Friday, 4 July 2008

The appetite for biofuel starves the poor

The evidence is mounting. The biofuels bonanza is forcing millions in the developing world into poverty and hunger

Benjamin Senauer,
Thursday July 3, 2008

The evidence linking biofuel production to rising food prices can't be ignored. Between the start of 2002 and early 2008, basic global food commodity prices rose by 220%. The global production of biofuels - ethanol and bodiesel - rose from less than 8m gallons in 2004 to an estimated 18m gallons in 2008. The most rapid increase has been in the production of ethanol derived from corn in the US: rising from about 3.5m gallons in 2004 to an estimated 9m in 2008. This year ethanol production is forecast to consume 30% or more of 2008's entire US corn crop.
Because of the surging price of agricultural commodities, Josette Sheeran, the executive director of the World Food Program, has warned that a "tsunami of hunger" is sweeping through the poorer countries of the world. Robert Zoellick, the president of the World Bank, has said that as many as 100 million people in the world have been forced into poverty and hunger because of the dramatic increase in food prices. These are people who live on the equivalent of less than $1 a day and whose households spend 70% or more of their meagre budgets on basic food staples. A debate is raging over the role biofuels, especially corn-based ethanol, have played in increasing food prices, and hence in the rising number of people going hungry.
Ed Schafer, the US Secretary of Agriculture, has said that biofuels account for only a few percent of the rise in the price of food, an estimate that would seem unbelievably low. One of the most reliable independent estimates comes from the International Food Policy Research Institute (IFPRI). IFPRI maintains the most sophisticated model of global agricultural commodity supply and utilization, referred to by the acronym Impact. Based on that model, IFPRI estimates that 30% of the increase in the prices of the major grains is due to biofuels. And now we learn that the World Bank's own unpublished forecasts suggest that biofuels have forced global food prices up by 75%.
The increasing US output of ethanol, by raising the price of corn, pulls land from the production of other crops and leads to substitutions elsewhere, so more wheat and other grains may be used to feed livestock. Moreover, for many countries food price inflation is so high that it has become a serious political problem. There have been food riots and protests in over 15 developing countries. A number of major food-producing countries have restricted their agricultural exports in an attempt to hold down the increase in domestic prices. India and Vietnam, usually major rice exporters, have cut off exports, thus reducing the global supply and pushing rice prices through the roof on world markets.
Grains are the staple food of most people in the developing world, although which particular cereal depends on the region. We can combine IFPRI's estimate that biofuels account for 30% of the rise in grain prices and the World Bank president's figure of 100 million more hungry people due to higher food prices. This combination suggests that biofuels are responsible for 30 million more people going hungry in the world. The IFPRI model also allows us to estimate the number of malnourished children less than age five under various conditions. Based on the model there are some 2.4 million more malnourished pre-schoolers in the developing countries in 2008 due to the impact of biofuels. Current research, that I and colleagues are working on, suggests that 390,000 additional children under the age of five will die because of this increase in malnutrition due to biofuels. If current biofuel development trends continue, child deaths will rise to 475,000, almost one-half million by 2010. If the leaked World Bank figures are more accurate, then that figure could be even higher.
Oxfam has called for a moratorium on biofuel mandates, and an end to subsidies - under the latest US farm bill the ethanol subsidy is 45 cents per gallon. Even the International Monetary Fund calls for a re-examination of these subsidies. The biofuel policies of the presumptive candidates for the US presidency have received little attention so far. However, both Barack Obama and John McCain need to re-examine their positions in light of the devastating impact biofuels are having on global hunger.
Benjamin Senauer is a professor of applied economics at the University of Minnesota. These are the personal views of the author and do not necessarily reflect the position of the University of Minnesota.

