuming they pass tests to certify they are safe to use with other electrical products.
National isn't the only one trying to attack the partial-shading problem. Some companies are developing "microinverters," which perform electrical conversions for each solar panel and thereby avoid the problem of one shaded panel disrupting the output of others.
But REgrid's Mr. McCalmont said microinverters contain circuitry that may be impacted by the harsh environment of a sunny rooftop. He said he believes National's technology will be more reliable.
National is one of many longtime chip makers that are diversifying into solar-power initiatives. Mr. Halla estimated that the SolarMagic product line could eventually grow to account for 25% of his company's sales. "It is the single most important and highest-prioritized initiative in the company today," he said.
Write to Don Clark at don.clark@wsj.com

Bovine growth hormone 'could cut CO2 emissions'

By Steve Connor, Science EditorTuesday, 1 July 2008

The use of bovine growth hormone to boost milk production – a bĂȘte noire of the organic food movement – could cut emissions of greenhouses gases substantially, according to a study that makes a strong environmental case for the controversial cattle injections.
Bovine growth hormone has been used extensively in the US for the past 14 years but is subject to a moratorium in the EU on animal welfare grounds. But now a team of American scientists has argued that its widespread adoption could help to feed a growing human population as well as helping to combat global warming.
The findings are likely to be used by the biotechnology industry, and in particular Monsanto, the US manufacturers of bovine growth hormone, to argue for the lifting of the EU moratorium on environmental grounds.
A dairy cow given bovine growth hormone produces between 10 and 16 per cent higher milk yields over a given lactation cycle, the study said. This would reduce "inputs" in the form of feedstuffs, fertilisers and fuels as well as waste "outputs" such as methane and carbon dioxide.
"Supplementing cows with [growth hormone] on an industry-wide scale would improve sustainability," said Judith Capper, of Cornell University in New York, the lead author of the study published in the journal Proceedings of the National Academy of Sciences.
Robin Maynard, of the Soil Association, said: "Routinely shooting up cows with a genetically modified hormone to squeeze more milk from them offers no sustainable solution to intensive farming's carbon footprint, nor for animal welfare."

Global warming: Government puts carbon capture on fast track

· Four energy groups to bid for demonstration project · E.ON's Kent coal-fired station may use system
Terry Macalister
The Guardian,
Tuesday July 1, 2008

The government has stepped up the pace of change in the battle against global warming by announcing a shortlist of four bidders pre-qualifying for its carbon capture and storage (CCS) demonstration project and outlining a proposed new legislative framework for "clean coal".
Among the bidders are E.ON, which wants to use CCS for its controversial Kingsnorth coal-fired station in Kent, and BP, which recently scrapped plans to develop a trial project in Scotland because ministers appeared to be moving too slowly to meet its own internal timetable. Scottish Power and Peel Power are also included.
John Hutton, the industry secretary, said CCS had the potential to capture 90% of carbon emissions from coal-fired power stations and its deployment would dovetail with a wider strategy which included renewable and nuclear generation.
"The progress we are making with the CCS demonstration competition and on developing a sound legislative and regulatory framework will help to deliver our ambition to see CCS ready for commercial deployment by 2020," Hutton said.
The minister, who announced a radical renewable energy strategy at the end of last week, will be pushing for CCS to be recognised by the European Union's emissions trading scheme and the clean development mechanism at the forthcoming meeting of G8 leaders. He said he wanted other countries to make similar commitments to what he said was a vital tool for tackling global warming.
CCS is a system whereby carbon usually emitted from power stations is removed and transported to a place for indefinite storage. Different stages of the process have been demonstrated but the whole process has not yet been applied to power plants on a commercial scale. There are questions about the technology and cost. Most interested companies say they would need financial incentives.
BP welcomed the decision last night but said it would probably be too late for planned trials with a plant to be built at Peterhead and using the North Sea Miller oil field for storage. It said it remained committed to developing alternative technologies. "We have always seen this [CCS] as a serious option," a spokesman said. Bob Taylor, managing director of generation at E.ON UK, said it was vital to develop a large-scale carbon capture project in the UK, to ensure the country could reduce carbon emissions while maintaining security of supply and keeping energy as affordable as possible.
"We firmly believe that our Kingsnorth project, which is the only modern, highly efficient coal-fired power station currently in planning, is a strong candidate for this competition," he said. "We look forward to supplying the government with more detail about our plans and hopefully to making Kingsnorth into the world's first large-scale CCS demonstration plant."
Independent experts said carbon capture was an exciting opportunity. "It is the great panacea. It would mean not having to do the hard things like changing the way we live," said Michael Grubb, chief economist at the Carbon Trust. "The trouble is that while everybody says it can be done, no one has yet done it. There are very big companies out there with very deep pockets but even they are not doing it."
Meanwhile E.ON yesterday welcomed a high court decision to award legal protection for part of the Kingsnorth power station site ahead of the 2008 protest Camp for Climate Action. Climate campaigners fear E.ON will construct a new coal plant there with or without CCS.

Prudence: a green virtue

Will economic woes push environmentalism down the political agenda? Not when being eco-friendly means saving money

