By Fiona Harvey, Environment Correspondent
Published: April 21 2009 03:00
Britain has fallen behind countries such as Bulgaria, Chile and Peru on investment in low-carbon energy, and is likely to miss key targets on renewable energy generation without drastic intervention by Alistair Darling, the chancellor, according to two studies published ahead of tomorrow's Budget.
Investment in "clean" energy in the first quarter of 2009 fell to only £138m, putting Britain in 15th place in an international league table of green investment compiled by New Energy Finance, a consultancy.
In 2008, Britain took fifth place with £2.5bn invested in the sector through the year. By comparison, Spain spent more than £2bn on clean energy in the first quarter, while the US and China each invested more than £800m.
Poor progress on renewable energy means Britain will miss its European Union target of generating 15 per cent of energy from renewable sources by 2020, according to Cambridge Econometrics in a separate study. But on the bright side for Mr Darling, who has talked of his intention to provide help for the low-carbon economy in the Budget, meeting the commitment to cut emissions has become easier thanks to the recession.
Cambridge Econometrics forecasts that carbon dioxide emissions will fall by about 3 per cent in both 2009 and 2010 as energy use declines because of lower economic activity. If the recession is deep and followed by a delayed recovery, that would bring forward needed emissions cuts by five years, as carbon dioxide levels by 2015 would hit the level that had not been expected until 2020.
These are not the kind of cuts Mr Darling has been hoping for, however, as the government wants to create a "green economy" based on jobs in renewables and energy efficiency.
Joan Ruddock, climate and energy minister, said: "We're serious about cutting our emissions, which is why as part of the Budget the UK will be the first country to set out legally binding carbon budgets limiting emissions for the next 15 years."
Doubt was also cast yesterday on the government's strategy of boosting electric car production and usage. The UK Energy Research Centre said more emphasis should be placed on reducing the need to travel by car and promoting walking, cycling, and public transport.
Copyright The Financial Times Limited 2009
Tuesday, 21 April 2009
Can Small Cars Overcome Crash Fears?
By JOSEPH B. WHITE
The U.S. government's push to decrease the nation's output of greenhouse gases by increasing the fuel efficiency of the cars Americans drive is rekindling an emotional debate: Does driving a small, fuel-efficient car make you more likely to die on the road?
Engineers and statistical analysts can point to data that suggest more-efficient cars don't necessarily put motorists at greater overall risk. But most of us care less about the "overall" risk than we do about ourselves. Driving a big Chevrolet Tahoe sport-utility vehicle makes many of us believe we are safer than we would be in a smaller car -- even if statistical measures across a large population of vehicles and all kinds of crashes suggest the margin of safety isn't quite as wide as SUV owners believe.
The Obama administration has put the fuel-efficiency/safety question back on the front burner by calling for new-vehicle fuel economy to rise to an average of 35 miles per gallon by 2020 from about 25 mpg today. That target could move higher if the administration decides to adopt California's mandate to cut vehicle greenhouse-gas emissions, which would result in stricter mileage standards.
Those moves, and the lingering effects of last summer's gas-price shock, are driving auto makers to offer cars such as the Toyota Yaris, Honda Fit and Daimler AG's Smart fortwo -- which get the kind of mileage today that federal law says should be the average in a decade. Beyond that, auto makers will launch a wide array of new subcompact and compact vehicles, and decrease production of large, body-on-frame SUVs.
All of this is exciting for consumers who want to leave a smaller carbon footprint. But these smaller vehicles will have to jostle with the millions of SUVs that Americans bought during the past 20 years -- and are still buying today, both new and used.
That's leading to new concerns about "green safety," a term for managing the tradeoffs between reducing vehicle size for efficiency and adding safety and crash-protection features that tend to make vehicles heavier and less efficient. The topic will be on the agenda this week at the Society of Automotive Engineers conference in Detroit, which has as its theme "Racing to Green Mobility."
Tom Wenzel, a researcher at the Lawrence Berkeley national laboratory who analyzes vehicle crash data, says better fuel economy and safety can be compatible, provided car makers make smart use of technology and policy makers take steps to reduce the disparity in the size of vehicles on the road.
SUVs may give their occupants more protection in a collision with a lighter vehicle, he says. But in effect, the SUV owners are transferring risk from themselves to others.
"A much bigger issue" than a vehicle's mass "is the incompatibility between truck-based SUVs and cars of any size," Mr. Wenzel says. One reason among many why overall fatality rates in Germany are lower than those in the U.S., he says, is that there isn't the same disparity in the sizes of passenger vehicles on the road. Better engineering to make cars more crash-resistant also plays an important role.