Food price rises force biofuel U-turn

By Colin Brown Friday, 4 July 2008

Soaring world food prices look set to force Gordon Brown into a U-turn over the use of crops such as corn, rapeseed, palm and soya to produce fuel as an alternative to petrol and diesel.
Biofuels were seen as the eco-friendly answer to global warming and rising fuel prices but a report to be published on Monday will force the Prime Minister to rethink his support for using crops to keep Britain's cars and lorries running.
A second report will also force Downing Street to revise its policies on food and the environment – opening Mr Brown to the charge from environmental groups of going soft on the Government's green agenda.
The Prime Minister has been warned in a report by Professor Ed Gallagher, head of the Renewable Fuels Agency, that the rush for biofuels has made a "significant" contribution to the soaring cost of food on the global markets. Corn ethanol and biodiesel derived from vegetable oil were widely seen as important ways of creating fuel and combating carbon emissions which contribute to global warming.
The Gallagher review threatens to knock out an important plank in Mr Brown's environmental strategy. He introduced targets in April in Britain requiring all petrol and diesel to contain 2.5 per cent of biofuels with the intention of doubling it to 5 per cent by 2010. The EU is contemplating a 10 per cent target by 2020. Professor Gallagher's report will say the production of fuels from "biomass" – non-food crops – may be sustainable but it challenges the targets for producing fuel from other crops normally used for food.
Greenpeace said biofuels initially "looked good on paper" but the Gallagher review would conclude that the risks are too great to impose higher targets.
The campaign group called for a moratorium on targets, subsidies and tax breaks for biofuels consumption until it was clear that they could be produced from sustainable sources. Oxfam said: "It is clear that any additional pressure on limited land resources has the potential to drive further agriculture clearance of forests or other habitats and to drive up food prices."
The vast majority of the European biodiesel was made from rapeseed oil, said Oxfam. "As we divert more and more rapeseed crop into fuel, European industry is buying increasing supplies of edible oils from overseas including palm oil.
A second report by the Cabinet Office strategy unit is intended to launch a debate over how Britain uses its land more effectively to produce more food.
In a further blow to the Prime Minister's "green" strategy, ministers are preparing to respond to the pressure from motorists – led by haulage owners who staged a noisy protest around Westminster this week – by bringing forward the announcement by the Chancellor Alistair Darling that the 2p rise in fuel duty in October will be scrapped.

Secret report: biofuel caused food crisis

Internal World Bank study delivers blow to plant energy drive
Aditya Chakrabortty
The Guardian,
Friday July 4, 2008

A handful of corn before it is processed. Photograph: Charlie Neibergall/AP
Biofuels have forced global food prices up by 75% - far more than previously estimated - according to a confidential World Bank report obtained by the Guardian.
The damning unpublished assessment is based on the most detailed analysis of the crisis so far, carried out by an internationally-respected economist at global financial body.
The figure emphatically contradicts the US government's claims that plant-derived fuels contribute less than 3% to food-price rises. It will add to pressure on governments in Washington and across Europe, which have turned to plant-derived fuels to reduce emissions of greenhouse gases and reduce their dependence on imported oil.
Senior development sources believe the report, completed in April, has not been published to avoid embarrassing President George Bush.
"It would put the World Bank in a political hot-spot with the White House," said one yesterday.
The news comes at a critical point in the world's negotiations on biofuels policy. Leaders of the G8 industrialised countries meet next week in Hokkaido, Japan, where they will discuss the food crisis and come under intense lobbying from campaigners calling for a moratorium on the use of plant-derived fuels.
It will also put pressure on the British government, which is due to release its own report on the impact of biofuels, the Gallagher Report. The Guardian has previously reported that the British study will state that plant fuels have played a "significant" part in pushing up food prices to record levels. Although it was expected last week, the report has still not been released.
"Political leaders seem intent on suppressing and ignoring the strong evidence that biofuels are a major factor in recent food price rises," said Robert Bailey, policy adviser at Oxfam. "It is imperative that we have the full picture. While politicians concentrate on keeping industry lobbies happy, people in poor countries cannot afford enough to eat."
Rising food prices have pushed 100m people worldwide below the poverty line, estimates the World Bank, and have sparked riots from Bangladesh to Egypt. Government ministers here have described higher food and fuel prices as "the first real economic crisis of globalisation".
President Bush has linked higher food prices to higher demand from India and China, but the leaked World Bank study disputes that: "Rapid income growth in developing countries has not led to large increases in global grain consumption and was not a major factor responsible for the large price increases."
Even successive droughts in Australia, calculates the report, have had a marginal impact. Instead, it argues that the EU and US drive for biofuels has had by far the biggest impact on food supply and prices.
Since April, all petrol and diesel in Britain has had to include 2.5% from biofuels. The EU has been considering raising that target to 10% by 2020, but is faced with mounting evidence that that will only push food prices higher.
"Without the increase in biofuels, global wheat and maize stocks would not have declined appreciably and price increases due to other factors would have been moderate," says the report. The basket of food prices examined in the study rose by 140% between 2002 and this February. The report estimates that higher energy and fertiliser prices accounted for an increase of only 15%, while biofuels have been responsible for a 75% jump over that period.
It argues that production of biofuels has distorted food markets in three main ways. First, it has diverted grain away from food for fuel, with over a third of US corn now used to produce ethanol and about half of vegetable oils in the EU going towards the production of biodiesel. Second, farmers have been encouraged to set land aside for biofuel production. Third, it has sparked financial speculation in grains, driving prices up higher.
Other reviews of the food crisis looked at it over a much longer period, or have not linked these three factors, and so arrived at smaller estimates of the impact from biofuels. But the report author, Don Mitchell, is a senior economist at the Bank and has done a detailed, month-by-month analysis of the surge in food prices, which allows much closer examination of the link between biofuels and food supply.
The report points out biofuels derived from sugarcane, which Brazil specializes in, have not had such a dramatic impact.
Supporters of biofuels argue that they are a greener alternative to relying on oil and other fossil fuels, but even that claim has been disputed by some experts, who argue that it does not apply to US production of ethanol from plants.
"It is clear that some biofuels have huge impacts on food prices," said Dr David King, the government's former chief scientific adviser, last night. "All we are doing by supporting these is subsidising higher food prices, while doing nothing to tackle climate change."

