Friday, 27 March 2009

Climate Talks Look to U.S. Role


When the Obama administration makes its debut in the international climate-change debate at talks next week, expectations will be high: Europe hopes the U.S. can help end a standoff between rich and poor countries over how to share the burden of cutting carbon emissions.
"The arrival of the new U.S. administration will have a huge and positive effect on the negotiations," said Yvo de Boer, head of the United Nations Climate Change Secretariat, which is overseeing the talks. "This will be the first opportunity for the Obama administration to state what it expects and wants."
The summit in Bonn from March 29 to April 8, is one of several meetings this year aimed at drafting a successor to the Kyoto Protocol. That treaty committed 183 signatories to collectively reduce their emissions 5% from 1990 levels by 2012.

The aim is to agree on a new global treaty that would include the world's biggest emitters -- the U.S. and China -- by mid-December. The U.S., under the Bush administration, didn't ratify the Kyoto treaty, and China and other developing countries such as India and Brazil aren't obligated under the treaty to restrict emissions of greenhouse gases, which are believed to contribute to climate change.
The thorniest issue in the talks is deciding how much aid rich countries will give poorer countries to help them limit emissions and cope with the effects of rising temperatures. Another challenge will be agreeing on how deeply and quickly rich countries will cut emissions.
In 2007, developing countries committed to take "measurable, reportable and verifiable" actions to reduce their emissions, but only if they were given support by rich countries. Hammering out the details of such support is crucial to getting countries such as China and India on board.
The Obama administration has sent mixed signals about the issue, highlighting the difficulty it faces in getting congressional support for its emissions goals.
U.S. President Barack Obama has repeatedly said the U.S. must do more to fight climate change, and has called for legislation to cut U.S. emissions about 80% below 2005 levels by 2050. But getting such a law through Congress will be difficult, and any international climate change treaty must be ratified by the Senate. Some politicians are balking at the idea of imposing new regulatory burdens on companies during a recession.
Todd Stern, Mr. Obama's climate envoy, told reporters earlier this month that the administration was developing a "financing package" to help developing countries. But U.S. Energy Secretary Steven Chu suggested last week that tariffs could be levied on products imported from countries that don't agree to limit their emissions -- a move that could shield energy-intensive U.S. industries and increase costs in developing countries.
Mr. Chu said tariffs were just one idea, but his comments raised eyebrows because they came after a Chinese diplomat warned that a carbon tariff would violate World Trade Organization agreements. In a letter Thursday, congressional Republicans called on the Obama administration to clarify its stance on emissions-related trade policy.
Mr. Stern, the climate envoy, declined through an aide to be interviewed ahead of the Bonn conference.
Meanwhile, the U.S. Environmental Protection Agency is moving toward regulating greenhouse-gas emissions, and Democrats in the House of Representatives have begun drafting a bill to establish a system that limits emissions and creates a market for businesses to buy and sell the right to produce them.
But in recent weeks, Democratic lawmakers such as Sen. Kent Conrad (D., N.D.), chairman of the Senate Budget Committee, have objected to key elements of Mr. Obama's plan, raising the prospect the U.S. won't be able to enact such legislation before the Copenhagen talks in December.
European countries haven't been able to agree among themselves on how much money they are willing to give to poorer countries to help them cut emissions. Europe was supposed to decide on a financial package by this month, but recently pushed back the decision until June after countries squabbled over how to share the burden.
"It's a disappointment," said the U.N.'s Mr. de Boer of Europe's delay. "Without money on the table, we will not get the developing-country engagement we need."
Write to Leila Abboud at and Stephen Power at

Mileage Standard to Rise to 27.3 MPG


WASHINGTON -- The Obama administration is expected to announce Friday that it will raise fuel economy standards for 2011 model cars and light trucks to 27.3 miles per gallon from the current 25.3 mpg.