Jonathon Porritt
Monday June 30, 2008

One of the standard accusations brought against the environmental movement is that it's irretrievably middle class. That environmental concern is a luxury for affluent Guardian readers who can afford to worry their heads about organic fair trade chocolate, while more than 2 billion people are living on less than a dollar a day. It's rubbish, but it's persistent.
Though it is not exactly surprising that the received opinion surrounding today's economic downturn is that environmental issues will disappear off the radar, and the politicians and business leaders will start back-pedalling or deferring any difficult or expensive initiatives. It is a seductively simple hypothesis, but by no means as done a deal as the usual suspects would have us believe. In testing this hypothesis, what can we learn from the past? There is not a huge amount of evidence to go on here as the number of years with very low or zero economic growth since the late 1960s have been quite few and far between – and by far the most significant was around 1990.
In 1989, the Green party won 15% of the vote in the European elections, and green issues were riding high in the polls. The recession kicked in shortly after, with high levels of unemployment, household repossessions and real economic hardship. The 1992 general election was dominated by economic issues, the Green party vote crashed, and environmental issues dropped out of the news. That, however, is only half the picture. As Ian Christie has written in an excellent paper for the Green Alliance, The Perfect Storm Warning:
It is not the case that green policies were dropped wholesale at that time. It is empirically not the case that there was a dramatic decline in green attitudes amongst citizens. The Department of the Environment's public attitude surveys do not indicate a sharp fall in public concerns after 1989; rather, they show a plateauing then a modest rise in interest in the late 1990s. In addition, in each survey carried out from 1986 to 2001, "environment/pollution" remained in the top five issues. It is therefore a mistake to conclude that immediate anxieties about economic conditions necessarily make people discard their concerns about the environment.
Although that is not today's "received opinion", there are other factors relating to the current downturn which should also be taken into account. Despite a relatively high media profile, green ideas in the late 1980s had relatively little traction below the surface. Whilst it was true that Margaret Thatcher's short-lived "green period" commanded a lot of attention, the Tory faithful didn't have a clue what she was banging on about, and, deep down, the Labour party in those days still subscribed to the view that the environment was indeed for middle-class elites, and therefore of near-zero relevance in their battle to resist the worst consequences of Thatcherism. That amazing Green party result in the European elections came and went like a migratory bird blown off course, and media commentators reverted all too quickly to their customary cynicism.
It isn't like that today. However difficult the mainstream parties might be finding the sustainable development agenda, they know that their own political destiny is being shaped by it more and more every year. Climate change, oil at $140 a barrel, food security issues, obesity, public health, infrastructure, housing – even if sustainable development isn't yet the "central organising principle" of contemporary politics, more and more of the agenda is framed by it.
And it is not that dissimilar for leading businesses. The late 1980s was a time of really "frothy" green consumerism, often driven by unscrupulous marketing departments happy to ride a wave whilst only too aware that it would have little staying power. An unprecedented number of consumers became interested for the first time, but it was all very brittle, with no deeper roots – and many of the new green products underperformed so badly that it wasn't long before the bubble burst.
By contrast, today's leading companies are well into their own sustainable development or corporate responsibility journeys. These are long-term commitments, not the product of fly-by-night opportunism, and though some initiatives might now move forwards a little more cautiously, they'll keep on moving forward.
There are two additional factors that will keep both government and the private sector focussed on their green commitments. The first is the high cost of energy. Even if you don't have an environmental bone in your body, and are amongst the 80% of people in this country (according to the latest Guardian/Mori poll) who still aren't persuaded that climate change is caused by our greenhouse gas emissions, the prospect of reducing energy bills by anything from 10% to 50% has to make a lot of sense.
By the same token, as food prices continue to rise, the first and most obvious response (from a consumer point of view) is to eliminate unnecessary food purchases, seek out real value for money, cut down on luxury treats, and make sure that everything bought actually gets eaten. (The recent study by Wrap showing that around 30% of all purchased food gets thrown away unused shows just how much people have taken cheap food for granted over the last few years.) All these things are better for people and for the environment, and as long as food retailers keep focussed on "making the sustainable affordable" it won't be the end of the world for them either
Secondly, although it is true that a downturn will change lots of things, some things carry on regardless. Legislation will not be undone just because we're going through a period of low growth. The landfill tax, for instance, will continue to rise by another £8 a tonne next year and the year after, reinforcing the increasingly clear message that generating unnecessary waste is just seriously stupid, let alone bad for the environment. Local authority recycling targets will remain as challenging as ever. And whereas the government may think of deferring the next increase in fuel taxes later this year (given the huge hike in the price of petrol and diesel), it is unlikely to give way on vehicle excise duty – a further incentive for car owners to downsize, save money and pollute less.
On all these counts, environmentalists should therefore hold their nerve, and work with politicians, business leaders and the media to demonstrate that living more sustainably is one of the most sensible and practical ways of avoiding the worst effects of any economic downturn

Hot demand in a cooling market

By Robin Wigglesworth
Published: June 30 2008 18:01

A large blue-panelled structure, among several new office blocks, stands over a cluster of dusty dhows in the Al Bateen area on the southern tip of Abu Dhabi island.
It is of the same size and design as a conventional building but it bears a sign that says “Energy Well Spent”. An insistent humming comes from within.
This tower block is a cooling plant. It ensures that an entire neighbourhood is temperate, even during summer, when the thermometer in the UAE capital touches 50°C. When fully operational, it will chill 1,000 villas.
The plant is operated by Tabreed, a leading cooling company. It refrigerates buildings by sending 126,000 litres of chilled water a minute through coils in the walls.
Air conditioners still dominate the roofs of Middle East buildings. But, beset by rising energy costs and criticisms of its environmental record, the Gulf is increasingly turning to district cooling. Chilling water is energy-intensive, but Tabreed estimates that district cooling uses 70 per cent less electricity than air conditioning.
“It’s economically viable, environmentally more viable and it saves the developers upfront costs, because they don’t have to put huge air conditioning units within the building,” says Abid Riaz, an analyst at EFG-Hermes, a regional investment bank.
Critics say the UAE’s carbon footprint is so bad that district cooling and other innovations are a drop in the ocean. A more effective means of improving the environmental record, they say, would be to raise subsidised energy prices.
But the Gulf construction industry is flocking to the technology. About 80 per cent of all new buildings in the UAE are being fitted with a district cooling system, according to analysts, although Tabreed’s market share is modest.
In spite of the rising popularity of its main product, which accounts for about half its revenue, Tabreed has had a tough year.
It has lost nearly a quarter of its value on the Dubai stock market because of concerns about large debt-financed capital expenditures. Profits tumbled more than 50 per cent in the first quarter to Dh10m ($2.7m) as labour costs climbed and construction delays hit UAE projects.
“Everyone in the construction business is seeing some kind of delays, and we are starting to build these delays into our projections,” says Karl Marietta, deputy chief executive.
Tabreed’s board is pushing through a change in strategy to boost short-term profitability. The company is considering selling Dh1bn of older assets a year for the next three years rather than raising money in the debt markets. This would mean selling three to seven plants a year.
“It sounds sensible to go down this route,” says Mr Riaz. “[Tabreed] are, after all, a listed company, and this could be a good short-term move for the share price. They would be selling smaller plants; the new ones are getting bigger.”
In another tacit admission of the dangers of overstretch, Tabreed last year entered into a Dh11bn joint venture with Aldar Properties, Abu Dhabi’s main real estate developer, to build a further 25 plants by 2012.
Because of the large capital outlays required to build plants, joint ventures are expected to play an increasing role in Tabreed’s business model.
According to Zawya, a regional data provider, the company at present produces 227,000 refrigeration tons, the standard measure of cooling. Of this, 220,000 tons is in the UAE and 7,000 tons in Bahrain.
With demand soaring, Tabreed has started the construction of 29 plants, which will more than treble production. Most of the output will be to meet Abu Dhabi’s planned expansion.
At the Al Bateen plant, Mohammed Khan, manager of the refrigeration utility, monitors flows of water into the plant. Only two of six cooling compressors are currently working, but the plant’s full 18,500-ton capacity has been fully committed to buildings that will be completed by 2009.
Traditional air conditioning uses about 1.7 kilowatts of energy per refrigeration ton. District cooling uses about 1kW, according to the company. “It’s just the best way to cool buildings,” says Mr Khan.
Copyright The Financial Times Limited 2008

