By Fiona Harvey, Environment Correspondent
Published: September 16 2008 03:00
Investment in environmentally sound sources of energy has risen nearly five-fold in the past four years, according to analysis by New Energy Finance, the consultancy. In 2004, investment in the sector stood at just over $33bn. Last year, it was more than $148bn.
The massive scale of investment has thrown up huge opportunities for entrepreneurs and a bewildering variety of new companies has sprung up, many startlingly unfamiliar to those in traditional energy businesses.
Waste, for instance, is not usually thought of in this context. But the search for alternative energies has thrown the spotlight on waste-to-energy companies.
Advanced Plasma Power is one. It claims to be the only UK company using gas plasma technology to convert municipal waste to energy. The company's technology is capable of taking standard "black bag" household waste to generate energy, sending less than 1 per cent back to landfill. This gives the process some of the lowest emissions of any energy technology, lower than waste incineration. The company will announce its first full-scale plant this year.
Interest in clean energy has also led some long-established companies to reinvent themselves - and waste drew NTR, an Irish company, far from its roots as a toll road operator into energy-from-waste and wind energy.
NTR, founded in 1978, entered the waste management market in 1999 before moving into landfill gas, a source of "green" energy. At around the same time, the company also made its big leap into the renewable energy market with an investment of €3.9m in Future Wind Holdings, later to become Airtricity, with wind farms in Ireland, the UK, Germany and the US. Investments in ethanol and biodiesel followed.
NTR has since sold Airtricity but remains focused on green energy. It re-entered the wind business in the US this year with an investment of $150m in Wind Capital Group, and branched out into solar, announcing plans to buy a stake in Stirling Energy Systems of the US.
Stirling is one of a clutch of new "solar thermal energy generation" (STEG) companies. This technology, also known as concentrated solar power, uses large arrays of mirrors to focus the sun's rays on a power conversion unit. This can be water, which is heated to steam to drive a turbine. In the case of Stirling, the unit is instead filled with hydrogen which, when heated, expands to drive the pistons of a Stirling engine, generating electricity.
Most solar thermal generation companies are in the US, but Solel is a start-up from Israel. The company announced a partnership with Iberdrola of Spain and plans for a $140m solar thermal energy generation manufacturing plant in Spain.
Jim Barry, chief executive of NTR, says the move to green energy has been reinvigorating. "I am more and more convinced of the growth opportunities from green energy," he says.
Whereas traditional energy companies focused firmly on selling as much of their product as possible, the need to reduce emissions has stimulated a wave of companies specialising in using as little energy as possible.
From New Zealand comes Wellington Drive Technologies, an electric motor company specialising in energy efficiency. The company's motors can be used in air-conditioning, fridges, driers and other white goods.
Moixa, the UK-based brainchild of entrepreneur Simon Daniel, produces the USBcell, a rechargeable battery that gets its power by connecting to the USB ports on computers.
Mr Daniel says that people prefer the convenience of single-use alkaline cells. He says USBcell addresses that by providing a more convenient way of recharging, which will put paid to the waste of at least some of the 15bn alkaline batteries that are thrown away each year. The company scooped top prize in the Barclays green leaders in business awards in September.
Though most of the investment in green energy to date has been in the developed world, rapidly industrialising countries such as China and India are catching up fast.
The Chinese solar panel maker SunTech, for instance, raised nearly $400m when it floated in the US in December 2005.
And India's Suzlon Energy, a wind turbine maker, surprised many when it won a takeover battle for the Belgian Hansen Transmissions in 2006. China and India are likely to produce many more clean energy companies in the coming years.
Copyright The Financial Times Limited 2008
Tuesday 16 September 2008
Ice-cream mogul calls for £10m wind power investment
Published Date: 16 September 2008
By Frank Urquhart
THE founder of Scotland's biggest independent ice-cream firm yesterday urged Britain's farmers and landowners to unite in forming the country's biggest windpower company.
Dr Maitland Mackie, the chairman of Mackies of Scotland, said they could seize the lion's share of a potential £270 billion renewable energy jackpot.With start-up funding of £10 million, Dr Mackie believes that within 12 years the new company would be capable of developing enough renewable energy projects to match and even surpass the 85 gigawatts of electricity already being produced by renewable energy companies in Britain.The Aberdeenshire businessman said: "Farmers and landowners are missing out on a colossal opportunity to be principal players in electricity generation through land-based wind power."At the moment, they are giving it away to the City and big financiers. Landowners, farmers and others in rural areas need to get our act together before the City and big business steal our show."Dr Mackie, whose company recently invested £2.5 million in three wind generators to fully power its farming and ice-cream manufacturing operations, said he was looking for 10,000 farmers and landowners throughout the UK, including 1,000 in Scotland, to back the scheme by investing a minimum of £1,000 in a new limited liability company.As part of the agreement, they will also give the company first call on suitable sites for wind generators.
A disruptive time of profound change
By Ed Crooks
Published: September 16 2008 03:00
At the small town of Schwarze Pumpe in eastern Germany, the Swedish energy group Vattenfall has built a power plant that would have bemused an earlier generation of electrical engineers.
The heat source is conventional: lignite, brown coal. What is new is that the coal is burned in pure oxygen, and the carbon dioxide that is the principal exhaust gas is captured, compressed and liquefied, and pumped into tankers. The trucks then drive the liquid CO2 to an exhausted gas field, also in Germany to be pumped 3.5km below the surface.
The pilot plant is tiny, generating a mere 30 megawatts of power. Vattenfall's conventional power station at the same site is about 50 times bigger. Yet the carbon capture project is the first working example of a technology that its supporters argue is our only hope for saving the planet from catastrophic climate change.
At a time of rapid technological progress, with the stakes potentially as high as they could possibly be, it is no suprise that much of the talk about energy has become super-heated.
José Manuel Barroso, president of the European Commission, has talked about the upheaval in the energy industry as a "third industrial revolution", set to change economies and societies as profoundly as the steam-powered first wave of industrialisation in the 19th century, or the oil-fuelled development of motor and air transport in the 20th.
In the US, Barack Obama, the Democratic presidential candidate, calls for a "transformation" of the economy to make America independent of imported energy and to fight the threat of climate change. "Energy independence will require an all-hands-on-deck effort from America: effort from our scientists and entrepreneurs, from businesses, and from every American citizen," he said in a speech last week.
John McCain, his Republican rival, has strongly backed nuclear power, calling for 45 new nuclear plants to be built by 2030. Sarah Palin, the Republican vice-presidential candidate, has also called for "energy independence".
