French court judges tax would punish households while letting off big industrial polluters
Lizzy Davies in Paris
guardian.co.uk, Wednesday 30 December 2009 16.13 GMT
Nicolas Sarkozy's dreams of putting France on the frontline of the fight against global warming were in disarray today, after his flagship carbon tax was ruled unconstitutional two days before it was due to come into effect.
In an unexpected and embarrassing blow, the court responsible for ensuring the validity of French legislation rejected the reform as ineffective and unfair.
It ruled that rather than being the revolutionary measure Sarkozy promised, the tax would have let off many industrial polluters, while placing a disproportionately heavy burden on ordinary households.
"The large number of exemptions from the carbon tax runs counter to the goal of fighting climate change and violates the equality enjoyed by all in terms of public charges," said the constitutional council in its eleventh hour ruling last night.
Scrambling to salvage a project which the President had vigorously defended against criticism from opposition politicians, green groups and members of his own party, the government insisted today the carbon tax had not been put off for good. "It is a tough fight, but a worthwhile one," said spokesman Luc Chatel. Ministers promised a revised text within weeks.
However, there was little the government could do to distract from the humiliation of having a much-trailed reform batted back by the sages of the august constitutional council.
Nor will the hopes of a new and improved plan do much to calm heightening worries over revenue. Even if a revised proposal is made, the tax – which was expected to raise €1.5bn (£1.34bn) during 2010 – will take weeks to reach parliament again and even longer to start boosting state coffers.
The opposition Socialist party made no secret of their glee at seeing the right-wing president fall at the final hurdle of his marathon battle to introduce a tax which was opposed by two-thirds of the public.
"This is a good decision and shows once again that Sarkozy's way of doing things does not work," the Socialist party's parliamentary leader, Jean-Marc Ayrault, told French radio. "They announce a reform, listen to no one and produce a poor job. It's a real mess."
Sarkozy, who has championed the environmental cause with increasing vigour since the strong performance of the French Greens in June's European elections, set out his vision for the carbon tax in September with the zeal of the ecological convert he claims to be. "It's a question of survival of the human race," he said. A tax of €17 (£17.22) per tonne of carbon emissions would have been levied on oil, coal and gas consumption.
But, while green campaigners warned the tax was not high enough to be effective, the Socialists and consumer groups claimed it would lead to an unfair situation in which certain people, such as car-dependant households in isolated areas, would be hit harder than the real culprits.
The ruling of the constitutional council appeared to support those criticisms. It said that more than 1,000 of France's biggest polluters could have been exempted from the charges, and that 93% of industrial emissions would not have been taxed.
However, many big polluters are required to participate in the EU emissions trading scheme, in which they must buy carbon permits if they exceed pollution targets.
Speaking on French radio this yesterday morning, the junior minister for trade and consumption admitted mistakes had been made. "It was perhaps shocking that the sectors given exemptions were those that polluted the most," said Hervé Novelli. "So we will have to put that right."
Sarkozy, who is returning tonight from a Christmas break in Morocco with his wife Carla Bruni, has made no public comment on the setback. But Chantal Jouanno, the junior minister for ecology, said he remained "very determined" to get a carbon tax into law before the summer.
Thursday, 31 December 2009
John Gummer to quit as MP to focus on international climate change campaign
Former Tory cabinet minister announces he is to step down at the election in order to play a leading role in a pan-European campaign to tackle global warming
Will Woodward and agencies
guardian.co.uk, Wednesday 30 December 2009 10.31 GMT
John Gummer, a former Conservative cabinet minister and one of the party's most staunch environmentalists, has announced he is to quit the Commons to join a new international campaign to combat climate change.
He said the collapse of the Copenhagen talks had forced him to rethink his longstanding plans to contest his Suffolk Coastal seat, which he has represented, with boundary changes, since the 1979 election which brought Margaret Thatcher into power. He was also MP for Lewisham West from 1970-74.
Gummer is to play a leading role in as-yet-unrevealed pan-European campaign on climate change, which will be launched next month.
"I had every intention of staying on," he told the Guardian today, but said he had his mind changed by "the collapse of the Copenhagen talks and then the pressures from other people that we have got to do something about it".
The departure of Gummer, who co-chaired the party's "quality of life" policy group with Tory candidate Zac Goldsmith, weakens the "green" presence on the Tory benches. He said he had discussed his departure with David Cameron before Christmas. "I am quite sure the future of these [green issues] are in safe hands with him. He is totally committed, but not everybody internationally is."
Gummer's departure will make Kenneth Clarke, assuming he retains his safe Tory seat at the next election, the sole surviving Commons representative of the "Cambridge mafia", a group of high-octane Conservative brains from that university which made it to the cabinet. Michael Howard is standing down and Lords Brittan, Lamont and Fowler have already left.
Gummer was party chairman under Thatcher, agriculture secretary under her and John Major, and then environment secretary for four years from 1993. He is possibly most famous, or infamous, for trying to feed his daughter Cordelia a beefburger to convince the public it was safe from mad cow disease.
His son Benedict Gummer is now Conservative candidate for neighbouring Ipswich, held by Labour's Chris Mole with a 5,332 majority but a swing seat vulnerable to a Tory challenge.
In a statement Gummer said: "Since the very disappointing results of the Copenhagen negotiations, I have been forced to rethink my plans for the future. In discussion with colleagues in the rest of Europe and the United States, as well as with international NGOs, I have realised that I cannot commit myself to the work that they believe has to be done and continue to serve my constituents as I would want.
"The things that I am urged to take on will demand a good deal of absence from home, which is simply incompatible either with the inevitably heavy legislative programme of a new parliament or with attendance at the many constituency functions upon which I have always laid great stress.
"During the 35 years that I have had the privilege of being a member of parliament, I have always put my constituency work first and I am not prepared to skimp on it now. It is therefore with very great sadness that I have decided it is simply not possible to contest the next election and still promise the kind of service that my constituents have rightly grown to expect."
More than 120 MPs have said they will step down at the next general election and many more are expected to go before the general election campaign starts. Many departures are directly or indirectly due to the outcry over MPs' expenses. Gummer attracted some criticism for claiming £9,000 in gardening expenses, including £100 a year to remove moles from his country estate.
Gummer said: "Climate change is not only a crisis without historic parallel, it is an urgent political threat. We will never win this battle if we diminish people's lives or preach at them. The threat must not be used as an excuse for unnecessary state direction and control.
"Instead, it is all of us, as citizens, entrepreneurs, and consumers, who will make change happen. Politicians and campaigners have to enable that change: they must unleash the power of the free market; they must harness the skills and innovation that drive it; and they must create the opportunities for competition to deliver new answers to this entirely new challenge.
"Those of us who have any chance to influence the course of events, even in a small way, have simply to make that our first priority, however difficult the choice."
Will Woodward and agencies
guardian.co.uk, Wednesday 30 December 2009 10.31 GMT
John Gummer, a former Conservative cabinet minister and one of the party's most staunch environmentalists, has announced he is to quit the Commons to join a new international campaign to combat climate change.
He said the collapse of the Copenhagen talks had forced him to rethink his longstanding plans to contest his Suffolk Coastal seat, which he has represented, with boundary changes, since the 1979 election which brought Margaret Thatcher into power. He was also MP for Lewisham West from 1970-74.
Gummer is to play a leading role in as-yet-unrevealed pan-European campaign on climate change, which will be launched next month.
"I had every intention of staying on," he told the Guardian today, but said he had his mind changed by "the collapse of the Copenhagen talks and then the pressures from other people that we have got to do something about it".
The departure of Gummer, who co-chaired the party's "quality of life" policy group with Tory candidate Zac Goldsmith, weakens the "green" presence on the Tory benches. He said he had discussed his departure with David Cameron before Christmas. "I am quite sure the future of these [green issues] are in safe hands with him. He is totally committed, but not everybody internationally is."
Gummer's departure will make Kenneth Clarke, assuming he retains his safe Tory seat at the next election, the sole surviving Commons representative of the "Cambridge mafia", a group of high-octane Conservative brains from that university which made it to the cabinet. Michael Howard is standing down and Lords Brittan, Lamont and Fowler have already left.
Gummer was party chairman under Thatcher, agriculture secretary under her and John Major, and then environment secretary for four years from 1993. He is possibly most famous, or infamous, for trying to feed his daughter Cordelia a beefburger to convince the public it was safe from mad cow disease.
His son Benedict Gummer is now Conservative candidate for neighbouring Ipswich, held by Labour's Chris Mole with a 5,332 majority but a swing seat vulnerable to a Tory challenge.
In a statement Gummer said: "Since the very disappointing results of the Copenhagen negotiations, I have been forced to rethink my plans for the future. In discussion with colleagues in the rest of Europe and the United States, as well as with international NGOs, I have realised that I cannot commit myself to the work that they believe has to be done and continue to serve my constituents as I would want.
"The things that I am urged to take on will demand a good deal of absence from home, which is simply incompatible either with the inevitably heavy legislative programme of a new parliament or with attendance at the many constituency functions upon which I have always laid great stress.
"During the 35 years that I have had the privilege of being a member of parliament, I have always put my constituency work first and I am not prepared to skimp on it now. It is therefore with very great sadness that I have decided it is simply not possible to contest the next election and still promise the kind of service that my constituents have rightly grown to expect."
More than 120 MPs have said they will step down at the next general election and many more are expected to go before the general election campaign starts. Many departures are directly or indirectly due to the outcry over MPs' expenses. Gummer attracted some criticism for claiming £9,000 in gardening expenses, including £100 a year to remove moles from his country estate.
Gummer said: "Climate change is not only a crisis without historic parallel, it is an urgent political threat. We will never win this battle if we diminish people's lives or preach at them. The threat must not be used as an excuse for unnecessary state direction and control.
"Instead, it is all of us, as citizens, entrepreneurs, and consumers, who will make change happen. Politicians and campaigners have to enable that change: they must unleash the power of the free market; they must harness the skills and innovation that drive it; and they must create the opportunities for competition to deliver new answers to this entirely new challenge.
"Those of us who have any chance to influence the course of events, even in a small way, have simply to make that our first priority, however difficult the choice."
'Carousel' frauds plague European carbon trading markets
Why are mysterious UK businesses registering to trade carbon in Europe?
By Rowena Mason, City ReporterPublished: 6:07PM GMT 30 Dec 2009
It is a building site, formerly a derelict car park, in a deprived part of West London, where the neon glow of curry houses and late-night grocery stores could not be further from the wealth and glamour of London's financial markets.
Described as a "consulting" business, this is the address of a UK company that has signed up to trade carbon permits under the European Emissions Trading Scheme in Copenhagen. But there is no trace of its existence on the Companies House database.
At the newsagent next door, nobody has ever even heard of emissions trading – the system where companies buy and sell the right to emit carbon dioxide – and there has not been a building there for many years.
It is not the only oddity to emerge from the Danish Carbon Registry. All the expected big players are on the list – utilities, oil and heavy industry – the only sectors obliged by law to own permits to cover emissions.
Quite a few investment banks are also signed up, on behalf of industry or trading to make a profit.
But outnumbering these familiar names, hundreds of UK companies selling anything from hair loss treatments to electronics have mysteriously registered to buy and sell carbon permits in the Scandinavian nation – mostly in the last 18 months.
Many give addresses in the regions such as Yorkshire, Lancashire, Essex and other places not known for their links to the world of finance.
The appearance of these obscure British companies – among them businesses with unreachable addresses and Hotmail, Gmail or Yahoo email accounts for company representatives – has recently come to the attention of the Danish authorities.
While many are bound to be genuine individual private traders playing the carbon markets, investigators are examining the possibility that some of these unknown UK-based companies have used the system to commit "carousel" fraud linked to VAT.
As the Copenhagen summit on global warming began this month, Denmark, the host nation, was bringing in an emergency ban to halt VAT on carbon. This followed similar suspensions in Britain, France, Spain and Holland.
According to sources, the Danish registry may be at the heart of Europe's problems with carbon trading fraud. Local media has repeatedly raised the fact that few, if any, checks are done on new traders and approval can be much quicker than in other countries.
Criminals profit by importing goods VAT-free, selling them through a series of companies, each liable to VAT, before exporting them again. Then, the first link in the chain often goes missing without accounting for the VAT and the final link reclaims the VAT it has paid from the state before disappearing.
It might sound like the tinpot scheme of local small-time crooks, but fleecing the tax man can bring in big money.
Just a few weeks ago, Europol, the cross-border police force, said that carbon trading fraudsters may have accounted for up to 90pc of all market activity in some European countries, with criminals mainly from Britain, France, Spain, Denmark and Holland pocketing an estimated €5bn (£4.5bn).
"It is estimated that in some countries, up to 90pc of the whole market volume was caused by fraudulent activities," Europol said.
Figures from New Energy Finance show the value of the global market falling from $38bn (£23bn) in the second quarter to $30bn in the three months to the end of September after several countries cracked down.
The London platform, the European Climate Exchange, where banks and energy companies tend to trade, is not affected by the fraud because it does not offer the spot contracts on which VAT was payable. But British traders can still defraud authorities by buying and selling permits on other European exchanges.
This organised criminal activity has even "endangered the credibility" of the current carbon trading system, according to Rob Wainwright, the director of Europol.
So why have fraudsters particularly targeted carbon trading? And what is being done to iron out problems in Europe before other areas – such as the US – start to trade carbon in the next few years?
Carousel fraud has been a known scam for years among mobile commodities, such as phones, computer chips and cigarettes.
But the attraction of carbon permits is their intangible nature, so there is no need physically to ship goods across borders. All is done at the click of a mouse.
It now looks like Europe will start a so-called "reverse charge" mechanism, which would remove the need for VAT to change hands between carbon traders every time permits are sold.
But will this remove all problems from the system? It should certainly eradicate VAT fraud, but the very nature of carbon credits makes them "an incredibly lucrative target for criminals", Rafael Rondelez, who was involved with the Europol investigation, has warned.
His message is clear: other types of carbon fraud could soon spring up because there are "no strong regulations or checking principles as there is in banking to prevent such activities as money laundering."
By Rowena Mason, City ReporterPublished: 6:07PM GMT 30 Dec 2009
It is a building site, formerly a derelict car park, in a deprived part of West London, where the neon glow of curry houses and late-night grocery stores could not be further from the wealth and glamour of London's financial markets.
Described as a "consulting" business, this is the address of a UK company that has signed up to trade carbon permits under the European Emissions Trading Scheme in Copenhagen. But there is no trace of its existence on the Companies House database.
At the newsagent next door, nobody has ever even heard of emissions trading – the system where companies buy and sell the right to emit carbon dioxide – and there has not been a building there for many years.
It is not the only oddity to emerge from the Danish Carbon Registry. All the expected big players are on the list – utilities, oil and heavy industry – the only sectors obliged by law to own permits to cover emissions.
Quite a few investment banks are also signed up, on behalf of industry or trading to make a profit.
But outnumbering these familiar names, hundreds of UK companies selling anything from hair loss treatments to electronics have mysteriously registered to buy and sell carbon permits in the Scandinavian nation – mostly in the last 18 months.
Many give addresses in the regions such as Yorkshire, Lancashire, Essex and other places not known for their links to the world of finance.
The appearance of these obscure British companies – among them businesses with unreachable addresses and Hotmail, Gmail or Yahoo email accounts for company representatives – has recently come to the attention of the Danish authorities.
While many are bound to be genuine individual private traders playing the carbon markets, investigators are examining the possibility that some of these unknown UK-based companies have used the system to commit "carousel" fraud linked to VAT.
As the Copenhagen summit on global warming began this month, Denmark, the host nation, was bringing in an emergency ban to halt VAT on carbon. This followed similar suspensions in Britain, France, Spain and Holland.
According to sources, the Danish registry may be at the heart of Europe's problems with carbon trading fraud. Local media has repeatedly raised the fact that few, if any, checks are done on new traders and approval can be much quicker than in other countries.
Criminals profit by importing goods VAT-free, selling them through a series of companies, each liable to VAT, before exporting them again. Then, the first link in the chain often goes missing without accounting for the VAT and the final link reclaims the VAT it has paid from the state before disappearing.
It might sound like the tinpot scheme of local small-time crooks, but fleecing the tax man can bring in big money.
Just a few weeks ago, Europol, the cross-border police force, said that carbon trading fraudsters may have accounted for up to 90pc of all market activity in some European countries, with criminals mainly from Britain, France, Spain, Denmark and Holland pocketing an estimated €5bn (£4.5bn).
"It is estimated that in some countries, up to 90pc of the whole market volume was caused by fraudulent activities," Europol said.
Figures from New Energy Finance show the value of the global market falling from $38bn (£23bn) in the second quarter to $30bn in the three months to the end of September after several countries cracked down.
The London platform, the European Climate Exchange, where banks and energy companies tend to trade, is not affected by the fraud because it does not offer the spot contracts on which VAT was payable. But British traders can still defraud authorities by buying and selling permits on other European exchanges.
This organised criminal activity has even "endangered the credibility" of the current carbon trading system, according to Rob Wainwright, the director of Europol.
So why have fraudsters particularly targeted carbon trading? And what is being done to iron out problems in Europe before other areas – such as the US – start to trade carbon in the next few years?
Carousel fraud has been a known scam for years among mobile commodities, such as phones, computer chips and cigarettes.
But the attraction of carbon permits is their intangible nature, so there is no need physically to ship goods across borders. All is done at the click of a mouse.
It now looks like Europe will start a so-called "reverse charge" mechanism, which would remove the need for VAT to change hands between carbon traders every time permits are sold.
But will this remove all problems from the system? It should certainly eradicate VAT fraud, but the very nature of carbon credits makes them "an incredibly lucrative target for criminals", Rafael Rondelez, who was involved with the Europol investigation, has warned.
His message is clear: other types of carbon fraud could soon spring up because there are "no strong regulations or checking principles as there is in banking to prevent such activities as money laundering."
Corn Cobs Have Energy Use
By IAN BERRY
The corn cob could go from farmer trash to treasure if an effort by the world's largest ethanol maker takes root.
Poet, Sioux Falls, S.D., is readying production of a new cellulosic ethanol plant that uses the corn waste product, rather than corn itself, to make the biofuel. The plant, located in Emmitsburg, Iowa, where Poet already has a traditional corn-based ethanol refinery, is expected to produce 25 million gallons per year once it starts commercial production in 2011. Poet already has a pilot project in Scotland, S.D., that produced about 20,000 gallons of cellulosic ethanol since it opened in November 2008.
The plant, called Project Liberty, could be a new revenue source for farmers, proponents say, although the future for the technology remains uncertain.
"We're looking at $30 to $60 per ton is what we'd be paying for the corn cobs," said Scott Weishaar, vice president of Commercial Development for Poet. "You take a look at a farmer who maybe has 1,000 or 2,000 acres of corn, that's pretty significant incremental income to his operation."
