Thursday, 19 March 2009

Europe is wasting water, agency warns

By Fiona Harvey in London
Published: March 17 2009 23:01

Europe is running out of fresh water and “living beyond its means” by overexploiting water supplies, the head of the European Environment Agency warned on Tuesday.
A dried-up Spanish reservoir near Barcelona. When the reservoir was created, only the bell tower of the old church was visible above the waterEuropeans are extracting too much from rivers, lakes and underground water sources, which can take millennia to be replenished, according to an EEA report published at the World Water Forum in Istanbul. This has so far disguised the continent’s water shortage, but it is only a stop-gap as supplies will run out.
Jacqueline McGlade, executive director of the European Union’s environmental watchdog, said: “The short-term solution to water scarcity has been to extract ever greater amounts of water from our surface and groundwater assets.”

She warned that the ill effects were beginning to be felt. “Overexploitation is not sustainable. It has a heavy impact on the quality and quantity of the remaining water as well as the ecosystems which depend on it.”
The report found that at least 11 per cent of Europe’s population and 17 per cent of its territory had been affected by water scarcity in recent years, and put the cost of droughts in Europe over the past 30 years at €100bn ($130bn, £93bn).
Cyprus and Bulgaria came out worst in a “water exploitation index” ranking in the report, which compares countries’ water supplies with their water use. Italy, Spain, Macedonia and Malta were also found to be exploiting a worryingly high proportion of their water resources.
The report also noted that some regions within countries have more serious problems: in Spain, for instance, the river basins of Andalusia and Segura are severely low in water.
Climate change is likely to exacerbate droughts. Scientists have forecast that much of southern Europe would become a desert if temperatures were to rise by 4ºC. However, other regions will not escape: climate change will also result in heavier floods, which themselves pose problems for water supplies as they can overwhelm reservoirs, sewers and other water infrastructure, and devastate agriculture.
Already, marked differences can be seen across Europe, with dry areas becoming drier and wet areas becoming wetter in the past century.
Prof McGlade said the only answer was to use water more sensibly across Europe, as far too much water was wasted. “We have to cut demand, minimise the amount of water that we are extracting and increase the efficiency of its use,” she urged.
One way of cutting wastage is to treat sewage to return it to drinking water quality. This “provides a dependable water supply relatively unaffected by periods of drought or low rainfall”, says the EEA. But Europe has failed to invest in treating wastewater, with only 2.4 per cent of effluent being recycled in this way.
Copyright The Financial Times Limited 2009

Swinney plots green route to recovery

Published Date: 19 March 2009
By David Maddox

GREEN energy, the creative industries and life sciences represent Scotland's best hope of escaping the worst effects of the recession, John Swinney, the finance secretary, said last night.
Speaking at a debate sponsored by The Scotsman and legal firm Morton Fraser, Mr Swinney also said Scotland could only flourish by becoming independent. The former SNP leader argued that the economic crisis had underlined the strength of this argument."Our budget is at the mercy of UK decisions – such as the proposed efficiency savings that could see more than £1 billion lost to Scotland in the two years from 2010," he said. "As a government we will continue to do all we can to argue against that approach. Cutting spending is exactly the wrong thing to do at exactly the wrong time."He also highlighted the Scottish Government's six-point economic recovery plan – including changing planning rules, accelerating capital investment, promoting the Homecoming Year for tourism, launching BusinessClub Scotland and improving and increasing training schemes.The debate, held at The Scotsman's Edinburgh headquarters, was chaired by Bruce Wood, the chairman of Morton Fraser LLP, and saw the finance secretary debate with The Scotsman's associate editor, Bill Jamieson.