It is important to take a reality check on this talk. Fossil fuels - oil, gas and coal - provide about four-fifths of the world's energy today. They are most likely to provide something very close to that even 20 years from now. It is highly unlikely that the US, which is this month importing more than 11m barrels of oil and petroleum products every day, will really become independent for energy at any time in the foreseeable future.
For transport, no alternative source has yet been found to match the convenience and cost of oil. Hopes invested in biofuels have drained away as food prices have soared.
For power generation, similarly, none of the nuclear or renewable alternatives can yet match the combination of low investment cost and project risk with high reliability that is provided by coal- and gas-fired plants.
The International Energy Agency, the rich countries' watchdog, estimated a year ago that under "business as usual" policies, fossil fuels' contribution to the world's energy mix would rise from 81 per cent in 2005 to 82 per cent by 2030.
Even if every policy then under consideration for supporting renewables and improving energy efficiency were adopted, that share would fall only 5 percentage points, to 76 per cent, the IEA believed.
That more renewable-friendly outlook certainly looks more plausible to many energy experts. Business as usual would, for example, require oil production to rise by a third from about 87m b/d today to about 116m b/d by 2030. Total, the French oil group, is one of several expert sources suggesting production is unlikely to go above 100m over that period. But even if that were the case, demand for oil, gas and coal will all continue to grow steadily.
One implication of that outlook is that the industry needs to became ever more skilled at finding and developing new sources of hydrocarbons. Heavy oil such as Canada's oil sands, gas shales such as the fields in Oklahoma and Louisiana, and exploration in ultra-deep water and in the Arctic will all be important elements.
Another implication is that if the threat of man-made climate change is to be addressed, the world will have to begin capturing the emissions from burning fossil fuels on a massive scale, which is why Vattenfall's little plant at Schwartze Pumpe is so significant.
Jean-Francois Minster, Total's scientific director, says: "Our view is that we should try to satisfy both energy needs and environmental constraints. The only source of energy in the short term for many uses is fossil fuels, so we should find ways in which both of those objectives are compatible."
But while the present central role of fossil fuels in the world's energy system should not be forgotten, it is still the case that the fastest growth is likely to come from other sources of energy: renewables and possibly nuclear power as well.
In that sense, the politicians' rhetoric is rooted in reality.
Traditional utilities are investing in huge wind farms in Europe and the US, encouraged by generous public subsidies.
Biofuels industries have grown up from nothing in a few years, again as a result of subsidies. Even big oil companies, often seen as the most conventional of energy businesses, are investing significant amounts in such exotic processes as extracting road fuel from algae.
ExxonMobil, the world's biggest energy company, is developing new processes to produce hydrogen. Exxon was blasted earlier in the year by some of its shareholders, descendents of John D. Rockefeller, the founder its ancestor Standard Oil, for not doing enough to develop new energy technologies.
Rex Tillerson, Exxon's chairman and chief executive, has made no secret of his scepticism about some renewable energy, including biofuels and solar power.
But even Exxon is backing a wide range of research into what it calls potential technological "breakthroughs" in alternative energy.
Change is visible in emerging economies, too. India still has a huge need for power supplies of any kind: 400m people have no access to electricity. But it is one of the most attractive countries in the world for investment in renewable energy, along with China.
Whether all this adds up to another industrial revolution, history will judge. But there can be no denying that energy companies are entering a period of profound change. This is a disruptive environment, in which new opportunities are being created, and new threats emerging. And while we can have a sense of the way the competitive forces are shifting, we are also facing huge uncertainties, over vital questions such as the pace of climate change and the availability of oil and gas.
Lew Watts of PFC Energy, the consultancy, argues: "I am convinced that the really major breakthroughs will come from outside the energy industry: from nanotech, or bio-sciences, or somewhere very different."
Copyright The Financial Times Limited 2008
Published: September 16 2008 03:00
At the small town of Schwarze Pumpe in eastern Germany, the Swedish energy group Vattenfall has built a power plant that would have bemused an earlier generation of electrical engineers.
The heat source is conventional: lignite, brown coal. What is new is that the coal is burned in pure oxygen, and the carbon dioxide that is the principal exhaust gas is captured, compressed and liquefied, and pumped into tankers. The trucks then drive the liquid CO2 to an exhausted gas field, also in Germany to be pumped 3.5km below the surface.
The pilot plant is tiny, generating a mere 30 megawatts of power. Vattenfall's conventional power station at the same site is about 50 times bigger. Yet the carbon capture project is the first working example of a technology that its supporters argue is our only hope for saving the planet from catastrophic climate change.
At a time of rapid technological progress, with the stakes potentially as high as they could possibly be, it is no suprise that much of the talk about energy has become super-heated.
José Manuel Barroso, president of the European Commission, has talked about the upheaval in the energy industry as a "third industrial revolution", set to change economies and societies as profoundly as the steam-powered first wave of industrialisation in the 19th century, or the oil-fuelled development of motor and air transport in the 20th.
In the US, Barack Obama, the Democratic presidential candidate, calls for a "transformation" of the economy to make America independent of imported energy and to fight the threat of climate change. "Energy independence will require an all-hands-on-deck effort from America: effort from our scientists and entrepreneurs, from businesses, and from every American citizen," he said in a speech last week.
John McCain, his Republican rival, has strongly backed nuclear power, calling for 45 new nuclear plants to be built by 2030. Sarah Palin, the Republican vice-presidential candidate, has also called for "energy independence".
It is important to take a reality check on this talk. Fossil fuels - oil, gas and coal - provide about four-fifths of the world's energy today. They are most likely to provide something very close to that even 20 years from now. It is highly unlikely that the US, which is this month importing more than 11m barrels of oil and petroleum products every day, will really become independent for energy at any time in the foreseeable future.
For transport, no alternative source has yet been found to match the convenience and cost of oil. Hopes invested in biofuels have drained away as food prices have soared.
For power generation, similarly, none of the nuclear or renewable alternatives can yet match the combination of low investment cost and project risk with high reliability that is provided by coal- and gas-fired plants.
The International Energy Agency, the rich countries' watchdog, estimated a year ago that under "business as usual" policies, fossil fuels' contribution to the world's energy mix would rise from 81 per cent in 2005 to 82 per cent by 2030.
Even if every policy then under consideration for supporting renewables and improving energy efficiency were adopted, that share would fall only 5 percentage points, to 76 per cent, the IEA believed.
That more renewable-friendly outlook certainly looks more plausible to many energy experts. Business as usual would, for example, require oil production to rise by a third from about 87m b/d today to about 116m b/d by 2030. Total, the French oil group, is one of several expert sources suggesting production is unlikely to go above 100m over that period. But even if that were the case, demand for oil, gas and coal will all continue to grow steadily.