Apply the brakes on retrospective tax

An incentive to buy greener cars is welcome, but new proposals for vehicle excise duty will only affect those who can't afford an upgrade

Edmund King
Monday June 30, 2008
Article history
Families who bought certain people carriers in the last few years may soon be hit with a doubling of the cost of their tax disc. The whole credibility of "green" taxes may well be undermined unless the government doe a quick rethink on retrospective vehicle excise duty. The government has been shaken by motoring revolts before. The fuel protests in 2000 were the first real test for the new Blair government and the 1.8 million signatures to the Downing Street website against road pricing put pricing even further back on the back-burner.
The current issue is a mistake that has not been thought through by Treasury officials rather than a "stealth" tax or unfair "green" tax. The principle of taxing vehicles linked to their CO2 performance is not something that I oppose. Indeed, I suggested it to the then chancellor, Gordon Brown, along with green groups a few years ago. What is totally unfair is the threat to double the tax disc for cars that people already own.
Incentives to purchase greener cars are welcome. For older cars the purchase has already been made, so people are just hit with the tax. Partly as a result of these proposed changes, the bottom has fallen out of the used car market with some owners suffering from negative equity. So even if motorists want to sell their older, less green cars, they can't.
There is a problem now with the proliferation of "green taxes". So in Richmond you have to pay up to £450 for a resident's parking permit based on CO2. This is a tax to park your car. In Norwich you have to pay more based on the length of your car. Westminster has concessions for electric cars while the City of London has just dropped its parking incentives. Motorists are confused even if they want to be green – and generally they do.
A recent AA/Populus poll of 17,481 AA members showed that more than 90% would consider taking measures to reduce the overall environmental impact of their cars. It also showed that 62% would consider buying a more fuel efficient car, 60% would consider eco driving and 48% consider cutting out shorter journeys by car.
Drivers are often portrayed as The Wind in the Willows' Mr Toad, but our panel results show that the vast majority of motorists do care about the environment and will consider taking steps to reduce the environmental impact of their cars. A majority of AA members said that the AA should be campaigning to reduce the environmental impact of cars. The purpose of graduated vehicle excise duty was to send out a message to motorists to help influence their vehicle purchase. A "retrospective" tax does not send out such a signal but hits many motorists who cannot afford to change their vehicles. Sometimes a U-turn is better than crashing into a wall. The chancellor should come clean, admit this measure isn't green and apply the brakes.

Tax break persuades Tesla Motors to continue building zero-emission vehicles in California

The Associated Press
Published: June 30, 2008

SAN CARLOS, California: The company that built the first mass-produced, all-electric car will keep its manufacturing plant in California, thanks to a new tax break.
Gov. Arnold Schwarzenegger and state Treasurer Bill Lockyer worked out the deal for Tesla Motors Inc. after learning that the Silicon Valley-based company would build its second-generation vehicle in New Mexico.
The financial break, announced Monday, allows Tesla to avoid paying state sales tax on equipment it buys to build its Model S. That will save the company 7 percent to 9 percent on each purchase.
The five-passenger sedan is expected to cost about $60,000 and will be able to travel 225 miles (362 kilometers) between charges to its electric engine.
Schwarzenegger says it drove him "absolutely insane" to learn Tesla planned to take its environmentally friendly technology to another state.

The governor was among several celebrities who lined up to buy Tesla's first-generation electric sports car, the Roadster, which has a base price of $109,000.
The car goes from a dead stop to 60 mph (100 kph) in just under four seconds and tops out at 125 mph (200 kph). The roadster takes 3 1/2 hours to recharge when its batteries are depleted.
Schwarzenegger is awaiting delivery.

A chorus of concern for the environment

By Bernard Simon in Toronto
Published: June 30 2008 03:00

Whenever residents of Edmonton, Alberta, flush their toilets after 2012, some of their sewage will find its way to a Petro-Canada plant north-east of the city that converts bitumen-like oil sands into crude oil.
Petro-Canada has promised that the first phase of the Fort Hills Sturgeon upgrader, consuming 15.8m litres of water a day, will not only run entirely on treated wastewater, but will then send the used water back to Edmonton for further recycling.
The Fort Hills initiative is one of many environmentally friendly processes companies are trumpeting in response to a widening chorus of concern about the damage caused by oil sands extraction and upgrading on water supplies, wildlife habitat and the atmosphere.
The Pembina Institute, an environmental group, warned in a recent report that Petro-Canada's upgrader and eight others planned for the same area over the next 12 years will consume 10 times as much fresh water as Edmonton's 750,000 residents, use more electricity than all the homes in Alberta, and spew out the same volume of greenhouse gases as 10m motor vehicles.
The institute and other activists have urged the Alberta and federal governments to impose far stricter conditions before approving new oil sands projects.
Greta Raymond, head of Petro-Canada's environmental and social responsibility group, says her job has become both easier and more difficult in the past year or two. "The environment is a strategic issue for us, and our business leaders understand that," she says. "The thing that's become harder is the external environment, the expectations of the public."
The stakes for all sides are huge. Located in three main deposits across an area the size of Florida, the oil sands are estimated to contain reserves of 173bn barrels of oil, a figure exceeded only by Saudi Arabia. Within the next decade, Canada's oil sands are expected to surpass deep-water offshore wells as the biggest source of new global oil supplies.
The oil sands, which look and feel like molasses, are found in bands between six and 10 metres thick. Two tons of oil sands typically yield 1.25 barrels of bitumen and a barrel of crude. Deep deposits are extracted by injecting huge quantities of steam into wells, using a process known as steamassisted gravity drainage.
The steam melts the bitumen, allowing it to be brought to the surface. Bitumen deposits closer to the surface are recovered by open-pit mining.
Once recovered, the bitumen is "upgraded" into heavy crude oil, and piped to a refinery.
Environmental activism is not the only shadow to creep across the Canadian industry's playground. Even as companies bask in surging prices, they are strugglingwith acute labour and material shortages, and heightened regulatory scrutiny.
Ben Dell, analyst at Sanford C. Bernstein, concluded in a recent report that "with rising costs, higher taxation and a currency disadvantage, Canada is not looking very good for oil and gas production, at least relative to the US".
Calgary-based Nexen and Opti Canada have pushed up the estimated cost of their Long Lake project, to C$6.1bn, almost double the original estimate of C$3.4bn.
Long Lake is due to come onstream this year, with an initial output of 59,000 b/d.
France's Total and Norway's StatoilHydro, have recently pushed back the start-up dates of their projects.
The Canadian Association of Petroleum Producers' latest forecast, in mid-June, expects production to grow from 1.2m b/d a day last year to 3.5m in 2020, down from its previous projection of 3.8m.
"The potential for oil sands projects to reach capacity is unchanged," the producer group says, "but this will be accomplished over a longer period due to continuing and new challenges."
Still, the pace of expansion in north-east Alberta remains frenetic. Statistics Canada estimates that capital spending in the oil sands will reach almost C$20bn this year, more than the national investment in manufacturing.
Oil companies have announced projects totalling more than C$100bn. "What's so exciting about this business is that it has no visible endpoint," Rick George, chief executive of Suncor, one of the biggest oil sands operators, recently told a Calgary business group.
But even the most gung-ho oil industry executives are being forced to take account of the critics.
A poll this year by the Calgary Herald and the Edmonton Journal, Alberta's two most influential newspapers, showed that almost two-thirds of the province's residents favour regulatory limits on greenhouse gas emissions from oil sands projects, even if some of the projects are delayed or cancelled.
"We need to listen to that concern," Mr George warned. "More importantly, we need to respond to it".
Copyright The Financial Times Limited 2008