The new rules aren't as aggressive as some environmental groups had hoped or as the Bush administration had once proposed. But they are likely just a first step in a series of moves by the administration to significantly ratchet up fuel-efficiency demands on the nation's automakers. Next could come a decision by June to grant California a waiver from the federal Clean Air Act that would allow the state to regulate automobile emissions of carbon dioxide.
Under the new rules, fuel economy standards for passenger cars will be set at 30.2 mpg in the 2011 model year, compared with the current 27.5 mpg standard. The light-trucks standard would rise to 24.1 mpg from the current standard of roughly 23 mpg. Combined, the fleet average for 2011 models is supposed to achieve 27.3 miles per gallon.
A spokesman for the Alliance of Automobile Manufacturers, Charles Territo, said the new rule is "a good first step" but that auto makers "now need the administration to finalize fuel economy regulations for 2012 and beyond."
Write to Stephen Power at and Christopher Conkey at

Minister insists UK is on track to meet its Kyoto targets as emissions fall 2%

Published Date: 27 March 2009

BRITAIN'S greenhouse gas emissions fell 2 per cent in 2008. Statistics from the Department for Energy and Climate Change show that UK emissions are now about a fifth lower than they were in 1990.
Joan Ruddock, the energy and climate change minister, said it was clear the UK would meet its targets under the Kyoto Protocol.It had pledged to cut greenhouse gas emissions by 12.5 per cent by 2012. But she acknowledged the country would have to do more to maintain its leadership on climate change globally."Our Climate Change Act is a world first. It will bind this and future governments to increasingly ambitious carbon budgets, the first three of which will be set out alongside the Budget next month," she said."Everyone will have a part to play, from government and businesses down to each of us in our homes," she added.Greg Clark, the shadow energy and climate change secretary, said the government would miss its target to reduce carbon dioxide by 20 per cent by 2010. "Over the last 11 years, Labour have managed to cut UK emissions by just 3.6 per cent," he said.Simon Hughes, the Liberal Democrats' energy and climate spokesman, accused the government of taking "baby steps" and said radical action was needed to avert the catastrophic consequences of climate change.The head of climate change for Greenpeace, Robin Oakley, said the reduction was solely because we were using more gas and less coal to generate power – and emissions had actually risen under Labour. He hit out at plans to build new fossil-fuel power stations in the UK.

A personal pollution plan

Idealism alone is not enough to drive carbon emissions down: we should give each individual a pollution entitlement

Arne Jon Isachsen, Thursday 26 March 2009 18.00 GMT

Trying to change how people behave by pure persuasion is futile. Making them act out of self-interest is the way forward. Idealism and painting a bleak and scary picture of the future may be useful as a way of waking people up. But to deal effectively with the challenge of developing the world economy in a sustainable way, idealism alone will not work – we have to get the incentives right. Bono and U2 have done us a great service here. They pointed out what was wrong. Then Bono moved from Ireland to the Netherlands for tax reasons.
The system of carbon credits is a start, but to ensure growth is sustainable, and at the same time to focus on the needs of the world's poor, we need a new concept – that of "entitlements". The world must accept that every single individual on the globe is entitled to emit the same quantity of greenhouse gases and other pollutants with a global reach. The total amount of each type of pollutant that the world can cope with must be decided on by researchers operating professionally and at arm's length from politicians. This amount should be divided by the world's population, and national quotas allocated accordingly.
An awareness of exactly how much pollution – and greenhouse gases in particular – the world can stomach would give developing countries a bargaining chip. If they agree to reduce their population growth, and we accept a formula of pollution quotas based on population size, we can all make progress. Current population figures should be the basis for quotas; any future population growth beyond accepted and agreed levels should lead to a cut in the allocation of pollutants.
So a viable system for monitoring emissions needs to be developed. It would have to allow for the ability to soak up greenhouse gases through proper forestry management. Brazil and other heavily forested countries could thereby sell emissions quotas based upon how much CO2 their country's remaining vegetation will have absorbed.
Countries whose pollution exceeds their quota would have to buy quotas from other countries. The higher the cost of emitting CO2, the stronger would be the incentives to behave in an energy efficient manner. More fuel-efficient cars and aeroplanes would be developed. Not only people but also goods would travel shorter distances. Technologies that enable people to communicate as easily if they were in the same room – but virtually – would receive a boost.
Manufacturing would not only require capital and labour, but also permits to pollute, and there would be markets for these permits as well as for capital and labour. Politicians would be able to focus on encouraging and educating people about the new rules of the game, rather than try to decide which projects are more environmentally friendly.
Similarly, the exploitation of marine resources beyond the current territorial limits should be based on tradable entitlements, proportional to population.
Over time, the price to emit CO2 would probably come down, as new technologies and new types of behaviour emerged. People and businesses would adapt to a new set of relative prices. Economic growth would continue. But what is actually produced would change significantly. In this new environment, where each individual had an equal entitlement to emit pollutants, international aid would be significantly curtailed. (History, after all, has shown that development aid never led to much development anyway.) Money as a gift makes countries dependent rather than developed. Only by applying this principle of "entitlement" can we avoid the fate Garrett Hardin predicted in his Tragedy of the Commons.
In association with the Global Policy Institute, Comment is Free and Germany's Zeit-Online are running a series of commentaries from countries not invited to the G20 summit. Look out for further views from Poland, Chile, Iran and Venezuela in the next week

