Monday, 2 February 2009

Parched: Australia faces collapse as climate change kicks in

Geoffrey Lean and Kathy Marks report on the worst heatwave in the country's history
Sunday, 1 February 2009

Leaves are falling off trees in the height of summer, railway tracks are buckling, and people are retiring to their beds with deep-frozen hot-water bottles, as much of Australia swelters in its worst-ever heatwave.
On Friday, Melbourne thermometers topped 43C (109.4F) on a third successive day for the first time on record, while even normally mild Tasmania suffered its second-hottest day in a row, as temperatures reached 42.2C. Two days before, Adelaide hit a staggering 45.6C. After a weekend respite, more records are expected to be broken this week.
Ministers are blaming the heat – which follows a record drought – on global warming. Experts worry that Australia, which emits more carbon dioxide per head than any nation on earth, may also be the first to implode under the impact of climate change.
At times last week it seemed as if that was happening already. Chaos ruled in Melbourne on Friday after an electricity substation exploded, shutting down the city's entire train service, trapping people in lifts, and blocking roads as traffic lights failed. Half a million homes and businesses were blacked out, and patients were turned away from hospitals.
More than 20 people have died from the heat, mainly in Adelaide. Trees in Melbourne's parks are dropping leaves to survive, and residents at one of the city's nursing homes have started putting their clothes in the freezer.
"All of this is consistent with climate change, and with what scientists told us would happen," said climate change minister Penny Wong.
Australia, the driest inhabited continent on earth, is regarded as highly vulnerable. A study by the country's blue-chip Commonwealth Scientific and Industrial Research Organisation identified its ecosystems as "potentially the most fragile" on earth in the face of the threat.
Many factors put Australia especially at risk. Its climate is already hot, dry and variable. Its vulnerable agriculture plays an unusually important part in the economy. And most people and industry are concentrated on the coast, making it vulnerable to the rising seas and ferocious storms that come with a warmer world.
Most of the south of the country is gripped by unprecedented 12-year drought. The Australian Alps have had their driest three years ever, and the water from the vast Murray-Darling river system now fails to reach the sea 40 per cent of the time. Harvests have fallen sharply.
It will get worse as global warming increases. Even modest temperature rises, now seen as unavoidable, are expected to increase drought by 70 per cent in New South Wales, cut Melbourne's water supplies by more than a third, and dry up the Murray-Darling system by another 25 per cent.
As Professor David Karoly, of the University of Melbourne, said last week: "The heat is unusual, but it will become much more like the normal experience in 10 to 20 years."

The next step on global warming

Published: February 1, 2009

It seemed that every chance he got, President George W. Bush ignored or flat out refused to address the problem of climate change. So we were greatly encouraged by President Obama's swift announcement that he is likely to approve California's request to regulate greenhouse gases from vehicles - a request the Bush administration denied.
The logical next step would be for Obama to quickly address the Supreme Court's 2007 decision ordering the Environmental Protection Agency to examine the effects of greenhouse gases and to regulate them if necessary. Bush dodged that one, too.
The court instructed the agency to first determine whether global warming pollution threatened public health and welfare - known as an "endangerment finding" under the Clean Air Act - and, if so, to devise emissions standards for vehicles.
Lisa Jackson, the agency's new administrator, said in a memo to her employees last week that she intended to honor her "obligation to address climate change under the Clean Air Act." But there is resistance from some members of Congress and the business community who fear that regulating vehicle emissions of greenhouse gases will lead to economy-wide controls on greenhouse gases from all sources, including industry.
Stephen Johnson, Bush's EPA administrator, initially tried to do the right thing. He ordered his staff to write an endangerment finding and craft regulations limiting greenhouse gas emissions from vehicles.

In December 2007, he sent the entire package to the White House, which not only chose to ignore the findings but refused to open the e-mail message that contained them.
Johnson then ordered up a laborious public rule-making process that essentially went nowhere and allowed Bush to retire to Texas without having done much of anything. Jackson is eager to get the process back on track.
Nobody, including the administrator, is under any illusions that the EPA alone can solve climate change. Congress will have to take ownership of the issue by authorizing major public investments in clean-energy technologies and by putting a price on greenhouse-gas emissions in order to unlock private investment.
But smart regulation can begin to advance the ball. For starters, it would force industry to look for ways to make cars that are much more fuel-efficient. It would help goad Congress into action. It is also, as the Supreme Court has pointed out, the law.