One implication of that outlook is that the industry needs to became ever more skilled at finding and developing new sources of hydrocarbons. Heavy oil such as Canada's oil sands, gas shales such as the fields in Oklahoma and Louisiana, and exploration in ultra-deep water and in the Arctic will all be important elements.
Another implication is that if the threat of man-made climate change is to be addressed, the world will have to begin capturing the emissions from burning fossil fuels on a massive scale, which is why Vattenfall's little plant at Schwartze Pumpe is so significant.
Jean-Francois Minster, Total's scientific director, says: "Our view is that we should try to satisfy both energy needs and environmental constraints. The only source of energy in the short term for many uses is fossil fuels, so we should find ways in which both of those objectives are compatible."
But while the present central role of fossil fuels in the world's energy system should not be forgotten, it is still the case that the fastest growth is likely to come from other sources of energy: renewables and possibly nuclear power as well.
In that sense, the politicians' rhetoric is rooted in reality.
Traditional utilities are investing in huge wind farms in Europe and the US, encouraged by generous public subsidies.
Biofuels industries have grown up from nothing in a few years, again as a result of subsidies. Even big oil companies, often seen as the most conventional of energy businesses, are investing significant amounts in such exotic processes as extracting road fuel from algae.
ExxonMobil, the world's biggest energy company, is developing new processes to produce hydrogen. Exxon was blasted earlier in the year by some of its shareholders, descendents of John D. Rockefeller, the founder its ancestor Standard Oil, for not doing enough to develop new energy technologies.
Rex Tillerson, Exxon's chairman and chief executive, has made no secret of his scepticism about some renewable energy, including biofuels and solar power.
But even Exxon is backing a wide range of research into what it calls potential technological "breakthroughs" in alternative energy.
Change is visible in emerging economies, too. India still has a huge need for power supplies of any kind: 400m people have no access to electricity. But it is one of the most attractive countries in the world for investment in renewable energy, along with China.
Whether all this adds up to another industrial revolution, history will judge. But there can be no denying that energy companies are entering a period of profound change. This is a disruptive environment, in which new opportunities are being created, and new threats emerging. And while we can have a sense of the way the competitive forces are shifting, we are also facing huge uncertainties, over vital questions such as the pace of climate change and the availability of oil and gas.
Lew Watts of PFC Energy, the consultancy, argues: "I am convinced that the really major breakthroughs will come from outside the energy industry: from nanotech, or bio-sciences, or somewhere very different."
Copyright The Financial Times Limited 2008
A disruptive time of profound change
By Ed Crooks
Published: September 16 2008 03:00
At the small town of Schwarze Pumpe in eastern Germany, the Swedish energy group Vattenfall has built a power plant that would have bemused an earlier generation of electrical engineers.
The heat source is conventional: lignite, brown coal. What is new is that the coal is burned in pure oxygen, and the carbon dioxide that is the principal exhaust gas is captured, compressed and liquefied, and pumped into tankers. The trucks then drive the liquid CO2 to an exhausted gas field, also in Germany to be pumped 3.5km below the surface.
The pilot plant is tiny, generating a mere 30 megawatts of power. Vattenfall's conventional power station at the same site is about 50 times bigger. Yet the carbon capture project is the first working example of a technology that its supporters argue is our only hope for saving the planet from catastrophic climate change.
At a time of rapid technological progress, with the stakes potentially as high as they could possibly be, it is no suprise that much of the talk about energy has become super-heated.
José Manuel Barroso, president of the European Commission, has talked about the upheaval in the energy industry as a "third industrial revolution", set to change economies and societies as profoundly as the steam-powered first wave of industrialisation in the 19th century, or the oil-fuelled development of motor and air transport in the 20th.
In the US, Barack Obama, the Democratic presidential candidate, calls for a "transformation" of the economy to make America independent of imported energy and to fight the threat of climate change. "Energy independence will require an all-hands-on-deck effort from America: effort from our scientists and entrepreneurs, from businesses, and from every American citizen," he said in a speech last week.
John McCain, his Republican rival, has strongly backed nuclear power, calling for 45 new nuclear plants to be built by 2030. Sarah Palin, the Republican vice-presidential candidate, has also called for "energy independence".
It is important to take a reality check on this talk. Fossil fuels - oil, gas and coal - provide about four-fifths of the world's energy today. They are most likely to provide something very close to that even 20 years from now. It is highly unlikely that the US, which is this month importing more than 11m barrels of oil and petroleum products every day, will really become independent for energy at any time in the foreseeable future.
For transport, no alternative source has yet been found to match the convenience and cost of oil. Hopes invested in biofuels have drained away as food prices have soared.
For power generation, similarly, none of the nuclear or renewable alternatives can yet match the combination of low investment cost and project risk with high reliability that is provided by coal- and gas-fired plants.
The International Energy Agency, the rich countries' watchdog, estimated a year ago that under "business as usual" policies, fossil fuels' contribution to the world's energy mix would rise from 81 per cent in 2005 to 82 per cent by 2030.
Even if every policy then under consideration for supporting renewables and improving energy efficiency were adopted, that share would fall only 5 percentage points, to 76 per cent, the IEA believed.
That more renewable-friendly outlook certainly looks more plausible to many energy experts. Business as usual would, for example, require oil production to rise by a third from about 87m b/d today to about 116m b/d by 2030. Total, the French oil group, is one of several expert sources suggesting production is unlikely to go above 100m over that period. But even if that were the case, demand for oil, gas and coal will all continue to grow steadily.
One implication of that outlook is that the industry needs to became ever more skilled at finding and developing new sources of hydrocarbons. Heavy oil such as Canada's oil sands, gas shales such as the fields in Oklahoma and Louisiana, and exploration in ultra-deep water and in the Arctic will all be important elements.
Another implication is that if the threat of man-made climate change is to be addressed, the world will have to begin capturing the emissions from burning fossil fuels on a massive scale, which is why Vattenfall's little plant at Schwartze Pumpe is so significant.
Jean-Francois Minster, Total's scientific director, says: "Our view is that we should try to satisfy both energy needs and environmental constraints. The only source of energy in the short term for many uses is fossil fuels, so we should find ways in which both of those objectives are compatible."
But while the present central role of fossil fuels in the world's energy system should not be forgotten, it is still the case that the fastest growth is likely to come from other sources of energy: renewables and possibly nuclear power as well.
In that sense, the politicians' rhetoric is rooted in reality.
Traditional utilities are investing in huge wind farms in Europe and the US, encouraged by generous public subsidies.