Wind of change: How environmental jobs can help boost the economy

By Steve McCormack
Thursday, 19 March 2009

Amid the hanging gloom of recession there are occasional shafts of optimism. One of these is the evidence that careers in the environmental sector are showing some resilience in the downturn.
This is due in part to an acknowledgment of the business case for healthy environmental practices. Senior figures in the sector also point out a clear political lead coming from Whitehall, which is consistent with their own optimistic view. "The Government's low-carbon strategy sends the message that the new green economy will help move the UK out of recession," says Martin Baxter, deputy chief executive of the Institute of Environmental Management and Assessment (IEMA), whose 14,000 members work as environment professionals across industry.
Evidence of the Government's priority in this area came when Peter Mandelson, the Business Secretary, announced a £2bn package of support for the British car industry, a key element of which was earmarked to help manufacturers develop cars with engines consuming far less carbon, or even none at all. In making the announcement, Lord Mandelson made clear his belief that this component will be key to the industry's future: "The steps we are taking will help companies speed their way to becoming greener, more innovative and more productive. This is the route to securing jobs for the long term."
The NHS, which employs one-and-a-half-million people, also recently announced a major campaign of carbon footprint reduction, which will be designed and driven by in-house and contracted environmental professionals.
These major public sector commitments bolster Baxter's own optimism, which stems partly from the knowledge that IEMA, as a body, continues to thrive. "We are still growing as an organisation, with 650 new members joining since January," he explains. Of these new recruits, about 80 per cent work for commercial businesses or are consultants operating in the sector, with the balance in the public sector or at academic institutions.
Of course, Baxter concedes that the credit crunch has hammered new capital developments and delayed numerous infrastructure projects, which in turn has radically reduced the amount of environmental assessment work required, such as cleaning up contaminated land.
"However," he says, "any lack of activity in this area is being offset by much more demand for climate-change and carbon-reduction services." Baxter has noticed more firms looking at carbon reduction down their supply chains, and ensuring that new products are resilient and relevant in the low-carbon market.
"Overall," he concludes, "the sector is performing well compared to other parts of the economy."
And this analysis is confirmed by those trying to place people in jobs. "There isn't as much of a downturn in the environmental sector as in most other markets," explains Adam Whitney, a partner of Evergreen Resources, one of the longest established recruitment agencies specialising in the sector. Among the categories of job where Evergreen continues to see a strong recruitment demand are renewable energy – marked growth in the last year or so, says Whitney – and positions demanding knowledge of sustainability issues for the building sector.
Here, Evergreen is seeing increasing demand for people with relevant sustainability qualifications and knowledge of the entire life cycle of a building. Among the most commonly sought-after qualifications are those allied to the Building Research Establishment Environmental Assessment Method, which is gaining currency in the property development and management field.
Another specific growth area observed by Whitney is for people with up-to-date and detailed knowledge of how to minimise the harmful environmental impact of electrical and electronic goods. Since 2007, new laws – enshrined in the Waste Electrical and Electronic Equipment directive – place fresh demands on business. These regulations impact on almost every single employer, given the ubiquity of electronic equipment, and, for large organisations, it makes sense to have a dedicated in-house member of staff carrying the responsibility.
Other recruitment firms, however, are more cautious about the degree to which the environment sector is coping with the recession. Chris Kiernan, from Cobalt, the recruitment firm that operates in the UK, Germany, Middle East and Australia, identifies a "significant negative impact" on the environmental jobs market resulting from the slump in property development and company mergers. But he does see an area where recruitment remains healthy: "It is the legal and compliance environmental work that remains strongest where employers are making sure that corporate activity, whatever its nature, remains within the environmental boundary guidelines."
Many of these jobs are driven by the arrival of, or tightening up of, legislation originating in the EU. An example of the growing number of businesses benefiting from this development is Westlakes Scientific Consulting, based in Cumbria. Around half of its 70 scientists and technicians work within the environmental sector.