Critics of a shift to smaller cars have a powerful ally in the Insurance Institute for Highway Safety. The IIHS, the insurance industry's auto-safety research arm, has long argued against small cars on safety grounds. Earlier this month, the IIHS upped the ante with a video of crash tests it conducted pitting midsize cars against three new minicars.
The Institute's images of a Smart for two getting crushed and thrown spinning into the air after a head-on collision with a midsize Mercedes C-Class sedan dramatize every driver's worst fear -- that no matter how careful you are, someday a car will veer into your lane. That's the moment when you want your car to save your life, and never mind the mileage.
Smart USA says the Insurance Institute's test dramatized a kind of collision that is "rare and extreme," representing less than 1% of all real-world crashes.
The challenge confronting the industry and its regulators will be how to break free of the "bigger and heavier equals safer" formula that the IIHS video represents, and which the auto industry has long used to argue against higher fuel-efficiency targets that threatened their profitable large vehicles.
The insurance group says one answer is to encourage more midsize vehicles that use advanced technology to boost fuel efficiency to minicar levels. The IIHS cites cars such as the Toyota Camry hybrid; European diesel technology could achieve a similar goal. The overall driver death rate in midsize cars is 23% lower than for minicars, the group says. The downside for consumers: Hybrids and diesels cost more.
Mr. Wenzel says auto makers should move even more aggressively to combine smarter engineering and lightweight, high-strength materials such as carbon fiber to create vehicles that can effectively dissipate collision forces, but that weigh less and thus require less fuel per mile.
The government should also require large pickup trucks to be substantially more efficient, which would also likely make them more expensive, Mr. Wenzel says. People who could prove they need a truck for work could get a tax break to offset the added cost, but not people who want to use a truck as a personal commuter vehicle, he says.
"If people want to use trucks as cars," he says, they should be considered "a luxury item."
Email: joseph.white@wsj.com
The U.S. government's push to decrease the nation's output of greenhouse gases by increasing the fuel efficiency of the cars Americans drive is rekindling an emotional debate: Does driving a small, fuel-efficient car make you more likely to die on the road?
Engineers and statistical analysts can point to data that suggest more-efficient cars don't necessarily put motorists at greater overall risk. But most of us care less about the "overall" risk than we do about ourselves. Driving a big Chevrolet Tahoe sport-utility vehicle makes many of us believe we are safer than we would be in a smaller car -- even if statistical measures across a large population of vehicles and all kinds of crashes suggest the margin of safety isn't quite as wide as SUV owners believe.
The Obama administration has put the fuel-efficiency/safety question back on the front burner by calling for new-vehicle fuel economy to rise to an average of 35 miles per gallon by 2020 from about 25 mpg today. That target could move higher if the administration decides to adopt California's mandate to cut vehicle greenhouse-gas emissions, which would result in stricter mileage standards.
Those moves, and the lingering effects of last summer's gas-price shock, are driving auto makers to offer cars such as the Toyota Yaris, Honda Fit and Daimler AG's Smart fortwo -- which get the kind of mileage today that federal law says should be the average in a decade. Beyond that, auto makers will launch a wide array of new subcompact and compact vehicles, and decrease production of large, body-on-frame SUVs.
All of this is exciting for consumers who want to leave a smaller carbon footprint. But these smaller vehicles will have to jostle with the millions of SUVs that Americans bought during the past 20 years -- and are still buying today, both new and used.
That's leading to new concerns about "green safety," a term for managing the tradeoffs between reducing vehicle size for efficiency and adding safety and crash-protection features that tend to make vehicles heavier and less efficient. The topic will be on the agenda this week at the Society of Automotive Engineers conference in Detroit, which has as its theme "Racing to Green Mobility."
Tom Wenzel, a researcher at the Lawrence Berkeley national laboratory who analyzes vehicle crash data, says better fuel economy and safety can be compatible, provided car makers make smart use of technology and policy makers take steps to reduce the disparity in the size of vehicles on the road.
SUVs may give their occupants more protection in a collision with a lighter vehicle, he says. But in effect, the SUV owners are transferring risk from themselves to others.
"A much bigger issue" than a vehicle's mass "is the incompatibility between truck-based SUVs and cars of any size," Mr. Wenzel says. One reason among many why overall fatality rates in Germany are lower than those in the U.S., he says, is that there isn't the same disparity in the sizes of passenger vehicles on the road. Better engineering to make cars more crash-resistant also plays an important role.