Pricey oil makes geothermal projects more attractive for Indonesia and the Philippines

By Ed Davies and Karen Lema Reuters
Published: June 29, 2008

JAKARTA: Faced with looming energy crises in their developing economies, power-hungry countries like Indonesia and the Philippines are looking deep into the earth for solutions.
Both are in the so-called Pacific Ring of Fire, an area peppered with volcanoes and home to the world's biggest reservoir of geothermal power.
"When I think of Indonesia and energy, I think geothermal," said Lester Brown, president of the Earth Policy Institute, during a speech this month to the brokerage house CLSA Asia-Pacific Markets. "Indonesia has more than 500 volcanoes, of which 130 are active."
"Indonesia could run its economy entirely on geothermal energy and has not come close to tapping the full potential," he told the investment group.
That might be changing, though, as soaring oil prices, surging demand and creaking infrastructure in the power sector make it all the more urgent for Indonesia and the Philippines to find ways to exploit their geothermal reserves.

But unlocking the potential is proving difficult.
Geothermal projects involve drilling wells deep into the earth to tap steam or hot water than can power turbines. Not all of the challenges are terrestrial in nature. This is a capital-intensive process complicated by bureaucracy and other stumbling blocks.
The Indonesian Bedugul project, set among volcanoes on the Hindu enclave of Bali, aims to develop up to 175 megawatts of power, or roughly half of what the resort island needs. But the project is on hold because local residents fear it could damage a sacred area and affect water supplies from the nearby lakes.
Most of the power supply in Bali comes from the neighboring island, Java, via an undersea cable. Supporters say that the Bali project is essential to meet growing electricity demand in the resort island, which is at the heart of the Indonesian tourism industry.
"We hope that the project will run, not just because of the investors but for Bali's future," said Ni Made Widiasari of Bali Energy, the firm behind the project. She denied that the project would be damaging.
In the Philippines, which is the world's second-biggest geothermal producer behind the United States, one of the main obstacles to developing the reserves is the high, pipe-corroding acidity associated with active volcanoes.
"There are many fields that are still acidic, meaning the dead volcanoes underlying them are not really dead," said Paul Aquino, president of PNOC-Energy Development which operates nine steam fields with a capacity of 1,199 megawatts, or about 60 percent of the country's geothermal capacity.
That would make it difficult for the Philippines to achieve its goal of raising geothermal capacity from an existing 1,931 megawatts to 3,131 by 2013, and overtaking the United States as top global geothermal producer, he added.
Geothermal power accounts for around 18 percent of the energy needs in the Philippines.
"We have already exploited those areas with the biggest geothermal resource," Aquino said, adding that many of the most attractive untapped sites in the Philippines are located in natural parks or protected by the Indigenous Peoples Rights Act.
Catherine Maceda, spokeswoman for the Renewable Energy Coalition, a group promoting the use of alternative energy, also warned that the Philippines needed to push through a renewable energy bill to provide greater incentives and clarity.
While President Gloria Macapagal Arroyo has earmarked the bill as urgent, political bickering is holding up its passage.
"Right now there is no predictability," Maceda said.
Electricity networks in the Philippines and Indonesia, with a combined population of 316 million, are already under strain.
Philippine power demand is estimated to be growing at an average rate of 4.8 percent a year, while Indonesia has suffered power blackouts because of a razor-thin supply cushion when demand peaks.
Indonesia supplies just 850 megawatts of an estimated 27,000 megawatt potential from geothermal sources, or about 3 percent of its current power output.
While the government wants to focus on using more coal-powered stations to meet energy needs, Energy Minister Purnomo Yusgiantoro has said that power from geothermal could reach 9,500 megawatts by 2025.
Despite the setbacks and stalled projects, high energy prices are providing the spur for firms to look at geothermal again, and several are eager to expand their existing operations, or to bid for fresh projects in Indonesia under a new government framework.
The Indonesian energy firms Medco Energi Internasional and Star Energy, are looking at making new investments, while Chevron, the world's largest private producer of geothermal energy, plans to double its geothermal business in Indonesia and the Philippines by 2020 despite the heavy capital outlays.
It takes about eight years for a geothermal plant to move from exploration to production. Aside from drilling and plant costs, there are often additional expenses like the need to build access roads in remote and mountainous areas.

Geothermal plants require high capital investment for exploration, drilling wells and plant installation compared to other alternatives. But operation and maintenance costs are relatively low.
Chevron is looking at further expansion of its existing fields in West Java and is considering 10 of 256 other sites identified by Indonesia as having geothermal potential.
"You have to spend all your capital up front to develop these fields, you know, put in the wells and power plants, but with current prices of oil, gas and coal, geothermal is becoming competitive" said Barry Andrews, president of geothermal power operations for Chevron.
Eligibility for carbon credits could make such investments more attractive, he said, as they might offset some of the hefty start-up costs.
The Chevron plant in Darajat, in West Java, has been registered with the United Nations as being eligible for 650,000 certified emissions credits per year.
Meanwhile, Indonesia is putting the finishing touches on new regulations for the geothermal sector, after many projects collapsed in the wake of the 1997-98 Asian financial crisis.
"I think we're virtually on the cusp of seeing all of that come together in the next year or so," Andrews of Chevron said.
Brown, the environmentalist from the Earth Policy Institute, said that this followed a global trend in localizing energy policies as oil prices prod countries to find cost-effective alternatives.
"In Indonesia that means geothermal is going to loom large in the energy economy of the future, and that development could come very quickly once the leadership begins to see the potential," Brown added.