Scotland must put more of its energy into renewables

Creating generation at home will help to cut fuel bills, says Sarah Boyack.

LAST week saw the launch of the UK Government's Renewable Energy Strategy – with the aim of 15 per cent of our electricity coming from renewables by 2020. In our first eight years in the Scottish Parliament, we managed to achieve our target of 20 per cent early. It was a major achievement. There is a wide degree of consensus that we should now be pushing for 50 per cent of our electricity from renewables by 2020. However, Scotland is falling behind the rest of the UK in our slow progress on microgeneration for households. It's an exciting agenda – with the potential to deliver secure, local green energy. With domestic fuel prices continuing to rise, we need to help people make their houses more energy-efficient and to produce their own heat and electricity. We also need to reduce our CO2 emissions to tackle climate change, so there is a win-win here if we act.There are success stories in Scotland. I've visited several projects in Edinburgh where the city council, local housing associations and householders have installed microgeneration devices. People are now experiencing lower bills – all year round. People get excited by installing renewables – but we also need to tackle homes and buildings that are badly insulated. There has been progress. But I'd like to go even further and require every new house to benefit from renewables.It's important, though, that we don't just focus on new housing. 80 per cent of the buildings that will be standing in 2050 have already been built. The Community Household Renewables Initiative has been very successful in testing the technologies and giving householders grants to install them, but research shows it is not until we have tax breaks that we will see a mass market created.That's why I'm continuing to campaign for the Scottish Government to support my Members Bill proposing that people putting in insulation or installing microgeneration are given a one-off rebate on their council tax. We're still waiting for the new SNP Government to deliver on cutting the red tape for individual householders who want to get on and install microgeneration. It took a year for draft guidelines to appear, but they only give the green light to mini wind and heat pumps when houses are 100 metres apart, and the rules on solar panels are out of step with the most efficient products on the market. Ministers have been lobbied by environmental campaigners and the renewables industry. In a recent debate, the Planning Minister recently told me that he was thinking of changing his approach. But we need to get a move on. • Sarah Boyack is a former Scottish Environment Minister and MSP for Edinburgh Central

France to build second new-generation nuclear reactor

The Associated Press
Published: July 3, 2008

LE CREUSOT, France: France will build a second new-generation nuclear reactor, President Nicolas Sarkozy said Thursday, pledging a "new industrial revolution" in an era in which fossil fuels have grown too expensive.
France — the country most reliant on nuclear power — has been constructing its first European Pressurized Reactor, or EPR, on the Normandy coast, and it is expected to go into service in 2012.
EPR reactors are meant eventually to replace the aging reactors around the world whose designs date from decades ago. The Normandy site is one of only two EPRs in the world currently under construction; the other is in Finland.
A decision about where to build a second French EPR will be made in 2009, Sarkozy said, adding that construction would start in 2011.
"The era of inexpensive oil is over," Sarkozy said. "Nuclear power is more than ever an industry of the future, and an essential form of energy."