Critics of a shift to smaller cars have a powerful ally in the Insurance Institute for Highway Safety. The IIHS, the insurance industry's auto-safety research arm, has long argued against small cars on safety grounds. Earlier this month, the IIHS upped the ante with a video of crash tests it conducted pitting midsize cars against three new minicars.
The Institute's images of a Smart for two getting crushed and thrown spinning into the air after a head-on collision with a midsize Mercedes C-Class sedan dramatize every driver's worst fear -- that no matter how careful you are, someday a car will veer into your lane. That's the moment when you want your car to save your life, and never mind the mileage.
Smart USA says the Insurance Institute's test dramatized a kind of collision that is "rare and extreme," representing less than 1% of all real-world crashes.
The challenge confronting the industry and its regulators will be how to break free of the "bigger and heavier equals safer" formula that the IIHS video represents, and which the auto industry has long used to argue against higher fuel-efficiency targets that threatened their profitable large vehicles.
The insurance group says one answer is to encourage more midsize vehicles that use advanced technology to boost fuel efficiency to minicar levels. The IIHS cites cars such as the Toyota Camry hybrid; European diesel technology could achieve a similar goal. The overall driver death rate in midsize cars is 23% lower than for minicars, the group says. The downside for consumers: Hybrids and diesels cost more.
Mr. Wenzel says auto makers should move even more aggressively to combine smarter engineering and lightweight, high-strength materials such as carbon fiber to create vehicles that can effectively dissipate collision forces, but that weigh less and thus require less fuel per mile.
The government should also require large pickup trucks to be substantially more efficient, which would also likely make them more expensive, Mr. Wenzel says. People who could prove they need a truck for work could get a tax break to offset the added cost, but not people who want to use a truck as a personal commuter vehicle, he says.
"If people want to use trucks as cars," he says, they should be considered "a luxury item."
Email: joseph.white@wsj.com
Climate change will overload humanitarian system, warns Oxfam
Number of people affected by extreme weather has doubled in 30 years and is expected to reach 375 million a year by 2015
John Vidal, Environment editor
guardian.co.uk, Tuesday 21 April 2009 00.05 BST
Emergency organisations could be overwhelmed within seven years by the rising number of people in poor countries affected by floods, droughts, heatwaves, wild fires, storms, landslides and other climate hazards.
Analysis by Oxfam International of the 6,500 climate-related disasters recorded since 1980 show that the numbers of people affected by extreme weather events, many of which are linked to climate change, has doubled in just 30 years and is expected to increase a further 54% to more than 375 million people a year on average by 2015. The figure does not include people hit by other disasters such as wars, earthquakes and volcanoes.
Worldwide emergency aid spending will have to be nearly doubled to at least $25bn (£17.2bn) a year to cope, says the report, The Right To Survive.
"Climate change is set to overload the humanitarian system and destroy the lives and livelihoods of people today and into the future. The system can barely cope with the current level of disasters and could be overwhelmed," said Oxfam's chief executive, Barbara Stocking.
Since the 1980s, the average number of people affected by climate-related disasters has risen from 121 million to 243 million a year. Reported major floods have quadrupled, peaking in 2007/8 when 23 African and 11 Asian countries experienced their worst in memory, heavy rains hit much of Central America, hurricanes created havoc in the Caribbean and cyclones devastated large swaths of Burma and Bangladesh.
The projected increase in climate-related disasters is expected to be driven by more small and medium-scale events which attract the least humanitarian assistance.
"While climate change increases people's exposure to disasters, it is their vulnerability to them that determines whether they survive, and if they do, whether their livelihoods are destroyed," says the report.
"In rich countries, an average of 23 people die in any given disaster, [but] in least-developed countries, the average is 1,052. Poor people live in poorly constructed homes, often on land more exposed to hazards such as floods, droughts, or landslides, and in areas without effective health services or infrastructure," it says.
In addition to the rise in extreme climatic events, people's vulnerability to natural disasters is increasing. "Rapid urbanisation in developing countries means that slums are expanding on to precarious land. The global food crisis is estimated to have increased the number of hungry people in the world to just under one billion. Now the global economic crisis is driving up unemployment and poverty, while undermining social safety nets".
Oxfam called for a fundamental review of the humanitarian aid system, saying that in addition to the $25bn a year for disaster relief, much more would be needed to adapt to future climate change. "A commitment to rich countries spending $42bn a year to help them adapt to unavoidable climate change is a vital first step and in the medium-term, developing countries will need at least $50bn a year."
The report adds: "Finance for adaptation is an obligation – it must be separate and additional to aid commitments, in the form of grants not loans, and disbursed through equitable governance mechanisms."