Agriculture must warm to Co2 responsibilities

Published Date: 30 June 2008
By Dan Buglass
THERE has not been much sign of global warming lately, but sceptical old me has at last, albeit reluctantly, come to accept that it is a fact of life and one that the farming world will have to come to terms with. My conversion came last Wednesday at a conference in Edinburgh staged by the International Dairy Federation.
I prefer the term climate change to global warming as that is what appears to be happening increasingly around the world. Serious flooding recently in several US states in the Mid West and a prolonged drought in Australia will have a major impact on world food supplies – and commodity prices. My guess is that we are entering a period of considerable volatility and that the politicians have, for the most part, not yet woken up to that probability. I am not suggesting that food prices will rocket in the same fashion as oil has done over the past year. However, the upsurge in the price beef producers are receiving for their cattle at point of slaughter is an example of what can occur.In Great Britain, prices for finished cattle have increased by around 60p per kilo since the turn of the year and are now hovering close to 280p per kilo. During the whole of 2007, the average GB price struggled to exceed 220p per kilo. The costs of production have also increased admittedly, but there does appear to be a renewed sense of optimism in the beef sector. Another example of that brighter outlook is that the value of beef breeding cattle has risen by a shade over 50 per cent since early January and a cow with a young calf at foot is now worth, on average, £1,100.However, what really hit home to me at that conference was the facts and figures spelt out by John Gilliland, a former president of the Ulster Farmers' Union. The world, he said, is having to feed an extra 70 million people a year and there are at least one billion in "food poverty". Meanwhile, over the past 100 years the average global temperature has increased by 0.75 degree centigrade and 50 per cent of that has occurred in the past half-century. I trotted out those statistics in the pub one night recently, but no-one would believe me. The fact it was raining and the daytime temperature has been more akin to winter than summer did not help, but I think we all must accept the evidence of the scientific community.Gilliland came up with a wide range of supporting evidence, not the least of which is the fact that we are experiencing real food inflation for the first time in over 30 years.My own observation is that shoppers are being much more careful in their choices and are, for the first time, talking about the price of food. Another pointer to food inflation is the fact that normally busy restaurants are much quieter: some have closed and booking a table is no longer an absolute necessity.World stocks of grain are at their lowest level for 50 years and at one stage in 2007 global supplies were down to just 30 days. During the past 50 years, the world's population has doubled and the stark reality is that never before have stocks of grain been at such a low level per head of population. At the same time, we are witnessing a massive economic expansion in the Far East, with China leading the way. That is reflected in what people are choosing to eat, with a switch from starch to protein. Consumption of dairy products in China has increased by 150 per cent in recent years, while the demand for meat is also expanding rapidly and that requires increasing quantities of cereals.Oil reserves are diminishing at a worrying rate and the days when oil was below $50 per barrel are unlikely ever to return. The great Henry Ford foresaw this as far back as 1925. He said: "The fuel of the future is coming from fruit, weeds, sawdust and almost anything." Ford further pointed out there was enough alcohol in one acre of potatoes to cultivate that area for 100 years. At present, 60 per cent of all the cereals produced in the world is utilised for human consumption, with 36 per cent devoted to feeding animals. Barely 4 per cent is used for biofuels, but this is growing by 20 per cent annually and probably far more in the US. Clearly, there will be an increasing conflict between using grain for feeding humans and livestock and the manufacture to biofuels. GILLILAND maintained that during this century the average global temperature will increase between one and four degrees centigrade, depending on what steps are taken to mitigate climate change. But his most worrying prediction is that each increase of one degree has the potential to reduce the yields of grain and milk by 10 per cent.Agriculture is a net emitter of greenhouse gases and it is clear that if all the various targets are to be met, there will have to be changes in farming practices. We could all go vegetarian, but that will not happen. Manipulating the diet of dairy cows to reduce emissions is one possibility, but the trouble is that far too little money is being invested in research and development – and that has been the case right across the entire spectrum of agricultural science. Gilliland reckons that expenditure on R&D needs to be trebled to fuel the "next green revolution". I tend to agree with that assertion and share his view that agriculture can be part of the solution to climate change and not the guilty party.

Emission targets will add 20pc to household energy bills By Russell Hotten

Last Updated: 1:20am BST 01/07/2008
Households already under pressure from soaring energy bills will see gas and electricity costs rise by an extra 20pc so that the UK can fund ambitious emission targets, according to a new report.
Consumers will have to find an extra £5.3bn by 2020 to meet the European Union's emission and renewable energy goals, the report for Ernst & Young claims.
Last week, the Government unveiled a strategy to invest in wind, solar, and other alternative energies.

Prime Minister Gordon Brown said the plan would be expensive - but it would be worth it.
However, E&Y also found that energy consumers believed they should not have to pay more.
More on energy
The E&Y report, called Costing the Earth, estimates that households will have to pay £213 more on average per year by 2020 to fund the £100bn or more of capital investment needed by the UK to meet the EU requirements.
Simon Harvey, a director at E&Y and co-author of the report, said: "Customers face a triple whammy - rising fuel and oil prices, the costs of climate-change mitigation, and the additional investment required to become more energy-efficient, for example by insulating the home."
The report also found that two-thirds of consumers surveyed are not prepared to pay more for their energy to combat climate change or reduce energy consumption.
"There seems to be a worrying degree of apathy among consumers towards reducing energy consumption, despite daily headlines about rising fuel bills," Mr Harvey said.