Currently, farmers have little use for the stripped-down corn cobs. The industry is moving toward cellulosic, as spelled out in the Environmental Protection Agency's renewable-fuel mandate. The mandate calls for cellulosic ethanol to account for 16 billion gallons of the total 36 billion gallons of production by 2022. Other sources for the cellulosic ethanol include wood waste, switchgrass and other corn "residue" besides the cob, such as the stalks. Corn cobs are currently the sole focus of Poet's cellulosic effort.
Unlike some of the other corn residue, the cobs are seen as having little if any value to the land and can be removed without depleting the soil. And the cob, unlike the grain, doesn't ignite the "food versus fuel" debate. Poet said that it is quickly finding ways to make cellulosic ethanol profitable. Since the pilot project started, it has cut costs almost in half, to $2.35 per gallon from $4.13, by reducing energy usage and enzyme costs, among other expenses. It costs roughly 50 to 80 cents more per gallon to make ethanol from corn cobs than from the grain, Poet said.
It hopes to have the costs per gallon below $2 by the start of commercial operation. Ethanol futures are trading around $1.90 at the Chicago Board of Trade.
Chief Executive Jeff Broin said that two years ago he would have considered cellulosic ethanol "a long shot" but that it is now a reality.
For farmers, harvesting the cobs requires additional equipment, and Poet is working with farm machine manufacturers to "accelerate their development" of equipment that will harvest cobs, Mr. Weishaar said.
The company hosted 16 different equipment makers in Emmitsburg for a field day in November, in which industry leaders showed off prototype machines to area farmers.
One of those companies, Agco Corp., has rarely before, if ever, taken a prototype machine to such a public event, said Agco spokesman Reid Hamre. The Duluth, Ga., company is probably at least several months away from deciding whether to mass-produce the equipment.
"It's a prototype machine, we've got some more testing and exhibiting and gathering of feedback for farmers and dealers we want to do," Mr. Hamre said.
The corn cob could go from farmer trash to treasure if an effort by the world's largest ethanol maker takes root.
Poet, Sioux Falls, S.D., is readying production of a new cellulosic ethanol plant that uses the corn waste product, rather than corn itself, to make the biofuel. The plant, located in Emmitsburg, Iowa, where Poet already has a traditional corn-based ethanol refinery, is expected to produce 25 million gallons per year once it starts commercial production in 2011. Poet already has a pilot project in Scotland, S.D., that produced about 20,000 gallons of cellulosic ethanol since it opened in November 2008.
The plant, called Project Liberty, could be a new revenue source for farmers, proponents say, although the future for the technology remains uncertain.
"We're looking at $30 to $60 per ton is what we'd be paying for the corn cobs," said Scott Weishaar, vice president of Commercial Development for Poet. "You take a look at a farmer who maybe has 1,000 or 2,000 acres of corn, that's pretty significant incremental income to his operation."
Currently, farmers have little use for the stripped-down corn cobs. The industry is moving toward cellulosic, as spelled out in the Environmental Protection Agency's renewable-fuel mandate. The mandate calls for cellulosic ethanol to account for 16 billion gallons of the total 36 billion gallons of production by 2022. Other sources for the cellulosic ethanol include wood waste, switchgrass and other corn "residue" besides the cob, such as the stalks. Corn cobs are currently the sole focus of Poet's cellulosic effort.
Unlike some of the other corn residue, the cobs are seen as having little if any value to the land and can be removed without depleting the soil. And the cob, unlike the grain, doesn't ignite the "food versus fuel" debate. Poet said that it is quickly finding ways to make cellulosic ethanol profitable. Since the pilot project started, it has cut costs almost in half, to $2.35 per gallon from $4.13, by reducing energy usage and enzyme costs, among other expenses. It costs roughly 50 to 80 cents more per gallon to make ethanol from corn cobs than from the grain, Poet said.
It hopes to have the costs per gallon below $2 by the start of commercial operation. Ethanol futures are trading around $1.90 at the Chicago Board of Trade.
Chief Executive Jeff Broin said that two years ago he would have considered cellulosic ethanol "a long shot" but that it is now a reality.
For farmers, harvesting the cobs requires additional equipment, and Poet is working with farm machine manufacturers to "accelerate their development" of equipment that will harvest cobs, Mr. Weishaar said.
The company hosted 16 different equipment makers in Emmitsburg for a field day in November, in which industry leaders showed off prototype machines to area farmers.
One of those companies, Agco Corp., has rarely before, if ever, taken a prototype machine to such a public event, said Agco spokesman Reid Hamre. The Duluth, Ga., company is probably at least several months away from deciding whether to mass-produce the equipment.
"It's a prototype machine, we've got some more testing and exhibiting and gathering of feedback for farmers and dealers we want to do," Mr. Hamre said.
Investing in coal is dysfunctional
Power companies, investment bankers and pension fund managers are fuelling an unlivable future – with our money
Jeremy Leggett
guardian.co.uk, Wednesday 30 December 2009 14.23 GMT
The acid test of the Copenhagen climate change summit was always going to be coal. Had governments managed to come up with a meaningful agreement, those who seek to continue burning coal would have faced significant risk that they would be spending their money on what investors call "strandable" assets – assets that become obsolete and therefore worthless. And for their part, financial institutions would have had to think twice whether they should keep pouring billions of dollars into new coal-fired electricity generation, seeking short-term returns while knowingly fuelling future climate ruin that is not costed in today's books.
But there was no meaningful agreement. And so we see the first in the queue to foist coal horrors upon us already knocking at the door. Since Copenhagen, E.ON has announced that any further emissions cuts by the company will depend on governments making progress in 2010 in the climate negotiations. E.ON and Centrica have both said they are less likely to build coal plants attempting carbon capture and storage. We can expect to see similar sentiments from most of the other big energy companies. Enlightened business leadership ahead of legislation is not their bag. More plans for unsequestered coal, without trapping and burying the carbon dioxide, will be the best we can expect.
To be fair to the power companies, the fault is wider. Most investors expect this behaviour of them. Most banks, insurance companies and pension funds are happy, as things stand, to continue investing in coal.
When it comes to the London Stock Exchange, they will have their first major chance soon. The largest Russian steam coal producer is eyeing an initial public offering in London during the first half of 2010. Suek, owned by two oligarchs, is worth $8-9bn (£5-6bn), and will be floating as many as a quarter of its shares. As one anonymous banker put it to Reuters: "There haven't been any good opportunities in this sector for a long time, and the sector is on its way up, so therefore this will be a positive story."
Of course, at the same time, those buying shares will be fuelling long-term wealth destruction – let me not be so base as to mention killing people to boot, let's stick to the money – by stoking climate change. This is the bottom line with the dysfunctional form of capitalism we have allowed to evolve. And the most galling thing is this: the bonus cultists are doing it, in large part, with our money.
A pension fund manager invests billions built up from tiny parcels of the peoples' pension contributions. He is rewarded, like everyone else in the temples of finance, on the basis of short-term returns. That the pension holder might retire into a world that is increasingly unliveable because of the actions of his fund manager features nowhere in any bonus calculation.
Hugo Chávez gloatingly told the Copenhagen summit that capitalism is to blame for climate change. He has more than half a point. After this failure of a summit many leaders had cast as a last-chance saloon, surely now we have to think hard about capitalism in the form we have allowed it to evolve.
The fact is that as things stand – to use the parlance of the investment bankers who will scrabble to win the Russian coal business and the pension fund managers who will line up to invest in the listing – there is no place on the global balance sheet for the assets most relevant to the survival of economies: ecosystems and civilisation. There is plenty of space for spectres they label as assets while shovelling the attendant megarisks off the books. That is the real bottom line.
Unless, that is, we can mobilise enough people-power, on enough fronts, for the citizenry to turn around the course of a war in which our leaders are currently displaying toothless impotence. The listing by Suek, and the role of our money it, might be a good place to start.
Any company investing in that IPO is a company that I will no longer bank or insure with. And any pension fund investing in it is one that I will encourage all my friends to switch their pension out of.
Jeremy Leggett, jeremyleggett.net, set up his company, Solarcentury, to fight climate change.
Jeremy Leggett
guardian.co.uk, Wednesday 30 December 2009 14.23 GMT
The acid test of the Copenhagen climate change summit was always going to be coal. Had governments managed to come up with a meaningful agreement, those who seek to continue burning coal would have faced significant risk that they would be spending their money on what investors call "strandable" assets – assets that become obsolete and therefore worthless. And for their part, financial institutions would have had to think twice whether they should keep pouring billions of dollars into new coal-fired electricity generation, seeking short-term returns while knowingly fuelling future climate ruin that is not costed in today's books.
But there was no meaningful agreement. And so we see the first in the queue to foist coal horrors upon us already knocking at the door. Since Copenhagen, E.ON has announced that any further emissions cuts by the company will depend on governments making progress in 2010 in the climate negotiations. E.ON and Centrica have both said they are less likely to build coal plants attempting carbon capture and storage. We can expect to see similar sentiments from most of the other big energy companies. Enlightened business leadership ahead of legislation is not their bag. More plans for unsequestered coal, without trapping and burying the carbon dioxide, will be the best we can expect.
To be fair to the power companies, the fault is wider. Most investors expect this behaviour of them. Most banks, insurance companies and pension funds are happy, as things stand, to continue investing in coal.
When it comes to the London Stock Exchange, they will have their first major chance soon. The largest Russian steam coal producer is eyeing an initial public offering in London during the first half of 2010. Suek, owned by two oligarchs, is worth $8-9bn (£5-6bn), and will be floating as many as a quarter of its shares. As one anonymous banker put it to Reuters: "There haven't been any good opportunities in this sector for a long time, and the sector is on its way up, so therefore this will be a positive story."
Of course, at the same time, those buying shares will be fuelling long-term wealth destruction – let me not be so base as to mention killing people to boot, let's stick to the money – by stoking climate change. This is the bottom line with the dysfunctional form of capitalism we have allowed to evolve. And the most galling thing is this: the bonus cultists are doing it, in large part, with our money.
A pension fund manager invests billions built up from tiny parcels of the peoples' pension contributions. He is rewarded, like everyone else in the temples of finance, on the basis of short-term returns. That the pension holder might retire into a world that is increasingly unliveable because of the actions of his fund manager features nowhere in any bonus calculation.
Hugo Chávez gloatingly told the Copenhagen summit that capitalism is to blame for climate change. He has more than half a point. After this failure of a summit many leaders had cast as a last-chance saloon, surely now we have to think hard about capitalism in the form we have allowed it to evolve.
The fact is that as things stand – to use the parlance of the investment bankers who will scrabble to win the Russian coal business and the pension fund managers who will line up to invest in the listing – there is no place on the global balance sheet for the assets most relevant to the survival of economies: ecosystems and civilisation. There is plenty of space for spectres they label as assets while shovelling the attendant megarisks off the books. That is the real bottom line.
Unless, that is, we can mobilise enough people-power, on enough fronts, for the citizenry to turn around the course of a war in which our leaders are currently displaying toothless impotence. The listing by Suek, and the role of our money it, might be a good place to start.
Any company investing in that IPO is a company that I will no longer bank or insure with. And any pension fund investing in it is one that I will encourage all my friends to switch their pension out of.
Jeremy Leggett, jeremyleggett.net, set up his company, Solarcentury, to fight climate change.
More China Companies Are Going Green
By JASON DEAN
BEIJING -- Chinese entrepreneurs and private citizens are starting to become more active in trying to address concerns over global warming, a nascent trend that could have significant long-term impact on the ability of the world's largest greenhouse-gas emitter to curb its effects on the climate.
The shift is most pronounced among a small-but-growing group of private business executives, who are adjusting their business practices and helping to spread awareness more broadly among the public.
Wang Shi, the 58-year-old chairman of China Vanke Co., the country's largest housing developer, said he became concerned about global warming through mountain climbing, a hobby he took up in 1998. He had read the Ernest Hemingway story "The Snows of Kilimanjaro," and in 2002 went to Tanzania to scale the mountain in the title. He was surprised at what he found.
"I didn't see any snow," he says. "I did more research, and discovered that within 50 years...its glaciers could be entirely gone as well."
Mr. Wang is gradually replacing wood used in the interiors of Vanke's apartment buildings with recyclable materials. Vanke is using more solar and other renewable energy, and adopting prefabrication techniques, borrowed partly from Japan, that are less wasteful than standard Chinese construction.
Mr. Wang is building a new corporate headquarters in Shenzhen designed by Steven Holl, an American architect, that he aims to make the first building in China with a platinum ranking -- the highest available -- on the international Leadership in Energy and Environmental Design rating system for "green buildings."
"China is a big country," says Mr. Wang, who founded Vanke 25 years ago. "It should try to shoulder the responsibilities of a large country, and therefore China's companies need to shoulder their own responsibilities."
In 2004, Vanke's Mr. Wang and about 60 other businessmen founded the Society of Entrepreneurs and Ecology to promote awareness and action on climate change and other environmental issues. It now has 160 members, each of whom pays 100,000 yuan ($14,620) in annual dues. That means an annual budget of at least $2.3 million, not including other contributions like free rent -- a hefty sum for a Chinese NGO.
SEE uses the funds for reforestation programs in China and educational efforts, and to help support more than 150 smaller environmental groups around the country.
On Dec. 8, at the beginning of the Copenhagen climate summit, the group joined several other organizations representing 200 business members to issue a communiqué pledging to reduce their companies' emissions and calling on governments to reach a deal including binding legal benchmarks.
Yang Peng, SEE's secretary-general, says the growing green consciousness is a natural outgrowth of China's development.
"In the past, people just wanted to get enough to eat. Now, many people live in nicer homes, and they're more concerned about the environment," he says. "Low carbon is a new idea, but it's spreading very fast."
Most of the focus in assessing China's climate-related practices has been on the government. That is logical, since Beijing, in addition to setting policy, plays an enormous direct role in the economy. The government has pledged to reduce China's carbon emissions relative to the size of its economy, but has refused to commit to outright emissions cuts. Some foreign officials and scientists have criticized China's stance and said it contributed to the failure of the Copenhagen summit to reach a breakthrough. China says it played a constructive role at the summit, but can only agree to a deal that treats developing nations fairly.
But the participation of private businesses and regular citizens in the world's most populous nation will also be a major factor in China's climate impact.
Until recently, there was little of the sort of nongovernmental activity on climate change and other environmental issues that is common in more-developed places like Europe, Japan and the U.S. Now, climate experts take heart in the increasing activities of some executives, educators and others -- even if it is too early for them to have had major impact, and abundant examples remain of indifference and waste.
"We are starting to see a growing level of awareness of climate change among people" in China, says Barbara Finamore, China program director for the Natural Resources Defense Council, a New York-based environmental organization. Ms. Finamore points to educational efforts in schools and by the state media to make people aware of climate issues, as well as "forward-looking companies who recognize the importance of this issue and are taking a leading role in trying to encourage their government to do more."
Some executives are changing their personal, as well as corporate, behavior. Zhang Yue, chairman of Broad Air Conditioner Co., was one of China's first entrepreneurs to buy a private jet, back in 1997. About five years ago, he became aware of the huge volume of carbon dioxide produced by a single 1,900-mile trip on the jet. Since then, he has heavily restricted the jet's use, and he often takes commercial flights.
Mr. Zhang has also made emissions reduction a central mission of his company. Broad is a major producer of giant air conditioners used in buildings, and it specializes in chillers that don't use electricity, instead relying on other energy sources like natural gas and waste heat. Broad says its air conditioners have only 20% the carbon-dioxide emissions of electric models.
Still, Mr. Zhang, who considers himself a pioneer on climate-change issues in China, is pessimistic about the overall level of awareness in the country.
"Public understanding of energy conservation and emissions reduction is still woefully behind," he says, adding that more education and publicity of the issue by the government is needed.
Others see progress already. Huang Ming, the chairman of Himin Solar Energy Group Co., China's largest maker of rooftop solar water heaters, says the desire among some of his customers, particularly educated, urban residents, to use more-environmentally friendly devices is helping to boost Himin's sales.
If property companies like Vanke change their behavior, it could have an especially strong impact, since China has the largest building market in the world by floor space. Building operations create about one-sixth of China's total carbon emissions, according to the China Greentech Report 2009, published by a business consortium.
A separate report in October by the NRDC and Boston Consulting Group estimated that "moderate" energy conservation, affecting 5% of China's existing buildings and 60% of new buildings, would have an environmental impact equivalent to halting global air traffic for four months.
Write to Jason Dean at jason.dean@wsj.com
Wednesday, 30 December 2009
Shell, Other Oil Firms Bolster Biofuels Spending
By RUSSELL GOLD
Royal Dutch Shell PLC has roughly doubled its financial support for biofuels start-up Codexis Inc. in the past year, the latest sign that oil companies are slowly and selectively increasing their interest in plants-to-fuels research.
Shell is on pace to spend $60 million in 2009 to fund research at Codexis, nearly twice the amount as the year before, according to regulatory filings. Codexis filed paperwork this week for a $100 initial public offering. The start-up is developing microbes to speed up the chemical reactions that turn inedible plants, such as grasses or stalks, into ethanol and diesel.
Other crude-oil companies also have increased spending on biofuels. Exxon Mobil Corp. said this summer it would spend $600 million over five or six years on a partnership with Synthetic Genomics Inc. to develop a way to turn algae into motor fuels. Chevron Corp. entered into a relationship in October with Mascoma Corp. to investigate plant-based fuel. And BP PLC created a venture with Verenium Corp. this year to build a fuel plant in central Florida next year.
Of course, this spending is tiny in comparison with these oil companies' annual capital budgets, which in some cases top $20 billion a year. But the funds are significant for biofuels research and are expected to accelerate efforts to determine if plants can be economically turned into motor fuels on a large scale.
Big oil companies don't appear to be interested in generating niche fuels. Rather, they are targeting investments at companies such as Codexis that can make a significant dent in a global 80-million-barrel-a-day fuel market. And they are steering clear of biofuels such as corn-based ethanol made from edible crops.
These investments are "proof that the oil industry sees the writing on the wall; they know they need to adapt," says Paul Dickerson, a partner at the law firm Haynes and Boone LLP and a former chief operating officer at the Energy Department's Office of Energy Efficiency and Renewable Energy. "We are not going to stop using oil, but these companies are aware that other energy sources are gaining traction, and they need to diversify their business plans just as America needs to diversify its energy supply."
Oil company interest in biofuels may be the industry's best chance right now. The industry was effectively frozen out of capital markets during the economic downturn and some advocates have been discouraged by the level of federal support.
The funding freeze has prevented the industry from fulfilling lofty goals. Two years ago, Congress envisioned that the industry would produce 100 millions gallons of biofuels from nonedible plants in 2010 and 250 million gallons in 2011. But few believe it can generate much more than 15 million gallons next year.