Oxfam condemned rich countries' reluctance to provide money for poor countries. "Adaptation finance is needed immediately so that developing countries can begin investing in projects to reduce vulnerability. So far, rich countries have pledged $18bn in one-off amounts and less than $1bn has been delivered. In the same time, countries have found trillions to bail out their banking sectors," says the report.
According to the UN's office of humanitarian affairs, there have been climate-related disasters in Burundi, Bangladesh, Madagascar, Colombia, Indonesia, Peru and Bolivia in the past eight weeks.
John Vidal, Environment editor
guardian.co.uk, Tuesday 21 April 2009 00.05 BST
Emergency organisations could be overwhelmed within seven years by the rising number of people in poor countries affected by floods, droughts, heatwaves, wild fires, storms, landslides and other climate hazards.
Analysis by Oxfam International of the 6,500 climate-related disasters recorded since 1980 show that the numbers of people affected by extreme weather events, many of which are linked to climate change, has doubled in just 30 years and is expected to increase a further 54% to more than 375 million people a year on average by 2015. The figure does not include people hit by other disasters such as wars, earthquakes and volcanoes.
Worldwide emergency aid spending will have to be nearly doubled to at least $25bn (£17.2bn) a year to cope, says the report, The Right To Survive.
"Climate change is set to overload the humanitarian system and destroy the lives and livelihoods of people today and into the future. The system can barely cope with the current level of disasters and could be overwhelmed," said Oxfam's chief executive, Barbara Stocking.
Since the 1980s, the average number of people affected by climate-related disasters has risen from 121 million to 243 million a year. Reported major floods have quadrupled, peaking in 2007/8 when 23 African and 11 Asian countries experienced their worst in memory, heavy rains hit much of Central America, hurricanes created havoc in the Caribbean and cyclones devastated large swaths of Burma and Bangladesh.
The projected increase in climate-related disasters is expected to be driven by more small and medium-scale events which attract the least humanitarian assistance.
"While climate change increases people's exposure to disasters, it is their vulnerability to them that determines whether they survive, and if they do, whether their livelihoods are destroyed," says the report.
"In rich countries, an average of 23 people die in any given disaster, [but] in least-developed countries, the average is 1,052. Poor people live in poorly constructed homes, often on land more exposed to hazards such as floods, droughts, or landslides, and in areas without effective health services or infrastructure," it says.
In addition to the rise in extreme climatic events, people's vulnerability to natural disasters is increasing. "Rapid urbanisation in developing countries means that slums are expanding on to precarious land. The global food crisis is estimated to have increased the number of hungry people in the world to just under one billion. Now the global economic crisis is driving up unemployment and poverty, while undermining social safety nets".
Oxfam called for a fundamental review of the humanitarian aid system, saying that in addition to the $25bn a year for disaster relief, much more would be needed to adapt to future climate change. "A commitment to rich countries spending $42bn a year to help them adapt to unavoidable climate change is a vital first step and in the medium-term, developing countries will need at least $50bn a year."
The report adds: "Finance for adaptation is an obligation – it must be separate and additional to aid commitments, in the form of grants not loans, and disbursed through equitable governance mechanisms."
Oxfam condemned rich countries' reluctance to provide money for poor countries. "Adaptation finance is needed immediately so that developing countries can begin investing in projects to reduce vulnerability. So far, rich countries have pledged $18bn in one-off amounts and less than $1bn has been delivered. In the same time, countries have found trillions to bail out their banking sectors," says the report.
According to the UN's office of humanitarian affairs, there have been climate-related disasters in Burundi, Bangladesh, Madagascar, Colombia, Indonesia, Peru and Bolivia in the past eight weeks.
China considers introducing carbon emission targets
The Chinese government could set targets for reducing carbon emissions starting from 2011, in a move that could spur an international consensus on combating climate change.
By Malcolm Moore in Shanghai Last Updated: 1:06PM BST 20 Apr 2009
The news that China is considering a firm target for carbon emissions comes ahead of a United Nations conference later this year in Copenhagen which will attempt to come up with a successor to the Kyoto treaty.
Publicly, Beijing's negotiation position on climate change is that China will not accept any carbon emission caps or reductions because the country is still in an early stage of development.
China is the world's biggest greenhouse gas emitter, but only uses a fraction of the energy per head as the United States.
However, Su Wei, one of China's senior negotiators on climate change, said officials could introduce a national target that would limit emissions relative to economic growth. The move could be implemented in the next five-year plan from 2011.