Maldives' carbon neutral plan is not greenwash, just imperfect progress

Proposals to cut emissions in the Maldives don't include aviation, but European emissions trading will help offset tourist CO2

Chris Goodall, Thursday 26 March 2009 14.01 GMT

The low-lying islands of the Maldives in the Indian Ocean would be flooded if oceans rose by two metres, the country's president, Mohamed Nasheed, has warned.

Mark Lynas's book Six Degrees strongly affects those who read it. It is a powerful but quietly voiced assessment of how the world will change as temperatures rise. The people of the Maldives, only too aware that their low-lying coral atolls are likely to disappear before the end of the century, are particularly interested in climate change and Lynas's book has been widely read in government circles in the capital Malé.
Last month the Maldives asked him for a plan to make the country "carbon-neutral". After a few days' work, he and I sent an outline scheme to the government in time for the president to make an announcement at the London premiere of Franny Armstrong's The Age of Stupid, a powerful film about climate change.
In our draft plan we showed how energy from wind and the sun could produce enough electricity to cover current needs and provide a surplus for future growth. A power station burning coconut husks will provide backup on those relatively rare occasions when the wind and sun aren't enough. Batteries will provide short-term storage on remote islands. Petrol can be largely replaced by ethanol made from Brazilian sugar cane.
Ambitiously, we said that the Republic of Maldives could set a target of going carbon-neutral within a decade or so. But we haven't proposed a way of avoiding the use of aviation fuel. So are we guilty of greenwash, like so many of the companies that brashly proclaim carbon neutrality on their website and in their sustainability reports?
Yes, in one sense we are. More than 500,000 people take long-distance flights to the Maldives, adding over a million tonnes of CO2 to the atmosphere every year. Our plan does not reduce the consumption of aviation fuel by a single litre. By setting out the steps to enable the Maldives to brand itself as a carbon-neutral destination, we could be accused of actually encouraging long-distance holidays. Eager travel agents will seize on the Maldives' plan and use it to persuade wavering customers that their air travel has no ecological side effects.
Our defence is that the emissions from air travel to the Maldives will be offset by the purchase of European emissions permits. Every European power station, many large factories and other major polluters have been granted rights to emit a certain amount of CO2. If a company wants to emit more than its allowance it has to buy certificates from other polluters who have permits to spare. The Maldives will become part of this scheme.
In effect we are admitting that air travel to the Maldives is a major source of pollution, just as if the country was a German power station or a Dutch cement works. Because the Maldives is a voluntary participant in the European scheme, it will not have any free emissions allowances. The total number of permits in the system will not rise as a result of the new entrant.
The Maldives' plan to buy allowances covering all the emissions from international flights to and from Malé therefore means that the emissions of other European polluters will have to decrease by an equal amount. This isn't a perfect solution, but it seems the best way of ensuring a flight to the Maldives doesn't add a single kilogramme to overall world emissions.
Nevertheless, many people believe that buying emissions permits is a poor compromise. They point out that the European scheme has set lax limits on the total amount of CO2 emitted by the continent's major carbon polluters. This is one of the reasons why the current price of permits is so low. However, the whole point of our scheme is that it will tighten the market, making emissions just a little bit more costly for all the major polluters across Europe.
Until the aviation industry develops sustainable biofuels, the only possible alternative to offsetting is to restrict the total number of flights to and from the Maldives. This would cripple the tourist industry and reduce the incomes of most of the inhabitants of the islands.
No scheme that places a large part of the burden of climate change mitigation on to the poorer half of the world can be appropriate. Although no one is completely happy with offsetting, even through the European emissions trading scheme, we believe it can be an effective way of helping the Maldives become carbon neutral.