Codexis is developing enzymes to break down plant fibers into sugars. These sugars can then be turned into ethanol and diesel. Shell has a 20% stake in the company and Chevron owns another 5%. Codexis executives declined to be interviewed. The enzymes developed by San Francisco-based Codexis could be used, under an existing agreement, by Iogen Energy Corp., a biofuels company half owned by Shell.
If Codexis goes ahead and issues stock on the Nasdaq Stock Market—it filed once before in 2008 before pulling back when stock markets started falling—it would be the first biofuels company to hold an U.S.-listed IPO since December 2007 when China-based biodiesel maker Gushan Environmental Energy Ltd. debuted on the New York Stock Exchange, according to investment bank Dealogic.
Write to Russell Gold at russell.gold@wsj.com
Royal Dutch Shell PLC has roughly doubled its financial support for biofuels start-up Codexis Inc. in the past year, the latest sign that oil companies are slowly and selectively increasing their interest in plants-to-fuels research.
Shell is on pace to spend $60 million in 2009 to fund research at Codexis, nearly twice the amount as the year before, according to regulatory filings. Codexis filed paperwork this week for a $100 initial public offering. The start-up is developing microbes to speed up the chemical reactions that turn inedible plants, such as grasses or stalks, into ethanol and diesel.
Other crude-oil companies also have increased spending on biofuels. Exxon Mobil Corp. said this summer it would spend $600 million over five or six years on a partnership with Synthetic Genomics Inc. to develop a way to turn algae into motor fuels. Chevron Corp. entered into a relationship in October with Mascoma Corp. to investigate plant-based fuel. And BP PLC created a venture with Verenium Corp. this year to build a fuel plant in central Florida next year.
Of course, this spending is tiny in comparison with these oil companies' annual capital budgets, which in some cases top $20 billion a year. But the funds are significant for biofuels research and are expected to accelerate efforts to determine if plants can be economically turned into motor fuels on a large scale.
Big oil companies don't appear to be interested in generating niche fuels. Rather, they are targeting investments at companies such as Codexis that can make a significant dent in a global 80-million-barrel-a-day fuel market. And they are steering clear of biofuels such as corn-based ethanol made from edible crops.
These investments are "proof that the oil industry sees the writing on the wall; they know they need to adapt," says Paul Dickerson, a partner at the law firm Haynes and Boone LLP and a former chief operating officer at the Energy Department's Office of Energy Efficiency and Renewable Energy. "We are not going to stop using oil, but these companies are aware that other energy sources are gaining traction, and they need to diversify their business plans just as America needs to diversify its energy supply."
Oil company interest in biofuels may be the industry's best chance right now. The industry was effectively frozen out of capital markets during the economic downturn and some advocates have been discouraged by the level of federal support.
The funding freeze has prevented the industry from fulfilling lofty goals. Two years ago, Congress envisioned that the industry would produce 100 millions gallons of biofuels from nonedible plants in 2010 and 250 million gallons in 2011. But few believe it can generate much more than 15 million gallons next year.
Codexis is developing enzymes to break down plant fibers into sugars. These sugars can then be turned into ethanol and diesel. Shell has a 20% stake in the company and Chevron owns another 5%. Codexis executives declined to be interviewed. The enzymes developed by San Francisco-based Codexis could be used, under an existing agreement, by Iogen Energy Corp., a biofuels company half owned by Shell.
If Codexis goes ahead and issues stock on the Nasdaq Stock Market—it filed once before in 2008 before pulling back when stock markets started falling—it would be the first biofuels company to hold an U.S.-listed IPO since December 2007 when China-based biodiesel maker Gushan Environmental Energy Ltd. debuted on the New York Stock Exchange, according to investment bank Dealogic.
Write to Russell Gold at russell.gold@wsj.com
Theolia Sells French Wind Power Assets To Boralex
PARIS (Dow Jones)--French wind energy company Theolia SA (TEO.FR) Tuesday said it has sold wind power assets in France with a capacity of 47 megawatts to Canada's Boralex Inc. (BLX.T).
Financial details of the transaction weren't disclosed.
The assets include a seven-megawatt wind farm in operation since December 2006, as well as two wind projects with capacities of 30 megawatts and 10 megawatts respectively.
The commissioning of both wind projects, which will be built by Theolia, is expected by mid-2010, the company said.
Theolia added that it expects to exceed its target to sell 200 megawatts of wind projects and assets in 2009 following this deal.
Earlier Tuesday, Theolia reached a debt deal with its main bondholders, including a project for a capital increase of up to EUR100 million, in a move to reduce its debt and to ensure funding for its projects.
Theolia shares closed down EUR0.21, or 6.5%, at EUR3.03.
Company Web site: www.theolia.com
-By Elena Berton, Dow Jones Newswires; +33 1 40 17 17 65; elena.berton@dowjones.com
Financial details of the transaction weren't disclosed.
The assets include a seven-megawatt wind farm in operation since December 2006, as well as two wind projects with capacities of 30 megawatts and 10 megawatts respectively.
The commissioning of both wind projects, which will be built by Theolia, is expected by mid-2010, the company said.
Theolia added that it expects to exceed its target to sell 200 megawatts of wind projects and assets in 2009 following this deal.
Earlier Tuesday, Theolia reached a debt deal with its main bondholders, including a project for a capital increase of up to EUR100 million, in a move to reduce its debt and to ensure funding for its projects.
Theolia shares closed down EUR0.21, or 6.5%, at EUR3.03.
Company Web site: www.theolia.com
-By Elena Berton, Dow Jones Newswires; +33 1 40 17 17 65; elena.berton@dowjones.com
Iran 'close to deal' for Kazakh uranium
Daniel Nasaw, Washington
The Guardian, Wednesday 30 December 2009
Iran is said to be close to an agreement to buy more than 1,300 tons of uranium ore from Kazakhstan, a move that would allow the country to pursue its nuclear programme without conditions imposed in a UN-brokered uranium-for-fuel swap.
The deal, thought to be worth about $450m (£280m) for Kazakhstan, could yield nuclear fuel to keep Iran's medical and research reactors churning, and, western countries fear, further its nuclear weapons programme. The transfer of purified uranium was reported by the Associated Press, which cited a report produced by an unnamed member state of the International Atomic Energy Agency.
"The price is high because of the secret nature of the deal and due to Iran's commitment to keep secret the elements supplying the material," a two-page summary of an intelligence report said. An official of the country which drew up the report said "elements" refers to rogue officials in the Kazakh government brokering the deal.
Iran is under three sets of UN security council sanctions for refusing to freeze its enrichment programme that could be used to make nuclear weapons. Tehran denies such aspirations. Any attempt to import such a large amount of uranium ore would be in violation of those sanctions, which ban exports to Iran of all items, materials, equipment, goods and technology that could contribute to its enrichment activities.
In New York, Burkina Faso's UN ambassador Michel Kafando, a co-chair of the security council's Iran sanctions committee, referred questions about a potential deal between Iran and Kazakhstan to his sanctions adviser, Zongo Saidou. Saidou told AP that, as far as he knew, none of the UN's member nations had alerted the committee about any such allegation.
The material Iran is trying to get needs to be converted to a uranium gas, which is then processed into nuclear fuel or enriched uranium for nuclear weapons.
Iran's Tehran research reactor, which produces medical isotopes and operates under the IAEA safeguards, will run out of fuel in 18 months, and the ore deal suggests Iran wants a stock of fuel to keep it running.
The Guardian, Wednesday 30 December 2009
Iran is said to be close to an agreement to buy more than 1,300 tons of uranium ore from Kazakhstan, a move that would allow the country to pursue its nuclear programme without conditions imposed in a UN-brokered uranium-for-fuel swap.
The deal, thought to be worth about $450m (£280m) for Kazakhstan, could yield nuclear fuel to keep Iran's medical and research reactors churning, and, western countries fear, further its nuclear weapons programme. The transfer of purified uranium was reported by the Associated Press, which cited a report produced by an unnamed member state of the International Atomic Energy Agency.
"The price is high because of the secret nature of the deal and due to Iran's commitment to keep secret the elements supplying the material," a two-page summary of an intelligence report said. An official of the country which drew up the report said "elements" refers to rogue officials in the Kazakh government brokering the deal.
Iran is under three sets of UN security council sanctions for refusing to freeze its enrichment programme that could be used to make nuclear weapons. Tehran denies such aspirations. Any attempt to import such a large amount of uranium ore would be in violation of those sanctions, which ban exports to Iran of all items, materials, equipment, goods and technology that could contribute to its enrichment activities.
In New York, Burkina Faso's UN ambassador Michel Kafando, a co-chair of the security council's Iran sanctions committee, referred questions about a potential deal between Iran and Kazakhstan to his sanctions adviser, Zongo Saidou. Saidou told AP that, as far as he knew, none of the UN's member nations had alerted the committee about any such allegation.
The material Iran is trying to get needs to be converted to a uranium gas, which is then processed into nuclear fuel or enriched uranium for nuclear weapons.
Iran's Tehran research reactor, which produces medical isotopes and operates under the IAEA safeguards, will run out of fuel in 18 months, and the ore deal suggests Iran wants a stock of fuel to keep it running.
Munich Re Sees Climate-Related Losses Mounting
By ULRIKE DAUER
FRANKFURT -- Munich Re AG, one of the world's largest reinsurers, Tuesday said economic and insured losses caused by climate change will continue to grow, and called for a near-term deal to ensure a substantial reduction in global greenhouse-gas emissions.
"We need as soon as possible an agreement that significantly reduces greenhouse gas emissions because the climate reacts slowly and what we fail to do now will have a bearing for decades to come," said management board member Torsten Jeworrek.
"In the light of these facts, it is very disappointing that no breakthrough was achieved at the Copenhagen climate summit in December 2009," Mr. Jeworrek said, pointing to the marked increase--more or less tripling--in major global weather-related natural disasters since 1950.
Reinsurers and primary insurers provide insurance protection against losses caused by large natural and man-made disasters.
Munich Re said it will step up its own initiatives in the matter, including investments of up to €2 billion in renewable energy and a strong commitment to the Sahara solar power project Desertec, which aims to come up with a feasible plan for generating solar power in the Sahara within the next three years.
Munich Re said losses caused by natural disasters cost the global insurance industry around $22 billion in 2009, helped by substantially lower U.S. hurricane activity than a year earlier, when the insurance industry had to pay around $50 billion for damage caused by natural disasters such as winter storms, hurricanes, cyclones, floods and earthquakes.
The figures are similar to estimates by Swiss peer Swiss Reinsurance Co., which estimated at the end of November that the bill the insurance industry had to pay for natural disaster losses in 2009 amounted to around $21 billion.
Munich Re said "severe weather events accounted for 45%, or nearly half, of global insured losses" in 2009. It also said this year's lower bill for natural disasters and the absence of "severe hurricanes and other mega-catastrophes" shouldn't be taken lightly, as there was a large number of moderately severe natural disasters.
"In particular, the trend toward an increase in weather-related catastrophes continues, while there has fundamentally been no change in the risk of geophysical events such as earthquakes," said Peter Hoeppe, who heads Munich Re's Geo Risks Research unit.
Earlier this month, leaders of the U.S., China and other major economies agreed on a new climate accord in Copenhagen, though many have said it wasn't ambitious enough and a future round of negotiations is now required to hash out the details. The accord contained no specific targets to reduce greenhouse gas emissions by 2050. A proposed 50% cut that was in earlier drafts was removed.
The pact calls on developed nations to provide $30 billion to help developing nations deal with the effects of climate change from 2010 to 2012. By 2020, rich nations aim to jointly mobilize $100 billion a year for poor nations.
Under the deal, countries have pledged to try to keep atmospheric concentrations of carbon dioxide low enough to keep average global temperatures less than two degrees Celsius above preindustrial levels; many scientists say breaching this threshold could have catastrophic consequences. But the agreement doesn't specify how countries will achieve that goal.
Write to Ulrike Dauer at ulrike.dauer@dowjones.com
FRANKFURT -- Munich Re AG, one of the world's largest reinsurers, Tuesday said economic and insured losses caused by climate change will continue to grow, and called for a near-term deal to ensure a substantial reduction in global greenhouse-gas emissions.
"We need as soon as possible an agreement that significantly reduces greenhouse gas emissions because the climate reacts slowly and what we fail to do now will have a bearing for decades to come," said management board member Torsten Jeworrek.
"In the light of these facts, it is very disappointing that no breakthrough was achieved at the Copenhagen climate summit in December 2009," Mr. Jeworrek said, pointing to the marked increase--more or less tripling--in major global weather-related natural disasters since 1950.
Reinsurers and primary insurers provide insurance protection against losses caused by large natural and man-made disasters.
Munich Re said it will step up its own initiatives in the matter, including investments of up to €2 billion in renewable energy and a strong commitment to the Sahara solar power project Desertec, which aims to come up with a feasible plan for generating solar power in the Sahara within the next three years.
Munich Re said losses caused by natural disasters cost the global insurance industry around $22 billion in 2009, helped by substantially lower U.S. hurricane activity than a year earlier, when the insurance industry had to pay around $50 billion for damage caused by natural disasters such as winter storms, hurricanes, cyclones, floods and earthquakes.
The figures are similar to estimates by Swiss peer Swiss Reinsurance Co., which estimated at the end of November that the bill the insurance industry had to pay for natural disaster losses in 2009 amounted to around $21 billion.
Munich Re said "severe weather events accounted for 45%, or nearly half, of global insured losses" in 2009. It also said this year's lower bill for natural disasters and the absence of "severe hurricanes and other mega-catastrophes" shouldn't be taken lightly, as there was a large number of moderately severe natural disasters.
"In particular, the trend toward an increase in weather-related catastrophes continues, while there has fundamentally been no change in the risk of geophysical events such as earthquakes," said Peter Hoeppe, who heads Munich Re's Geo Risks Research unit.
Earlier this month, leaders of the U.S., China and other major economies agreed on a new climate accord in Copenhagen, though many have said it wasn't ambitious enough and a future round of negotiations is now required to hash out the details. The accord contained no specific targets to reduce greenhouse gas emissions by 2050. A proposed 50% cut that was in earlier drafts was removed.
The pact calls on developed nations to provide $30 billion to help developing nations deal with the effects of climate change from 2010 to 2012. By 2020, rich nations aim to jointly mobilize $100 billion a year for poor nations.
Under the deal, countries have pledged to try to keep atmospheric concentrations of carbon dioxide low enough to keep average global temperatures less than two degrees Celsius above preindustrial levels; many scientists say breaching this threshold could have catastrophic consequences. But the agreement doesn't specify how countries will achieve that goal.
Write to Ulrike Dauer at ulrike.dauer@dowjones.com
Environment preview of 2010
After the debacle at Copenhagen, the world will be hoping that global leaders can make up for lost time this year
By Louise Gray, Environment CorrespondentPublished: 8:00AM GMT 29 Dec 2009
1. Post Copenhagen
Already Gordon Brown is pushing for another meeting of world leaders to sort out the mess as soon as possible. However he is dead set against the UN process that ended in such confusion last time. Instead it is likely that high level meetings, many behind closed doors, will be held throughout the year under the guise of the Major Economies Forum, G8 and other groupings.
The key sticking point is over how to reduce carbon emissions. Developed countries will be announcing how much they are willing to reduce greenhouse gases by 2020 at the end of January. The EU is willing to increase its target from 20 to 30 per cent by 2020 if other rich nations like the US, Japan and Australia also increase ambition. This horse trading will be a key part of strengthening world action against climate change.
Other points in the Copenhagen Accord that will take immediate action include handing out some of the $30 billion (£24bn) promised to poor nations by 2012 to help them reduced emissions and adapt to climate change. Work will also start on a scheme to save the rainforests by paying poor nations not to chop down trees.
Meanwhile the official UN process will shuffle on. The UN Framework Convention on Climate Change (UNFCCC), that is in charge of talks, will meet in June in Bonn and again in November in Mexico. It is hoped that progress will be made on the Copenhagen Accord so that it can be made a legal treaty by the end of the year.
2. Climate change
This is still the main issue for the environment in 2010. As well as the Copenhagen Accord, every department in the British Government will be working to address the problem of climate change by reducing emissions and protecting nature. The Committee on Climate Change will issue further instructions on how the UK is expected to meet its current target of cutting emissions by 34 per cent on 1990 levels by 2020. This will include further measures to encourage people from cars to public transport, including looking at road tolls and high speed trains.
3. Tory green policy
If David Cameron's party take power they have promised to introduce measures to cut household energy consumption. This would see the Government link up with major retailers like M&S and Tesco to offer households a full "green make-over". Loans to install insulation as well as more expensive measures like solar panels can be paid back over time from the savings made on energy bills. The Tories claim six billion homes will have access to £6,500 worth of energy saving measures.
4. Recycling and bins
The UK is running out of holes in the ground to dump rubbish and local authorities are likely to ramp up the drive to increase recycling rates. Households will be expected to separate their food waste for collection and could even be fined for failing to sort rubbish properly. This has proved unpopular so far. The Tories are trying a new track by offering to pay people who recycle correctly instead.
5. Green farming
Reform of the Common Agricultural Policy in 2013 could transform how the land is managed. British farmers will be monitoring progress in Brussels closely and making sure that food production in industrialised nations continues to be supported. The role of the environment in farming is likely to have much greater importance under the new CAP and already farmers are being asked to leave field margins for birds and use less chemicals. In Britain the conservationists and National Farmers Union have agreed to trial a scheme this year known as the Campaign for the Farmed Environment. Farmers will leave fallow a certain amount of land for wildlife to make up for the loss of set aside land. If they fail to prove they can protect nature on farms voluntarily then the Government has threatened to made it compulsory.
6. Frankenstein Foods
The Food Standards Agency has launched a mass public consultation on genetically modified (GM) foods. This will report back some time in 2010 and is likely to spark up the continuing debate around the controversial issue. Scientists, including the Royal Society, have made it clear that they think GM is part of the answer to food security in the future. But whether the public will countenance "Frankenstein foods" in their diet or on their farmland is another question. The Government is in favour of further research but afraid of backing GM too much in case of a public backlash. Universities in Britain continue to work on new varieties and new experiments will begin this year, despite public unease. The campaign to get more people growing-their-own, led by civil society groups including the National Trust, will continue into the New Year with more families encouraged to produce their own fruit and vegetables.
7. Energy Policy
The Government has announced 10 sites for possible nuclear power stations and energy companies will be coming forward with their bids. But despite Government backing their could be resistance from local communities as questions remain over the safety and cost of nuclear. Wind farms and bio mass projects will mushroom as the Government struggles to reach its target in producing more energy from green sources. The Severn Barrage is the only tidal project expected to go forward this year although there will be more research and development in this area. Households will be encouraged to set up their own renewable energy projects through a new Feed-In Tariff, although at the moment environmental groups are concerned that the reward for feeding energy into the grid is still too low.