Westlakes works with and for businesses and public organisations in a range of areas, including monitoring of air and water quality, land contamination and gas emissions from landfill sites. At a current air quality project in Birmingham, for example, working as a consultant to the local authority, Westlakes has installed measuring equipment in the city centre that transmits real-time data on air quality back to Cumbria, where experts carry out and analyse detailed modelling of future air conditions. Conclusions based on this modelling are then sent back to Birmingham to be used in planning applications – a new factory or main road, for example, where effects on air quality are a factor. The company provides similar services to large industrial complexes, which can be comparable to small towns and where air quality, for employees, visitors and neighbours alike is of growing importance.
Westlakes has taken on six new junior staff this year – at graduate or Masters level – on the back of the firm winning two new large pieces of work involving the long-term monitoring of industrial sites.
Steve Bradley, chief executive of Westlakes and a fluvial geomorphologist by academic discipline, displays qualified optimism about the employment picture when looking at the sector as a whole. "Right at the moment things are holding up," says Bradley. He also endorses the view that devoting manpower and resources to sustainability-related projects will likely contribute to bringing about an economic upturn: "It's right and proper to get the best long-term value out of any capital investment, so I can see a lot of merit in focusing on green jobs."
Bradley's view is echoed by smaller operators in the field, such as Janet Shepherd, an IEMA member and principal consultant at EcoAgility, the environmental consultancy. She says she is yet to feel any adverse effects from the recession: "Demand is not reducing. In fact, it would appear that, as small- and medium-sized businesses are keener to get value for money, they are turning to smaller, independent consultancies with lower overheads and lower charges."
'I feel I am contributing to the solutions'
Lucy Candlin is a director of Future Perfect, an environmental consultancy. She is a chartered environmentalist and IEMA fellow. Candlin has a degree in botany and ecology, and a Masters in landscape management. She set up the firm, together with her two co-directors, five years ago. Candlin has a background in local government, NGOs and technical consultancy.
"I do a range of strategic risk management for a variety of organisations. I recently did a waste electronics compliance review at a small recycling company with three or four employees; but we also work with companies of the size of BP and Shell.
On a typical site visit, for climate-change accounting considerations, I might look at what emissions the firm is declaring and how they are ensuring the declarations are right and that they keep to agreed levels. We check that gas flow meters are calibrated properly, look at the process by which they take gas samples, how they analyse the samples and interpret the results.
I enjoy the work because I come from an ecological, conservationist background, and I believe in the need for sustainability, and the need for mankind to live within the capacity of the planet; I feel that I am contributing to the solutions through increasing awareness and controls.
Are sustainability concerns becoming embedded in corporate thinking? I'm open minded, but like to err on the positive side, because I think there are some really good companies out there who understand that risk management must encompass non-financial issues. Failure to consider corporate social responsibility and sustainability can come back and bite you further down the line."
'My job is to focus on the real challenges'
Dr Ben Vivian is head of communication and corporate social responsibility at Aggregate Industries, the building materials and road surfacing firm. He has an academic background in geography and has worked in a number of roles, including a period as a technical advisor for a law firm's environment team.
"I don't come from a communications background. I see myself as a physical environmental scientist who is keen to be heard, and working in this role is an exciting opportunity because I have the authority to take communications on environmental issues in a certain direction.
I have responsibility for the staff magazine, the website and the intranet. I am also one of the main points of contact between Aggregate Industries and the outside world.
My job's about being an environmental professional in a position to focus on the real challenges and take us forward as a society, rather than focusing on the negatives. People don't like being told what to do, and even less what not to do.
The firm is trying to shift from being a purely extractive industrial business to being one which promotes better construction methods, and a better built environment, which lasts longer and uses materials more efficiently.
We try to show our customers what they can achieve if they do things differently. For example, if they use what we call 'thin-surfacing' – a layer of asphalt on a road surface, manufactured to a high specification – the environment will benefit because less raw material will be used and the road will be a quieter one. Although it is more expensive, the gains are worth it."