SNP 'lagging' on renewables

Published Date: 26 March 2009

THE Scottish Government is "dragging its heels" over the use of micro-renewable energy in the home, Labour today claimed.

New planning rules on the installation of solar panels come into force today.But Labour's environment spokeswoman Sarah Boyack called for a timetable to boost the use of other micro-renewable schemes."The SNP Government is not making big enough strides to help boost the sector for household renewables," she said.Ms Boyack welcomed the new legislation, which she said would make it easier for people to install solar panels. "The Minister must now come forward with a proper timetable for other micro renewables as soon as possible," she added.

Shell betrays 'new energy future' promises

The energy company has sold out on its renewable investments, claiming they are 'not economic'

Fred Pearce, Thursday 26 March 2009 10.29 GMT

Shell, I have to report, is the new Exxon. The company that back in December was filling this and other newspapers with double-page adverts promoting its conversion to a "new energy future" of wind farms, hydrogen fuels, fuel made from marine algae and much else, has pulled the plug.
In the 1990s Royal Dutch Shell set its boffins on finding new green fuels, such as forest plantations to make biofuels. I remember them at the Earth Summit in Rio back in 1992. Not long after, Shell was for a time the world's second largest manufacturer of solar panels. In 2004, it opened the world's largest grid-connected solar park.
The company seemed to embrace the idea that a modern global oil company could and should transform itself into a green energy company. But, to rewrite its old advertising slogan, you can never be sure of Shell.
Just as the other European oil giant, BP, flattered to deceive when it began to call itself Beyond Petroleum, so too with Shell.
At a time when new bosses at Exxon in the US are making overtures to Barack Obama's idea of a new green deal to fight climate change, Shell is going back to the bad old days.
Last week, this and other papers reported: "Shell will no longer invest in renewable technologies such as wind, solar and hydropower because they are not economic."
In recent years, Shell has invested more than $1bn in the most commercial of the new renewable industries, wind power. It claims to have more than 500MW of wind power capacity altogether — the equivalent of half a regular power station.
It was chicken feed for them. But many hoped for more. Then last year, Shell pulled out of what would be the world's largest offshore wind farm in the Thames estuary. The London Array would have tripled its wind capacity.
The company claimed at the time that it was going to concentrate its renewables business in the US. Now that promise has quietly disappeared. Last week, its head of gas and power, Linda Cook, told reporters: "We do not expect material amounts of investment [in wind and solar] going forward." Biofuels will still get cash. Everything else is back into cold storage.
Why? "They continue to struggle to compete with other investment opportunities we have in our portfolio." In other words, oil prices are back down and Shell is in this for the short term.
We are left with those, shall we say unfulfilled, ads. "Tackling climate change and providing fuel for a growing population seems like an impossible problem, but at Shell we try to think creatively," said one. If you keep old newspapers, you'll find it across the centrefold of the Guardian on 15 December. If not, a version is still on their web site.
But now we know the creative thinking had more to do with advertisement copywriting rather than energy technology.
The ad continues: "It won't be easy. Innovative solutions rarely are. But when the challenge is hardest, when everyone else is shaking their heads, we believe there is a way." Do smile, amid your tears.
Shell was busted last year by the UK Advertising Standards Authority for an ad claiming that its $10bn investment in sucking oil from tar sands in Canada was a contribution to a sustainable energy future.
Clearly it hasn't been chastened. Those pre-Christmas ads were more greenwash. But, for anyone who has watched the company over the years, what has happened is not so much a cynical misrepresentation of its policies as an outright betrayal of past promises.
In the race for a greener future, Shell could have been a contender. Now it is on the canvas, flat out cold.
• How many more green scams, cons and generous slices of wishful thinking are out there? Please email your examples of greenwash to or add your comments below