Scrap carbon trading

This flawed system has failed to cut emissions. It's time to tackle the broader economic system that led to the climate crisis

Oscar Reyes, Sunday 1 February 2009 17.30 GMT

Every time the carbon market fails to reduce emissions, the politicians and businesses who promote the market as the solution to the climate crisis reach for their Samuel Beckett: "Try again, fail again, fail better."
With the price of carbon collapsing, and even the head of EDF Energy in the UK, Vincent de Rivaz, warning of a speculative "carbon bubble", the EU continues to promote the expansion of carbon markets globally – with its proposal to create an OECD-wide carbon market by 2015, which it hopes to expand to major industrialising economies by 2020.
We've been here before. In the first phase of the EU Emissions Trading Scheme, prices collapsed because the "permits to pollute" that are the basis of such a system were over-allocated in response to corporate lobbying. In other words, the cap-and-trade scheme that was supposed to set a limit on carbon emissions failed to "cap" anything.
The EU's response was to stress that this was a test phase, and promote an expansion of the scheme (which was passed into EU law last December). This was broadly akin to arguing that a car that disintegrates in a crash test should then be considered roadworthy.
Now that the price has collapsed again, we need to examine the deeper failings of the carbon market. It is not simply a question of Europe's power companies cashing in on a surplus of allowances which should have been sold rather than given away to them for free. The carbon markets themselves were designed by many of the same Chicago School economists who brought us derivatives trading, and they adopt a similar logic.
New financial products are made by parcelling up real world objects into commodities – in this case, "carbon". To make the market function, a broad range of very different activities are then treated as equivalent, although you don't need to be a climate scientist to see that burning more coal and oil is not eliminated by building more hydro-electric dams or capturing the methane in coal mines – and that funding the latter to cancel out the former can end up subsidising the very industries that need to change if we are to avoid catastrophic climate change.
In fact, the whole basis of carbon offsets (which are tied into the EU scheme through a regulation called the Linking Directive) is that credits are issued for projects deemed "additional" – rewarding companies and consultancies for turning stories of an unknowable future into bankable carbon credits. This is fundamentally unjust, insofar as it uses the global South to clean up a mess that Northern, industrialised countries have created. Numerous cases have been documented where such projects have resulted in land grabs and the repression of local communities.
The response of the political leaders at the World Economic Forum in Davos is to call for a reformed and extended carbon market. Here in the Brazilian city of Belem, where the World Social Forum is taking place, the response is different – with climate justice activists and campaigners arguing for the whole flawed system of carbon trading to be scrapped.
We have seen already the corrosive effect of the carbon market on climate negotiations – with the UN currently debating how best to construct new markets in forests (called REDD in the jargon), rather than tackling the real drivers of deforestation, such as pulp mills, mining and biofuel plantations.
If the road to Copenhagen, where a new global climate deal should be signed in December, is to be anything other than a dead-end, it is time to recall the many means of non-market based regulation and public sector investment that have been more successful in achieving environmental change, and to learn from communities with low-carbon lifestyles. It is time, in other words, not simply to talk of the impact of the financial crisis on the carbon market, but to examine and correct the failings of the broader economic system that led to the climate crisis in the first place.
Oscar Reyes is a researcher with Carbon Trade Watch, a project of the Transnational Institute, and environment editor of Red Pepper magazine

Swinney unveils his green jobs blueprint

The Sunday Times
February 1, 2009
Finance secretary to outline plan for low-carbon industries in energy production and efficiency, and sustainable transport