Valero Outbids ADM For VeraSun Plants


Oil refiner Valero Energy Corp. outbid agribusiness giant Archer Daniels Midland Co. for the right to buy ethanol plants from bankrupt VeraSun Energy Corp.
The U.S. Bankruptcy Court in Wilmington, Del., on Wednesday accepted the bid from Valero, making it the first oil company to buy a group of ethanol plants.
Valero, the largest U.S. refiner, is shoring up its access to the corn-based fuel, which it blends into the gasoline it produces to comply with a federal mandate.
"We expect increases in the Renewable Fuels Standard to continue," Valero Chief Executive Bill Klesse said in a statement.
Valero bid on seven of VeraSun's plants and the right to build an eighth. The refiner, based in San Antonio, Texas, will pay $477 million, and an additional $75 million in working capital, it said. The bid was larger in size and scope than an initial offer of $280 million for five of the plants.
Valero outbid ADM, offering $33 million more than ADM was willing to pay for the five plants and the right to buy a sixth, said Patrick J. Nash, an attorney for VeraSun.
ADM offered $700 million for the entire company but lost to Valero, in part due to antitrust concerns. Valero also bid on the entire company, but on a plant-by-plant basis rather than on ADM's winner-take-all position, said Mr. Nash, who is with the firm of Skadden Arps Slate Meagher & Flom.
The plants will provide Valero with 780 million gallons of ethanol production capacity, enough to make about half of the ethanol it needs to comply with a federal mandate in 2009, according to analyst estimates.
The federal mandate for ethanol, first adopted in 2005 and expanded in 2007, generated interest in the industry, prompting investors to fund new plant construction across the Midwest. In 2008, high corn prices and low gasoline demand squeezed ethanol producers' margins, forcing several of them to file for bankruptcy protection.
VeraSun filed for Chapter 11 bankruptcy protection in October, after taking on debt to buy rivals. As corn prices skyrocketed in mid-2008, a poorly executed risk-management strategy led VeraSun's costs to mount, rendering the company unable to pay its debt. The company was unable to get enough cash while under bankruptcy protection to keep all its plants in production or to restructure.
Write to Jessica Resnick-Ault at and Peg Brickley at

World faces 'perfect storm' of problems by 2030, chief scientist to warn

Food, water and energy shortages will unleash public unrest and international conflict, Professor John Beddington will tell a conference tomorrow

Ian Sample, science correspondent, Wednesday 18 March 2009 17.19 GMT

A "perfect storm" of food shortages, scarce water and insufficient energy resources threaten to unleash public unrest, cross-border conflicts and mass migration as people flee from the worst-affected regions, the UK government's chief scientist will warn tomorrow.
In a major speech to environmental groups and politicians, Professor John Beddington, who took up the position of chief scientific adviser last year, will say that the world is heading for major upheavals which are due to come to a head in 2030.
He will tell the government's Sustainable Development UK conference in Westminster that the growing population and success in alleviating poverty in developing countries will trigger a surge in demand for food, water and energy over the next two decades, at a time when governments must also make major progress in combating climate change.
"We head into a perfect storm in 2030, because all of these things are operating on the same time frame," Beddington told the Guardian.
"If we don't address this, we can expect major destabilisation, an increase in rioting and potentially significant problems with international migration, as people move out to avoid food and water shortages," he added.
Food prices for major crops such as wheat and maize have recently settled after a sharp rise last year when production failed to keep up with demand. But according to Beddington, global food reserves are so low – at 14% of annual consumption – a major drought or flood could see prices rapidly escalate again. The majority of the food reserve is grain that is in transit between shipping ports, he said.
"Our food reserves are at a 50-year low, but by 2030 we need to be producing 50% more food. At the same time, we will need 50% more energy, and 30% more fresh water.
"There are dramatic problems out there, particularly with water and food, but energy also, and they are all intimately connected," Beddington said. "You can't think about dealing with one without considering the others. We must deal with all of these together."
Before taking over from Sir David King as chief scientist last year, Beddington was professor of applied population biology at Imperial College London. He is an expert on the sustainable use of renewable resources.
In Britain, a global food shortage would drive up import costs and make food more expensive. Some parts of the country are predicted to become less able to grow crops as higher temperatures become the norm. Most climate models suggest the south-east of England will be especially vulnerable to water shortages, particularly in the summer.
The speech will add to pressure on governments following last week's climate change conference in Copenhagen, where scientists warned that the impact of global warming has been substantially underestimated by the UN's Intergovernmental Panel on Climate Change. The latest research suggests that sea level rises, glacier melting and the risk of forest fires are at, or beyond, what was considered the worst case scenario in 2007.
Beddington said that shifts in the climate will see northern Europe and other high-latitude regions become key centres for food production. Other more traditional farming nations will have to develop more advanced pesticides or more hardy crops to boost yields, he said. In some countries, almost half of all crops are lost to pests and disease before they are harvested. Substantial amounts of food are lost after haversting, too, because of insufficient storage facilities.
Beddington said a major technological push is needed to develop renewable energy supplies, boost crop yields and better utilise existing water supplies.
Looming water shortages in China have prompted officials to build 59 new reservoirs to catch meltwater from mountain glaciers, which will be circulated into the water supply.
Beddington will use the speech to urge Europe to involve independent scientists more directly in its policy making, using recent appointments by President Barack Obama in the US as an example of how senior scientists have been brought into the political fold. Shortly after taking office, Obama announced what many see as a "dream team" of scientists, including two Nobel laureates, to advise on science, energy and the environment.