U.S. fund for developing electric cars is untouched

By Leslie Wayne
Published: March 24, 2009

WASHINGTON: The future of the American auto industry is getting off to a slow start.
The U.S. Energy Department has $25 billion to make loans to hasten the arrival of the next generation of automotive technology - electric-powered cars. But no money has been allocated so far, even though the Advanced Technology Vehicles Manufacturing Loan program, established in 2007, has received applications from 75 companies, including start-ups as well as the three Detroit automakers.
With General Motors and Chrysler making repeat visits to Washington to ask for bailout money to stave off insolvency, some members of Congress are starting to ask why the Energy Department money is not yet flowing. The loans also are intended to help fulfill President Barack Obama's campaign promise of putting one million electric cars on American roads by 2015.
"Politicians are breaking down the door asking why the money isn't being sent out," said Michael Carr, counsel to the Senate Energy Committee, which oversees the Energy Department.
It is a question that Lachlan Seward, director of the program, says he hears a lot these days. "We're moving with a sense of urgency," said Seward, who also oversaw the Chrysler Loan Guarantee Board from 1981 to 1984. "But at the same time we are trying to do this in a responsible way that reflects prudent credit policy and taxpayer protections."

Energy Department staff members said they were still reading loan applications, dozens of which arrived on the filing deadline of Dec. 31. On top of that, $2 billion more is coming to the department from the $787 billion stimulus package. That money will be used to develop the advanced battery technology needed to power electric cars, batteries more durable, safer and cheaper than anything available today.
The program has been caught in the shifting of Washington priorities. The program was not funded until September 2008. Then, the administration of President George W. Bush considered using the Energy Department fund to help bail out GM and Chrysler, an idea that was later rejected. After that, Obama had to name a new cabinet. As soon as Steven Chu took office as energy secretary, some members of Congress started applying pressure on the fund.
Senator Evan Bayh, Democrat of Indiana, wrote Chu on Jan. 23, two days after he was sworn in, to say the agency was "under an obligation to issue the loans as soon as possible."
In response, Chu announced last week that the first loans would be made by late April or early May, adding that the program's paperwork would be simplified and more staff members would be hired.
There are complications. Money can be given only to companies and projects that are deemed "financially viable." GM and Chrysler, which have applied for a combined $13 billion from the Energy Department, must wait until the end of March for the Obama administration to decide whether the companies' planned restructuring would make them viable.
The program's small staff - about a dozen part- and full-time employees - must also sort through complicated proposals, as much as 1,000 pages long. Many of the applicants have lined up members of Congress to put pressure on the department. Meanwhile, smaller companies say they fear the bulk of the money will be directed to the Detroit automakers.
Still, with credit markets tight, the program represents a rare source of financing to develop electric-vehicle technology.
"No one else out there will take on this risk," Seward said. "It reminds me of the time at the dawn of the auto age when you had hundreds of companies making hundreds of kinds of cars and then they all coalesced. We are back in that era of invention again."
The Energy Department has whittled the initial 75 loan applications, which seek a total of $38 billion, down to 25 for a second round of reviews. General Motors is requesting $8.3 billion, earmarking a portion for the Chevy Volt, a plug-in hybrid. Ford Motor is asking for $5 billion for a variety of electric car retooling programs, and Chrysler is asking for about $5 billion. Even Nissan said it had submitted an application for one of its U.S. plants that meets the program's criteria.
Other applications are coming from battery developers. A123 Systems has asked for $1.8 billion to build a next-generation battery plant in Detroit, and Ener1, a maker of lithium-ion batteries, is asking for $480 million.
"Failure is not an option," said Charles Gassenheimer, chief executive of Ener1. "We are confident we would build batteries without government help. But government help is necessary to launching the business in a mass way in the United States."
Japan, South Korea and China are currently the leaders in producing the batteries used in cellphones, computers and other portable electronics.
Advanced Mechanical Products, a Cincinnati-based company that converts Saturn Sky sports cars into electric vehicles, has asked for a $20 million loan. Stephen Burns, the company's chief executive, even dropped off his application by driving one of the all-electric cars to the agency and giving members of Congress a ride.
"Getting the money would be a big step for us," Burns said. "We can function without it. But with it, we'd be on steroids."

Ministers pore over incentives to save growth of green energy

The Times
March 27, 2009

Robin Pagnamenta, Energy and Environment Editor and Lewis Smith, Environment Reporter

Ministers were last night considering fresh incentives designed to spur investment in renewable energy amid evidence that the credit crunch is threatening government energy targets.
The Energy Minister hit back at claims that the Government was failing to deliver on an ambitious plan to foster a green energy revolution by building thousands of onshore and offshore wind turbines. Mike O’Brien told a meeting of renewable-energy chiefs that he was determined that Britain would meet its goal of generating as much as 35 per cent of all UK electricity from wind, wave and solar power by 2020, up from less than 5 per cent at present.
Responding to news of a further collapse in financing for the UK wind industry, he said that the Government was examining new ideas to increase investment, which has been hit by the recession as banks rein in lending and the price of conventional fuels plunges.
Mr O’Brien said: “We are fully aware of the investment challenges facing some parts of the industry. We are examining how we can help ensure there is sufficient finance and other support available for viable projects which are short of the investment they need.”