Other big issues coming up this year will include Britain's response to the continued in flooding, the threat of animal disease, the decline of bees and the possible extension of the country's national parks.
By Louise Gray, Environment CorrespondentPublished: 8:00AM GMT 29 Dec 2009
1. Post Copenhagen
Already Gordon Brown is pushing for another meeting of world leaders to sort out the mess as soon as possible. However he is dead set against the UN process that ended in such confusion last time. Instead it is likely that high level meetings, many behind closed doors, will be held throughout the year under the guise of the Major Economies Forum, G8 and other groupings.
The key sticking point is over how to reduce carbon emissions. Developed countries will be announcing how much they are willing to reduce greenhouse gases by 2020 at the end of January. The EU is willing to increase its target from 20 to 30 per cent by 2020 if other rich nations like the US, Japan and Australia also increase ambition. This horse trading will be a key part of strengthening world action against climate change.
Other points in the Copenhagen Accord that will take immediate action include handing out some of the $30 billion (£24bn) promised to poor nations by 2012 to help them reduced emissions and adapt to climate change. Work will also start on a scheme to save the rainforests by paying poor nations not to chop down trees.
Meanwhile the official UN process will shuffle on. The UN Framework Convention on Climate Change (UNFCCC), that is in charge of talks, will meet in June in Bonn and again in November in Mexico. It is hoped that progress will be made on the Copenhagen Accord so that it can be made a legal treaty by the end of the year.
2. Climate change
This is still the main issue for the environment in 2010. As well as the Copenhagen Accord, every department in the British Government will be working to address the problem of climate change by reducing emissions and protecting nature. The Committee on Climate Change will issue further instructions on how the UK is expected to meet its current target of cutting emissions by 34 per cent on 1990 levels by 2020. This will include further measures to encourage people from cars to public transport, including looking at road tolls and high speed trains.
3. Tory green policy
If David Cameron's party take power they have promised to introduce measures to cut household energy consumption. This would see the Government link up with major retailers like M&S and Tesco to offer households a full "green make-over". Loans to install insulation as well as more expensive measures like solar panels can be paid back over time from the savings made on energy bills. The Tories claim six billion homes will have access to £6,500 worth of energy saving measures.
4. Recycling and bins
The UK is running out of holes in the ground to dump rubbish and local authorities are likely to ramp up the drive to increase recycling rates. Households will be expected to separate their food waste for collection and could even be fined for failing to sort rubbish properly. This has proved unpopular so far. The Tories are trying a new track by offering to pay people who recycle correctly instead.
5. Green farming
Reform of the Common Agricultural Policy in 2013 could transform how the land is managed. British farmers will be monitoring progress in Brussels closely and making sure that food production in industrialised nations continues to be supported. The role of the environment in farming is likely to have much greater importance under the new CAP and already farmers are being asked to leave field margins for birds and use less chemicals. In Britain the conservationists and National Farmers Union have agreed to trial a scheme this year known as the Campaign for the Farmed Environment. Farmers will leave fallow a certain amount of land for wildlife to make up for the loss of set aside land. If they fail to prove they can protect nature on farms voluntarily then the Government has threatened to made it compulsory.
6. Frankenstein Foods
The Food Standards Agency has launched a mass public consultation on genetically modified (GM) foods. This will report back some time in 2010 and is likely to spark up the continuing debate around the controversial issue. Scientists, including the Royal Society, have made it clear that they think GM is part of the answer to food security in the future. But whether the public will countenance "Frankenstein foods" in their diet or on their farmland is another question. The Government is in favour of further research but afraid of backing GM too much in case of a public backlash. Universities in Britain continue to work on new varieties and new experiments will begin this year, despite public unease. The campaign to get more people growing-their-own, led by civil society groups including the National Trust, will continue into the New Year with more families encouraged to produce their own fruit and vegetables.
7. Energy Policy
The Government has announced 10 sites for possible nuclear power stations and energy companies will be coming forward with their bids. But despite Government backing their could be resistance from local communities as questions remain over the safety and cost of nuclear. Wind farms and bio mass projects will mushroom as the Government struggles to reach its target in producing more energy from green sources. The Severn Barrage is the only tidal project expected to go forward this year although there will be more research and development in this area. Households will be encouraged to set up their own renewable energy projects through a new Feed-In Tariff, although at the moment environmental groups are concerned that the reward for feeding energy into the grid is still too low.
Other big issues coming up this year will include Britain's response to the continued in flooding, the threat of animal disease, the decline of bees and the possible extension of the country's national parks.
Bright future for lighting technology with glowing OLED wallpaper
OLEDs may soon replace lightbulbs in homes and offices with panels of energy-efficient light built into walls
Alok Jha, green technology correspondent
guardian.co.uk, Wednesday 30 December 2009
Wallpaper that can glow with light and bendable flat-panel screens are a step closer thanks to research into organic LEDs (OLEDs), which are widely hailed as the next generation of environmentally friendly lighting technology.
OLEDs use very little power to produce light, even compared with modern energy-saving bulbs. The chemicals they are made from can be painted on to thin, flexible surfaces, allowing them potentially to be used to replace traditional lightbulbs in homes and offices with panels of energy-efficient light built into walls, windows or even furniture. Other uses include flexible display screens, whose very low power consumption would mean they could operate without mains power, for example as roadside traffic warning signs powered by small solar panels.
Lomox Limited, a two-year-old company based in north Wales, awarded more than £450,000 today by the government-backed Carbon Trust to accelerate the development of its OLED technology.
Around a sixth of all the UK's electricity is used for lighting and Lomox claims its OLEDs are 2.5 times more efficient than standard energy-saving lightbulbs. The Carbon Trust said that, if all modern lights were replaced by OLEDs, annual carbon emissions around the world could fall by 2.5m tonnes by 2020 and almost 7.4mT by 2050. Replacing old, incandescent bulbs with OLEDs would generate even greater CO2 savings.
OLEDs have shown much promise in laboratories but must get over two major hurdles to become widespread consumer items: they are expensive to make and they tend to have relatively short lifetimes. "What our technology does, with the seven patents we have, is fix those problems," said Ken Lacey, chief executive of Lomox. He said his company's OLEDs have the potential to last as long as modern fluorescent lights and, for the display sector, as long as LCD panels. Lomox also claims its light matches natural light more closely than other energy-saving bulbs.
The company will focus its efforts on getting the first of its OLEDs to market by 2012, mainly for outdoor lighting. "The early part of the grant is to do the testing and take this out to that marketplace," said Lacey.
Mark Williamson, director of innovations at the Carbon Trust, said: "Lighting is a major producer of carbon emissions. This technology has the potential to produce ultra-efficient lighting for a wide range of applications, tapping into a huge global market. We're now on the look-out for other technologies that can save carbon and be a commercial success."
The grant for Lomox is one of 164 projects supported by the Carbon Trust for small companies working on a range of renewable energy and energy efficiency technologies such as fuel cells, combined heat and power, bioenergy, solar power, low-carbon building technologies, marine energy devices and more efficient industrial processes.
Alok Jha, green technology correspondent
guardian.co.uk, Wednesday 30 December 2009
Wallpaper that can glow with light and bendable flat-panel screens are a step closer thanks to research into organic LEDs (OLEDs), which are widely hailed as the next generation of environmentally friendly lighting technology.
OLEDs use very little power to produce light, even compared with modern energy-saving bulbs. The chemicals they are made from can be painted on to thin, flexible surfaces, allowing them potentially to be used to replace traditional lightbulbs in homes and offices with panels of energy-efficient light built into walls, windows or even furniture. Other uses include flexible display screens, whose very low power consumption would mean they could operate without mains power, for example as roadside traffic warning signs powered by small solar panels.
Lomox Limited, a two-year-old company based in north Wales, awarded more than £450,000 today by the government-backed Carbon Trust to accelerate the development of its OLED technology.
Around a sixth of all the UK's electricity is used for lighting and Lomox claims its OLEDs are 2.5 times more efficient than standard energy-saving lightbulbs. The Carbon Trust said that, if all modern lights were replaced by OLEDs, annual carbon emissions around the world could fall by 2.5m tonnes by 2020 and almost 7.4mT by 2050. Replacing old, incandescent bulbs with OLEDs would generate even greater CO2 savings.
OLEDs have shown much promise in laboratories but must get over two major hurdles to become widespread consumer items: they are expensive to make and they tend to have relatively short lifetimes. "What our technology does, with the seven patents we have, is fix those problems," said Ken Lacey, chief executive of Lomox. He said his company's OLEDs have the potential to last as long as modern fluorescent lights and, for the display sector, as long as LCD panels. Lomox also claims its light matches natural light more closely than other energy-saving bulbs.
The company will focus its efforts on getting the first of its OLEDs to market by 2012, mainly for outdoor lighting. "The early part of the grant is to do the testing and take this out to that marketplace," said Lacey.
Mark Williamson, director of innovations at the Carbon Trust, said: "Lighting is a major producer of carbon emissions. This technology has the potential to produce ultra-efficient lighting for a wide range of applications, tapping into a huge global market. We're now on the look-out for other technologies that can save carbon and be a commercial success."
The grant for Lomox is one of 164 projects supported by the Carbon Trust for small companies working on a range of renewable energy and energy efficiency technologies such as fuel cells, combined heat and power, bioenergy, solar power, low-carbon building technologies, marine energy devices and more efficient industrial processes.
Tuesday, 29 December 2009
A Fast, Cheap Way to Cool the Planet
Forget about carbon. If we want to buffer global warming, cutting methane is the key.
By ROBERT WATSON AND MOHAMED EL-ASHRY
This month's Copenhagen talks focused on the leading climate change culprit: carbon dioxide. But reversing global temperature increases by reducing carbon emissions will take many decades, if not centuries. Even if the largest cuts in CO2 contemplated in Copenhagen are implemented, it simply will not reverse the melting of ice already occurring in the most sensitive areas, including the rapid disappearance of glaciers in Tibet, the Arctic and Latin America.
So what can we do to effectively buffer global warming? The most obvious strategy is to make an all-out effort to reduce emissions of methane.
Sometimes called the "other greenhouse gas," methane is responsible for 75% as much warming as carbon dioxide measured over any given 20 years. Unlike carbon dioxide, which remains in the atmosphere for hundreds of years, methane lasts only a decade but packs a powerful punch while it's there.
Methane's short life makes it especially interesting in the short run, given the pace of climate change. If we need to suppress temperature quickly in order to preserve glaciers, reducing methane can make an immediate impact. Compared to the massive requirements necessary to reduce CO2, cutting methane requires only modest investment. Where we stop methane emissions, cooling follows within a decade, not centuries. That could make the difference for many fragile systems on the brink.
Yet global discussions about climate and policies to date have not focused on methane. Methane is formally in the "basket" of six gases targeted by the 1997 Kyoto Protocol. But its value is counted as if it has the same lifetime as carbon dioxide.
This ignores its much larger, near-term potential. As a result, methane represents only about 15% of the projects under the Kyoto Protocol's emissions offset program. And it is not a major focus of climate protection programs in any nation.
This is huge missed opportunity, and not just for the climate. Methane also forms ozone, the smog that severely damages food crops and kills tens of thousands each year by worsening asthma, emphysema and other respiratory diseases
Captured methane gas can be used as a clean energy source, contributing to energy security and diversification as well as reducing damaging black carbon (soot) and CO2 emissions. Solving the methane problem will lead to a higher quality of life by cleaning up city and agricultural wastes and odors, and curbing air pollution from dirty stoves and local industries. It will also create local jobs in construction and operation of methane-abating equipment.
Methane comes from a variety of sources: landfills, sewage streams, coal mines, oil and gas drilling operations, agricultural wastes, and cattle farms. For most of these sources, relatively cheap "end of pipe" technologies are available to collect methane and convert it to useful energy rather than venting it to the atmosphere.
These technologies include drilling into coal seams before mining to release and collect methane (this also reduces the risk of mine explosions, which kill hundreds of miners per year); depositing manure into "biogas" digesting tanks where pipes collect methane produced from decomposition; and covering and lining open landfills, shunting methane into a collection pipe.
In most cases, the collected methane can be used to run a village- or city-scale power plant. The Institute for Applied Systems Analysis and U.S. Environmental Protection Agency (EPA) estimate that as much as 40% of the world's projected methane could be reduced at less than $60 dollars per ton of carbon equivalent. Some methane projects even have "negative" cost, as the value of the captured gas exceeds the investment.
Experience has shown that even with modest incentives, methane projects, which are typically small scale, can move fast. Timberline Energy, a U.S. company, reports an expected construction time of six to eight months for landfill gas projects once financing is secured. And the United Nations Clean Development Mechanism estimates that setting up biogas projects can take as little as five months. Hundreds of shovel-ready projects around the world are ready to go, but are stalled because of uncertainty over future carbon rules.
This is why on Dec. 11, along with a distinguished group of colleagues from the scientific and financial communities, we proposed the creation of a Global Methane Fund to address the specific measures needed to get methane projects off the ground now. This includes a guaranteed price floor for methane projects to allay uncertainty over future carbon prices.
Funded by governments and private foundations, a Global Methane Fund with only $100 million to $200 million could leverage tens of billions of dollars for other projects, which will have a quick and measurable cooling effect in the Arctic and elsewhere. Scientific studies, such as the EPA's June 2006 report, "Global Mitigation of Non-CO2 Greenhouse Gases," conservatively indicate that we could eliminate 1.3 gigatons of annual CO2 equivalent emissions—that's half the U.S. power industry's emissions—just by targeting landfills, coal mines, and oil and gas leaks.
Such a fund would benefit melting glaciers in the Arctic, and in the Andean and Himalayan mountains. And it would demonstrate to the world that we can do something to quickly slow climate change.
We need to get moving to cool the planet's temperature. Methane is the most effective place for us to start.
Mr. Watson is former chair of the Intergovernmental Panel on Climate Change. Mr. Mohamed El-Ashry is a senior fellow at the United Nations Foundation, and former CEO of Global Environment Facility, an independent partnership that funds environmental projects in the developing world.
By ROBERT WATSON AND MOHAMED EL-ASHRY
This month's Copenhagen talks focused on the leading climate change culprit: carbon dioxide. But reversing global temperature increases by reducing carbon emissions will take many decades, if not centuries. Even if the largest cuts in CO2 contemplated in Copenhagen are implemented, it simply will not reverse the melting of ice already occurring in the most sensitive areas, including the rapid disappearance of glaciers in Tibet, the Arctic and Latin America.
So what can we do to effectively buffer global warming? The most obvious strategy is to make an all-out effort to reduce emissions of methane.
Sometimes called the "other greenhouse gas," methane is responsible for 75% as much warming as carbon dioxide measured over any given 20 years. Unlike carbon dioxide, which remains in the atmosphere for hundreds of years, methane lasts only a decade but packs a powerful punch while it's there.
Methane's short life makes it especially interesting in the short run, given the pace of climate change. If we need to suppress temperature quickly in order to preserve glaciers, reducing methane can make an immediate impact. Compared to the massive requirements necessary to reduce CO2, cutting methane requires only modest investment. Where we stop methane emissions, cooling follows within a decade, not centuries. That could make the difference for many fragile systems on the brink.
Yet global discussions about climate and policies to date have not focused on methane. Methane is formally in the "basket" of six gases targeted by the 1997 Kyoto Protocol. But its value is counted as if it has the same lifetime as carbon dioxide.
This ignores its much larger, near-term potential. As a result, methane represents only about 15% of the projects under the Kyoto Protocol's emissions offset program. And it is not a major focus of climate protection programs in any nation.
This is huge missed opportunity, and not just for the climate. Methane also forms ozone, the smog that severely damages food crops and kills tens of thousands each year by worsening asthma, emphysema and other respiratory diseases
Captured methane gas can be used as a clean energy source, contributing to energy security and diversification as well as reducing damaging black carbon (soot) and CO2 emissions. Solving the methane problem will lead to a higher quality of life by cleaning up city and agricultural wastes and odors, and curbing air pollution from dirty stoves and local industries. It will also create local jobs in construction and operation of methane-abating equipment.
Methane comes from a variety of sources: landfills, sewage streams, coal mines, oil and gas drilling operations, agricultural wastes, and cattle farms. For most of these sources, relatively cheap "end of pipe" technologies are available to collect methane and convert it to useful energy rather than venting it to the atmosphere.
These technologies include drilling into coal seams before mining to release and collect methane (this also reduces the risk of mine explosions, which kill hundreds of miners per year); depositing manure into "biogas" digesting tanks where pipes collect methane produced from decomposition; and covering and lining open landfills, shunting methane into a collection pipe.
In most cases, the collected methane can be used to run a village- or city-scale power plant. The Institute for Applied Systems Analysis and U.S. Environmental Protection Agency (EPA) estimate that as much as 40% of the world's projected methane could be reduced at less than $60 dollars per ton of carbon equivalent. Some methane projects even have "negative" cost, as the value of the captured gas exceeds the investment.
Experience has shown that even with modest incentives, methane projects, which are typically small scale, can move fast. Timberline Energy, a U.S. company, reports an expected construction time of six to eight months for landfill gas projects once financing is secured. And the United Nations Clean Development Mechanism estimates that setting up biogas projects can take as little as five months. Hundreds of shovel-ready projects around the world are ready to go, but are stalled because of uncertainty over future carbon rules.
This is why on Dec. 11, along with a distinguished group of colleagues from the scientific and financial communities, we proposed the creation of a Global Methane Fund to address the specific measures needed to get methane projects off the ground now. This includes a guaranteed price floor for methane projects to allay uncertainty over future carbon prices.
Funded by governments and private foundations, a Global Methane Fund with only $100 million to $200 million could leverage tens of billions of dollars for other projects, which will have a quick and measurable cooling effect in the Arctic and elsewhere. Scientific studies, such as the EPA's June 2006 report, "Global Mitigation of Non-CO2 Greenhouse Gases," conservatively indicate that we could eliminate 1.3 gigatons of annual CO2 equivalent emissions—that's half the U.S. power industry's emissions—just by targeting landfills, coal mines, and oil and gas leaks.
Such a fund would benefit melting glaciers in the Arctic, and in the Andean and Himalayan mountains. And it would demonstrate to the world that we can do something to quickly slow climate change.
We need to get moving to cool the planet's temperature. Methane is the most effective place for us to start.
Mr. Watson is former chair of the Intergovernmental Panel on Climate Change. Mr. Mohamed El-Ashry is a senior fellow at the United Nations Foundation, and former CEO of Global Environment Facility, an independent partnership that funds environmental projects in the developing world.
Democrats pose threat to President Obama’s cap-and-trade climate Bill
Giles Whittell in Washington
Less than ten days after claiming a breakthrough on climate change in Copenhagen President Obama is facing a mutiny from senior Democrats who are imploring him to postpone or even abandon his cap-and-trade Bill.