Mr Su told the Guardian newspaper: "It is an option. We can very easily translate our [existing] energy reduction targets to carbon dioxide limitation. China hasn't reached the stage where we can reduce overall emissions, but we can reduce energy intensity and carbon intensity."
Yang Ailun, a spokesman for Greenpeace in Beijing, also said the introduction of carbon emissions targets was "not unlikely".
He added: "Targets are likely to be set on specific industries, like power and steel, rather than all the industries nationwide. China has been playing quite an active role in the negotiations as a big carbon emission country."
However, he expressed doubts the government would move quickly enough to have an impact on the negotiations in Copenhagen.
"There has been a plan to reduce our energy use which has gone on for some time, but we only saw a notable effect last year because the economy slowed," he said.
However, the debate within China on climate change is widening and last month the Chinese Academy of Science called for a 50 per cent cut in carbon dioxide emissions relative to GDP.
The Chinese State Council has also ordered all local governments to buy "more energy-efficient products", including certified refrigerators, air conditioners, computers and televisions.
By Malcolm Moore in Shanghai Last Updated: 1:06PM BST 20 Apr 2009
The news that China is considering a firm target for carbon emissions comes ahead of a United Nations conference later this year in Copenhagen which will attempt to come up with a successor to the Kyoto treaty.
Publicly, Beijing's negotiation position on climate change is that China will not accept any carbon emission caps or reductions because the country is still in an early stage of development.
China is the world's biggest greenhouse gas emitter, but only uses a fraction of the energy per head as the United States.
However, Su Wei, one of China's senior negotiators on climate change, said officials could introduce a national target that would limit emissions relative to economic growth. The move could be implemented in the next five-year plan from 2011.
Mr Su told the Guardian newspaper: "It is an option. We can very easily translate our [existing] energy reduction targets to carbon dioxide limitation. China hasn't reached the stage where we can reduce overall emissions, but we can reduce energy intensity and carbon intensity."
Yang Ailun, a spokesman for Greenpeace in Beijing, also said the introduction of carbon emissions targets was "not unlikely".
He added: "Targets are likely to be set on specific industries, like power and steel, rather than all the industries nationwide. China has been playing quite an active role in the negotiations as a big carbon emission country."
However, he expressed doubts the government would move quickly enough to have an impact on the negotiations in Copenhagen.
"There has been a plan to reduce our energy use which has gone on for some time, but we only saw a notable effect last year because the economy slowed," he said.
However, the debate within China on climate change is widening and last month the Chinese Academy of Science called for a 50 per cent cut in carbon dioxide emissions relative to GDP.
The Chinese State Council has also ordered all local governments to buy "more energy-efficient products", including certified refrigerators, air conditioners, computers and televisions.
Budget to include £500m spending on reducing carbon emissions
• Package includes £40m top-up for renewable energy grants• Britain's renewable energy performance second-worst in EU
Ashley Seager
guardian.co.uk, Monday 20 April 2009 11.01 BST
Alistair Darling will use this week's budget to announce an extra £500m of government spending on reducing carbon emissions, including a pledge of £40m to top up and keep open a grants programme for renewable-energy technologies.
The chancellor has been coming under increasing pressure from Britain's fledgling renewables industry not to allow a key part of the controversial low carbon buildings programme to come to an end this summer, nearly a year before a new support system offering a feed-in tariff kicks in.
The industry has been warning that many small companies that install solar panels, wind turbines or biomass boilers would go out of business if the LCBP were closed. In any case, the programme's budget was significantly underspent and firms were worried that the unspent money – over £20m – would be reallocated elsewhere.
Firms have already been laying off staff due to the recession and the fact that grants for the LCBP's most popular technology – solar photovoltaics – have already been suspended because the PV part of the grant pot had been spent.
But Darling is understood to be determined to make good on the government's rhetoric that it wants a "green jobs revolution" and will make money available on Wednesday despite the dire state of public finances.
November's pre-budget report provided a green stimulus of about £500m in total. This week's budget is expected to deliver a further £500m, plus other policy measures that will support billions in investment in low-carbon industries and secure tens of thousands of jobs.
Ministers believe the new funding will provide much needed support for the renewable supply chain in the lead-up to the introduction of feed-in tariffs for electricity in 2010 and the renewable heat incentive in 2012.
Industry representatives gave a cautious welcome to the news. "This is good news but we will need to see the detail," said Seb Berry, spokesman for solar panel company Solarcentury. "We look forward to sitting down with the government to work through how the money can be spent."
Several companies and campaign groups are planning to deliver a petition to Downing Street today demanding that the government put greater support for renewable energy in place. Britain is the second-worst performer in the European Union in terms of the amount of energy coming from renewables, and is a long way behind Germany, Denmark, Spain and Portugal.