In dangerous denial

Peter Wilby
The Guardian,
Monday June 30, 2008

According to an Ipsos Mori poll, carried out for the Observer this month, most Britons believe climate change is at least partially down to natural causes, and not solely to human activity. A majority also believe scientists are divided on the causes and more than a fifth say the whole thing has been exaggerated.
Now where would they have got those ideas from? One Channel 4 programme, claiming global warming is "a swindle", has no doubt played a role, as have internet blogs arguing all the world's scientists are party to a Marxist conspiracy bent on destroying western civilisation. But the press, though declining, still counts. It contributes to the framework within which public debate proceeds. It lends respectability to the opinions it highlights.
A study by the Environmental Change Institute at Oxford University found US newspapers have improved their coverage of global warming. By 2006, only 8% of what they published failed to reflect the scientific consensus: that human activity is more than 90% likely to be responsible. The UK tabloids - the Sun, Mirror, Mail, Express and their Sundays - show no improvement, with 23% of their 2006 coverage at odds with what nearly every climate scientist believes.
Happily, the Murdoch empire has gone green, thanks to James Murdoch, chairman of News Corporation in Europe and Asia. The Sun and the Times now rarely give space to deniers of man-made global warming. The latter was once full of sceptics but then a leader graciously announced "the planet deserves the benefit of the doubt". But neither paper gives consistent and/or prominent coverage. The Sun is currently dominated by UFOs, with an "exclusive" last Wednesday about a 13-strong army of alien craft over Shropshire, and other recent front-page stories about police helicopters chasing little green men over Cardiff.
These stories didn't include even a final-paragraph quote expressing scepticism - a "balance" newspapers observe scrupulously when they report evidence of global warming. It's harmless fun, I suppose. But Sun readers could be forgiven for concluding that, as a matter of public concern, global warming is on the same level as extraterrestrial visitations.
Several other papers continue to give a high profile to global warming denial. In the Daily Mail, Melanie Phillips, Richard Littlejohn, Tom Utley and Andrew Alexander all scorn suggestions that we need to reduce carbon emissions. None has anything beyond a science O-level. Nor does the Sunday Telegraph columnist Christopher Booker, a former Private Eye editor. He gleefully reported this month that, since January 2007, global temperatures have fallen 0.77C. This figure, from satellite and balloon readings, is correct but, down here on Earth, where we happen to live, spring 2007 land temperatures were the highest on record (the figures go back to 1880) and those for spring 2008 tied with 2000 as the third highest.
Booker is the most plausible global warming denier among regular columnists because he packs his pieces with "facts" sourced to "experts". But he is none too particular about his experts' credentials. Take another of his campaigns, concerning white asbestos, which the World Health Organisation regards as a class one carcinogen. According to Booker, it is harmless (he admits the dangers of blue and brown asbestos) and claims to the contrary are attributable to commercial interests that make money from disposing of it.
The most quoted "expert" for this story is a Professor John Bridle who runs something called Asbestos Watchdog. In 2006, Radio 4's You and Yours - in a 20-minute item denounced by Booker as "reckless" and "laughable" - reported Bridle had been convicted under the Trade Descriptions Act for passing himself off falsely as a qualified asbestos surveyor. He claimed connections to an impressively titled European body that couldn't be traced. His professorship is an honorary one from Russia. As for Asbestos Watchdog - which, writes Booker, offers "honest advice" to an "ever larger number of people" - I tried to contact it last week and both its website and telephone number were inaccessible. Bridle went to Ofcom about You and Yours; this month, the regulator rejected all his complaints.
Dig deep enough and you find that, just as Bridle proved to have connections to the asbestos industry, so many of the "experts" journalists quote on global warming receive money, directly or indirectly, from the oil industry. There's nothing wrong in newspapers challenging consensus views, and many scientists who have been proved right in the end - for example, those who warned of how lead in petrol could affect children - began as lone mavericks. But sceptics themselves merit scepticism, and journalists should give their scientific credentials and their relationship to vested interests the most careful scrutiny. Berating the EU, as Booker frequently does, or denouncing school standards, as Melanie Phillips does, won't kill anybody. Asbestos is different. So is measles and, as Cardiff University research has shown, MMR vaccinations fell in step with press claims that they were linked to autism.
Global warming could kill millions. If Ipsos Mori is right, the deniers are gaining ground. Its polls show the proportion of Britons who are unconcerned has risen from 15% to 23% in the past year. Many politicians believe government action to arrest climate change is still a vote loser. It is likely to remain so as long as much of the press remains wilfully ignorant of science.
So Nick is now right of the Times?
Nearly three years ago in this column, I asked of my former colleague Nick Cohen, "how far right is he going?". At that time, I detected signs that the Observer and New Statesman columnist, once the most unshakeable of leftists, might extend the change in his political allegiances beyond his support for the Iraq war.
Last Wednesday, I was surprised to find in the London Evening Standard that my old friend is wobbling even in his previously reliable defence of civil liberties and fair trials. By ruling that anonymous witnesses could make trials unfair, the law lords, Cohen wrote, would leave themselves "with blood on their hands and the rest of us with corpses on our streets". The contrary view was put in a Times leader: "Without knowing who a hostile witness is, no defence lawyer can properly assess his or her credibility for a jury." Anonymity, it continued, could protect those who wished to settle scores "and prejudice a jury against a defendant as evidence of fear that he or she inspires".
If he had written it, the old Cohen would have put it more robustly.
Dirty secret exposed
Congratulations to the Lords committee on communications for exploding the myth that media ownership doesn't matter any more because the internet allows a thousand opinions to bloom. Opinion lacks clout without the backing of information and, as the committee points out, nearly all fresh information is generated by a handful of established news organisations. Even the most sturdy critics of the mainstream media use material from the same media to demonstrate how they are fed a pack of lies. That, as one witness told the committee, is "the dirty little secret of the information revolution".

The world's will to tackle climate change is irresistible

Far from stymying the environmental cause, the downturn in the world's economies highlights just how pressing it is