West Antarctic ice sheet could melt – again

New study suggests a 5C local rise in ocean temperatures could be enough to trigger a collapse of the giant West Antarctic ice sheet

David Adam, environment correspondent, Wednesday 18 March 2009 18.05 GMT

The giant West Antarctic ice sheet has melted several times in the past, and will do so again if temperatures continue to rise, new research shows.
Such a change would raise sea levels by some five metres around the world, but scientists have struggled to predict when it might happen. The new study suggests a 5C local rise in ocean temperatures could be enough to trigger a collapse.
David Pollard of Pennsylvania State University, and Robert DeConto of the University of Massachusetts used a computer model to simulate the behaviour of the ice sheet over the past five million years.
They focused on a period called the Pliocene, some five to three million years ago, when temperatures were similar to those expected in the coming centuries. The scientists found that the West Antarctic ice sheet melted and reformed several times. Each switch took just a few thousand years.
The results are bolstered by a separate analysis of sediment dug from underneath the Antarctic Ross ice shelf, which also indicate periodic large-scale melting during that period. Both studies are published tomorrow in the journal Nature.
Pollard said: "The modelling shows it [the ice sheet collapse] has happened with regularity in the past and will happen again, driven by ocean warming."
He said more studies were needed to work out what level of ocean warming in the region would provoke another collapse. The 5C figure in the new paper is a "rough number" he said. "It could be 3C or it could be 6C."
Warmer oceans would melt the floating ice sheets around Antarctica, which currently block the sea's access to larger, ground-based ice sheets further towards the continent's interior. With the floating ice sheets gone, the land-based ice would be free to melt and so raise sea levels.
Glaciologists call such an event a collapse, but Pollard said it would not be rapid, and would take thousands of years to unfold: "We had a bit of a debate whether to use the word collapse in the paper. It's not something like an avalanche."
How quickly the West Antarctic and Greenland ice sheets could break up and melt has become a hot topic in climate science. The 2007 report from the Intergovernmental Panel on Climate Change said not enough was known to make any predictions. Since then some scientists have warned that the ice sheets are more unstable than realised – and that sea levels could rise faster than expected.

Low-carbon energy will hit customers in their pockets

Published Date: 19 March 2009
By Peter MacMahon
Business Editor

HIGHER electricity bills will be the price people have to pay for the massive investment needed to equip Scotland with a modern low-carbon electricity generation and transmission system, Ignacio Galán, chairman and chief executive of Iberdrola, the Spanish owners of ScottishPower, signalled yesterday.
His warning came as he expressed extraordinary confidence that ScottishPower will win the UK government competition to build Britain's first demonstrator carbon capture and storage project at Longannet power station, Fife.The project, thought likely to cost more than £1 billion, is only a small part of the estimated £100bn estimated as needed to be spent in the next decade in the UK to replace ageing nuclear power stations and clean up existing coal-fired stations.About £8bn also needs to be spent on upgrading Britain's transmission system where the industry regulator Ofgem currently caps the return on investment at 4.8 per cent. This is lower than the current cost of capital, Sr Galán said, and would need to rise to between 10-11 per cent to attract the necessary funds.This is a relatively small part of what eventually makes up customers' bills. But in a world where funds for investment have become scarce, similar higher returns will also be demanded for the tens of billions needed to finance new power stations, implying that electricity bills will rise even if the costs of fuel – the major factor in determining electricity prices – do not.Galán was talking to journalists in Bilbao, where Iberdrola is based, ahead of the company's annual shareholders' meeting tomorrow.He said that ScottishPower, which is competing with E.ON and RWE Npower, to win the carbon capture contract, is now Iberdrola's centre for researching and developing clean coal technologies.ScottishPower is partnering with Norway's Aker, a gas technology company and oil firm Marathon, which hopes to transport captured from Longannet and pump it into storage in a depleted North Sea oilfield.Galán said: "The British government wants to have this plant in operation by 2014 and ours is the only one which complies with that requirement." The rival bids are believed to involve building a new power station, but ScottishPower will use one of the four existing generating units at Longannet, cutting several years off the time needed to complete the project."The only place in the group for all our technologies in coal will be Scotland. We will not make another thing in any other country," he said underlining the prospect that ScottishPower success in this project could have a huge spin-off in creating lots of jobs in building and selling clean coal technology.