Democratic Senators, fearful of a drubbing in the mid-term elections next year, are lining up to argue for alternatives to the scheme that is the centrepiece of the carbon reduction proposals that Mr Obama hopes to sign into law. With the Congressional battles over Mr Obama’s healthcare reforms fresh in their memory senior Democrats are asking the Administration to postpone the next big climate change push until at least 2011.
Senators from Louisiana, Indiana, Nebraska and North Dakota, some with powerful energy companies among their constituents, are falling out of love with the idea of a large-scale cap-and-trade scheme — which seeks to allocate tradeable permits to major polluters — in favour of less ambitious proposals that put jobs and the economy first.
Each of their Senate votes is vital for any climate change Bill to have a chance of being passed, and a firm American commitment to cap and trade is essential for similar carbon reduction mechanisms to be effective on a global scale.
Asked if she has urged the White House to abandon cap and trade — at least until after the mid-terms — Senator Mary Landrieu of Louisiana told the Politico website yesterday: “I am communicating that in every way I know how.”
At least five other high-ranking Democrats have lobbied the Administration in similar terms. Senator Kent Conrad of North Dakota said that winning passage of climate change legislation in an election year had “very poor prospects”, and Senator Ben Nelson of Nebraska said that he would “just as soon see [climate change] set aside until we work through the economy”.
Even more significant — as indicators of the majority party’s resolve to pass climate change legislation in the face of almost unanimous Republican opposition — were remarks from Dick Durbin, the Senate Majority Whip, and John Kerry, the Massachusetts Senator who is in the process of drafting a climate change Bill favoured by the White House.
“At this point, I’d like to see a complete Bill but we have to be realistic,” Senator Durbin said. Senator Kerry, speaking at the Copenhagen climate conference this month, said: “I can’t tell you the method or the means by which we might price carbon. We haven’t resolved that issue yet.”
Proponents of cap and trade argue that allowing polluters to trade carbon permits gives them a powerful incentive to emit less than the maximum imposed by the cap — and ensures that these emission reductions are achieved by the most cost-effective means available, whether by investing in new, clean technology at home, or in offsetting schemes in developing economies where greater reductions can be achieved per dollar spent.
Critics of the system point to teething problems in the European pilot scheme, begun under the auspices of the Kyoto Protocol, when the price of carbon collapsed because of excessive free allocations of carbon permits to big, politically connected polluters such as the power generation industry.
Mr Obama has been a personal convert to cap and trade since witnessing the success of a scheme limited to the control of sulphur dioxide emissions in the 1990s. The creation of a market in tradeable sulphur dioxide permits cut emissions of the gas so swiftly that the acid rain it produces has disappeared from the Midwest as a serious environmental issue.
Congress will return from its winter break with healthcare reform unfinished, Democrats wary of any new proposals that can be presented as a further burden on the economy and Republicans eager to depict cap and trade as just such a burden.
The official position of the White House remains that “a cap-and-trade mechanism is the best way to achieve the most cost-effective reductions” — but it is not yet embedded firmly in the Senate Bill being drafted by Senators Kerry, Lindsey Graham and Joe Lieberman.
That Bill is one of nine competing proposals before the Senate and while most Democrats can be relied on to support it, a half-dozen defectors would leave the party short of the 60-vote majority that they need to overcome a Republican filibuster.
Senator Graham, a Republican, has said that he believes others from his party can be won over. If so, they have gone to ground.
Senator John McCain, once a vocal supporter of cap and trade, now wants huge federal backing for the nuclear industry in return for his vote. Senator Mike Johanns of Nebraska has called the scheme “a death sentence” for farming.
Mr Obama put his political prestige on the line in Copenhagen to reach agreement on a pact to curb carbon emissions while trying to shore up his domestic flank amid rising scepticism about a new climate Bill in the US.
He declined to offer new sweeteners to get a deal, rebuked China’s reluctance to allow outside scrutiny of action on greenhouse-gas emissions and warned developing states that they could forget aid that had no strings attached.
Lobbyists count the cost of power
Senator Mary Landrieu (Dem — Louisiana)
Louisiana is a large oil and gas state and Ms Landrieu has fought hard for energy interests during her 12 years in the Senate. She was listed as one of a “Dirty Dozen” legislators by the League of Conservation Voters and was described in a local newspaper as “the most fervent pro-drilling Democrat in the Senate”.
About 14 per cent of crude oil that is imported by the US comes through the Louisiana Offshore Oil Port, a deepwater facility off the state’s coast
Senator Kent Conrad (Dem — N Dakota)
North Dakota is a leading coal state, with coal-fired power stations providing about 93 per cent of its energy production. Large oil reserves were discovered in the state in the 1950s. Much of the state’s economy is also based on agricultural production — a sector that would be hit particularly hard by an increase in the price of fossil fuels. Mr Conrad has poor environmental credentials. He voted against the American Clean Energy and Security Act and called for an increase in oil and gas drilling
Senator Ben Nelson (Dem — Nebraska)
Nebraska has more than 47,000 farms, and is an important agriculture state. Mr Nelson sits on the Senate Agriculture Committee and has in the past vigorously defended the interests of farmers, arguing that climate change legislation would drive up the cost of electricity and damage the agriculture sector.
He said: “Every farm-state senator is aware of what the cap-and-trade proposals could do to their agriculture base.”
Sources: Grist; US Department of Agriculture
Less than ten days after claiming a breakthrough on climate change in Copenhagen President Obama is facing a mutiny from senior Democrats who are imploring him to postpone or even abandon his cap-and-trade Bill.
Democratic Senators, fearful of a drubbing in the mid-term elections next year, are lining up to argue for alternatives to the scheme that is the centrepiece of the carbon reduction proposals that Mr Obama hopes to sign into law. With the Congressional battles over Mr Obama’s healthcare reforms fresh in their memory senior Democrats are asking the Administration to postpone the next big climate change push until at least 2011.
Senators from Louisiana, Indiana, Nebraska and North Dakota, some with powerful energy companies among their constituents, are falling out of love with the idea of a large-scale cap-and-trade scheme — which seeks to allocate tradeable permits to major polluters — in favour of less ambitious proposals that put jobs and the economy first.
Each of their Senate votes is vital for any climate change Bill to have a chance of being passed, and a firm American commitment to cap and trade is essential for similar carbon reduction mechanisms to be effective on a global scale.
Asked if she has urged the White House to abandon cap and trade — at least until after the mid-terms — Senator Mary Landrieu of Louisiana told the Politico website yesterday: “I am communicating that in every way I know how.”
At least five other high-ranking Democrats have lobbied the Administration in similar terms. Senator Kent Conrad of North Dakota said that winning passage of climate change legislation in an election year had “very poor prospects”, and Senator Ben Nelson of Nebraska said that he would “just as soon see [climate change] set aside until we work through the economy”.
Even more significant — as indicators of the majority party’s resolve to pass climate change legislation in the face of almost unanimous Republican opposition — were remarks from Dick Durbin, the Senate Majority Whip, and John Kerry, the Massachusetts Senator who is in the process of drafting a climate change Bill favoured by the White House.
“At this point, I’d like to see a complete Bill but we have to be realistic,” Senator Durbin said. Senator Kerry, speaking at the Copenhagen climate conference this month, said: “I can’t tell you the method or the means by which we might price carbon. We haven’t resolved that issue yet.”
Proponents of cap and trade argue that allowing polluters to trade carbon permits gives them a powerful incentive to emit less than the maximum imposed by the cap — and ensures that these emission reductions are achieved by the most cost-effective means available, whether by investing in new, clean technology at home, or in offsetting schemes in developing economies where greater reductions can be achieved per dollar spent.
Critics of the system point to teething problems in the European pilot scheme, begun under the auspices of the Kyoto Protocol, when the price of carbon collapsed because of excessive free allocations of carbon permits to big, politically connected polluters such as the power generation industry.
Mr Obama has been a personal convert to cap and trade since witnessing the success of a scheme limited to the control of sulphur dioxide emissions in the 1990s. The creation of a market in tradeable sulphur dioxide permits cut emissions of the gas so swiftly that the acid rain it produces has disappeared from the Midwest as a serious environmental issue.
Congress will return from its winter break with healthcare reform unfinished, Democrats wary of any new proposals that can be presented as a further burden on the economy and Republicans eager to depict cap and trade as just such a burden.
The official position of the White House remains that “a cap-and-trade mechanism is the best way to achieve the most cost-effective reductions” — but it is not yet embedded firmly in the Senate Bill being drafted by Senators Kerry, Lindsey Graham and Joe Lieberman.
That Bill is one of nine competing proposals before the Senate and while most Democrats can be relied on to support it, a half-dozen defectors would leave the party short of the 60-vote majority that they need to overcome a Republican filibuster.
Senator Graham, a Republican, has said that he believes others from his party can be won over. If so, they have gone to ground.
Senator John McCain, once a vocal supporter of cap and trade, now wants huge federal backing for the nuclear industry in return for his vote. Senator Mike Johanns of Nebraska has called the scheme “a death sentence” for farming.
Mr Obama put his political prestige on the line in Copenhagen to reach agreement on a pact to curb carbon emissions while trying to shore up his domestic flank amid rising scepticism about a new climate Bill in the US.
He declined to offer new sweeteners to get a deal, rebuked China’s reluctance to allow outside scrutiny of action on greenhouse-gas emissions and warned developing states that they could forget aid that had no strings attached.
Lobbyists count the cost of power
Senator Mary Landrieu (Dem — Louisiana)
Louisiana is a large oil and gas state and Ms Landrieu has fought hard for energy interests during her 12 years in the Senate. She was listed as one of a “Dirty Dozen” legislators by the League of Conservation Voters and was described in a local newspaper as “the most fervent pro-drilling Democrat in the Senate”.
About 14 per cent of crude oil that is imported by the US comes through the Louisiana Offshore Oil Port, a deepwater facility off the state’s coast
Senator Kent Conrad (Dem — N Dakota)
North Dakota is a leading coal state, with coal-fired power stations providing about 93 per cent of its energy production. Large oil reserves were discovered in the state in the 1950s. Much of the state’s economy is also based on agricultural production — a sector that would be hit particularly hard by an increase in the price of fossil fuels. Mr Conrad has poor environmental credentials. He voted against the American Clean Energy and Security Act and called for an increase in oil and gas drilling
Senator Ben Nelson (Dem — Nebraska)
Nebraska has more than 47,000 farms, and is an important agriculture state. Mr Nelson sits on the Senate Agriculture Committee and has in the past vigorously defended the interests of farmers, arguing that climate change legislation would drive up the cost of electricity and damage the agriculture sector.
He said: “Every farm-state senator is aware of what the cap-and-trade proposals could do to their agriculture base.”
Sources: Grist; US Department of Agriculture
Sir Richard Branson: the airline owner on his new war
"Carbon is the enemy," says Sir Richard Branson. "Let's attack it in any possible way we can, or many people will die just like in any war."
By Rowena MasonPublished: 3:10PM GMT 28 Dec 2009
With a certain sense of irony, the billionaire part-owner of five airlines has just jetted into Copenhagen, battleground of the international climate change talks, to warn fellow business leaders, politicians and campaigners about this apocalyptic scenario.
Sir Richard, who is due to give a speech at an event on saving the rainforests, has no sooner sat down than launched into a diatribe against carbon dioxide, of which his Virgin Atlantic airline emits 4.8m tonnes per year.
Every weapon in the arsenal must be deployed to reduce carbon dioxide, he argues, from biofuels to greener materials for aeroplane bodies, both through financial penalties for polluters and more funding for technology.
Flying around the world for seven days and taking tourists into space have been among Sir Richard's well-documented – and carbon-intensive – thrill-seeking missions.
He claims that his current goal for the decade is not only to ensure that all his planes run on eco-friendly biofuel mixes by 2015, but to persuade others in the airline industry that they should do the same by 2020.
Relaxing in jeans and a shirt at a hotel conference centre in the greenest city in the world, Branson is showing no signs of nerves about being an airline owner about to share a stage with an array of environmentalists, from the governor of the Amazon to the president of the World Wildlife Fund.
But as the self-confessed owner of a "dirty business", doesn't he feel some responsibility for his key role in the transport industry that produces 20pc of the world's emissions each year?
A quick look at the website of Virgin Atlantic shows that this single airline emits more carbon dioxide than many entire countries – including Uganda, Paraguay and Albania.
Even within the industry it is not the greenest airline of them all. Per passenger-kilometre, British Airways and Virgin Atlantic emit substantially higher amounts of carbon dioxide than easyJet – and even Ryanair, the airline run by the famous environmental sceptic Michael O'Leary.
Budget airlines, with their newer fleets and passengers crammed into every seat, boast significantly lower emissions than the traditional flyers.
"We do owe it to the world to get our house in order, which is why I want airlines to get together and set an example on lowering emissions. Realising that flying was part of the problem is why we donate all the profits from Virgin Atlantic to environmental projects," Sir Richard says, ducking the low-flying question about whether consumers should simply be hopping on fewer planes.
Green activists have criticised this approach, which, like offsetting, assumes that business can simply pay to pollute – the corporate equivalent of trashing a hotel room and leaving a pile of cash at reception. Some also point out that these donations are only the dividends paid to Sir Richard's Virgin Group, with the bulk of profits injected back into the business. The sum total of his green philanthropy has so far failed to reach anywhere near the $3bn (£1.87bn) originally promised in 2006.
But as a businessman, it is hardly surprising that Sir Richard is desperate to find a means of spending his way out of the problem rather than stymie growth for the airline industry. His strong support for Heathrow's third runway makes it clear that he thinks that reducing consumption is not the answer.
"We have to make a low-carbon world capable of growth otherwise we won't have hospitals and schools, and society will start falling apart," Sir Richard claims, swinging from one Doomsday narrative to the next. "We're not going to get China and India to stop growing, so the challenge will be all about changing our ways."
Recognising that financial penalties on heavy carbon emissions could make huge dents in the future profits of the transport sector, he says, it also makes financial sense to pump some profits into researching new fuels.
Scientists regularly cast doubt on the idea that biofuels will be ready for air travel within the next decade, despite the ideal solution that one day petroleum will be replaced by algae or sugar. Virgin Atlantic pioneered the first biofuel flight last year, but the brief journey from London to Amsterdam had only 20pc coconut oil in one of four jet engines – and the technology is still a long way off being commercially viable.
With $75m spent on researching biochar, a charcoal that may be able to pump CO2 out of air, and more funding for geo-engineering to change the make-up of the earth's atmosphere, Sir Richard is at pains to show he is at least trying.
Top on his list of priorities is a global emissions trading system for aviation and shipping, which he would like to see go towards environmental causes.
"What we really want is a global agreement on aviation, where a percentage goes to the rainforests," he says, pointing out that under the European emissions trading scheme for airlines due to start in 2012, governments will be able to spend the proceeds on whatever they wish.
Another crusade is shipping and he has used his time in the Danish capital to meet the mayors and port authorities of Calgary and Los Angeles to try to show them how to "impose specific standards on ships coming into those ports".
"Business groups have done a good job in some areas like energy but some industries like shipping have done very little and that's where I can help," Sir Richard says. "I would love every industry in the world to be clear about what it has to do."
The plane manufacturers, such as Airbus and Boeing, are also crucial to cleaning up the industry's image, Sir Richard says, urging them to move from carbon-based plastics and titanium to new "composite" green materials.
However, at the mention of potential green taxes, rather than market-mechanisms, Sir Richard shifts from environmental fervour into a rage against the business-bashing policies of New Labour. "The airline industry has suffered a 100pc increase in taxes by this Labour Government, which are not going to environmental causes, and the danger is that this would tax the industry out of existence," he says. "But if they do end up taxing industry they need to make it absolutely clear that running planes on clean fuels would see taxes removed."
There is an argument that aviation's acceptance of emissions trading and offer to peak its emissions by 2020 is purely a move to pre-empt stricter potential curbs in the future. Sir Richard disagrees, but thinks the aviation industry could push itself harder by offering to cut emissions even further given the failure of the Copenhagen talks.
"If governments don't get their act together or make stupid, populistic decisions, businesses will have to take action on their own and we might as well do that now," he says.
By Rowena MasonPublished: 3:10PM GMT 28 Dec 2009
With a certain sense of irony, the billionaire part-owner of five airlines has just jetted into Copenhagen, battleground of the international climate change talks, to warn fellow business leaders, politicians and campaigners about this apocalyptic scenario.
Sir Richard, who is due to give a speech at an event on saving the rainforests, has no sooner sat down than launched into a diatribe against carbon dioxide, of which his Virgin Atlantic airline emits 4.8m tonnes per year.
Every weapon in the arsenal must be deployed to reduce carbon dioxide, he argues, from biofuels to greener materials for aeroplane bodies, both through financial penalties for polluters and more funding for technology.
Flying around the world for seven days and taking tourists into space have been among Sir Richard's well-documented – and carbon-intensive – thrill-seeking missions.
He claims that his current goal for the decade is not only to ensure that all his planes run on eco-friendly biofuel mixes by 2015, but to persuade others in the airline industry that they should do the same by 2020.
Relaxing in jeans and a shirt at a hotel conference centre in the greenest city in the world, Branson is showing no signs of nerves about being an airline owner about to share a stage with an array of environmentalists, from the governor of the Amazon to the president of the World Wildlife Fund.
But as the self-confessed owner of a "dirty business", doesn't he feel some responsibility for his key role in the transport industry that produces 20pc of the world's emissions each year?
A quick look at the website of Virgin Atlantic shows that this single airline emits more carbon dioxide than many entire countries – including Uganda, Paraguay and Albania.
Even within the industry it is not the greenest airline of them all. Per passenger-kilometre, British Airways and Virgin Atlantic emit substantially higher amounts of carbon dioxide than easyJet – and even Ryanair, the airline run by the famous environmental sceptic Michael O'Leary.
Budget airlines, with their newer fleets and passengers crammed into every seat, boast significantly lower emissions than the traditional flyers.
"We do owe it to the world to get our house in order, which is why I want airlines to get together and set an example on lowering emissions. Realising that flying was part of the problem is why we donate all the profits from Virgin Atlantic to environmental projects," Sir Richard says, ducking the low-flying question about whether consumers should simply be hopping on fewer planes.
Green activists have criticised this approach, which, like offsetting, assumes that business can simply pay to pollute – the corporate equivalent of trashing a hotel room and leaving a pile of cash at reception. Some also point out that these donations are only the dividends paid to Sir Richard's Virgin Group, with the bulk of profits injected back into the business. The sum total of his green philanthropy has so far failed to reach anywhere near the $3bn (£1.87bn) originally promised in 2006.
But as a businessman, it is hardly surprising that Sir Richard is desperate to find a means of spending his way out of the problem rather than stymie growth for the airline industry. His strong support for Heathrow's third runway makes it clear that he thinks that reducing consumption is not the answer.