"France will experience a new industrial revolution," Sarkozy said. He spoke while visiting metal workers at the Industeel plant in Le Creusot in the Burgundy region, which he said would produce most of the components needed for the reactor. Industeel is a subsidiary of steelmaker ArcelorMittal Group.
During Sarkozy's visit, Anne Lauvergeon, CEO of French nuclear company Areva, and Aditya Mittal, CFO of ArcelorMittal, signed a memorandum of understanding to increase production at Industeel for the nuclear market.
Already, 77 percent of France's electricity comes from nuclear power, Sarkozy said.
"We, the French, can become exporters of electricity, though we have no oil and no more natural gas," Sarkozy said. "This is a historic chance for development."
France's Green Party and environmental groups oppose the building of EPRs, saying they are dangerous and costly and do not address root causes of global warming and shrinking world resources.
France Nature Environment called it a "catastrophic sign" for France's presidency of the European Union, which began this week and runs through the end of this year. The group lamented that Sarkozy made the announcement the same day that EU environment ministers were meeting outside Paris.
"The fight against climate disruption is unfortunately serving as a commercial argument for promoting false remedies such as nuclear energy," the group's spokesman Arnaud Gossement said in a statement.

Daimler sees car demand growing despite oil price


Daimler AG Chief Executive Dieter Zetsche said global demand for cars is expected to rise further in coming years though the price for oil will remain high.
"There is good reason to assume that the 'second century of the automobile' has only just begun....The number of automobiles world-wide is currently growing five times faster than the world population," Mr. Zetsche said Thursday at a conference in Magdeburg, Germany.
"While it has taken more than 100 years to put 800 million vehicles on the roads, it will take less than 30 years to at least double that figure....In fact, by the year 2050, the number may almost triple," Mr. Zetsche said, adding that "emerging markets are growing dynamically and so is the demand for self-determined mobility."
However, Mr. Zetsche said he sees "pressure to reconcile the growing demand for mobility with an effective reduction of emissions" in times of skyrocketing fuel prices. "Oil is limited...there's no real expectation of it ever being cheap again," he said.
Mr. Zetsche said the biggest current risks to oil supply are related to politics, security and the cost of new oil projects, "not to mention that financial speculators appear to be turning oil futures into the 'dot-com' stocks of the new millennium." He said he expects excess or new oil reserves to be quickly absorbed by fast-growing countries such as India and China.
Environmental issues, such as reducing emissions of carbon dioxide, are a big concern for car makers, he said.
"The issue is not just CO2 but other emissions as well...and at Daimler, we're not going to wait for new legislation...we're working to comply ahead of time. Daimler is leaving no stone unturned in meeting the challenge of reducing CO2 and other emissions," Mr. Zetsche said. "Ultimately, we'll be driving zero-emission vehicles."
In the next two years, Daimler is investing almost €14 billion ($22 billion) in research and development.
Mr. Zetsche said Daimler will start production of "the next-generation of fuel-cell drive systems" in a low-volume Mercedes-Benz B-Class series in 2010.
Write to Christoph Rauwald at

Airtricity takes on Italian job

AIRTRICITY, the renewable energy division of Perth-based Scottish & Southern Energy, has entered into a 60/40 joint venture with Italian wind farm development company Entropya.
The joint venture company will be based in Lecce in Puglia, southern Italy, and will develop a portfolio of wind farm sites across Puglia, Basilicata, Calabria and Sicily. It has a development pipeline of more than 2,000 megawatts and follows a similar deal between Airtricity and Swedish Gothia Vind in April. Last Updated: 03 July 2008 8:56 PM
Source: The Scotsman
Location: Edinburgh

Go sustainable to survive the crunch

Will recession force people to ditch good environmental habits? It shouldn't: going green is the best solution to a financial squeeze