Leading climate scientist: 'democratic process isn't working'

David Adam, environment correspondent, Wednesday 18 March 2009 18.31 GMT

Protest and direct action could be the only way to tackle soaring carbon emissions, a leading climate scientist has said.
James Hansen, a climate modeller with Nasa, told the Guardian today that corporate lobbying has undermined democratic attempts to curb carbon pollution. "The democratic process doesn't quite seem to be working," he said.
Speaking on the eve of joining a protest against the headquarters of power firm E.ON in Coventry, Hansen said: "The first action that people should take is to use the democratic process. What is frustrating people, me included, is that democratic action affects elections but what we get then from political leaders is greenwash.
"The democratic process is supposed to be one person one vote, but it turns out that money is talking louder than the votes. So, I'm not surprised that people are getting frustrated. I think that peaceful demonstration is not out of order, because we're running out of time."
Hansen said he was taking part in the Coventry demonstration tomorrow because he wants a worldwide moratorium on new coal power stations. E.ON wants to build such a station at Kingsnorth in Kent, an application that energy and the climate change minister Ed Miliband recently delayed. "I think that peaceful actions that attempt to draw society's attention to the issue are not inappropriate," Hansen said.
He added that a scientific meeting in Copenhagen last week had made clear the "urgency of the science and the inaction taken by governments".
Officials will gather in Bonn later this month to continue talks on a new global climate treaty, which campaigners have called to be signed at a UN meeting in Copenhagen in December. Hansen warned that the new treaty is "guaranteed to fail" to bring down emissions.
Hansen said: "What's being talked about for Copenhagen is a strenghening of Kyoto [protocol] approach, a cap and trade with offsets and escape hatches which will be gauranteed to fail in terms of getting the required rapid reduction in emissions. They talk about goals which sound impressive, but when you see the actions are such that it will be impossible to reach those goals, then I can understand the informed public getting frustrated."
He said he was growing "concerned" over the stance taken by the new US adminstration on global warming. "It's not clear what their intentions are yet, but if they are going to support cap and trade then unfortunately i think that will be another case of greenwash. It's going to take stronger action than that."

Energy chiefs urge quick action on carbon

By Joshua Chaffin in Brussels and Ed Crooks in London
Published: March 18 2009 19:41

Chief executives from Europe’s biggest energy companies have urged EU leaders to take swifter action to support low-carbon electricity, as member states tried to overcome differences on a €5bn ($6.49bn, £4.62bn) proposal to bolster energy infrastructure.
The European Commission proposal, including support for new grid connections and pilot power stations that can capture and store their carbon dioxide emissions, have proved unusually divisive ahead of a two-day meeting of heads of state that begins on Thursday in Brussels.