John Swinney, the finance secretary, will tomorrow set out a blueprint to create thousands of green jobs with proposals for new low-carbon industries.
Swinney will commit the Scottish government to work for a “greener deal” for Scotland as part of its economic recovery plan, with the aim of grabbing its share of the thousands of jobs in energy industries and research.
At an RSPB conference on Scotland’s Natural Wealth, Swinney will outline specific proposals to create new, low-carbon industries in energy production, energy efficiency and sustainable transport.
It is estimated that there could be 160,000 jobs in the renewable energy industry in the UK over the next decade. There are currently about 3,000 jobs in renewables in Scotland.
Speaking ahead of the conference, Swinney said: “Scotland already generates a fifth of its electricity demand from renewables and we have unrivalled natural resources to go much further, with 25% of Europe’s wave and tidal energy potential and abundant wind and forestry resources.
“The jobs we want to create will be in our rapidly expanding renewables and clean fossil fuel technology industries, alongside energy efficiency and transport jobs for a sustainable economic future for Scotland.”

Carbon price fall bad for green investment

By Fiona Harvey in London
Published: February 1 2009 22:16

The price of carbon dioxide in the European Union has fallen so low it no longer provides an incentive to low-carbon development, and seems unlikely to do so in the near future.
Permits to emit the gas, issued by the EU’s emissions trading scheme (Euets), have tested record lows in the past two weeks and now trade at about €11.80 ($15.12, £10.42), according to analyst Point Carbon.

That is barely a third of their peak of more than €30 last summer, and well below the level at which they tip the economic balance for companies in favour of making investments in efficiency and “clean” technologies, analysts and traders say.
“The current carbon price has little impact on green investment decisions,” said Dean Cooper, head of renewable energy at Ambrian. “A price nearer to €25 a tonne is necessary for carbon to play a role.”
Paul Newman, managing director at brokerage Icap, puts the desired level higher, at €35 to €45, to make a real impact on investments. But he is more optimistic about the scheme’s future: “It makes people more conscious of the subject than four years ago, and that alone has some merit.”
The effect of the low price is already felt by industry. Paul Golby, chief executive of Eon UK, told the Financial Times: “As the cost of carbon permits has crashed in recent months, funding low-carbon investments has become more difficult.”
The trading scheme intends to cut greenhouse gas output by heavy industry by issuing companies with a quota of permits to emit carbon dioxide.
If businesses need to emit more, they must buy permits from companies with spares. That should make efficiency and investment in modern equipment and renewable energy more attractive.
But the carbon price has been volatile, and its recent falls have demonstrated the difficulty for the European Commission and member states to set carbon quotas at levels industry finds acceptable, while providing a reliable incentive to low-carbon investment.
Since the scheme began in 2005, the carbon price has correlated closely to energy prices, and is seen by some traders as a hedge against high oil prices. As the oil price has fallen drastically, so has the carbon price.
That has been compounded by the recession. As companies produce less, they will need fewer permits.
The price fall of permits is also bad news for EU governments. Several, including the UK, intended to raise substantial sums, in the billions, by auctioning carbon permits, as permitted under EU rules.
Additional reporting by Ed Crooks
Copyright The Financial Times Limited 2009

We can't check everything, admits atomic safety chief after 14-year leak

• Campaigners furious that discharges stayed secret • Lawyers allege 11 breaches of radioactive disposal
Terry Macalister
The Guardian, Monday 2 February 2009