Arlo Brady,
Thursday July 3, 2008

Over the last five years we have witnessed what I describe as a "greenrush". Businesses and consumers alike – one driven by the other – have sought to become more environmentally and socially responsible, with varying degrees of practical and perceived success.
However, today, as we sit on our forest stewardship council-certified wooden chairs, on the verge of a recession, we find ourselves asking whether this trend can survive. As the prices of many everyday items spiral out of control, are consumers now set to "dump values for value"? The answer is both yes, and no.
In the last decade, public awareness of the key sustainability issues of our generation has risen as has public perception of the power of big business. Ten years of mega-mergers, each more substantial than the next, have done little to alter this perception. The new breed of behemoth brands and businesses has been at the forefront of the greenrush; desperate to prove to consumers and regulators that big does not necessarily equate to bad. This behaviour, coupled with the invasive transparency of the digital revolution, has resulted in an unprecedented growth in public expectation of business.
By enthusiastically showing that they can be part of the solution, businesses have inadvertently opened Pandora's box. There can be no going back.
Today's consumers want more from business, and following an unprecedented period of economic growth, they have become unaccustomed to compromise. They are looking for value, but they are also looking for authenticity, transparency and responsibility. As a recession takes hold, it's true that consumers may themselves be willing to compromise, but they are unlikely to react sympathetically if businesses and brands try the same trick.
As consumers get used to questioning what they spend their hard earned money on, they will place businesses under an unprecedented level of scrutiny. Ironically, in doing so they may inadvertently find themselves making some fundamentally more sustainable choices. This is certainly true in the automotive market where consumers are currently downshifting from large 4x4s to more economical vehicles in their droves.
Throughout the recent greenrush a fundamental misunderstanding had become established in the consumer mindset – namely that buying products and services that have a lower environmental impact is costly and therefore a luxury. This is a direct result of the premium pricing strategy that many businesses have adopted, and the lack of easily accessible and credible information on environmental impact.
This misunderstanding is fundamentally wrong on a number of levels.
Firstly, there is the obvious point that in general, consuming less equates to less environmental impact. This is the paradox of environmental consumerism. And then there is the observation that products that are more environmentally friendly tend to have used (and use) fewer resources than their conventional counterparts, and should therefore be cheaper to buy or run.
Following the principles of environmental efficiency enables us to do more with less. I can't think of a better message during a downturn. Smart businesses, governments and individuals will seek out efficiency and the competitive advantage that it brings.
In the short term, there will be a number of unsavoury consequences. For example, as the oil price soars perhaps to the $200 mark within the next year, businesses like Shell and BP will seek to exploit hard-to-extract oil resources like Canada's carbon-heavy tar sands. But in the long-term this trend will be self-defeating: it will act only to stabilise oil prices at a high level, while simultaneously increasing the economic viability of alternatives. The investment that oil majors are making in unconventional reserves is only viable if the oil price remains high. Big oil will very soon have a vested interest in maintaining a price that will ultimately lead to a decisive shift towards renewable energy.
From a corporate perspective, there is no doubt that many shortsighted businesses will stop, or even reverse, investment in sustainability and corporate social responsibility initiatives. But I don't view this as a serious cause for concern – instead, I argue that it could and should be viewed as a bonus. We have all had more than enough of greenwash.
Sustainability will simply enter a new, and more robust, phase of its development. A recession is likely to foster a more genuine sustainability, removing inefficient and vacuous programmes, and leaving the most effective and authentic in their place.
Although an economic downturn will have many negative consequences, the pain won't last forever. It's my contention that those businesses that use the time to lay reputational and practical foundations for success, by working on relevant issues that matter to real people, will be those that emerge with real competitive advantage when the downturn lifts.

Energy efficiency specialist Eaga to work with giant


EAGA has reached agreement in principle on a £200 million deal with ScottishPower, to deliver the power company's entire carbon emissions reduction target (Cert) obligation.Cert – which came into effect on 1 April and will run until 2011 – is an obligation introduced by the UK government on energy suppliers to reduce carbon emissions from houses.Methods used to improve energy efficiency will include loft and cavity wall insulation, especially for elderly people or those on low income.Eaga already has government contracts to improve energy efficiency in people's homes, including the Warm Front programme in England and Home Energy Efficiency Scheme in Wales.It also holds a contract with the BBC to run its digital switchover help scheme. Eaga, which has a market cap of about £250m, has an office in Livingston and depots in Inverness and Perth. John Clough, Eaga's chief executive, said: "This ground-breaking partnership with ScottishPower demonstrates our outsourcing capabilities and, as planned, utilises the strong organic growth platform we have built within our installation services".