Nearly 60 chief executives from leading electricity companies across Europe met in Brussels on Wednesday to urge stronger action to support low-carbon electricity.
The group, which included executives from Eon and RWE of Germany, EDF of France, Enel of Italy and Endesa and Iberdrola of Spain, issued their first ever joint declaration, pledging to make electricity carbon-free by 2050, but urging governments to play their part in achieving that goal.
The chief executives’ demands include the speedy release of subsidies for carbon capture and storage, incentives to build new grid connections, a commitment to nuclear power, and better co-ordination of the patchwork of national systems for subsidising renewable electricity generation.
Many of those prescriptions lie at the heart of plans put forward by José Manuel Barroso, European commission president. He called for using unspent funds from the 2008 budget to build plants and offshore wind.
The initiative appeared to receive a boost in January after the Russia-Ukraine crisis cut gas supplies to Europe and the economy continued to slide into the worst recession since 1945.
Yet it quickly became bogged down in disputes between member states over money and priorities that critics say highlight the EU’s clumsy response to the larger financial crises.
“It’s been difficult all along,” said one diplomat involved in the discussions. Even Mr Barroso last week acknowledged that he was “rather concerned” about a lack of progress.
Energy executives, including Lars Josefsson, chief executive of Vatenfall and president of the European electricity producers group, urged policymakers to move forward. “Let’s get this €1.25bn out and let’s build these projects. Time is of the essence,” Mr Josefsson said, referring to the funds within the €5bn package proposed by the commission for carbon capture and storage.
Copyright The Financial Times Limited 2009

Canberra's Carbon Awakening


A funny thing happened on Canberra's way to cap-and-trade carbon regulation -- Australians noticed how expensive it would be. The Obama Administration, which is contemplating its own emissions trading scheme, could learn a lesson or two from this political debacle.
Prime Minister Kevin Rudd's Labor government unveiled its draft Carbon Pollution Reduction Scheme on March 10. Canberra wants to sell emission permits to private businesses, raising 11.5 billion Australian dollars (US$7.6 billion) in the first two years. The government would then redistribute the money in transfer payments to households and certain industries to offset the costs.
And the costs are huge. Australians will pay for this once with a 1.1% increase in prices, and then keep paying in the form of a 0.1% cut in average economic growth until 2050. That's probably a conservative estimate, given that almost every corner of the economy would be taxed by higher energy prices.

Some industries, like mining, have seen the potential economic problems with this all along. Consider the as-yet uncalculated compliance burden. Private companies will be required to determine whether their carbon emissions reach the threshold beyond which a company is subject to the law and then figure out how many permits they need to buy. If a company gets it wrong, or if the government alleges it has, the business will find itself facing a fine of up to A$1 million.
Unions and business lobbies like the Business Council of Australia -- which had once supported cap and trade in theory -- are now voicing reservations. Even without the additional tax of a cap-and-trade regime, Australian unemployment hit a four-year high of 5.2% last month and is expected to rise further in coming months. Unions and business advocates don't do much good when there aren't jobs to fill, or companies to lobby for.
Politicians of all stripes are backing away fast. Opposition Liberal Party leader Malcolm Turnbull, who backed a limited emissions trading scheme in the past, says Mr. Rudd's plan is wrong for the economic times. So do his coalition partners, the Nationals. On the other extreme, the Green Party, which controls five swing votes in the Senate, doesn't think the Rudd plan is green enough. That's despite the fact that the scheme would cover around 75% of national emissions, compared to the "only" 40% of emissions the European Union covers in its own (ineffective) cap-and-trade program.
The hisses have left the Rudd government scrambling for cover. Climate Change Minister Penny Wong is trying to gain parliamentary votes by persuading Greens that a plan is better than no plan. Meanwhile, the proposal will have to survive scrutiny by no fewer than three hostile committees in the Senate. Mr. Rudd himself has remained firm, saying earlier this month that he's "100% committed." He's pushing a rapid timetable, hoping to see the scheme implemented next year.
When he proposed his plan on the campaign trail two years ago, Mr. Rudd didn't wager on a global recession that would focus minds on the costs of his green goals. And when they voted for him, perhaps Australians didn't appreciate the full costs. But now they are beginning to, especially given the paltry benefits. Australia contributes only 1.5% of global greenhouse gas emissions. With no emissions plans from the likes of India, China or Brazil in sight, Australians would be making their exports more expensive for negligible -- if any -- environmental gain.
Politics being politics, Mr. Rudd's plan isn't quite dead yet. There is always a chance the government will reach a deal with its Green Party allies. But the political uproar is itself instructive. The left has often assumed it can conceal the costs of its environmental ambitions. At least in Australia, voters aren't so easily deceived.