Rajendra Pachauri
The Guardian,
Monday June 30, 2008

Last year marked a watershed in awareness of environmental issues, and in particular the challenge of climate change. Among many breakthroughs, the Intergovernmental Panel on Climate Change released its fourth assessment report - laying out the science of global warming more clearly than ever - and the Nobel peace prize was co-awarded to the panel and Al Gore.
Today, however, many nations are facing recessionary trends and high rates of inflation. Oil prices are at an all-time high, and look likely to rise even higher. A price touching $140 per barrel is something no one could have predicted even six months ago, despite spiralling prices throughout 2007.
Food prices have also increased as a result of fundamental factors, including rapidly increasing demand for food grains against prolonged stagnation in supply. Increasing prices have hit some of the poorest countries most severely, particularly those that have low incomes and are largely dependent on imports for basic subsistence. According to the UN's Food and Agriculture Organisation, annual food expenditure of the most vulnerable countries has more than doubled since 2000. In a number of these nations food now constitutes 70%-80% of family expenditure. It is not at all surprising that we've seen food riots and large-scale demonstrations.
In this context, there is growing worldwide concern that the economic slowdown could lead to a parallel slowdown in environmental progress, with governments less willing to advocate the hard steps essential for reducing greenhouse emissions. This is indeed a worry, but I see a ray of hope, as I believe that global society is seriously questioning whether today's problems can be solved through short-term measures, as has been the case with routine ups and downs in the economy during past cycles. Could this lead to a widespread realisation that today's problems are the result of fundamental flaws in past growth and development patterns? There are, in my view, two reasons to suggest that the answer could be yes.
First, the world has reached an unprecedented level of awareness of the science behind climate change, with the contents of the IPCC's fourth assessment disseminated extensively by the media worldwide. A growing number of people - and not just typical environmentalists - now believe that climate change is not a concern for the distant future but something we are witnessing here and now. The cyclone that caused massive devastation in Burma and the extensive floods in Iowa, for instance, are linked in the public perception to climate change. Public concerns in several parts of the world have been heightened to such an extent that extreme weather events are invariably attributed to climate change. Never before has human society been gripped by such a strong realisation of the need to reduce our dependence on fossil fuels - and even change our lifestyles - in order to reduce emissions of CO2 and other greenhouse gases.
Second, this existing resolve is being strengthened considerably by increasing oil prices, which prompted even a conservative Republican like President Bush to state that America is "addicted to oil" and must switch to alternatives. Car manufacturers are already investing heavily in electric vehicles - which reduce oil dependency and emissions - and public transport systems are getting renewed attention. As some politicians in the UK and elsewhere have recently argued, with high oil prices the world can't afford not to go green.
The possibility of a shift to other forms of energy is something that is not lost on the major oil producers. So it's no surprise that Saudi Arabia has convened a summit of producers and consumers to see what needs to be done to stabilise oil prices. A continuing increase in prices would accelerate a move towards renewables, which would not support the interests of producer nations.
Based on all this, and on my discussions with policymakers, I believe the world is beginning to look at the deep underlying causes of its current problems, and is preparing for radical change. Barack Obama's performance in the US presidential race is, I think, symptomatic of a widespread thirst for such a change.
What we have today is no routine downturn in the conventional economic cycle. It is, and is seen to be, the crossroads in human progress that compels a major turn in direction. I believe the current generation is ready for such a shift and is unlikely to be distracted for long by an economic downturn that emanates from serious systemic distortions in existing patterns of growth.
· Rajendra K Pachauri chairs the Intergovernmental Panel on Climate Change and is director general of The Energy & Resources Institute comment@guardian.co.uk

Consensus on climate change goals

By Lord Browne
Published: June 30 2008 03:00

For people concerned about climate change, there is quite a lot to be gloomy about today. Short-term economic concerns - the credit crunch and high food and fuel prices - are dominating the agenda.
But there is also cause for optimism. There is momentum coming out of last December's Bali climate change summit. And a clear consensus has emerged on the policy goals that need to be agreed at next year's crucial Copenhagen meeting.
First, a long-term global emissions cap, a trajectory for achieving it over time and a burden-sharing agreement that defines regional and national responsibilities. Second, a basket of policies to do the three most important things to reduce emissions against business-as-usual projections: taking energy out of gross domestic product through a revolution in energy efficiency; taking carbon emissions out of energy through changing the mix of energy we use; and preserving carbon-rich assets, notably the world's forests. And third, a policy framework for climate change adaptation.
Yet there has been comparatively little discussion on the institutions that will be needed to deliver these goals.
Stronger international governance than today will undoubtedly be needed. But tearing up existing institutions - the United Nations Framework Convention on Climate Change (UNFCCC), the World Bank, the International Monetary Fund and G8 - and starting from scratch would be counterproductive. The evolution of the General Agreement on Tariffs and Trade (Gatt) to the World Trade Organisation suggests a more promising approach: institutional seeds, if properly fed and nurtured, can grow into strong players over time. Existing institutions need principles to help them widen, strengthen and link together. I offer four suggestions.
The first is that international climate institutions must be inclusive: they should convene the operators that count.
By 2030, developing countries will contain 80-90 per cent of the world's population and, under business-as-usual projections, be responsible for 60-70 per cent of emissions. A climate change solution without the involvement of developing countries would be highly inefficient.
A recent survey by Accenture, the consultants, suggests people in Brazil, China and India care more about climate change than those in Europe and North America. But these countries will only come to the table if the agreement struck at Copenhagen is equitable. And that means industrialised nations must take a lead: above all, demonstrating that carbon-constrained growth is possible.
Developing countries should commit to binding cuts in the future - say, after 2020. They should be allowed to grow without hindrance in the interim, although also commit themselves to verifiable steps to place their economies on a low-carbon trajectory. The obvious places to start are where cutting carbon emissions align with other goals.
Another crucial constituency is business. It is striking to compare the relative lack of business engagement at the international level with engagement at the domestic level.
This leads to the second main principle: institutional arrangements should be enduring. The most important features of any policy framework designed to mobilise investment dollars are that it is clear, stable and predictable. Uncertain and intermittent climate change policies are choking low-carbon energy investments.
However, stability must be balanced with the need for institutions to learn: to evolve as science, technologies, economics and politics inevitably develop. This points to the medium term as being the critical time frame. Five-year compliance periods would be too short. Fifty years too long. Fifteen years strikes me as about right.
The third principle is enforcing. Lessons of history - not least the recent history of the WTO - suggest that heavy penalties can hinder co-operation. Carrots, rather than sticks, are more successful in ensuring compliance in a world where power is devolved to nation states.
The carbon market will be the key: access to the carrot of international carbon finance flows. Today the Clean Development Mechanism (CDM) is the closest thing we have to the policy required.
I believe the CDM has a future, though its rules must be tightened and bureaucratic obstacles removed. The CDM must also be augmented with additional carbon mechanisms to incentivise emissions reductions across industrial sectors and from forestry.
The final principle is enabling. Reducing energy consumption, decarbonising the energy mix and preserving carbon-rich assets will be driven primarily by national policies. But international institutions can play an important enabling role.
As I argued in the FT a year ago in a piece co-authored with Nick Butler, I believe a new body, an International Carbon Fund, will be needed to manage the exchange of multiple carbon currencies of different relative values, as state, national and regional cap-and-trade programmes become linked.
International institutions must also help with capacity building: making the ground fertile for carbon finance to flow and for the transfer of low-carbon technologies. Examples include removing barriers, improving administrative capacity and education and training. Some of these efforts will require hard technical work. Others will require funding - which could be substantial in time. More thinking needs to be done about how to disburse funds held internationally in a way that is efficient, equitable and transparent.
There is talk today of an energy and environment crisis. And at times like this, when policymaking is prolific, it is important to highlight some bad ideas - the don'ts as well as the dos. Half a dozen come to mind.
First, be careful where you put energy subsidies. Incentives will be needed, for example to stimulate technology innovation, but energy in general should not be subsidised.
Second, establish facts before acting. Biofuels are a good example. There are good biofuels, such as ethanol from Brazilian sugar cane, but also bad biofuels. Policies must distinguish between the good and the bad.
Third, beware technology silver bullets. A suite of technologies, including all types of renewables, carbon capture and storage and nuclear will be needed.
Fourth, there are no silver bullets in policy either. For example, cap-and-trade programmes will establish a carbon price for large stationary emitters but a basket of fiscal and regulatory measures will be needed to change consumer behaviour to encourage energy efficiency.
Fifth, resist the siren call of protectionism. Combating climate change - and mitigating energy security, our other great challenge - will require global markets in oil, gas, coal, carbon and biofuels and regional markets in power.
And finally, do not rob the long term to pay for the short term. Doing what is needed will require enlightened, long-term political leadership - leadership that transcends short-term economic cycles and the day-to-day tussle of politics.
We have seen this kind of leadership before: for example after the second world war. As J.M. Keynes remarked at the closing plenary session of the Bretton Woods conference in 1944: "We have shown that a concourse of nations is actually able to work together at a constructive task in amity and unbroken concord."
Let us hope that these words ring true at Copenhagen next year.
Lord Browne, former chief executive of BP, is President of the Royal Academy of Engineering and Chairman of the Accenture Global Energy Board. This article is based on his speech last week at Chatham House.
Copyright The Financial Times Limited 2008