Ashley Seager
guardian.co.uk, Monday 20 April 2009 11.01 BST
Alistair Darling will use this week's budget to announce an extra £500m of government spending on reducing carbon emissions, including a pledge of £40m to top up and keep open a grants programme for renewable-energy technologies.
The chancellor has been coming under increasing pressure from Britain's fledgling renewables industry not to allow a key part of the controversial low carbon buildings programme to come to an end this summer, nearly a year before a new support system offering a feed-in tariff kicks in.
The industry has been warning that many small companies that install solar panels, wind turbines or biomass boilers would go out of business if the LCBP were closed. In any case, the programme's budget was significantly underspent and firms were worried that the unspent money – over £20m – would be reallocated elsewhere.
Firms have already been laying off staff due to the recession and the fact that grants for the LCBP's most popular technology – solar photovoltaics – have already been suspended because the PV part of the grant pot had been spent.
But Darling is understood to be determined to make good on the government's rhetoric that it wants a "green jobs revolution" and will make money available on Wednesday despite the dire state of public finances.
November's pre-budget report provided a green stimulus of about £500m in total. This week's budget is expected to deliver a further £500m, plus other policy measures that will support billions in investment in low-carbon industries and secure tens of thousands of jobs.
Ministers believe the new funding will provide much needed support for the renewable supply chain in the lead-up to the introduction of feed-in tariffs for electricity in 2010 and the renewable heat incentive in 2012.
Industry representatives gave a cautious welcome to the news. "This is good news but we will need to see the detail," said Seb Berry, spokesman for solar panel company Solarcentury. "We look forward to sitting down with the government to work through how the money can be spent."
Several companies and campaign groups are planning to deliver a petition to Downing Street today demanding that the government put greater support for renewable energy in place. Britain is the second-worst performer in the European Union in terms of the amount of energy coming from renewables, and is a long way behind Germany, Denmark, Spain and Portugal.
South Korea lights the way on carbon emissions with its £23bn green deal
Seoul's huge financial stimulus package pledges 81% for a swath of environmental projects. But activists fear a wave of construction may increase the country's carbon footprint
Jonathan Watts in Seoul
The Guardian, Tuesday 21 April 2009
The secretary for future vision is considering how many South Koreans it takes to change a million lightbulbs. No joke.
Kim Sang-hyo, the president's extravagantly titled right-hand man, is trying to create more than 940,000 green jobs and improve his country's energy efficiency at the same time. Switching every bulb in every public building in South Korea to light-emitting diodes by the end of this year is one, very small, element in the master plan of what has been described as the greenest new deal on the planet.
Since the start of the financial crisis last year, governments across the globe have been talking up the environmental content of their fiscal stimulus programmes and being judged by their efforts to save the planet. US president Barack Obama and the Chinese government have been praised for their ambitious plans to invest in renewable power, clean transport and energy-efficient buildings. Britain, by contrast, has been castigated for the relatively miserly sums it has so far committed to green projects. Alistair Darling's budget tomorrow will be closely scrutinised from the same perspective.
But no matter what the UK promises, it will pale in comparison with the green boasts of South Korea's 50tn won (£23bn) plan. According to an international ranking by the bank HSBC, 81% of the money is earmarked for green projects, easily the highest proportion in the world and vastly more than the 7% share in the UK.
So how will South Korea spend all that money? The first challenge for Kim is co-ordinating how this huge sum - equivalent to 2.6% of GDP - should be doled out. He must face both drooling construction industry conglomerates and suspicious environmental groups while creating jobs and lifting a nosediving economy. Many Koreans believe the apparently green spending will turn out to be heavily grey.
At his office in the presidential Blue House, Kim says he is tasked with a fundamental restructuring of the South Korean economy and energy structure, which is 97% dependent on expensive imported fuel. "The president realises that now is the time for change," he says.
Over the next four years, the government promises to build a million green homes, improve the energy efficiency of a million more, invest £1.2bn on research into low-carbon technologies and spend £4.8bn on high-speed railways and other forms of "clean" transport.
More than 2,500 miles of bicycle expressways will be built, including a 175-mile stretch alongside the demilitarised zone boundary with North Korea. By 2020, expanded subway, railway and electric car ownership is expected to reduce greenhouse gases from transport by 20%. The forestry sector will employ an extra 50,000 people to increase carbon sink capacity and build the country's first wood pellet fuel mill.