The most senior figure in nuclear safety has defended the regulation of an atomic power station barely 50 miles from the centre of London that leaked radioactive material for 14 years.
Mike Weightman, chief inspector at the Nuclear Installations Inspectorate, said it was not possible to "inspect or check every feature of a complex plant". But as soon as the leak in the sump of one of the Magnox reactors at Bradwell-on-Sea was discovered the safety body did all it could to ensure that the cause of the problem was identified and dealt with, he added.
The leak became public when a little-publicised case started by the Environment Agency against the then owners of the plant, Magnox Electric Ltd, for 11 breaches of safety regulations came to court last month.
The Environment Agency said it was not willing to talk further about the case because it was sub judice but would explain in detail what it was about when a judgment was finally given.
The lack of information about the leak, which was discovered in 2004, has infuriated environmentalists and risks undermining the government's drive for a new generation of atomic power stations.
Bradwell has been earmarked as a potential site for one of the new plants. It ceased producing electricity in 2002 and is being dismantled by a US company, EnergySolutions.
Weightman, who was confirmed as chief inspector only yesterday after being acting head for five years, told the Guardian the NII operated a "sampling regulatory regime" including inspection that targets those aspects of design and operation that have most significance for safety.
"It is not possible for the regulator to inspect or check every feature of a complex plant," he explained. "In this case the sump was effectively underground and the sump pump was not part of the strict maintenance schedule, and hence would have been most unlikely to have been part of any of our inspection programmes.
"Once we were informed of the leak, which was discovered by the licensee when washing down the sump to address a problem with the sump pump, we instructed the licensee not to use the pump again until the matter was investigated and resolved. We conducted a joint investigation with EA, and agreed afterwards with the licensee measures to determine the extent of the leakage, assess its significance and refurbish the sump to modern standards."
Friends of the Earth said it was wrong that the problems were not made public for five years. "It is extremely unfortunate that ministers have been selling the public a new generation of nuclear power plants since 2005 on the grounds that they are safe when incidents of this kind remain out of the public eye," argued Robin Webster, climate change and energy campaigner at Friends of the Earth.
The power station is said by the Environment Agency to be responsible for allowing liquids to seep into the ground from 1990 to 2004. "It has taken a long time to get to court because it is a complicated case with a lot of detail," said a spokesman for the agency.
Lawyers working for the agency are alleging 11 breaches of the radioactive waste disposal laws by Magnox Electric Ltd, which was originally part of the old Central Electricity Generating Board.
Mark Harris, prosecuting on behalf of the agency, told a jury at Chelmsford crown court that leaks were caused by poor design and continued because of a lack of checks and maintenance.
"The case concerns the disposal of liquid radioactive waste which leaked to the ground from a sump at the site of what is now the former Bradwell nuclear power station," said Harris. "These leaks occurred on a number of occasions between as long ago as 1990 until discovery of these leaks in February 2004.
"In the period when this company was running it ... there was no routine inspection or maintenance of the sump until after the leak was discovered."
EnergySolutions said last night that it had no responsibility for the leak. "We are part of the solution not part of the problem," said a spokesman.

Budget delay may put £30m of projects at risk

The Sunday Times
February 1, 2009
Developments at Edinburgh BioQuarter, the SECC Arena in Glasgow, and Energy Park Fife Scotland could be held back by revisions

About £30m of investment in key projects being accelerated by Scottish Enterprise could be at risk if the government’s revised budget fails to gain approval in the coming weeks.
Developments at Edinburgh BioQuarter, the SECC Arena in Glasgow, and Energy Park Fife Scotland, are among capital spending projects which had been brought forward to tackle the effects of the recession.
If the revised budget fails, however, these plans would be delayed.
Scottish Enterprise would not comment on specific programmes but said it did not expect “major issues” as a result of the budget situation.

The BioQuarter is a landmark, life-science, real-estate development intended to establish Edinburgh and Scotland as one of the world’s top 10 centres for commercialising biomedical products arising from research and development.
Although there is no long-term threat to the projects, the decision to accelerate spending was hailed as an important measure to fight the recession.
The Scottish government is talking to the other parties to gain approval for its revised budget but David Watt, executive director of the Institute of Directors (IoD) Scotland, said that, even if agreement was reached, dithering by politicians last week had cost people their jobs.
“It is a disgrace,” he said. “The IoD is seriously concerned about the delays over the Scottish budget, and the political manoeuvring of this week, which has brought into jeopardy the necessary speeding of the spending at this time of massive economic problems.”
“Leadership and governance standards were absent at Holyrood this week. This is a non-party pragmatic view.
“Every day of delay costs jobs and politicians really do need to face up to this. The general public and the business community will not forgive them for the procrastination as jobs go.”

Full charge in lithium-ion battery boom

By Robin Harding
Published: February 1 2009 20:28

A battery boom is under way as the prospect of electric cars spurs electronics companies to invest billions of dollars in their least glamorous business.
Japanese electronics companies such as Toshiba and GS Yuasa have announced plans for new battery plants, even as the industry slashes capital investment overall.