White House Blocks EPA Emissions Draft

Fight Tests Reach Of Clean Air Act, Agency's Autonomy
June 30, 2008; Page A3
WASHINGTON -- The White House is trying to prevent the Environmental Protection Agency from publishing a document that could become the legal roadmap for regulating greenhouse-gas emissions in the U.S., said people close to the matter.
The fight over the document is the latest development in a long-running conflict between the EPA and the White House over climate-change policy. It will likely intensify ongoing Congressional investigations into the Bush administration's involvement in the agency's policymaking.
The draft document, which has been viewed by The Wall Street Journal, outlines how the government, under the Clean Air Act, could regulate greenhouse-gas emissions from mobile sources such as cars, trucks, trains, planes and boats, and from stationary sources such as power stations, chemical plants and refineries. The document is based on a multimillion-dollar study conducted over two years.
The White House's Office of Management and Budget has asked the EPA to delete sections of the document that say such emissions endanger public welfare, say how those gases could be regulated, and show an analysis of the cost of regulating greenhouse gases in the U.S. and other countries.
The OMB instead wants the document to show that the Clean Air Act is flawed and that greenhouse-gas regulations should be developed under new legislation, several people close to the matter said. The EPA needs to clear a final draft with the White House in order to release the document.
"This is a collision course between the agency and the OMB," said one person familiar with the document. The OMB "had in mind to lay out a different story that the Clean Air Act is broken and can't be used to regulate emissions." The Clean Air Act was originally enacted in 1970 to clean up air pollution and was amended in 1990.
EPA spokesman Jonathan Shradar said, "Work on the [document] continues in earnest and it will be published soon." He declined to comment further.
Neither the White House nor the Office of Management and Budget responded to requests for comment.
The document would be the agency's formal response to an April 2007 Supreme Court decision that found greenhouse gases such as carbon dioxide are pollutants under the Clean Air Act, and that the EPA can regulate them.
The court's ruling centered on emissions from automobiles. But it set the stage for regulations affecting the entire U.S. economy -- from power plants to factories and ships -- by ordering the EPA to determine whether greenhouse gases endanger public health or welfare, the legal criteria for regulating greenhouse gases under the Clean Air Act.
In recent weeks, the Bush Administration warned that regulatory havoc would result if the EPA were to regulate greenhouse gases under the act. The White House argues the act restricts the EPA from considering costs when imposing regulations and could ultimately mean the agency would have to regulate nearly everything that created emissions, including hospitals, schools and apartment buildings.
The EPA draft document concludes that motor vehicles could be even more fuel efficient than currently required by law. Based on advanced technologies such as plug-in hybrid vehicles, fuel efficiency could be improved to well above 35 miles per gallon between 2020 and 2025, it says. A 2007 energy law that has been supported by the Bush administration mandates an average vehicle fuel-efficiency of 35 miles per gallon by 2020.
For other sectors, the EPA draft document shows how emissions such as carbon dioxide could be regulated through the government-permit process and through a cap-and-trade system similar to the programs the agency administers for acid rain and mercury.
"The net benefit to society could be in excess of $2 trillion," according to the draft document.
Administration supporters say projecting the future benefits of regulation is fraught with uncertainty, and that some degree of debate over what the document should say is to be expected. "Any time you're trying to monetize benefits, there's a controversy," said Jeffrey Holmstead, a former EPA assistant administrator for air and radiation.
"Clearly [White House officials] don't want to leave behind a blueprint that suggests that the Clean Air Act could offer a potential pathway in a cost-effective way to reduce greenhouse-gas emissions," said one of the people close to the matter who supports the EPA document's analysis. "Leaving a blueprint behind could leave the next administration a document they could work from, and that's not in their interest," the person said.
If the agency establishes a policy direction in this phase of the rule-making but later changes direction in the proposed rule, it could create opportunities for legal challenges under the Administrative Procedures Act, said Peter Robertson, a former deputy administrator at the EPA and a partner at the Pillsbury law firm specializing in environmental public policy.
"There wouldn't be a reason for OMB to monkey with this document if it weren't going to be an important step in the process now and later on," Mr. Robertson said.
Two people familiar with the matter said that although EPA Administrator Stephen Johnson originally supported much of the White House cuts from the draft, he felt that the edits became too aggressive. A spokesman for Mr. Johnson declined to comment.
The internal battle has delayed the publishing of the document, which was originally due out June 23. The document could now be released later in the week.
This isn't the first time that the White House has intervened in the process of setting emissions regulations. Mr. Johnson and the administration's role in blocking emission regulations has come under intense scrutiny by Congress.
--Stephen Power contributed to this article.
Write to Ian Talley at ian.talley@dowjones.com and Siobhan Hughes at siobhan.hughes@dowjones.com