Carmakers negotiate a maze of European green taxes

By John Thornhill and Haig Simonian
Published: July 4 2008 03:00

The French love tinkering with their tax regime for the purposes of social engineering. The state provides fiscal incentives to buy property, hire home help and have babies. But the government is now becoming increasingly enthusiastic about using taxes to persuade consumers to turn green. In particular, it is extending its carrot-and-stick "bonus-malus" system from cars to a range of consumer products including electronic goods.
The idea is to reward consumers for making sound environmental choices while punishing those who do not. So, for example, drivers who buy a Toyota Prius 1.5 litre hybrid car with low CO 2 emissions will benefit from a €2,000 ($3,140) bonus. Those who buy a petrol-guzzling sports utility vehicle will have to pay an initial "malus" of €2,600 - and, according to government plans announced this week, an additional tax every year amounting to about 10 per cent of this original charge. Since its introduction at the start of the year, the scheme has had a striking impact on new car sales - although surging petrol prices have also been a big factor. Small car sales have risen 50 per cent in the first half of the year in France, while those of the most heavily polluting have fallen by 40 per cent.
The "bonus-malus" scheme is widely viewed as a good thing, but it has its critics. Environmentalists argue it is not grand enough to meet the scale of the challenge. Car associations say it unfairly penalises those who can only afford second-hand cars. Liberal economists fear it could lead to backdoor protectionism. Finance officials worry the scheme is proving too popular. The new tax regime was supposed to be revenue neutral. Instead, it is costing the government money.
Car manufacturers are ambivalent about its effects. The announcement of the government's expanded scheme initially knocked the share prices of French car manufacturers. But Renault and PSA Peugeot-Citro├źn both argue they are well placed to benefit from the scheme thanks to their range of low-emission cars.
What is more worrying is that a patchwork of different environmental tax regimes is emerging around Europe as more than a dozen countries have introduced CO 2 -based car taxes. It would certainly help business if EU partners could agree a common set of rules to apply across the single market. That's one more priority for President Nicolas Sarkozy now that France has taken up the EU's rotating presidency.
Austria awaits verdict
Whatever the verdicts, today's conclusion of the mammoth Bawag trial in Vienna will leave someone fuming. If the judge convicts the defendants and proposes tough sentences for the nine former executives of the Austrian trade union-owned bank and their key investment adviser, the accused will immediately claim they never received a fair trial because of adverse publicity. If they are exonerated, however, there will be popular outcry that no one has been pinpointed for the bank's travails.
Ironically, the verdicts look set to coincide with a separate investigation in New York into Refco, the failed securities broker with which Bawag was once associated. Recapitulating the complex affair in less than three volumes is not easy. In essence, Bawag's problems emerged in October 2005, when a trio of senior managers made an emergency €350m loan to Phillip Bennett, Refco's founder and chief executive, one day before the latter's arrest.
Investigations under new management unearthed an astonishing trail of losses on other transactions that had been hidden for years to prevent a run of confidence in Austria's fourth-biggest bank. The unorthodox procedure had been approved by Bawag's auditors because the unions were prepared to stand as lender of last resort. The scandal prompted top level arrests, including a nail-biting extradition fight by Helmut Elsner, Bawag's autocratic former chief executive. At one stage, Mr Elsner's luxury retirement villa in the south of France was virtually surrounded by Austrian journalists. His affairs remain highly controversial: his wife is still titular owner of the lavish flat, with swimming pool, built for him above Bawag's central Vienna headquarters and now subject of a bitter ownership battle with the bank's new bosses. Bawag's sale early last year to Cerberus, the US private equity group, helped to restore stability. Modest central and eastern European operations - arguably the jewels in Bawag's crown - and non-core assets have been sold, and efforts made to improve earnings in the core Austrian retail business under David Roberts, a former top Barclays manager.
But the trial, which began last July and was initially expected to close within weeks, has dragged on. Periodic twists and occasional dramas have still not adequately explained how the bank managed to lose more than €1.4bn ($2.2bn). But the main actors have been identified. Now all Austria wants is the verdict.
Copyright The Financial Times Limited 2008