Biofuels industries have grown up from nothing in a few years, again as a result of subsidies. Even big oil companies, often seen as the most conventional of energy businesses, are investing significant amounts in such exotic processes as extracting road fuel from algae.
ExxonMobil, the world's biggest energy company, is developing new processes to produce hydrogen. Exxon was blasted earlier in the year by some of its shareholders, descendents of John D. Rockefeller, the founder its ancestor Standard Oil, for not doing enough to develop new energy technologies.
Rex Tillerson, Exxon's chairman and chief executive, has made no secret of his scepticism about some renewable energy, including biofuels and solar power.
But even Exxon is backing a wide range of research into what it calls potential technological "breakthroughs" in alternative energy.
Change is visible in emerging economies, too. India still has a huge need for power supplies of any kind: 400m people have no access to electricity. But it is one of the most attractive countries in the world for investment in renewable energy, along with China.
Whether all this adds up to another industrial revolution, history will judge. But there can be no denying that energy companies are entering a period of profound change. This is a disruptive environment, in which new opportunities are being created, and new threats emerging. And while we can have a sense of the way the competitive forces are shifting, we are also facing huge uncertainties, over vital questions such as the pace of climate change and the availability of oil and gas.
Lew Watts of PFC Energy, the consultancy, argues: "I am convinced that the really major breakthroughs will come from outside the energy industry: from nanotech, or bio-sciences, or somewhere very different."
Copyright The Financial Times Limited 2008
Published: September 16 2008 03:00
At the small town of Schwarze Pumpe in eastern Germany, the Swedish energy group Vattenfall has built a power plant that would have bemused an earlier generation of electrical engineers.
The heat source is conventional: lignite, brown coal. What is new is that the coal is burned in pure oxygen, and the carbon dioxide that is the principal exhaust gas is captured, compressed and liquefied, and pumped into tankers. The trucks then drive the liquid CO2 to an exhausted gas field, also in Germany to be pumped 3.5km below the surface.
The pilot plant is tiny, generating a mere 30 megawatts of power. Vattenfall's conventional power station at the same site is about 50 times bigger. Yet the carbon capture project is the first working example of a technology that its supporters argue is our only hope for saving the planet from catastrophic climate change.
At a time of rapid technological progress, with the stakes potentially as high as they could possibly be, it is no suprise that much of the talk about energy has become super-heated.
José Manuel Barroso, president of the European Commission, has talked about the upheaval in the energy industry as a "third industrial revolution", set to change economies and societies as profoundly as the steam-powered first wave of industrialisation in the 19th century, or the oil-fuelled development of motor and air transport in the 20th.
In the US, Barack Obama, the Democratic presidential candidate, calls for a "transformation" of the economy to make America independent of imported energy and to fight the threat of climate change. "Energy independence will require an all-hands-on-deck effort from America: effort from our scientists and entrepreneurs, from businesses, and from every American citizen," he said in a speech last week.
John McCain, his Republican rival, has strongly backed nuclear power, calling for 45 new nuclear plants to be built by 2030. Sarah Palin, the Republican vice-presidential candidate, has also called for "energy independence".
It is important to take a reality check on this talk. Fossil fuels - oil, gas and coal - provide about four-fifths of the world's energy today. They are most likely to provide something very close to that even 20 years from now. It is highly unlikely that the US, which is this month importing more than 11m barrels of oil and petroleum products every day, will really become independent for energy at any time in the foreseeable future.
For transport, no alternative source has yet been found to match the convenience and cost of oil. Hopes invested in biofuels have drained away as food prices have soared.
For power generation, similarly, none of the nuclear or renewable alternatives can yet match the combination of low investment cost and project risk with high reliability that is provided by coal- and gas-fired plants.
The International Energy Agency, the rich countries' watchdog, estimated a year ago that under "business as usual" policies, fossil fuels' contribution to the world's energy mix would rise from 81 per cent in 2005 to 82 per cent by 2030.
Even if every policy then under consideration for supporting renewables and improving energy efficiency were adopted, that share would fall only 5 percentage points, to 76 per cent, the IEA believed.
That more renewable-friendly outlook certainly looks more plausible to many energy experts. Business as usual would, for example, require oil production to rise by a third from about 87m b/d today to about 116m b/d by 2030. Total, the French oil group, is one of several expert sources suggesting production is unlikely to go above 100m over that period. But even if that were the case, demand for oil, gas and coal will all continue to grow steadily.
One implication of that outlook is that the industry needs to became ever more skilled at finding and developing new sources of hydrocarbons. Heavy oil such as Canada's oil sands, gas shales such as the fields in Oklahoma and Louisiana, and exploration in ultra-deep water and in the Arctic will all be important elements.
Another implication is that if the threat of man-made climate change is to be addressed, the world will have to begin capturing the emissions from burning fossil fuels on a massive scale, which is why Vattenfall's little plant at Schwartze Pumpe is so significant.
Jean-Francois Minster, Total's scientific director, says: "Our view is that we should try to satisfy both energy needs and environmental constraints. The only source of energy in the short term for many uses is fossil fuels, so we should find ways in which both of those objectives are compatible."
But while the present central role of fossil fuels in the world's energy system should not be forgotten, it is still the case that the fastest growth is likely to come from other sources of energy: renewables and possibly nuclear power as well.
In that sense, the politicians' rhetoric is rooted in reality.
Traditional utilities are investing in huge wind farms in Europe and the US, encouraged by generous public subsidies.
Biofuels industries have grown up from nothing in a few years, again as a result of subsidies. Even big oil companies, often seen as the most conventional of energy businesses, are investing significant amounts in such exotic processes as extracting road fuel from algae.
ExxonMobil, the world's biggest energy company, is developing new processes to produce hydrogen. Exxon was blasted earlier in the year by some of its shareholders, descendents of John D. Rockefeller, the founder its ancestor Standard Oil, for not doing enough to develop new energy technologies.
Rex Tillerson, Exxon's chairman and chief executive, has made no secret of his scepticism about some renewable energy, including biofuels and solar power.
But even Exxon is backing a wide range of research into what it calls potential technological "breakthroughs" in alternative energy.
Change is visible in emerging economies, too. India still has a huge need for power supplies of any kind: 400m people have no access to electricity. But it is one of the most attractive countries in the world for investment in renewable energy, along with China.
Whether all this adds up to another industrial revolution, history will judge. But there can be no denying that energy companies are entering a period of profound change. This is a disruptive environment, in which new opportunities are being created, and new threats emerging. And while we can have a sense of the way the competitive forces are shifting, we are also facing huge uncertainties, over vital questions such as the pace of climate change and the availability of oil and gas.