Mr O’Brien was speaking after The Times revealed yesterday that Iberdrola Renovables, the Spanish energy company that is the world’s largest investor in wind energy, plans to cut its UK investments in renewable electricity this year by up to 40 per cent from as high as €700 million in 2008 to €400 million (£374 million).
Iberdrola, which blames the cut on the global economic crisis, said that it remained committed to the UK market and hoped to raise the level of investment when conditions improved. However, Xabier Viteri, the chief executive, also cited delays in securing planning permission and access to National Grid connections as threats to industry investment in the UK.
Doug Parr, the chief scientist of Greenpeace, said the UK renewables industry was moving “at a snail’s pace” and called for urgent action by the Government to accelerate its plans for a green energy revolution.
“It really is a case of getting off their backsides and doing what they said they were going to do,” Dr Parr said.
Lifting the UK’s share of renewable electricity generation to 35 per cent will cost an estimated £100 billion, but a string of investments have collapsed in recent months because of the credit crunch. Onshore wind energy generated only 1.14 per cent of UK electricity in 2007 and offshore wind accounted for only 0.2 per cent. Hydroelectric schemes, some of which were built decades ago, accounted for the biggest single slice at about 1.3 per cent.
“No sector is immune from the economic downturn, and that includes the energy sector,” Mr O’Brien said. “To meet our commitments on renewables, we have changed the planning laws and increased support for the sector.
“We also are working with National Grid and Ofgem to ensure sufficient access to the grid and we very much welcome the announcement last week about the timetable for an extra 450MW of grid connection.”
Meanwhile, a skills shortage in nuclear engineering is threatening the Government’s hopes that new nuclear plants will be operating by 2020, a Commons committee says today in a report. Many of the engineers working in the industry are approaching retirement and not enough young people are being trained. Failure to increase the number of qualified engineers entering the nuclear field will leave Britain dependent on foreign experts, who are already in great demand abroad.
Expressing concern at the “lack of a clear and detailed plan for delivering the next generation of nuclear power stations”, MPs on the Commons Innovation, Universities, Science and Skills Committee called for ministers to create a “master road map” for all big engineering projects to address issues such as the numbers of engineers available.
Phil Willis, the chairman of the committee, said: “If there’s a great drive postrecession to deliver on civil nuclear power, we will be competing in a small pool for that talent. The difficulty then is delivering on time at a cost we can afford.”
The report says that the Government is neglecting the potential of geoengineering to limit climate change if a greenhouse gas treaty cannot be reached.

Zapatero favours ‘green’ stimulus

By Victor Mallet in Madrid
Published: March 26 2009 20:25

Spain will launch a fresh round of government spending to pull its economy out of recession if another stimulus is needed later this year, José Luis Rodríguez Zapatero, prime minister, said on Thursday.
In an interview with the Financial Times and other newspapers, Mr Zapatero said he would back a fresh round of European spending focused on renewable energy and biotechnology.