The UN secretary general, Ban Ki-moon, has praised the example set by his homeland. But environmental groups warn the plan is not nearly as green as it seems.
The biggest and most controversial item of expenditure is the "renewal" of four rivers, ostensibly to reduce the risk of drought. The project is likely to mean more dams and concrete embankments. Critics suspect it will be used as a cover to push through the president's widely opposed goal of building a canal through the centre of the country. There are fears too that developers will use the excuse of "ecohome" building to tear up strips of green belt outside Seoul.
Many also question the wisdom of building long-distance cycle paths they think will benefit the cement industry more than the environment.
"This is just old-style fiscal spending with a new label. At the end of this 'green new deal', Korea will definitely be a greyer country," said Oh Sung-kyu, general secretary of the Citizen's Movement for Environmental Justice. "The problem is that in Korea, jobs equals concrete."
With few specific details about how the money will be spent and no estimate of the impact on carbon emissions, environmental auditing of the plan is difficult. Diplomats and local journalists said the true amount of green spending was likely to be far below 81%. In the short term, some suggest, South Korea's carbon footprint could even go up as a result of the burst of construction. But Kim denies these accusations. "Our projects are all related to lowering emissions. They will definitely reduce our carbon emissions."
President Lee Myung-bak may have a long way to go before he can persuade sceptics that he has turned over a green new leaf. Lee is a former head of Hyundai Construction, one of the world's biggest cement pourers. As mayor of Seoul, his best-known "green" project was the development of Cheongye stream, which was uncovered and now runs on a concrete bed, beside concrete walkways and neon-illuminated concrete walls.
Concern for the environment has traditionally been a low priority in South Korea's development, which has long centred on energy-intensive heavy industry. Green groups say the world's 13th biggest economy pours almost twice as much cement as Japan and is three times worse for energy inefficiency.
However, the business-oriented president says the country must turn green to improve its corporate competitiveness. To sell his green growth plans to the nation's conglomerates - known as chaebol - he has stressed that moving early on low-carbon technology will give South Korea a head start over rivals around the world.
Hi-tech companies, such as Samsung, Hyundai and SK, have already begun investing in energy-saving technologies that use their expertise in semi-conductors and information technology.
The government hopes to accelerate the move to green-tech powerhouses by offering incentives and support for research and development. Hyundai and Kia will get financial support to develop electric and hybrid vehicles. South Korea also aims to be the first country in the world to have a "smart national grid" that uses information technology to maximise the efficiency of electricity transmission.
Given the huge sums spent in other areas, the renewable energy spending share of South Korea's green new deal is a disappointingly low £80m, mostly on solar-powered homes, photovoltaic heating and geothermal power sources for apartment blocks. Part of the reason is that the government had previously announced plans to invest 37tn won from 2009 to 2022 on new power plants, including 12 nuclear plants, to improve fuel efficiency and lower emissions.
Government advisers say South Korea's relatively small and crowded land area limits the potential for large-scale wind and solar projects and the rivers have far less hydro-power potential than those in China and the US. But even before the green new deal, engineers had begun work on the world's biggest tidal power plant. When it is finished later this year, the 254MW capacity plant at Siwha will supply the energy equivalent of 862,000 barrels of oil a year. A three times bigger tidal power plant is planned at Ganghwa.
Over the next 20 years, the government says it will invest 110tn won in renewables so that by 2030, they make up 11%of the overall energy mix. While this is far less ambitious than China, Europe or the US, it is a big improvement on the 2.4% share in 2007. Chung Rae-kwon, South Korea's climate change ambassador, said that by June, the government will announce its first target for reducing greenhouse gases: "The green new deal is just the start."
John Ashton, special representative for climate change for the UK Foreign Office, said South Korea was moving fast. "There seems to be growing consensus in Korea that being an early mover in the low carbon transition is good for the Korean economy, and good for Korean manufacturers."
At the Blue House, Kim says South Korea is on the point of embracing green technology with the same fervour that it adopted broadband in the late 1990s.
"By 2020, we'd like to be at least in the top five nations for green technology," says the presidential secretary for future vision. "As a nation, we want to be charming, to get respect from global society, to be seen as more than an economic animal.
"It has been only seven months since the president made the speech calling for low-carbon, green growth, but so much is changing. Everyone is now talking about green things. It may be a strength or a weakness of Korean people, but once we reach a consensus we move very quickly," he said.
Key projects:
Housing
$6bn for the construction of 1m green homes, energy efficiency upgrades for a million more, energy conservation improvements in villages and schools, and the installation of LED lighting in public facilities.