Lew Watts of PFC Energy, the consultancy, argues: "I am convinced that the really major breakthroughs will come from outside the energy industry: from nanotech, or bio-sciences, or somewhere very different."
Copyright The Financial Times Limited 2008
Arctic ice could be thinnest ever amid fears climate is 'low priority'
Published Date: 16 September 2008
By Jenny Haworth
AS ANOTHER report reveals the vanishing state of the Arctic ice, scientists have raised fears that the message about the urgent need to act on climate change is not getting through fast enough.
The director of WWF Scotland has said only nuclear war or an asteroid hitting Earth should be considered more of a crisis than climate change.New data has revealed this summer could have seen the lowest Arctic ice cover on record.Dr Richard Dixon admitted that, with concerns over house prices and the credit crunch, for some people it might not seem like the biggest priority.But he said despite more immediate worries, it must be at the top of the list."Humans beings are genetically programmed to deal with the immediate crisis in front of them. "If you don't know where your next crust of bread is coming from, you might not be concerned about what happens to the planet in 50 years' time."But he said it must be seen as the biggest priority, and urged governments to act."If you don't tackle climate change, the global economy will fall apart," he said."If you don't tackle climate change the natural resources we rely on from timber to fish stocks will also be severely disrupted."Apart from all-out nuclear war or an asteroid hitting the planet, there isn't anything bigger than climate change."The continuing loss of older, thicker ice means the cover has become dramatically thinner this year. The area of ice that is at least five years old has already decreased by 56 per cent between 1985 and 2007.Dr Martin Sommerkorn, a senior climate change adviser at WWF International's Arctic Programme, said: "If you take reduced ice thickness into account, there is probably less ice overall in the Arctic this year than in any other year since monitoring began."With less ice to reflect the sun's heat, more of it is absorbed by the water, adding to global warming. This is also the first year that the Northwest Passage, over the top of North America, and the Northeast Passage, over the top of Russia, are both free of ice. There are already signs that species including polar bears are suffering as climate change erodes the ice on which they rely. Duncan McLaren, the chief executive of Friends of the Earth Scotland, thinks the public are not put off concerns about climate change by other worries, but by the enormity of the problem. "They are put off by the absolute magnitude of what it might mean," he said.He said, as a result, both the public and governments look for excuses not to take action."What we get continually is people saying they want to do something but they say if they do it on their own it won't make a difference. The public is looking to the government and business to make the solutions easy to adopt."Last week, a coalition of environment groups accused the main political parties of failing to prepare for the challenges of climate change, by switching focus instead to the economy.
Published Date: 16 September 2008
By Jenny Haworth
AS ANOTHER report reveals the vanishing state of the Arctic ice, scientists have raised fears that the message about the urgent need to act on climate change is not getting through fast enough.
The director of WWF Scotland has said only nuclear war or an asteroid hitting Earth should be considered more of a crisis than climate change.New data has revealed this summer could have seen the lowest Arctic ice cover on record.Dr Richard Dixon admitted that, with concerns over house prices and the credit crunch, for some people it might not seem like the biggest priority.But he said despite more immediate worries, it must be at the top of the list."Humans beings are genetically programmed to deal with the immediate crisis in front of them. "If you don't know where your next crust of bread is coming from, you might not be concerned about what happens to the planet in 50 years' time."But he said it must be seen as the biggest priority, and urged governments to act."If you don't tackle climate change, the global economy will fall apart," he said."If you don't tackle climate change the natural resources we rely on from timber to fish stocks will also be severely disrupted."Apart from all-out nuclear war or an asteroid hitting the planet, there isn't anything bigger than climate change."The continuing loss of older, thicker ice means the cover has become dramatically thinner this year. The area of ice that is at least five years old has already decreased by 56 per cent between 1985 and 2007.Dr Martin Sommerkorn, a senior climate change adviser at WWF International's Arctic Programme, said: "If you take reduced ice thickness into account, there is probably less ice overall in the Arctic this year than in any other year since monitoring began."With less ice to reflect the sun's heat, more of it is absorbed by the water, adding to global warming. This is also the first year that the Northwest Passage, over the top of North America, and the Northeast Passage, over the top of Russia, are both free of ice. There are already signs that species including polar bears are suffering as climate change erodes the ice on which they rely. Duncan McLaren, the chief executive of Friends of the Earth Scotland, thinks the public are not put off concerns about climate change by other worries, but by the enormity of the problem. "They are put off by the absolute magnitude of what it might mean," he said.He said, as a result, both the public and governments look for excuses not to take action."What we get continually is people saying they want to do something but they say if they do it on their own it won't make a difference. The public is looking to the government and business to make the solutions easy to adopt."Last week, a coalition of environment groups accused the main political parties of failing to prepare for the challenges of climate change, by switching focus instead to the economy.
Proposal to tax plastic forks sticks in the throats of les pique-niqueurs
By John Lichfield in Paris Tuesday, 16 September 2008
Not since the unveiling of Edouard Manet's scandalous painting Le Déjeuner sur l'Herbe in 1863 has a row over the humble picnic – or pique-nique – so convulsed France.
The French Environment minister, Jean-Louis Borloo, yesterday confirmed dark, but seemingly preposterous, rumours that have circulated in France for several days. The government intends to levy a tax on picnics.
In a country devoted to both food and the outdoors, such an idea might seem outrageous, like placing a tax on smiling. M. Borloo was, however, unabashed. "We are doing it," he told a French radio interviewer.
A tax of 90 cents (71p) per kilogram (2.2lb) will be placed on plastic and paper throwaway cups from next year as part of a government drive to protect the environment and reduce the 360kg of rubbish generated, on average, by each person in France each year. Similar "green" taxes on wasteful fridges, washing machines, televisions and batteries – and tax-breaks on their more eco-friendly equivalents – are also under consideration.
The so-called "picnic tax" was immediately attacked by the main opposition party, the Socialists, as a heartless salvo in a new class war. Why not tax the rich, who could afford to eat in restaurants, asked Stéphane Le Foll, the spokesman for the Parti Socialiste. Why tax those who could only afford to picnic?
A centre-right government which had promised to cut taxes had introduced at least a dozen new taxes in the past 16 months, he said. "The government is piling up new taxes which hurt the consumer," he argued.
French parks are crowded with picnickers each weekend, frequently consuming not just cheese and pickle sandwiches but a choice of pâtés, gateaux and salads. Unlike the two women in Manet's celebrated painting, which was ejected from the national Salon, the picnickers generally keep their clothes on.