He acknowledged that such a fiscal stimulus would have to be better co-ordinated, more modest and more focused than the previously announced stimulus packages that are draining the coffers of most of the world’s big economies.
Mr Zapatero insisted Spain had fiscal room for manoeuvre because its government debt was still only 38-39 per cent of GDP, much less than the European Union average. That is despite billions of euros of recent new bond issuance to finance a budget deficit likely to reach 7 per cent of gross domestic product this year.
“We have an ample margin with our debt,” Mr Zapatero said, adding Spain’s fiscal stimulus in December was only now beginning to take effect on the “nervous system” of the economy. “Let’s wait at least four months to see if there are symptoms of economic recovery.”
If it worked, there would be no need for further stimulus. If it did not, a “co-ordinated and selected effort” would be required, to concentrate on energy saving and renewable energy – in which Spain is already a leader – and on biotechnology and life sciences.
Asked if that would do much to reduce Spain’s unemployment rate of more than 14 per cent when employers wanted reforms to the country’s rigid labour market, Mr Zapatero said energy saving was a “major structural reform” that would form jobs and reduce the oil-dependent country’s external deficit.
“To change the world’s energy model is the most significant challenge facing humanity in this generation,” he said, “not only for the impact on climate change but also for its effects on the economic model.”
Mr Zapatero said he would stick to his promise to raise Spain’s foreign aid budget to the UN’s target level of 0.7 per cent of GDP by the end of the Socialist government’s mandate in 2012, up from 0.5 per cent at present. “There’s an ethical imperative,” he said. With the exception of Scandinavian countries, most developed economies have so far failed to reach the target.
Mr Zapatero would be recommending Spanish-style regulation to help restore confidence in the world’s financial systems when he attends the G20 summit of the world’s developed and emerging countries in London next week.
Measures enforced by the Bank of Spain include a de facto ban on off-balance sheet assets and “counter-cyclical” bad loan provisioning that has sheltered Spanish banks from the worst of the crisis.
“The North American and British attitude is moving closer to the European position on the need for efficient regulation – not hyper-regulation, but serious regulation,” he said, noting that other regulators were sometimes surprised to find that the Bank of Spain had inspectors permanently stationed inside the big commercial banks.
“The Spanish financial institutions are grateful now that these measures were put in place.”
The 48-year-old Mr Zapatero, now serving his second term, remains popular with Spanish electorate but is under attack from the right-wing opposition for his handling of the economic crisis, his liberal social agenda and what critics see as the government’s inept handling of foreign policy.
Copyright The Financial Times Limited 2009

Solar Companies Shine


NEW YORK -- Options traders rallied around solar companies after the Chinese Ministry of Finance said it will start to offer subsidies for solar energy.
Among the most active stocks were Suntech Power Holdings Co., LDK Solar Co., JA Solar Holdings Co. and Yingli Green Energy Holding Co.
Trading in Suntech Power climbed to 12 times the normal level, with investors picking up 32,000 calls that allow them to buy the company's stock and 22,000 puts that allow them to sell it, according to Trade Alert.
Investors showed interest in Suntech's April $12.50 calls, as well as longer-dated May $12.50 calls. The former are priced at 85 cents and make money if Suntech climbs above $13.35 before April 17. The shares closed at $11.29, gaining 44%.
In LDK Solar, which closed at $7.76, up 32%, investors gravitated toward April $10 calls. And in JA Solar, which closed at $3.77, up 42%, investors liked April $5 calls.
In Yingli Green Energy, investors scooped up April $5 calls and took short positions in September $2.50 puts. Yingli shares closed at $6.01, gaining 45%.
Fueling the activity were reports that China will provide relatively generous subsidies to help cover the costs of solar panels.
Write to Tennille Tracy at

RWE and E.ON in joint bid for UK nuclear sites

Published: March 26, 2009

FRANKFURT: German power utility E.ON and smaller domestic rival RWE have placed joint bids for three British nuclear sites, German daily Handelsblatt reported on Thursday, citing company sources.
Britain's Nuclear Decommissioning Authority (NDA) last week launched an auction of 999-year leases on land near three of its nuclear power stations in the UK, at Wylfa in north Wales, Oldbury in Gloucestershire and Bradwell in Essex.
RWE has bought options on farmland near the Wylfa site, while E.ON has sites near Oldbury.
The two German companies announced earlier this month that they had teamed up to build British nuclear power stations.
The NDA declined to confirm the Handelsblatt report, but said the auction had attracted a high level of interest.

"It's been pretty successful," an NDA spokesman said.
The NDA potentially might be able to make an announcement next week about the winning bidders, the spokesman said.
The NDA is nominating its three plots of land to the UK government, which is expected to make a preliminary announcement in the autumn about sites it believes are suitable for new nuclear development.
Ministers are expected to make their final decision known in the spring of 2010, paving the way for successful bidders to apply for planning permission and to start building the plants, which would be likely to generate their first power in 2018.
France's GDF Suez and Spain's Iberdrola, which have also formed a partnership to build nuclear power stations in Britain, will take part in the auction, Handelsblatt said, citing industry sources.
E.ON and RWE were not immediately available for comment.
(Reporting by Nicola Leske and Philip Waller in London; editing by Will Waterman)