"We have to make a low-carbon world capable of growth otherwise we won't have hospitals and schools, and society will start falling apart," Sir Richard claims, swinging from one Doomsday narrative to the next. "We're not going to get China and India to stop growing, so the challenge will be all about changing our ways."
Recognising that financial penalties on heavy carbon emissions could make huge dents in the future profits of the transport sector, he says, it also makes financial sense to pump some profits into researching new fuels.
Scientists regularly cast doubt on the idea that biofuels will be ready for air travel within the next decade, despite the ideal solution that one day petroleum will be replaced by algae or sugar. Virgin Atlantic pioneered the first biofuel flight last year, but the brief journey from London to Amsterdam had only 20pc coconut oil in one of four jet engines – and the technology is still a long way off being commercially viable.
With $75m spent on researching biochar, a charcoal that may be able to pump CO2 out of air, and more funding for geo-engineering to change the make-up of the earth's atmosphere, Sir Richard is at pains to show he is at least trying.
Top on his list of priorities is a global emissions trading system for aviation and shipping, which he would like to see go towards environmental causes.
"What we really want is a global agreement on aviation, where a percentage goes to the rainforests," he says, pointing out that under the European emissions trading scheme for airlines due to start in 2012, governments will be able to spend the proceeds on whatever they wish.
Another crusade is shipping and he has used his time in the Danish capital to meet the mayors and port authorities of Calgary and Los Angeles to try to show them how to "impose specific standards on ships coming into those ports".
"Business groups have done a good job in some areas like energy but some industries like shipping have done very little and that's where I can help," Sir Richard says. "I would love every industry in the world to be clear about what it has to do."
The plane manufacturers, such as Airbus and Boeing, are also crucial to cleaning up the industry's image, Sir Richard says, urging them to move from carbon-based plastics and titanium to new "composite" green materials.
However, at the mention of potential green taxes, rather than market-mechanisms, Sir Richard shifts from environmental fervour into a rage against the business-bashing policies of New Labour. "The airline industry has suffered a 100pc increase in taxes by this Labour Government, which are not going to environmental causes, and the danger is that this would tax the industry out of existence," he says. "But if they do end up taxing industry they need to make it absolutely clear that running planes on clean fuels would see taxes removed."
There is an argument that aviation's acceptance of emissions trading and offer to peak its emissions by 2020 is purely a move to pre-empt stricter potential curbs in the future. Sir Richard disagrees, but thinks the aviation industry could push itself harder by offering to cut emissions even further given the failure of the Copenhagen talks.
"If governments don't get their act together or make stupid, populistic decisions, businesses will have to take action on their own and we might as well do that now," he says.
John Prescott defends China's role at Copenhagen climate summit
• Former deputy PM attacks US envoy's stance at talks• Negotiator at Kyoto rejects Obama's view of 1997 deal
Patrick Wintour and Jonathan Watts
The Guardian, Monday 28 December 2009
John Prescott has defended China's role in the climate change summit, saying the blame for its flawed outcome must lie with the United States and Barack Obama.
The former deputy prime minister helped negotiate the Kyoto protocol in 1997, and was in Copenhagen acting as an informal bridge between the Chinese delegation and others.
As a frequent visitor to China, who knows many of its officials personally, Prescott fears privately that the Chinese will walk away from the talks if they continue to be singled out for blame.
In a letter to the Guardian, Prescott criticises the US climate change special envoy, Todd Stern, who "said at Copenhagen emissions weren't about 'morality or politics', they were 'just maths', with China projected to emit 60% more CO2 than the US by 2030".
In his letter Prescott claims that Stern's arguments "ignored the more transparent measure of pollution per capita, which shows the US emits 20 tonnes per person every year, compared to China's six tonnes, whilst America's GDP per person is almost eight times greater than the Chinese". He also attacks President Barack Obama for suggesting there had been a period of "two decades of talking and no action. That might have been true in America, which refused to sign up to Kyoto, but not in the case of China or Europe, who followed a lot of that protocol's policies. Indeed Obama's offer of a 17% cut is wholly dependent on Congressional approval and will still be less than Kyoto targets." Prescott is climate change convenor for the Council of Europe, with the role of exploring how to keep the talks on the road.
China itself defended its "crucial role" in saving the Copenhagen conference from failure, according to the state media's first blow-by-blow rebuttal of European claims that China wrecked a climate deal.
In a florid account of prime minister Wen Jiabao's 60 hours in Copenhagen, the Xinhua news agency said the premier staved off the "unrealistic and unfair demands" of Britain, Germany and Japan.
There is no direct criticism of the US, but Obama is described as "awkward" in the presence of the Chinese premier.
According to the lengthy defence of China's actions, European nations repeatedly tried to impose secret drafts, unscheduled meetings and a hidden agenda on China and other developing nations.
The article, likely to have been approved at the highest level of government, notes that Wen walked out of a state dinner after hearing that an unscheduled meeting of leaders was being arranged soon afterwards to discuss a new draft text.
"It was really absurd that the country who called for the meeting never informed China," the report says. "Premier Wen concluded that this was no small matter.
"Since the start of the conference, there had been cases where individual or small group of countries put forward new texts in disregard of the principle of openness and transparency, arousing strong complaints from other participants."
Such accusations infuriate senior European negotiators, who claim China was fully informed ahead of Copenhagen of the plan for a new document, though it never agreed to the content.
Xinhua avoids mention of how and why China killed attempts to impose 2050 targets for reducing emissions. Beijing has consistently rejected such long-term goals, which it sees as a threat to itseconomic growth.It also fails to address claims that China torpedoed the inclusion of a 1.5C maximum global temperature rise, requested by small island states and African nations. Instead, it says, Wen showed sincerity by accepting a rise of no more than 2C by 2050.
Patrick Wintour and Jonathan Watts
The Guardian, Monday 28 December 2009
John Prescott has defended China's role in the climate change summit, saying the blame for its flawed outcome must lie with the United States and Barack Obama.
The former deputy prime minister helped negotiate the Kyoto protocol in 1997, and was in Copenhagen acting as an informal bridge between the Chinese delegation and others.
As a frequent visitor to China, who knows many of its officials personally, Prescott fears privately that the Chinese will walk away from the talks if they continue to be singled out for blame.
In a letter to the Guardian, Prescott criticises the US climate change special envoy, Todd Stern, who "said at Copenhagen emissions weren't about 'morality or politics', they were 'just maths', with China projected to emit 60% more CO2 than the US by 2030".
In his letter Prescott claims that Stern's arguments "ignored the more transparent measure of pollution per capita, which shows the US emits 20 tonnes per person every year, compared to China's six tonnes, whilst America's GDP per person is almost eight times greater than the Chinese". He also attacks President Barack Obama for suggesting there had been a period of "two decades of talking and no action. That might have been true in America, which refused to sign up to Kyoto, but not in the case of China or Europe, who followed a lot of that protocol's policies. Indeed Obama's offer of a 17% cut is wholly dependent on Congressional approval and will still be less than Kyoto targets." Prescott is climate change convenor for the Council of Europe, with the role of exploring how to keep the talks on the road.
China itself defended its "crucial role" in saving the Copenhagen conference from failure, according to the state media's first blow-by-blow rebuttal of European claims that China wrecked a climate deal.
In a florid account of prime minister Wen Jiabao's 60 hours in Copenhagen, the Xinhua news agency said the premier staved off the "unrealistic and unfair demands" of Britain, Germany and Japan.
There is no direct criticism of the US, but Obama is described as "awkward" in the presence of the Chinese premier.
According to the lengthy defence of China's actions, European nations repeatedly tried to impose secret drafts, unscheduled meetings and a hidden agenda on China and other developing nations.
The article, likely to have been approved at the highest level of government, notes that Wen walked out of a state dinner after hearing that an unscheduled meeting of leaders was being arranged soon afterwards to discuss a new draft text.
"It was really absurd that the country who called for the meeting never informed China," the report says. "Premier Wen concluded that this was no small matter.
"Since the start of the conference, there had been cases where individual or small group of countries put forward new texts in disregard of the principle of openness and transparency, arousing strong complaints from other participants."
Such accusations infuriate senior European negotiators, who claim China was fully informed ahead of Copenhagen of the plan for a new document, though it never agreed to the content.
Xinhua avoids mention of how and why China killed attempts to impose 2050 targets for reducing emissions. Beijing has consistently rejected such long-term goals, which it sees as a threat to itseconomic growth.It also fails to address claims that China torpedoed the inclusion of a 1.5C maximum global temperature rise, requested by small island states and African nations. Instead, it says, Wen showed sincerity by accepting a rise of no more than 2C by 2050.
Blame Denmark, not China, for Copenhagen failure
The decision to override the multilateral process and hold a secret meeting of select nations ruined any chance of success
Martin Khor
guardian.co.uk, Monday 28 December 2009 12.11 GMT
It's been several days since the chaotic end to the Copenhagen climate conference but the aftershocks from its failure are still reverberating. As John Prescott points out in his letter to the Guardian, the pointing of fingers in the blame game does not help the regaining of trust needed for the positive resumption of talks early next year and to complete them by December 2010, the new deadline agreed to in Copenhagen.
First, the misinformation put out in the past few days has to be corrected. The UK climate secretary, Ed Miliband, backed by individuals such as Mark Lynas (both writing in the Guardian) have turned on China as the villain that "hijacked" the conference. The main "evidence" they gave was that China vetoed an "agreement" on a 50% reduction in global emissions by 2050 and an 80% reduction by developed countries, in the small meeting of 26 leaders on Copenhagen's final day.
There was indeed a "hijack" in Copenhagen, but it was not by China. The hijack was organised by the host government, Denmark, whose prime minister convened a meeting of 26 leaders in the last two days of the conference, in an attempt to override the painstaking negotiations taking place among 193 countries throughout the two weeks and in fact in the past two to four years.
That exclusive meeting was not mandated by the UN climate convention. Indeed, the developing countries had warned the Danish prime minister, Lars Lokke Rasmussen, not to come up with his own "Danish text" to be negotiated by a small group that he himself would select, as this would violate the multilateral treaty-based process, and would replace the documents carefully negotiated by all countries with one unilaterally issued by the host country.
Despite this, the Danish government produced just such a document, and it convened exactly the kind of exclusive group that would undermine the UN climate convention's multilateral and democratic process. Under that process, the 193 countries had been collectively working on coming to a conclusion on the many aspects of the climate deal.
Weeks before, it had become clear that Copenhagen could not adopt a full agreement because many basic differences remained. Copenhagen should have been designed as a stepping stone to a future successful outcome accepted by all. Unfortunately, the host country Denmark selected a small number of the 110 top leaders who came, to meet in secret, without the mandate or even knowledge of the convention's membership.
The selected leaders were given a draft Danish document that mainly represented the developed countries' positions, thereby marginalising the developing countries' views tabled at the two-year negotiations.
Meanwhile, most of the thousands of delegates were working for two weeks on producing two reports representing the latest state of play, indicating areas of agreement and those where final decisions still had to be taken.
These reports were finally adopted by the conference. They should have been announced as the real outcome of Copenhagen, together with a decision to resume and complete work next year. It would not have been a resounding success, but it would have been an honest ending that would not have been termed a failure.
Instead, the Copenhagen accord was criticised by the final plenary of members and not adopted. The unwise attempt by the Danish presidency to impose a non-legitimate meeting to override the legitimate multilateral process was the reason why Copenhagen will be considered a disaster.
The accord itself is weak mainly because it does not contain any commitments by the developed countries to cut their emissions in the medium term. Perhaps the reason for this most glaring omission is that the national pledges so far announced amount to only a 11-19% overall reduction by the developed countries by 2020 (compared to 1990), a far cry from the over 40% target demanded by the developing countries and recent science.
To deflect from this great failure on their part, the developed countries tried to inject long-term emission-reduction goals of 50% for the world and 80% for themselves, by 2050 compared to 1990. When this failed to get through the 26-country meeting, some countries, especially the UK, began to blame China for the failure of Copenhagen.
In fact, these targets, especially taken together, have been highly contentious during the two years of discussions, and for good reasons. They would result in a highly inequitable outcome where developed countries get off from their responsibilities and push the burden of adjustment onto the developing countries.
Together, they imply that developing countries would have to cut their emissions overall by about 20% in absolute terms and at least 60% in per capita terms. By 2050, developed countries with high per capita emissions – such as the US – would be allowed to have two to five times higher per capita emission levels than developing countries. The latter would have to severely curb not only their emissions but also their economic growth, especially since there is, up to now, no credible plans let alone commitments for financial and technology transfers to help them shift to a low-emissions development path.
The developed countries have already completed their industrialisation on the basis of cheap carbon-based energy and can afford to take on an 80% goal for 2050, especially since they now have the technological and organisational capacity and infrastructure. For a minimally equitable deal, they should commit to cuts of at least 200-400%, or move into negative emission territory, with net re-absorption of greenhouse gases, to enable developing countries the atmospheric space to develop.
The acceptance of the two targets would also have locked in a most unfair sharing of the remaining global carbon budget as it would have allowed the developed countries to get off free from their historical responsibility and their carbon debt. They would have been allocated the rights to a large amount of "carbon space", historically and in the future, without being given the obligation and responsibility to undertake adequate emission cuts nor to make adequate financial and technology transfers to developing countries.
Fortunately these targets are absent from the accord. The imperative for the negotiations next year is to agree on what science says is necessary for the world to do (in terms of limits to temperature rise or in global emissions cut) but also on what is a just and equitable formula for sharing the costs and burdens of adjustment, and to decide on both simultaneously. By asking for agreement on only a global goal and a very low commitment figure for their own obligatory cut, the developed countries were attempting to fix a global carbon budget distribution that enables them to get away with the hijacking of atmospheric space, a resource worth many trillions of dollars.
Learning from Copenhagen's mistakes, the countries should return to the multilateral track and resume negotiations in the climate convention's two working groups as early as possible.
They can start with the two reports passed at Copenhagen as reference points. There should not be more attempts to hijack this multilateral process, which represents our best hope to achieve final results.
The bottom-up democratic process is slower but also steadier, compared to the top-down attempt to impose a solution by a few powers that will always lack legitimacy in decision-making and success or sustainability in implementation.
Martin Khor
guardian.co.uk, Monday 28 December 2009 12.11 GMT
It's been several days since the chaotic end to the Copenhagen climate conference but the aftershocks from its failure are still reverberating. As John Prescott points out in his letter to the Guardian, the pointing of fingers in the blame game does not help the regaining of trust needed for the positive resumption of talks early next year and to complete them by December 2010, the new deadline agreed to in Copenhagen.
First, the misinformation put out in the past few days has to be corrected. The UK climate secretary, Ed Miliband, backed by individuals such as Mark Lynas (both writing in the Guardian) have turned on China as the villain that "hijacked" the conference. The main "evidence" they gave was that China vetoed an "agreement" on a 50% reduction in global emissions by 2050 and an 80% reduction by developed countries, in the small meeting of 26 leaders on Copenhagen's final day.
There was indeed a "hijack" in Copenhagen, but it was not by China. The hijack was organised by the host government, Denmark, whose prime minister convened a meeting of 26 leaders in the last two days of the conference, in an attempt to override the painstaking negotiations taking place among 193 countries throughout the two weeks and in fact in the past two to four years.
That exclusive meeting was not mandated by the UN climate convention. Indeed, the developing countries had warned the Danish prime minister, Lars Lokke Rasmussen, not to come up with his own "Danish text" to be negotiated by a small group that he himself would select, as this would violate the multilateral treaty-based process, and would replace the documents carefully negotiated by all countries with one unilaterally issued by the host country.
Despite this, the Danish government produced just such a document, and it convened exactly the kind of exclusive group that would undermine the UN climate convention's multilateral and democratic process. Under that process, the 193 countries had been collectively working on coming to a conclusion on the many aspects of the climate deal.
Weeks before, it had become clear that Copenhagen could not adopt a full agreement because many basic differences remained. Copenhagen should have been designed as a stepping stone to a future successful outcome accepted by all. Unfortunately, the host country Denmark selected a small number of the 110 top leaders who came, to meet in secret, without the mandate or even knowledge of the convention's membership.
The selected leaders were given a draft Danish document that mainly represented the developed countries' positions, thereby marginalising the developing countries' views tabled at the two-year negotiations.
Meanwhile, most of the thousands of delegates were working for two weeks on producing two reports representing the latest state of play, indicating areas of agreement and those where final decisions still had to be taken.
These reports were finally adopted by the conference. They should have been announced as the real outcome of Copenhagen, together with a decision to resume and complete work next year. It would not have been a resounding success, but it would have been an honest ending that would not have been termed a failure.
Instead, the Copenhagen accord was criticised by the final plenary of members and not adopted. The unwise attempt by the Danish presidency to impose a non-legitimate meeting to override the legitimate multilateral process was the reason why Copenhagen will be considered a disaster.
The accord itself is weak mainly because it does not contain any commitments by the developed countries to cut their emissions in the medium term. Perhaps the reason for this most glaring omission is that the national pledges so far announced amount to only a 11-19% overall reduction by the developed countries by 2020 (compared to 1990), a far cry from the over 40% target demanded by the developing countries and recent science.
To deflect from this great failure on their part, the developed countries tried to inject long-term emission-reduction goals of 50% for the world and 80% for themselves, by 2050 compared to 1990. When this failed to get through the 26-country meeting, some countries, especially the UK, began to blame China for the failure of Copenhagen.
In fact, these targets, especially taken together, have been highly contentious during the two years of discussions, and for good reasons. They would result in a highly inequitable outcome where developed countries get off from their responsibilities and push the burden of adjustment onto the developing countries.
Together, they imply that developing countries would have to cut their emissions overall by about 20% in absolute terms and at least 60% in per capita terms. By 2050, developed countries with high per capita emissions – such as the US – would be allowed to have two to five times higher per capita emission levels than developing countries. The latter would have to severely curb not only their emissions but also their economic growth, especially since there is, up to now, no credible plans let alone commitments for financial and technology transfers to help them shift to a low-emissions development path.
The developed countries have already completed their industrialisation on the basis of cheap carbon-based energy and can afford to take on an 80% goal for 2050, especially since they now have the technological and organisational capacity and infrastructure. For a minimally equitable deal, they should commit to cuts of at least 200-400%, or move into negative emission territory, with net re-absorption of greenhouse gases, to enable developing countries the atmospheric space to develop.
The acceptance of the two targets would also have locked in a most unfair sharing of the remaining global carbon budget as it would have allowed the developed countries to get off free from their historical responsibility and their carbon debt. They would have been allocated the rights to a large amount of "carbon space", historically and in the future, without being given the obligation and responsibility to undertake adequate emission cuts nor to make adequate financial and technology transfers to developing countries.