One serial picnicker, Martine Pilon, who invites up to 20 friends to a feast in the Bois de Boulogne on most fine Sundays, had mixed feelings about the new picnic tax yesterday. "I do use plastic forks and knives and plastic or paper plates, but I insist on proper dishes or plastic dishes hidden in wicker baskets. Plastic bags are completely banned," she said.
"No one wants to pay more to picnic, but M. Borloo has a point. Plastic is very ugly at a picnic and throwaway plastic is terrible for the environment."
The picnic tax has been the subject of a heated row between the environment and finance ministries. M. Borloo – the minister for sustainable development – sees the tax as a logical progression from the decisions made at a national environment conference last year.
M. Borloo has already pushed through a "bonus-malus" system, which imposes heavy taxes on highly polluting cars and gives a tax break to environmentally friendly vehicles. He now wants to spread the idea to other goods, starting with plastic goblets, knives and forks, and non-degradable paper plates and napkins.
"We already have high taxes on other polluting products," he said. "We are now planning a tax on throwaway plastic items which will help to finance tax cuts on recyclable products. We don't like to think of this as a tax, but a levy on goods which are heavy generators of rubbish."
Not since the unveiling of Edouard Manet's scandalous painting Le Déjeuner sur l'Herbe in 1863 has a row over the humble picnic – or pique-nique – so convulsed France.
The French Environment minister, Jean-Louis Borloo, yesterday confirmed dark, but seemingly preposterous, rumours that have circulated in France for several days. The government intends to levy a tax on picnics.
In a country devoted to both food and the outdoors, such an idea might seem outrageous, like placing a tax on smiling. M. Borloo was, however, unabashed. "We are doing it," he told a French radio interviewer.
A tax of 90 cents (71p) per kilogram (2.2lb) will be placed on plastic and paper throwaway cups from next year as part of a government drive to protect the environment and reduce the 360kg of rubbish generated, on average, by each person in France each year. Similar "green" taxes on wasteful fridges, washing machines, televisions and batteries – and tax-breaks on their more eco-friendly equivalents – are also under consideration.
The so-called "picnic tax" was immediately attacked by the main opposition party, the Socialists, as a heartless salvo in a new class war. Why not tax the rich, who could afford to eat in restaurants, asked Stéphane Le Foll, the spokesman for the Parti Socialiste. Why tax those who could only afford to picnic?
A centre-right government which had promised to cut taxes had introduced at least a dozen new taxes in the past 16 months, he said. "The government is piling up new taxes which hurt the consumer," he argued.
French parks are crowded with picnickers each weekend, frequently consuming not just cheese and pickle sandwiches but a choice of pâtés, gateaux and salads. Unlike the two women in Manet's celebrated painting, which was ejected from the national Salon, the picnickers generally keep their clothes on.
One serial picnicker, Martine Pilon, who invites up to 20 friends to a feast in the Bois de Boulogne on most fine Sundays, had mixed feelings about the new picnic tax yesterday. "I do use plastic forks and knives and plastic or paper plates, but I insist on proper dishes or plastic dishes hidden in wicker baskets. Plastic bags are completely banned," she said.
"No one wants to pay more to picnic, but M. Borloo has a point. Plastic is very ugly at a picnic and throwaway plastic is terrible for the environment."
The picnic tax has been the subject of a heated row between the environment and finance ministries. M. Borloo – the minister for sustainable development – sees the tax as a logical progression from the decisions made at a national environment conference last year.
M. Borloo has already pushed through a "bonus-malus" system, which imposes heavy taxes on highly polluting cars and gives a tax break to environmentally friendly vehicles. He now wants to spread the idea to other goods, starting with plastic goblets, knives and forks, and non-degradable paper plates and napkins.
"We already have high taxes on other polluting products," he said. "We are now planning a tax on throwaway plastic items which will help to finance tax cuts on recyclable products. We don't like to think of this as a tax, but a levy on goods which are heavy generators of rubbish."
Roll back time to safeguard climate, expert warns
A return to pre-industrial levels of carbon dioxide urged as the only way to prevent the worst impacts of global warming
David Adam
guardian.co.uk,
Monday September 15 2008 11:16 BST
Scientists may have to turn back time and clean the atmosphere of all man-made carbon dioxide to prevent the worst impacts of global warming, one of Europe's most senior climate scientists has warned.
Professor John Schellnhuber, director of the Potsdam Institute for Climate Impact Research in Germany, told the Guardian that only a return to pre-industrial levels of CO2 would be enough to guarantee a safe future for the planet. He said that current political targets to slow the growth in emissions and stabilise carbon levels were insufficient, and that ways may have to be found to actively remove CO2 from the air.
Schellnhuber said: "We have to start pondering that it might not be enough to stabilise carbon levels. We should not rule out that it might be necessary to bring them down again."
Carbon levels have fluctuated over the last few hundred thousand years, but have rarely gone much beyond 280 parts per million (ppm), which is commonly referred to as the pre-industrial concentration. Over the last few centuries, human emissions of greenhouse gases have forced that concentration up as high as 387ppm, and it is rising at more than 2ppm each year.
World governments are currently trying to agree a deal that would restrict emissions and stabilise carbon levels at 450ppm, in an effort to limit global temperatures to 2C warmer than pre-industrial times.
Schellnhuber, who has advised the German government and European Commission on climate, said: "It is a compromise between ambition and feasibility. A rise of 2C could avoid some of the big environmental disasters, but it is still only a compromise."
He said even a small increase in temperature could trigger one of several climatic tipping points, such as methane released from melting permafrost, and bring much more severe global warming.
"It is a very sweeping argument, but nobody can say for sure that 330ppm is safe," he said. "Perhaps it will not matter whether we have 270ppm or 320ppm, but operating well outside the [historic] realm of carbon dioxide concentrations is risky as long as we have not fully understood the relevant feedback mechanisms."
He calls the plan to remove man-made emissions "atmospheric restitution" and has discussed it at recent seminars, but not written it up for a scientific journal. "It's such a bold idea and sounds very desperate," he said.
Schellnhuber said the most severe long-term impact could be sea-level rise. Over several centuries or more, a 1C global rise would correspond to a 15-20m rise in sea level. "Since we have built all our coastal zones for the current sea level we should not change [it] by tens of metres."
If CO2 levels are stabilised over the next decades, he said, then "science fiction" technology could be developed to bring the level down again by 2200. He suggested the large-scale burning of plant material for energy, with the resulting carbon dioxide captured and stored, could reduce CO2 levels by about 50ppm. Other techniques would be needed as well, he said.
Scientists in the US, led by Klaus Lackner at Columbia University, are developing a device that could scrub carbon dioxide from the air using absorbent plastic strips. Richard Branson has promised $25m (£14m) to the inventor of a machine that could take CO2 from the air on a large scale.