When Ryoji Chubachi, president of Sony, stood up last month and announced a list of factory closures, the one area where he promised growth was batteries.
“Nobody wants to be left out and nobody wants to lose existing market share,” said Donald Saxman, an analyst at BCC Research.
Fuji Keizai, a research company, expects the market for rechargeable lithium-ion batteries to more than double to Y1,255bn ($14bn) between 2007 and 2012, and the overall battery market to grow by 37 per cent.
Industry analysts give three reasons for this. First is the growth in mobile devices, from laptop computers to Apple’s iPhone.
Second is the push for hybrid or fully electric cars, all of which will need a large battery.
Third is the potential use of batteries to store renewable energy generated by turbines when the wind blows, or solar panels when it is sunny, and release it as conditions change.
Most observers agree, however, that electric cars are a key factor in the boom.
“We are on the cusp of mass production now – that is why there is a sense of urgency,” said Ravi Krishnaswamy of consultants Frost & Sullivan.
Most of the recent investments are being made with car industry partners. GS Yuasa, a battery specialist, is launching a joint venture with Honda, while, according to industry reports, NEC and Nissan may increase investment in their battery joint venture to Y100bn by 2012.
Today’s hybrid electric cars, such as the Toyota Prius, use a nickel-metal hydride battery, but the current investments are in lithium-ion technology.
Lithium-ion batteries, which are smaller and lighter relative to the amount of energy stored, are expected to power fully electric cars in the future.
An important motive for Panasonic’s Y807bn takeover bid for Japanese rival Sanyo Electric was the former’s desire to get its hands on Sanyo’s lithium-ion battery business, the world leader.
So many companies are trying to get into the market, however, that there are doubts whether all of them can succeed. “The most successful are typically existing lithium battery companies,” said Mr Saxman.
Sanyo, for example, argues that all carmakers will want at least two battery suppliers to reduce risk. It says that its proved technology, customer relationships and global manufacturing base will give it an advantage over ventures part-owned by rival carmakers. Sanyo already plans to invest Y80bn by 2015 and Panasonic may increase that.
Mr Krishnaswamy says Japanese and South Korean producers are well ahead, but US companies are trying to catch up. Last month, A123 Systems, a US battery-maker, applied for $1.84bn in US government loans to build a lithium-ion plant.
One investment that has raised eyebrows is Toshiba’s decision to start mass production in 2010 – a plan that analysts expect to cost several hundred million dollars – in spite of pulling out of the lithium-ion battery market in 2004.
Toshiba did not stop its battery research, however, and says the decision reflects its confidence in a new technology called SCiB, which it claims is not only safer and longer lasting than other lithium-ion batteries, but can also reach up to 90 per cent of its full charge in as little as five minutes.
Copyright The Financial Times Limited 2009

Lightning is conductor for electric supercar

By Eamonn Rafferty
Published: February 2 2009 01:48

The problems facing the automotive industry across the globe have not deterred one UK company from pushing ahead with plans for a high-performance electric car.
The Lightning garnered plaudits at last year’s British Motor Show, when a prototype attracted widespread praise for its sleek, supercar design. With its “whiff of Aston Martin” looks, the Lightning has a projected price tag of £125,000 ($180,000).

In spite of the price, the Lightning Car Company is confident that the model will do well because the combination of its zero-emissions and high performance will tap into a niche market.
The company believes that a new market is emerging for these vehicles because of increased environmental awareness .
This niche offers higher margins, making it more immune to the economic vagaries that high-volume, low-margin carmakers are suffering, argues the company.
Already the Lightning has attracted 400 expressions of interest and 20 indicative orders. It is expected to be ready next year. The car is likely to use 120kw electric motors on each wheel, giving it an equivalent of 650BHP. Its batteries will give a 300km range and fast-charge options.
Initially, Iain Sanderson, chairman, expects that customers will already have three or four cars in the garage and have the financial wherewithal to be in at the start of this “paradigm shift” – of merging technology with prestige and performance.
At full production, the company, based in London and Peterborough, expects to sell 500 Lightnings a year.
It is raising £2m through St Helen’s Capital, the Aim-listed finance adviser, as part of a £20m fundraising.
Ruari McGirr, St Helens’ chief executive, said: “Lightning epitomises the enduring ability of British engineering to innovate and adapt in the face of new technology and the changing needs of consumers.”
Copyright The Financial Times Limited 2009