Fortunately these targets are absent from the accord. The imperative for the negotiations next year is to agree on what science says is necessary for the world to do (in terms of limits to temperature rise or in global emissions cut) but also on what is a just and equitable formula for sharing the costs and burdens of adjustment, and to decide on both simultaneously. By asking for agreement on only a global goal and a very low commitment figure for their own obligatory cut, the developed countries were attempting to fix a global carbon budget distribution that enables them to get away with the hijacking of atmospheric space, a resource worth many trillions of dollars.
Learning from Copenhagen's mistakes, the countries should return to the multilateral track and resume negotiations in the climate convention's two working groups as early as possible.
They can start with the two reports passed at Copenhagen as reference points. There should not be more attempts to hijack this multilateral process, which represents our best hope to achieve final results.
The bottom-up democratic process is slower but also steadier, compared to the top-down attempt to impose a solution by a few powers that will always lack legitimacy in decision-making and success or sustainability in implementation.
China threatens to slam brakes on price of lead
Leo Lewis, Asia Business Correspondent
After a surge of more than 125 per cent, the price of lead ends the year in limbo — its future at the mercy of Chinese bureaucracy, the stroke of a pen and the legal status of 100 million electric bicycles.
The cycles in question, known as “e-bikes”, are battery-enhanced machines that are the darlings of the modern, urban Chinese. More than 20 million were sold this year, putting a vast army of commuters, unable to afford cars or motorcycles — and without licences — on the roads at a sedate maximum speed of 12 km/h (7½ mph).
If the rules stay as they are, analysts say, e-bike sales may rise to 25 million next year. If they change, as seems possible, the ramifications will stretch far beyond the streets of Shanghai, Beijing, Wuhan and Guangzhou.
Crucially, more than 90 per cent of e-bikes use a lead-acid battery — and, with each one needing about 12kg (26lb 7oz) of lead, China’s cyclists represent more than 6 per cent of global demand for the metal. If the Chinese are allowed to continue to own e-bikes without a licence, according to analysts at CLSA, the Asia-based brokerage, the price of lead may continue to rise. If rules are tightened severely, commodity traders in Hong Kong think that much of the speculative “froth” that has been driving up lead may vanish.
The Chinese have embraced the machines more vigorously than any other nation. Even without government “green” subsidies of the sort used to push e-bikes in Europe, 80 per cent of the world’s electric bicycles were sold to Chinese commuters. Ecological concerns have little to do with their decision. E-bikes outsell cars in China by a ratio of two-to-one for reasons of economy. A standard e-bike, costing 1,700 yuan (£155) and used as an alternative to a daily commute by bus, pays for itself in 100 days. Competition between China’s 1,000 licensed e-bike makers is likely to keep prices down.
The e-bikes are also easier to negotiate through China’s huge traffic jams. This month, the four millionth private car hit the roads of Beijing. In every big Chinese city, the roads are clogged to a standstill as the highway infrastructure bends under the strain.
Recent talks in Beijing over the status of the larger e-bikes have loomed over the industry just as its golden era seemed to be approaching. Citing accidents and the use of silent e-bikes as an ideal stealth vehicle for bag-snatchers, the Government said that it might re-classify some as motorcycles. That, manufacturers argued, would make them too expensive for many consumers and make millions of existing users criminals because they do not hold driving licences.
Ten days ago Beijing’s State Standardisation Authority seemed to back down, postponing the new classification, which would have gone into force this Friday, but industry insiders think that the delay could prove to be short-lived. Local reports suggest that many e-bike makers, wary of the industry’s future, are planning to shed workers.
After a surge of more than 125 per cent, the price of lead ends the year in limbo — its future at the mercy of Chinese bureaucracy, the stroke of a pen and the legal status of 100 million electric bicycles.
The cycles in question, known as “e-bikes”, are battery-enhanced machines that are the darlings of the modern, urban Chinese. More than 20 million were sold this year, putting a vast army of commuters, unable to afford cars or motorcycles — and without licences — on the roads at a sedate maximum speed of 12 km/h (7½ mph).
If the rules stay as they are, analysts say, e-bike sales may rise to 25 million next year. If they change, as seems possible, the ramifications will stretch far beyond the streets of Shanghai, Beijing, Wuhan and Guangzhou.
Crucially, more than 90 per cent of e-bikes use a lead-acid battery — and, with each one needing about 12kg (26lb 7oz) of lead, China’s cyclists represent more than 6 per cent of global demand for the metal. If the Chinese are allowed to continue to own e-bikes without a licence, according to analysts at CLSA, the Asia-based brokerage, the price of lead may continue to rise. If rules are tightened severely, commodity traders in Hong Kong think that much of the speculative “froth” that has been driving up lead may vanish.
The Chinese have embraced the machines more vigorously than any other nation. Even without government “green” subsidies of the sort used to push e-bikes in Europe, 80 per cent of the world’s electric bicycles were sold to Chinese commuters. Ecological concerns have little to do with their decision. E-bikes outsell cars in China by a ratio of two-to-one for reasons of economy. A standard e-bike, costing 1,700 yuan (£155) and used as an alternative to a daily commute by bus, pays for itself in 100 days. Competition between China’s 1,000 licensed e-bike makers is likely to keep prices down.
The e-bikes are also easier to negotiate through China’s huge traffic jams. This month, the four millionth private car hit the roads of Beijing. In every big Chinese city, the roads are clogged to a standstill as the highway infrastructure bends under the strain.
Recent talks in Beijing over the status of the larger e-bikes have loomed over the industry just as its golden era seemed to be approaching. Citing accidents and the use of silent e-bikes as an ideal stealth vehicle for bag-snatchers, the Government said that it might re-classify some as motorcycles. That, manufacturers argued, would make them too expensive for many consumers and make millions of existing users criminals because they do not hold driving licences.
Ten days ago Beijing’s State Standardisation Authority seemed to back down, postponing the new classification, which would have gone into force this Friday, but industry insiders think that the delay could prove to be short-lived. Local reports suggest that many e-bike makers, wary of the industry’s future, are planning to shed workers.
Economics and the environment: Down to earth index
Editorial
The Guardian, Monday 28 December 2009
How much is the planet worth? Not a jot, according to most economists' calculations. Last week, politicians and City analysts got Tiggerishly excited over an official report showing that Britain's economy shrank 0.2% in the three months to the end of September rather than the 0.4% initially reported. Yet that all-important measure of GDP is a 20th-century invention which simply tots up all the goods and services produced in an economy, as valued at market prices. Among all the many things it leaves out is the cost to the environment of this activity. Indeed, it often puts a perverse value on damage to the planet. While another Exxon Valdez would be a huge environmental disaster, the cleanup costs would give a big boost to GDP – fantastic evidence for that old jibe about economics being the dismal science.
Or perhaps it is modern practitioners who are particularly dismal, or myopic. Writing to comrades in Germany in 1875, Karl Marx criticised their assertion that "Labour is the source of wealth and all culture". No, he replied, "Nature is just as much the source of use values (and it is surely of such that material wealth consists!)". Yet it is only in the last 15 years or so that economists have done much more than treat environmental issues – whether smog or global warming – as mere footnotes (or "externalities") to their various measures of human progress. Climate change has forced the issue up the academic agenda, so that an LSE economist, Nicholas Stern, is now a world authority on how to reduce carbon emissions. Other economists have been working on ways to measure natural capital, or environmental damage and depletion (and those rare opposite examples).
Foremost among these is Partha Dasgupta, who has just published a lucid survey of the field for the Royal Society. The most striking bit comes when the economist takes a handful of developing countries and measures their performance along a few yardsticks, such as GDP. To these old favourites he adds the index of wealth, which tries to measure "natural capital assets": forests, oil and minerals, and atmospheric quality. Nearly all of Professor Dasgupta's countries have enjoyed income growth over the past 30 years, but in natural wealth they have all gone backwards. Pakistan's GDP per head rose 2.2% a year between 1970 and 2000 – but its per capita natural wealth shrank 1.4%.
This is interesting and vital work. Interesting because the methods of environmental measurement, and the parts of the environment measured, are still crude (the wealth index does not include water or soil); vital for, well, obvious reasons. In nearly all their earlier calculations and prescriptions, economists have taken the earth for granted. Time to get real.
The Guardian, Monday 28 December 2009
How much is the planet worth? Not a jot, according to most economists' calculations. Last week, politicians and City analysts got Tiggerishly excited over an official report showing that Britain's economy shrank 0.2% in the three months to the end of September rather than the 0.4% initially reported. Yet that all-important measure of GDP is a 20th-century invention which simply tots up all the goods and services produced in an economy, as valued at market prices. Among all the many things it leaves out is the cost to the environment of this activity. Indeed, it often puts a perverse value on damage to the planet. While another Exxon Valdez would be a huge environmental disaster, the cleanup costs would give a big boost to GDP – fantastic evidence for that old jibe about economics being the dismal science.
Or perhaps it is modern practitioners who are particularly dismal, or myopic. Writing to comrades in Germany in 1875, Karl Marx criticised their assertion that "Labour is the source of wealth and all culture". No, he replied, "Nature is just as much the source of use values (and it is surely of such that material wealth consists!)". Yet it is only in the last 15 years or so that economists have done much more than treat environmental issues – whether smog or global warming – as mere footnotes (or "externalities") to their various measures of human progress. Climate change has forced the issue up the academic agenda, so that an LSE economist, Nicholas Stern, is now a world authority on how to reduce carbon emissions. Other economists have been working on ways to measure natural capital, or environmental damage and depletion (and those rare opposite examples).
Foremost among these is Partha Dasgupta, who has just published a lucid survey of the field for the Royal Society. The most striking bit comes when the economist takes a handful of developing countries and measures their performance along a few yardsticks, such as GDP. To these old favourites he adds the index of wealth, which tries to measure "natural capital assets": forests, oil and minerals, and atmospheric quality. Nearly all of Professor Dasgupta's countries have enjoyed income growth over the past 30 years, but in natural wealth they have all gone backwards. Pakistan's GDP per head rose 2.2% a year between 1970 and 2000 – but its per capita natural wealth shrank 1.4%.
This is interesting and vital work. Interesting because the methods of environmental measurement, and the parts of the environment measured, are still crude (the wealth index does not include water or soil); vital for, well, obvious reasons. In nearly all their earlier calculations and prescriptions, economists have taken the earth for granted. Time to get real.
Sunday, 27 December 2009
Sun Kings
SolarAid is bringing electricity, light, health and hope to Africa
It is a cruel irony that some of the sunniest countries on the planet spend so much of the time in darkness for want of a cheap source of energy. More cruel still is that the remedy is so easily available, if there were just enough seed money for Africans to be able to harness it: solar power.
SolarAid, one of the charities supported by The Times in this year’s Christmas Charity Appeal, is slowly providing the seed money to exploit this inadequately tapped resource. Money that will allow children who have ambition but no classroom lighting to stay at school beyond sunset, to use computers and listen to tapes while they are in their classrooms, and to do homework when they get home. Money for doctors in hospitals to be able to work in well-lit wards and operating theatres, to ensure that no more mothers have to give birth in the dark, and to power fridges in which to store vital vaccines.
The charity’s work in spreading the use of solar panels helps villages to pump clean water; and enables families to avoid respiratory diseases resulting from the use of toxic, polluting kerosene-powered lamps. It also lessens the risk of their homes being razed by accidents from kerosene-fuelled fires. The lack of electricity means that in rural communities, villagers fell trees to make charcoal for cooking, in the process accelerating deforestation and soil erosion. By funishing power for mobile phones and radios, SolarAid helps remote villages to reach the outside world.
SolarAid may be only three years old, but already it has reached 150,000 people. With the help of Times readers it hopes to reach more than 400,000 of Africa’s poorest within a year, and 1.5 million by 2012. It deserves your support.
It is a cruel irony that some of the sunniest countries on the planet spend so much of the time in darkness for want of a cheap source of energy. More cruel still is that the remedy is so easily available, if there were just enough seed money for Africans to be able to harness it: solar power.
SolarAid, one of the charities supported by The Times in this year’s Christmas Charity Appeal, is slowly providing the seed money to exploit this inadequately tapped resource. Money that will allow children who have ambition but no classroom lighting to stay at school beyond sunset, to use computers and listen to tapes while they are in their classrooms, and to do homework when they get home. Money for doctors in hospitals to be able to work in well-lit wards and operating theatres, to ensure that no more mothers have to give birth in the dark, and to power fridges in which to store vital vaccines.
The charity’s work in spreading the use of solar panels helps villages to pump clean water; and enables families to avoid respiratory diseases resulting from the use of toxic, polluting kerosene-powered lamps. It also lessens the risk of their homes being razed by accidents from kerosene-fuelled fires. The lack of electricity means that in rural communities, villagers fell trees to make charcoal for cooking, in the process accelerating deforestation and soil erosion. By funishing power for mobile phones and radios, SolarAid helps remote villages to reach the outside world.
SolarAid may be only three years old, but already it has reached 150,000 people. With the help of Times readers it hopes to reach more than 400,000 of Africa’s poorest within a year, and 1.5 million by 2012. It deserves your support.
Britain’s green rich list
There’s gold in those wind turbines. We highlight the top eco-tycoons, as rated by the compiler of our Rich List
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The Copenhagen summit may have put the damper on global plans to tackle climate change — but British entrepreneurs are charging ahead regardless.
Research by Philip Beresford, author of The Sunday Times Rich List, has unveiled 20 British business people who have already made millions from going green. They range from Dale Vince, the New Age traveller turned wind-power tycoon, to the Cottingham family, which has quietly built up a fortune from insulating houses and installing energy-efficient heating. In drawing up the list, we have excluded businessmen like Sir Richard Branson, who have added environmental interests to their businesses.
Compared with other European countries, in particular Germany and Spain, Britain has been sparing with its subsidies for renewable energy and slow to push through big infrastructure projects in the face of local opposition.
All that might be about to change. After the fudge at Copenhagen, where world leaders failed to adopt firm targets to cut carbon-dioxide emissions, Britain is one of the few developed countries with a legally binding target on greenhouse gas emissions. The Climate Change Act 2008 says the UK must cut carbondioxide output 34% by 2020, a goal that should generate even more opportunities for our green millionaires.
1: DALE VINCE Ecotricity £85m
Dale Vince was a grammar school pupil in Great Yarmouth but realised he did not want a conventional career. He got his first taste of the hippie way of life at music festivals: “I’d seen people living in old buses and knew there was an alternative.”
So at 19 Vince decided to become a New Age traveller. His first home was an old ambulance. Eventually, he was living in a truck that he had converted into a home and he had an entire alternative lifestyle.
“I had a little wind turbine to charge old batteries and even run a laptop computer ,” he said. Vince wanted more than to lead a lowimpact lifestyle, though, so he drove to Cornwall to see Britain’s first wind farm. It gave him the dream of building a wind turbine on the hill where he lived in Gloucestershire.
It took five years of challenges and appeals before he managed to get planning permission. The next hurdle Vince faced was selling the power. The energy sector had not been deregulated and the price he was offered to supply the national grid was lower than he wanted. Undaunted, he came up with a bold solution. “The only way to make the venture work was to cut out the middleman and reach end-users directly. At that time the electricity industry was just liberalising and it was possible to get a supplier licence.”
The company he created, Ecotricity, has grown rapidly and now incorporates a wind-development arm, which deals with the turbines, and a retail arm, which delivers the energy to customers. In 2007 alone Ecotricity invested £25m in wind energy. In 2007-8 it made a £1.9m profit on £28m sales. It has £37.8m net assets and has been valued at more than £100m. Cautiously, in this difficult climate, we value Vince, 48, at £85m.
2: ANDREW OWENS and ALEX LEWIS Greenergy £50m
Andrew Owens formerly an oil trader, invested £300,000 in 1992 to set up Greenergy to supply what was, at the time, a new concept: low-sulphur petrol. As the oil giants muscled in on his niche, the Welshman, who had worked for Esso and Petrotrade, decided the company needed to focus on carbon itself.
Greenergy now makes car fuel from oilseed rape. By buying oil from the Continent, South America, Russia and Africa and mixing low–carbon versions for supermarket pumps, it has grown with its customers, the largest of which is Tesco. In 2007-8, Greenergy made £21.1m profit on £1.7 billion sales.
Owens, 47, and his wife Alex Lewis, 46, a former lobbyist who is the company’s communications chief, have a 33.1% stake worth perhaps £50m.
3: LEE COTTINGHAM and FAMILY Mark Group £45m
The Leicester-based Mark Group began insulating homes in 1974 and recognised that for most householders this is the first step to saving energy, money and carbon emissions. Now it helps to make more than 3,000 homes more energy efficient every week.
In 2005 the co-founder, John Cottingham, handed control to his son Lee, now 34, after more than three decades in charge. Since then, nationwide expansion has grown the business from 4 depots to 14. Customers range from homeowners to local councils and utility companies.
In 2008-9, profits hit a record £8.8m on sales of £97.6m. Mark Group should easily be worth £45m. The Cottingham family owns it all.
4: ROY MacGREGOR and FAMILY Global Energy Group £45m
Global Energy Group makes, repairs and inspects infrastructure for clients such as British Gas and Trans-ocean. The company, based in Inverness and Aberdeen, has projects ranging from refurbishing equipment on oil rigs to assembling turbines for a wind farm in Scotland.
Roy MacGregor, the chairman, started out in his family’s supermarket operation. That was sold in 1985, when the family had already branched out into recruitment, property and supplying food and other products to oil platforms in the Cromarty Firth. The supply work became the basis of MacGregor Energy Services, which he launched in 1986. It was sold to 3i, the venture capitalist, in 1997 for about £20m.
MacGregor became involved in football as chairman of local club Ross County. In 2005 he started up in business again, founding Global Energy, and has grown it by acquisition. In 2007-8 it made £5.8m profit on £94.3m sales. He stepped down as chairman of Ross County in April but continues as life president.
5=: IAIN DORRITY PV Crystalox Solar £38m
PV Crystalox Solar, which makes silicon wafers for solar roof panels, joined the main stock market in 2007. It is now one of the biggest listed green companies, though the recent stock-market turmoil hit its shares and it is now worth £331m, against £640m in January 2008.
The Oxfordshire business was set up in 1982 and now has about 250 staff. The solar power market is growing at a rate of 30%-35% a year.
About 75% of the production goes to Japan, while the rest is sent to Germany where it is processed into wafers for the European market. Iain Dorrity, 57, the chief executive, joined Crystalox in 1986 and was a member of the management buyout team that acquired the business in 1994. He sold £20m of shares in the float and today has a stake worth £25.8m. After tax, Dorrity should be worth £38m.
5=: BARRY GARRARD PV Crystalox Solar £38m
Barry Garrard, technical director at the company, has a stake worth £24.5m. He sold £27m of shares at the float and afterwards.