Schellnhuber's warning comes as climate experts say current emissions trends show the world is unlikely to stabilise carbon dioxide levels below 650ppm, which could see a 4C rise. Alice Bows and Kevin Anderson, of the Tyndall Centre for Climate Change Research at the University of Manchester, say carbon pollution is rising faster than officially admitted. They say emissions would need to peak by 2015 and then decrease by up to 6.5% each year for atmospheric CO2 levels to stabilise at 450ppm.
Even a goal of 650ppm – way above most government projections – would need world emissions to peak in 2020 and then reduce 3% each year. They say this year's G8 pledge to cut global emissions 50% by 2050, in an effort to limit global warming to 2C, has no scientific basis and could lead to "dangerously misguided" policies.
David Adam
guardian.co.uk,
Monday September 15 2008 11:16 BST
Scientists may have to turn back time and clean the atmosphere of all man-made carbon dioxide to prevent the worst impacts of global warming, one of Europe's most senior climate scientists has warned.
Professor John Schellnhuber, director of the Potsdam Institute for Climate Impact Research in Germany, told the Guardian that only a return to pre-industrial levels of CO2 would be enough to guarantee a safe future for the planet. He said that current political targets to slow the growth in emissions and stabilise carbon levels were insufficient, and that ways may have to be found to actively remove CO2 from the air.
Schellnhuber said: "We have to start pondering that it might not be enough to stabilise carbon levels. We should not rule out that it might be necessary to bring them down again."
Carbon levels have fluctuated over the last few hundred thousand years, but have rarely gone much beyond 280 parts per million (ppm), which is commonly referred to as the pre-industrial concentration. Over the last few centuries, human emissions of greenhouse gases have forced that concentration up as high as 387ppm, and it is rising at more than 2ppm each year.
World governments are currently trying to agree a deal that would restrict emissions and stabilise carbon levels at 450ppm, in an effort to limit global temperatures to 2C warmer than pre-industrial times.
Schellnhuber, who has advised the German government and European Commission on climate, said: "It is a compromise between ambition and feasibility. A rise of 2C could avoid some of the big environmental disasters, but it is still only a compromise."
He said even a small increase in temperature could trigger one of several climatic tipping points, such as methane released from melting permafrost, and bring much more severe global warming.
"It is a very sweeping argument, but nobody can say for sure that 330ppm is safe," he said. "Perhaps it will not matter whether we have 270ppm or 320ppm, but operating well outside the [historic] realm of carbon dioxide concentrations is risky as long as we have not fully understood the relevant feedback mechanisms."
He calls the plan to remove man-made emissions "atmospheric restitution" and has discussed it at recent seminars, but not written it up for a scientific journal. "It's such a bold idea and sounds very desperate," he said.
Schellnhuber said the most severe long-term impact could be sea-level rise. Over several centuries or more, a 1C global rise would correspond to a 15-20m rise in sea level. "Since we have built all our coastal zones for the current sea level we should not change [it] by tens of metres."
If CO2 levels are stabilised over the next decades, he said, then "science fiction" technology could be developed to bring the level down again by 2200. He suggested the large-scale burning of plant material for energy, with the resulting carbon dioxide captured and stored, could reduce CO2 levels by about 50ppm. Other techniques would be needed as well, he said.
Scientists in the US, led by Klaus Lackner at Columbia University, are developing a device that could scrub carbon dioxide from the air using absorbent plastic strips. Richard Branson has promised $25m (£14m) to the inventor of a machine that could take CO2 from the air on a large scale.
Schellnhuber's warning comes as climate experts say current emissions trends show the world is unlikely to stabilise carbon dioxide levels below 650ppm, which could see a 4C rise. Alice Bows and Kevin Anderson, of the Tyndall Centre for Climate Change Research at the University of Manchester, say carbon pollution is rising faster than officially admitted. They say emissions would need to peak by 2015 and then decrease by up to 6.5% each year for atmospheric CO2 levels to stabilise at 450ppm.
Even a goal of 650ppm – way above most government projections – would need world emissions to peak in 2020 and then reduce 3% each year. They say this year's G8 pledge to cut global emissions 50% by 2050, in an effort to limit global warming to 2C, has no scientific basis and could lead to "dangerously misguided" policies.
The trillion dollar band-aid
Solving climate change will be the most expensive public policy decision ever. Half-baked thinking won't fix it now
Björn Lomborg
guardian.co.uk,
Monday September 15 2008 09:30 BST
One commonly repeated argument for doing something about climate change sounds compelling, but turns out to be almost fraudulent. It is based on comparing the cost of action with the cost of inaction, and almost every major politician in the world uses it.
The president of the European commission, José Manuel Barroso, for example, used this argument when he presented the European Union's proposal to tackle climate change earlier this year. The EU promised to cut its carbon emissions by 20% by 2020, at a cost that the commission's own estimates put at about 0.5% of GDP, or roughly €60bn per year. This is obviously a hefty price tag – at least a 50% increase in the total cost of the EU – and it will likely be much higher (the commission has previously estimated the cost to be double its current estimate).
But Barroso's punchline was that "the cost is low compared to the high price of inaction". In fact, he forecasted that the price of doing nothing "could even approach 20% of GDP". (Never mind that this cost estimate is probably wildly overestimated – most models show about 3% damages.)
So there you have it. Of course, politicians should be willing to spend 0.5% of GDP to avoid a 20% cost of GDP. This sounds eminently sensible – until you realise that Barroso is comparing two entirely different issues.
The 0.5%-of-GDP expense will reduce emissions ever so slightly (if everyone in the EU actually fulfills their requirements for the rest of the century, global emissions will fall by about 4%). This would reduce the temperature increase expected by the end of the century by just five-hundredths of a degree Celsius. Thus, the EU's immensely ambitious programme will not stop or even significantly impact global warming.
In other words, if Barroso fears costs of 20% of GDP in the year 2100, the 0.5% payment every year of this century will do virtually nothing to change that cost. We would still have to pay by the end of the century, only now we would also have made ourselves poorer in the 90 years preceding it.
The sleight of hand works because we assume that the action will cancel all the effects of inaction, whereas of course, nothing like that is true. This becomes much clearer if we substitute much smaller action than Barroso envisions.
For example, say that the EU decides to put up a diamond-studded wind turbine at the Berlaymont headquarters, which will save one tonne of CO2 each year. The cost will be $1bn, but the EU says that this is incredibly cheap when compared to the cost of inaction on climate change, which will run into the trillions. It should be obvious that the $1bn windmill doesn't negate the trillions of dollars of damage from climate change that we still have to pay by the end of the century.