UK's CO2 emissions higher than official figures, government admits

David Adam,
Thursday July 3, 2008

Britain's greenhouse gas emissions are higher than official figures suggest, the government has admitted.
The environment department Defra says UK emissions are higher than previously stated if carbon pollution linked to imported goods is included. Official figures only count direct emissions within national boundaries, so miss out the carbon cost of goods manufactured elsewhere.
A report this week from several international groups says carbon dioxide emissions associated with UK consumption grew 18% between 1992 and 2004, once these imports are accounted for. Official figures show UK CO2 pollution falling 5% over that period
The environment secretary, Hilary Benn, said: "Under international climate change agreements, we only have direct influence over our domestic emissions – and they are, and will remain, the basis for these commitments. But as we move to a low carbon economy, we must help businesses and individuals to understand and reduce the environmental impacts of the products and services they produce, sell or consume, wherever in the world they are made."
The report was commissioned by Defra and prepared by experts at the Stockholm Environment Institute and the University of Sydney.
It follows a series of analyses over the last year that have pointed out that official government figures underestimate the UK's contribution to global warming.
In December, a team of economists led by Dieter Helm at Oxford University, said UK progress on cutting greenhouse gases was an "illusion". Counting pollution from aviation, shipping, overseas trade and tourism, which are not measured in the official figures, meant that emissions of UK greenhouse gases – not just CO2 – have risen 19% since 1990.
Officially, Britain's output is 15% lower over that period – placing it on track to meet its 12.5% target under the Kyoto Protocol.

G8 to agree tariff steps to drive CO2 cuts - paper


Friday July 4 2008

TOKYO, July 4 (Reuters) - G8 leaders will agree to take their own initiatives to reduce or abolish import tariffs on industrial goods that aid efforts to curb greenhouse gas emissions and thus help fight global warming, Japan's Asahi newspaper said on Friday.
Climate change is high on the agenda for the G8's July 7-9 summit in Hokkaido, northern Japan. But views differ on how much the world's emissions should be cut in the mid or long term as well as the responsibility of developed nations for such reductions.
A G8 agreement will not identify individual goods to which low or zero tariffs would be applied, but is aimed at helping to drive the World Trade Organisations' Doha round, the Asahi said without quoting sources.
Among G8 members, the European Union imposes 22 percent tariffs on small cars to protect domestic industry and Russia imposes a 10 percent tax on solar panel imports, the Asahi said.
The Doha round, launched in November 2001, has missed deadline after deadline partly because of a rift on cutting tariffs on industrial goods such as cars, shoes, fuel and timber.
WTO Director-General Pascal Lamy has called for a select group of ministers to meet on July 21 to push the Doha round toward conclusions, diplomats said.
G8 leaders will also confirm cooperation on research and development to help find breakthroughs in emission-reduction innovative technologies in such areas as fuel cell vehicles, solar power and carbon dioxide capture and storage (CCS), the Asahi said.
Japan will separately announce a rise in its spending on R&D to encourage innovation in the fields of the environment and energy of about 20 percent to $10 billion a year, the Asahi said.
That compares with a pledge by Prime Minister Yasuo Fukuda in January to set such investment at $30 billion over the next five years to help meet his proposed target for global emissions cuts of 50 percent by 2050. (Reporting by Risa Maeda; Editing by Mike Watson)

EU likely to lift target for greenhouse gas cuts by 2020 to 30 percent

The Associated Press
Published: July 3, 2008

PARIS: European Union leaders are likely to raise their target to cut emissions of greenhouse gases to 30 percent by 2020, up from the current target of 20 percent, Czech Environment Minister Martin Bursik said Thursday.
"The 20 percent target on greenhouse gas cuts will very probably change into 30 percent," Bursik told reporters at a briefing during an informal summit of EU environment and energy ministers taking place near Paris.
French Environment Minister Jean-Louis Borloo said that a 20 percent cut in comparison to 1990 levels remained the 27-nation bloc's goal, but that the environment ministers were "looking at ways of changing that to 30 percent."
EU leaders last year pledged to cut the bloc's overall greenhouse gas emissions by 20 percent below 1990 levels by 2020, or by 30 percent if the United States, Japan and others join Europe in a global international emissions trading scheme.
The emissions cuts, together with energy savings and the promotion of clean energies, are part of a package of measures that EU wants to see adopted by year's end.