7: GRAHAM YOUNG PV Crystalox Solar £30m
Graham Young, a shareholder in the solar power group, has an £8.8m stake. He sold shares worth about £8.7m at the float. With other assets, Young should be worth about £12m after tax.
8: STUART OLDHAM PV Crystalox Solar £22m
Like Graham Young, a shareholder in PV Crystalox Solar, Stuart Oldham has a £15.6m stake. At the float he sold shares worth £13m. His fortune totals about £22m.
9=: JIM CLARKE and FAMILY Clarke Energy £21m
Liverpool-based Clarke Energy is a market leader in decentralised power generation, combined heat and power, green energy and waste treatment. It was formed by Jim Clarke in 1989 from a diesel-engine and spares business. The company’s power-generation projects are in applications such as natural gas, landfill gas, biogas from sewage works, waste methane from mines, coal-seam methane extracted from unmined coal and “syngas” produced by the gasification of biomass and waste. The international business is growing fast and in 2008 made £2.6m profit on £150m sales. It is 50.8% owned by Clarke, 58, the chairman and managing director, and his family. We value the company at £40m.
9=: NEIL ECKERT Climate Exchange £21m
A former insurance executive in the City, Neil Eckert gave up his job in 2005 to dedicate his life to protecting the planet. His good intentions did not come at any great financial cost, however. Rather, they have turned him into a millionaire.
Eckert, 47, became one of the new breed of green entrepreneurs via Climate Exchange, which he co-founded in London. It dominates the market in carbon emissions trading, part of the green gold rush that was created by the Kyoto climate change treaty. Eckert, the chief executive, has a stake worth more than £8.4m.
He also has a £1.8m stake in Trading Emissions, a quoted company in the same field. We add £11m for Eckert family stakes we can see in other companies such as Northward Properties and Whetsone Properties. In all, Eckert should be worth £21m.
11: ROD and DIANE WOOD Community Windpower £10m
Community Windpower was formed in 2001 to work with local communities to build wind farms. The aim is to provide economic, educational and environmental benefits to local schools and whole communities.
The company’s first wind farm, at Dalry, North Ayrshire, was commissioned in 2006 and has generated enough power for more than 12,000 homes in its first year of operation. The second wind farm, near Dunbar, East Lothian, was given planning consent in 2007 and is now generating 48MW of electricity.
In 2008, Community Windpower made an £858,000 profit but its Dairy Community Wind Company subsidiary made a £2.5m profit on £4.5m sales in the same period.
The Cheshire-based business is owned and run by Rod and Diane Wood, 46 and 44, respectively. The company should be worth £8.5m on these figures. We add £1.5m for farming companies owned by the family.
12: ALEXANDER McKINNON and FAMILY McKinnon & Clarke £8m
Sandy McKinnon, a former military intelligence analyst, co-founded the energy consultancy McKinnon & Clarke in 1976 from a small office. The company, headquartered in Dunfermline, has grown into a key player in carbon trading and other areas of renewable energy.
It has expanded into a range of overseas markets and has offices in 17 countries. In the year to June 2008, profits rose from £1.3m to £1.7m. Simon Northrop, the managing director, said in April: “Sales are going like a train. We have never before experienced such demand for our services.”
There have been reports that McKinnon, 66, wants to sell his family’s 55% controlling stake in a deal that would value the company at about £15m. That seems a fair price and the McKinnon family stake would be worth more than £8m.
13=: SIMON ARMES-REARDON Entec £7m
Entec was formed by Northumberland Water in 1989 as an environmental and engineering consultancy after privatisation of the water industry. It was spun out of Northumbrian Water in 2005 and sold to its management team for £30m. Entec is now a stand-alone company heavily involved in energy, including wind-farm development onshore and offshore. The management buyout was led by Simon Armes-Reardon, 54, the managing director, Douglas Morton, commercial director, and Barry Canfield, finance director. All three are still performing the same roles.
In 2008-9 the Newcastle company made £6m profit on £63.5m sales. The downturn has hit sales, which are not expected to recover until mid-2010. We value the company at £30m, which makes Armes-Reardon’s stake worth almost £7m.
13=: DREW JOHNSON Eaga £7m
Eaga was established in Newcastle upon Tyne in 1990 to administer the Home Energy Efficiency Scheme, which provides government grants for heating and insulation improvements for low-income households. Drew Johnson joined the business a year later, having previously worked at British Coal. He joined the board in 1999 and 10 years later took over as chief executive.
The company became a partnership owned by the employees in 2000. Each year it insulates a quarter of a million homes and fits more than 50,000 energy-efficient central-heating systems across the country. Eaga floated on the stock market in 2007, valued at £453m. Johnson, 50, has a stake worth more than £7m.
13=: DAVID ROUTLEDGE Eaga £7m
David Routledge, 51, is organisational development director at Eaga, the heating and renewable-energy supplier. He joined the company in 2002 after running his own consultancy. His stake is worth more than £7m.
16=: EUAN CAMERON Wind Prospect Group £6m
Euan Cameron is managing director of Wind Prospect, the Bristol company he co-founded in 1997. It reckons to be one of the most successful independent renewable-energy developers in the world, with operations in countries including Ireland, Canada, France, China and Australia.
In 2008 Wind Power made a healthy £1.4m profit on £14.3m sales. It has a strong balance sheet and should be worth £15m. Cameron, 57, has a stake worth about £6m.
16=: ERIC LUMLEY and FAMILY Viscount Environmental £6m
Yorkshire-based Viscount Environmental was formed in 1992. Its core business is providing insulation for residential buildings, and its activities stretch across the energy-saving spectrum, from draught-proofing to central heating installation. In 2007-8, it made £1.3m, and should be worth about £6m. It is largely owned by Eric Lumley, 64, and his family.
18: IAN MCLEOD Eaga £6m
Ian McLeod, 41, finance director of the Newcastle upon Tyne heating and renewable-energy supplier, has a stake worth almost £6m. He spent 14 years with Price Waterhouse Coopers, the accountancy firm.
19: COLIN PALMER Wind Prospect Group £4m
An engineer by training, Colin Palmer is a director of Wind Prospect, the Bristol renewable-energy group that he co-founded in 1997. He is now a non-executive director. Palmer, 61, holds a stake worth about £4m.
20: JEREMY LEGGETT Solar Century Holdings £3m
Jeremy Leggett chairs Solar Century Holdings, a London solar energy supplier he founded in 1998. It designs innovative products for buildings, working with architects and builders. Leggett, 55, has been called “the UK’s most respected green energy boss” and was a member of the government’s Renewables Advisory Board from 2002 to 2006. He has 30.7% of ordinary shares in Solar Century, which is worth £13m. His stake and work in the first private-equity fund for renewable energy take him to £3m.
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The Copenhagen summit may have put the damper on global plans to tackle climate change — but British entrepreneurs are charging ahead regardless.
Research by Philip Beresford, author of The Sunday Times Rich List, has unveiled 20 British business people who have already made millions from going green. They range from Dale Vince, the New Age traveller turned wind-power tycoon, to the Cottingham family, which has quietly built up a fortune from insulating houses and installing energy-efficient heating. In drawing up the list, we have excluded businessmen like Sir Richard Branson, who have added environmental interests to their businesses.
Compared with other European countries, in particular Germany and Spain, Britain has been sparing with its subsidies for renewable energy and slow to push through big infrastructure projects in the face of local opposition.
All that might be about to change. After the fudge at Copenhagen, where world leaders failed to adopt firm targets to cut carbon-dioxide emissions, Britain is one of the few developed countries with a legally binding target on greenhouse gas emissions. The Climate Change Act 2008 says the UK must cut carbondioxide output 34% by 2020, a goal that should generate even more opportunities for our green millionaires.
1: DALE VINCE Ecotricity £85m
Dale Vince was a grammar school pupil in Great Yarmouth but realised he did not want a conventional career. He got his first taste of the hippie way of life at music festivals: “I’d seen people living in old buses and knew there was an alternative.”
So at 19 Vince decided to become a New Age traveller. His first home was an old ambulance. Eventually, he was living in a truck that he had converted into a home and he had an entire alternative lifestyle.
“I had a little wind turbine to charge old batteries and even run a laptop computer ,” he said. Vince wanted more than to lead a lowimpact lifestyle, though, so he drove to Cornwall to see Britain’s first wind farm. It gave him the dream of building a wind turbine on the hill where he lived in Gloucestershire.
It took five years of challenges and appeals before he managed to get planning permission. The next hurdle Vince faced was selling the power. The energy sector had not been deregulated and the price he was offered to supply the national grid was lower than he wanted. Undaunted, he came up with a bold solution. “The only way to make the venture work was to cut out the middleman and reach end-users directly. At that time the electricity industry was just liberalising and it was possible to get a supplier licence.”
The company he created, Ecotricity, has grown rapidly and now incorporates a wind-development arm, which deals with the turbines, and a retail arm, which delivers the energy to customers. In 2007 alone Ecotricity invested £25m in wind energy. In 2007-8 it made a £1.9m profit on £28m sales. It has £37.8m net assets and has been valued at more than £100m. Cautiously, in this difficult climate, we value Vince, 48, at £85m.
2: ANDREW OWENS and ALEX LEWIS Greenergy £50m
Andrew Owens formerly an oil trader, invested £300,000 in 1992 to set up Greenergy to supply what was, at the time, a new concept: low-sulphur petrol. As the oil giants muscled in on his niche, the Welshman, who had worked for Esso and Petrotrade, decided the company needed to focus on carbon itself.
Greenergy now makes car fuel from oilseed rape. By buying oil from the Continent, South America, Russia and Africa and mixing low–carbon versions for supermarket pumps, it has grown with its customers, the largest of which is Tesco. In 2007-8, Greenergy made £21.1m profit on £1.7 billion sales.
Owens, 47, and his wife Alex Lewis, 46, a former lobbyist who is the company’s communications chief, have a 33.1% stake worth perhaps £50m.
3: LEE COTTINGHAM and FAMILY Mark Group £45m
The Leicester-based Mark Group began insulating homes in 1974 and recognised that for most householders this is the first step to saving energy, money and carbon emissions. Now it helps to make more than 3,000 homes more energy efficient every week.
In 2005 the co-founder, John Cottingham, handed control to his son Lee, now 34, after more than three decades in charge. Since then, nationwide expansion has grown the business from 4 depots to 14. Customers range from homeowners to local councils and utility companies.
In 2008-9, profits hit a record £8.8m on sales of £97.6m. Mark Group should easily be worth £45m. The Cottingham family owns it all.
4: ROY MacGREGOR and FAMILY Global Energy Group £45m
Global Energy Group makes, repairs and inspects infrastructure for clients such as British Gas and Trans-ocean. The company, based in Inverness and Aberdeen, has projects ranging from refurbishing equipment on oil rigs to assembling turbines for a wind farm in Scotland.
Roy MacGregor, the chairman, started out in his family’s supermarket operation. That was sold in 1985, when the family had already branched out into recruitment, property and supplying food and other products to oil platforms in the Cromarty Firth. The supply work became the basis of MacGregor Energy Services, which he launched in 1986. It was sold to 3i, the venture capitalist, in 1997 for about £20m.
MacGregor became involved in football as chairman of local club Ross County. In 2005 he started up in business again, founding Global Energy, and has grown it by acquisition. In 2007-8 it made £5.8m profit on £94.3m sales. He stepped down as chairman of Ross County in April but continues as life president.
5=: IAIN DORRITY PV Crystalox Solar £38m
PV Crystalox Solar, which makes silicon wafers for solar roof panels, joined the main stock market in 2007. It is now one of the biggest listed green companies, though the recent stock-market turmoil hit its shares and it is now worth £331m, against £640m in January 2008.
The Oxfordshire business was set up in 1982 and now has about 250 staff. The solar power market is growing at a rate of 30%-35% a year.
About 75% of the production goes to Japan, while the rest is sent to Germany where it is processed into wafers for the European market. Iain Dorrity, 57, the chief executive, joined Crystalox in 1986 and was a member of the management buyout team that acquired the business in 1994. He sold £20m of shares in the float and today has a stake worth £25.8m. After tax, Dorrity should be worth £38m.
5=: BARRY GARRARD PV Crystalox Solar £38m
Barry Garrard, technical director at the company, has a stake worth £24.5m. He sold £27m of shares at the float and afterwards.
7: GRAHAM YOUNG PV Crystalox Solar £30m
Graham Young, a shareholder in the solar power group, has an £8.8m stake. He sold shares worth about £8.7m at the float. With other assets, Young should be worth about £12m after tax.
8: STUART OLDHAM PV Crystalox Solar £22m
Like Graham Young, a shareholder in PV Crystalox Solar, Stuart Oldham has a £15.6m stake. At the float he sold shares worth £13m. His fortune totals about £22m.
9=: JIM CLARKE and FAMILY Clarke Energy £21m
Liverpool-based Clarke Energy is a market leader in decentralised power generation, combined heat and power, green energy and waste treatment. It was formed by Jim Clarke in 1989 from a diesel-engine and spares business. The company’s power-generation projects are in applications such as natural gas, landfill gas, biogas from sewage works, waste methane from mines, coal-seam methane extracted from unmined coal and “syngas” produced by the gasification of biomass and waste. The international business is growing fast and in 2008 made £2.6m profit on £150m sales. It is 50.8% owned by Clarke, 58, the chairman and managing director, and his family. We value the company at £40m.
9=: NEIL ECKERT Climate Exchange £21m
A former insurance executive in the City, Neil Eckert gave up his job in 2005 to dedicate his life to protecting the planet. His good intentions did not come at any great financial cost, however. Rather, they have turned him into a millionaire.
Eckert, 47, became one of the new breed of green entrepreneurs via Climate Exchange, which he co-founded in London. It dominates the market in carbon emissions trading, part of the green gold rush that was created by the Kyoto climate change treaty. Eckert, the chief executive, has a stake worth more than £8.4m.
He also has a £1.8m stake in Trading Emissions, a quoted company in the same field. We add £11m for Eckert family stakes we can see in other companies such as Northward Properties and Whetsone Properties. In all, Eckert should be worth £21m.
11: ROD and DIANE WOOD Community Windpower £10m
Community Windpower was formed in 2001 to work with local communities to build wind farms. The aim is to provide economic, educational and environmental benefits to local schools and whole communities.
The company’s first wind farm, at Dalry, North Ayrshire, was commissioned in 2006 and has generated enough power for more than 12,000 homes in its first year of operation. The second wind farm, near Dunbar, East Lothian, was given planning consent in 2007 and is now generating 48MW of electricity.
In 2008, Community Windpower made an £858,000 profit but its Dairy Community Wind Company subsidiary made a £2.5m profit on £4.5m sales in the same period.
The Cheshire-based business is owned and run by Rod and Diane Wood, 46 and 44, respectively. The company should be worth £8.5m on these figures. We add £1.5m for farming companies owned by the family.
12: ALEXANDER McKINNON and FAMILY McKinnon & Clarke £8m
Sandy McKinnon, a former military intelligence analyst, co-founded the energy consultancy McKinnon & Clarke in 1976 from a small office. The company, headquartered in Dunfermline, has grown into a key player in carbon trading and other areas of renewable energy.
It has expanded into a range of overseas markets and has offices in 17 countries. In the year to June 2008, profits rose from £1.3m to £1.7m. Simon Northrop, the managing director, said in April: “Sales are going like a train. We have never before experienced such demand for our services.”
There have been reports that McKinnon, 66, wants to sell his family’s 55% controlling stake in a deal that would value the company at about £15m. That seems a fair price and the McKinnon family stake would be worth more than £8m.
13=: SIMON ARMES-REARDON Entec £7m
Entec was formed by Northumberland Water in 1989 as an environmental and engineering consultancy after privatisation of the water industry. It was spun out of Northumbrian Water in 2005 and sold to its management team for £30m. Entec is now a stand-alone company heavily involved in energy, including wind-farm development onshore and offshore. The management buyout was led by Simon Armes-Reardon, 54, the managing director, Douglas Morton, commercial director, and Barry Canfield, finance director. All three are still performing the same roles.
In 2008-9 the Newcastle company made £6m profit on £63.5m sales. The downturn has hit sales, which are not expected to recover until mid-2010. We value the company at £30m, which makes Armes-Reardon’s stake worth almost £7m.
13=: DREW JOHNSON Eaga £7m
Eaga was established in Newcastle upon Tyne in 1990 to administer the Home Energy Efficiency Scheme, which provides government grants for heating and insulation improvements for low-income households. Drew Johnson joined the business a year later, having previously worked at British Coal. He joined the board in 1999 and 10 years later took over as chief executive.
The company became a partnership owned by the employees in 2000. Each year it insulates a quarter of a million homes and fits more than 50,000 energy-efficient central-heating systems across the country. Eaga floated on the stock market in 2007, valued at £453m. Johnson, 50, has a stake worth more than £7m.
13=: DAVID ROUTLEDGE Eaga £7m
David Routledge, 51, is organisational development director at Eaga, the heating and renewable-energy supplier. He joined the company in 2002 after running his own consultancy. His stake is worth more than £7m.
16=: EUAN CAMERON Wind Prospect Group £6m
Euan Cameron is managing director of Wind Prospect, the Bristol company he co-founded in 1997. It reckons to be one of the most successful independent renewable-energy developers in the world, with operations in countries including Ireland, Canada, France, China and Australia.
In 2008 Wind Power made a healthy £1.4m profit on £14.3m sales. It has a strong balance sheet and should be worth £15m. Cameron, 57, has a stake worth about £6m.
16=: ERIC LUMLEY and FAMILY Viscount Environmental £6m
Yorkshire-based Viscount Environmental was formed in 1992. Its core business is providing insulation for residential buildings, and its activities stretch across the energy-saving spectrum, from draught-proofing to central heating installation. In 2007-8, it made £1.3m, and should be worth about £6m. It is largely owned by Eric Lumley, 64, and his family.
18: IAN MCLEOD Eaga £6m
Ian McLeod, 41, finance director of the Newcastle upon Tyne heating and renewable-energy supplier, has a stake worth almost £6m. He spent 14 years with Price Waterhouse Coopers, the accountancy firm.
19: COLIN PALMER Wind Prospect Group £4m
An engineer by training, Colin Palmer is a director of Wind Prospect, the Bristol renewable-energy group that he co-founded in 1997. He is now a non-executive director. Palmer, 61, holds a stake worth about £4m.
20: JEREMY LEGGETT Solar Century Holdings £3m
Jeremy Leggett chairs Solar Century Holdings, a London solar energy supplier he founded in 1998. It designs innovative products for buildings, working with architects and builders. Leggett, 55, has been called “the UK’s most respected green energy boss” and was a member of the government’s Renewables Advisory Board from 2002 to 2006. He has 30.7% of ordinary shares in Solar Century, which is worth £13m. His stake and work in the first private-equity fund for renewable energy take him to £3m.
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