The EU's argument is similar to advising a man with a gangrenous leg that paying $50,000 for an aspirin is a good deal because the cost compares favorably to the cost of inaction, which is losing the leg. Of course, the aspirin doesn't prevent that outcome. The inaction argument is really terribly negligent, because it causes us to recommend aspirin and lose sight of smarter actions that might actually save the leg.
Likewise, it is negligent to focus on inefficiently cutting CO2 now because of costs in the distant future that in reality will not be avoided. It stops us from focusing on long-term strategies like investment in energy research and development that would actually solve climate change, and at a much lower cost.
If Barroso were alone, perhaps we could let his statement go, but the same argument is used again and again by influential politicians. Germany's Angela Merkel says it "makes economic sense" to cut CO2, because the "the economic consequences of inaction will be dramatic for us all." Australia's Kevin Rudd agrees that "the cost of inaction will be far greater than the cost of action." United Nations secretary general Ban Ki-Moon has gone on record with the exact same words. In the United States, both John McCain and Barack Obama use the cost of inaction as a pivotal reason to support carbon cuts.
California senator Diane Feinstein argues that we should curb carbon emissions because the Sierra snowpack, which accounts for much of California's drinking water, will be reduced by 40% by 2050 due to global warming. What she fails to tell us is that even a substantial reduction in emissions – at a high cost – will have an immeasurable effect on snowmelt by 2050. Instead, we should perhaps invest in water storage facilities.
Likewise, when politicians fret that we will lose a significant proportion of polar bears by 2050, they use it as an argument for cutting carbon, but forget to tell us that doing so will have no measurable effect on polar bear populations. Instead, we should perhaps stop shooting the 300 polar bears we hunt each year.
The inaction argument makes us spend vast resources on policies that will do virtually nothing to deal with climate change, thereby diverting those resources from policies that could actually make an impact.
We would never accept medical practitioners advising ultra-expensive and ineffective aspirins for gangrene because the cost of aspirin outweighs the cost of losing the leg. Why, then, should we tolerate such fallacious arguments when debating the costliest public policy decision in the history of mankind?
Copyright: Project Syndicate, 2008.
Björn Lomborg
guardian.co.uk,
Monday September 15 2008 09:30 BST
One commonly repeated argument for doing something about climate change sounds compelling, but turns out to be almost fraudulent. It is based on comparing the cost of action with the cost of inaction, and almost every major politician in the world uses it.
The president of the European commission, José Manuel Barroso, for example, used this argument when he presented the European Union's proposal to tackle climate change earlier this year. The EU promised to cut its carbon emissions by 20% by 2020, at a cost that the commission's own estimates put at about 0.5% of GDP, or roughly €60bn per year. This is obviously a hefty price tag – at least a 50% increase in the total cost of the EU – and it will likely be much higher (the commission has previously estimated the cost to be double its current estimate).
But Barroso's punchline was that "the cost is low compared to the high price of inaction". In fact, he forecasted that the price of doing nothing "could even approach 20% of GDP". (Never mind that this cost estimate is probably wildly overestimated – most models show about 3% damages.)
So there you have it. Of course, politicians should be willing to spend 0.5% of GDP to avoid a 20% cost of GDP. This sounds eminently sensible – until you realise that Barroso is comparing two entirely different issues.
The 0.5%-of-GDP expense will reduce emissions ever so slightly (if everyone in the EU actually fulfills their requirements for the rest of the century, global emissions will fall by about 4%). This would reduce the temperature increase expected by the end of the century by just five-hundredths of a degree Celsius. Thus, the EU's immensely ambitious programme will not stop or even significantly impact global warming.
In other words, if Barroso fears costs of 20% of GDP in the year 2100, the 0.5% payment every year of this century will do virtually nothing to change that cost. We would still have to pay by the end of the century, only now we would also have made ourselves poorer in the 90 years preceding it.
The sleight of hand works because we assume that the action will cancel all the effects of inaction, whereas of course, nothing like that is true. This becomes much clearer if we substitute much smaller action than Barroso envisions.
For example, say that the EU decides to put up a diamond-studded wind turbine at the Berlaymont headquarters, which will save one tonne of CO2 each year. The cost will be $1bn, but the EU says that this is incredibly cheap when compared to the cost of inaction on climate change, which will run into the trillions. It should be obvious that the $1bn windmill doesn't negate the trillions of dollars of damage from climate change that we still have to pay by the end of the century.
The EU's argument is similar to advising a man with a gangrenous leg that paying $50,000 for an aspirin is a good deal because the cost compares favorably to the cost of inaction, which is losing the leg. Of course, the aspirin doesn't prevent that outcome. The inaction argument is really terribly negligent, because it causes us to recommend aspirin and lose sight of smarter actions that might actually save the leg.
Likewise, it is negligent to focus on inefficiently cutting CO2 now because of costs in the distant future that in reality will not be avoided. It stops us from focusing on long-term strategies like investment in energy research and development that would actually solve climate change, and at a much lower cost.
If Barroso were alone, perhaps we could let his statement go, but the same argument is used again and again by influential politicians. Germany's Angela Merkel says it "makes economic sense" to cut CO2, because the "the economic consequences of inaction will be dramatic for us all." Australia's Kevin Rudd agrees that "the cost of inaction will be far greater than the cost of action." United Nations secretary general Ban Ki-Moon has gone on record with the exact same words. In the United States, both John McCain and Barack Obama use the cost of inaction as a pivotal reason to support carbon cuts.
California senator Diane Feinstein argues that we should curb carbon emissions because the Sierra snowpack, which accounts for much of California's drinking water, will be reduced by 40% by 2050 due to global warming. What she fails to tell us is that even a substantial reduction in emissions – at a high cost – will have an immeasurable effect on snowmelt by 2050. Instead, we should perhaps invest in water storage facilities.
Likewise, when politicians fret that we will lose a significant proportion of polar bears by 2050, they use it as an argument for cutting carbon, but forget to tell us that doing so will have no measurable effect on polar bear populations. Instead, we should perhaps stop shooting the 300 polar bears we hunt each year.
The inaction argument makes us spend vast resources on policies that will do virtually nothing to deal with climate change, thereby diverting those resources from policies that could actually make an impact.
We would never accept medical practitioners advising ultra-expensive and ineffective aspirins for gangrene because the cost of aspirin outweighs the cost of losing the leg. Why, then, should we tolerate such fallacious arguments when debating the costliest public policy decision in the history of mankind?
Copyright: Project Syndicate, 2008.
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