Tide on the rise for wave generation

By Andrew Bolger, Scotland Correspondent
Published: February 2 2009 02:00

Could the credit crunch actually benefit the development of Scottish wave and tidal power?
This intriguing prospect has been raised by Cameron Johnstone, director of Strathclyde University's energy systems research unit and a member of EquiMar, Europe's largest ocean energy research programme.
Speaking in Edinburgh last week, Mr Johnstone said: "With sterling losing value against both the dollar and euro, the attractiveness of deploying devices in UK waters increases for overseas developers."
Vessel hire and services costs accounted for a large part of project costs, he said. "Since these are charged in local currency, it will be 25 per cent cheaper for most foreign projects to work in UK waters compared with the same time last year - and that is a meaningful reduction in total project delivery costs."
Mr Johnstone was speaking on the day Lord Smith, chairman of the Environment Agency, expressed concern that several big energy companies were reconsidering plans for offshore wind farms. Eon, the German energy company, also said the economics of the London Array - touted as the world's biggest offshore wind farm - were on a "knife-edge".
But Mr Johnstone argued that the credit crunch had reduced asset values of both share and land bank portfolios, so returns to investors in conventional markets were very low. The Russian threat to the security of gas supplies had induced further instability in financial and energy markets.
"The coincidence of these events could open up opportunities for wave and tidal energy projects to attract new and greater levels of investment," he said.
Returns on wave and tidal projects "could easily match and potentially exceed" returns in conventional markets. Such projects would also provide "an autonomous energy supply" controlled by the UK.
"Scotland is ideally placed to house new marine projects - and reduce its dependency on potentially insecure supply networks, with all the turmoil that dependency creates in both our financial and energy markets."
Mr Johnstone was speaking days after Alex Salmond, Scotland's first minister, said one of the world's largest wave electricity generating stations would be constructed at Siadar, off Lewis in the Western Isles.
The 4MW Npower Renewables scheme will create up to 70 jobs and start with the capacity to power about 1,800 homes.
In 2007 the Scottish government granted consent for a 3MW array of four Pelamis machines at the European Marine Energy Centre in Orkney. Pelamis machines float on the surface of the waves, while the proposed 40 turbines at Siadar would be encased in a concrete breakwater.
Holyrood is processing 30 applications for renewable projects - 23 wind farms and seven hydro-electric projects - and more are expected.
The tardiness of the planning process is also being addressed. The Scottish government said it had determined 24 energy applications since being elected in May 2007 - more than during the previous four years. Of these, 18 renewable and one non-renewable project had been approved.
Scottish government targets are to meet 50 per cent of electricity demand from renewables by 2020, with an interim target of 31 per cent by 2011.
Total installed capacity of renewables in Scotland is already more than 3,000MW. Adding all potential energy from consented renewable projects brings the total to 5,500MW, which means the government is set to surpass its 2011 target.
Meanwhile, about £12bn
of new offshore power networks will be needed to carry electricity from proposed wind farms off Britain's coast. Ofgem, the UK energy regulator, has appointed financial advisers to help it run the competitive tendering of the transmission licences.
Ofgem has engaged a consortium - led by Ernst & Young, the professional services group, Royal Bank of Canada and Willis, the insurance broker - for the first round, which is expected to conclude in June. Shortly after that, £500m to £1bn of competitive tenders will be invited.
The Department of Energy and Climate Change expects up to 33,000MW of offshore wind generation to be constructed under the scheme - enough to power about 10m homes.
The UK is already the largest user of offshore wind, with some 4,500MW of projects in operation, under construction or with consent, according to the British Wind Energy Association. The association says increasing the amount of wind energy in the UK's electricity mixture reduces overall energy costs and limits the risks associated with volatile prices of fossil fuels.
Scottish generators say the development of renewable energy is being hindered by the electricity charging regime, which encourages the generation of power close to the largest centres of population.
The Scottish government - backed by Scottish Power and Scottish and Southern Energy - has lobbied Ofgem over this and National Grid is expected to publish further analysis of the issue this month.
Copyright The Financial Times Limited 2009