Cars
$1.8bn to support the development of fuel-efficient vehicles, such as electric and hybrid cars, by automakers
Hyundai and Kia.
Trains and bikes
$7bn to upgrade the transport infrastructure through the expansion of electrified tracks, new high-speed rail links and the construction of more than 2,500 miles of bicycle paths.
Water
$11.1bn on river "restoration" and water resource management that will controversially include building dams
and concreting some embankments.
Forestry
$1.7bn on forestry management,
including tree planting to improve
carbon sink capacity, and new facilities to use wood as biomass energy.
Recycling
$670m on resource recycling, including rubbish incineration plants that burn methane emissions to generate electricity.
Jonathan Watts in Seoul
The Guardian, Tuesday 21 April 2009
The secretary for future vision is considering how many South Koreans it takes to change a million lightbulbs. No joke.
Kim Sang-hyo, the president's extravagantly titled right-hand man, is trying to create more than 940,000 green jobs and improve his country's energy efficiency at the same time. Switching every bulb in every public building in South Korea to light-emitting diodes by the end of this year is one, very small, element in the master plan of what has been described as the greenest new deal on the planet.
Since the start of the financial crisis last year, governments across the globe have been talking up the environmental content of their fiscal stimulus programmes and being judged by their efforts to save the planet. US president Barack Obama and the Chinese government have been praised for their ambitious plans to invest in renewable power, clean transport and energy-efficient buildings. Britain, by contrast, has been castigated for the relatively miserly sums it has so far committed to green projects. Alistair Darling's budget tomorrow will be closely scrutinised from the same perspective.
But no matter what the UK promises, it will pale in comparison with the green boasts of South Korea's 50tn won (£23bn) plan. According to an international ranking by the bank HSBC, 81% of the money is earmarked for green projects, easily the highest proportion in the world and vastly more than the 7% share in the UK.
So how will South Korea spend all that money? The first challenge for Kim is co-ordinating how this huge sum - equivalent to 2.6% of GDP - should be doled out. He must face both drooling construction industry conglomerates and suspicious environmental groups while creating jobs and lifting a nosediving economy. Many Koreans believe the apparently green spending will turn out to be heavily grey.
At his office in the presidential Blue House, Kim says he is tasked with a fundamental restructuring of the South Korean economy and energy structure, which is 97% dependent on expensive imported fuel. "The president realises that now is the time for change," he says.
Over the next four years, the government promises to build a million green homes, improve the energy efficiency of a million more, invest £1.2bn on research into low-carbon technologies and spend £4.8bn on high-speed railways and other forms of "clean" transport.
More than 2,500 miles of bicycle expressways will be built, including a 175-mile stretch alongside the demilitarised zone boundary with North Korea. By 2020, expanded subway, railway and electric car ownership is expected to reduce greenhouse gases from transport by 20%. The forestry sector will employ an extra 50,000 people to increase carbon sink capacity and build the country's first wood pellet fuel mill.
The UN secretary general, Ban Ki-moon, has praised the example set by his homeland. But environmental groups warn the plan is not nearly as green as it seems.
The biggest and most controversial item of expenditure is the "renewal" of four rivers, ostensibly to reduce the risk of drought. The project is likely to mean more dams and concrete embankments. Critics suspect it will be used as a cover to push through the president's widely opposed goal of building a canal through the centre of the country. There are fears too that developers will use the excuse of "ecohome" building to tear up strips of green belt outside Seoul.
Many also question the wisdom of building long-distance cycle paths they think will benefit the cement industry more than the environment.
"This is just old-style fiscal spending with a new label. At the end of this 'green new deal', Korea will definitely be a greyer country," said Oh Sung-kyu, general secretary of the Citizen's Movement for Environmental Justice. "The problem is that in Korea, jobs equals concrete."
With few specific details about how the money will be spent and no estimate of the impact on carbon emissions, environmental auditing of the plan is difficult. Diplomats and local journalists said the true amount of green spending was likely to be far below 81%. In the short term, some suggest, South Korea's carbon footprint could even go up as a result of the burst of construction. But Kim denies these accusations. "Our projects are all related to lowering emissions. They will definitely reduce our carbon emissions."
President Lee Myung-bak may have a long way to go before he can persuade sceptics that he has turned over a green new leaf. Lee is a former head of Hyundai Construction, one of the world's biggest cement pourers. As mayor of Seoul, his best-known "green" project was the development of Cheongye stream, which was uncovered and now runs on a concrete bed, beside concrete walkways and neon-illuminated concrete walls.
Concern for the environment has traditionally been a low priority in South Korea's development, which has long centred on energy-intensive heavy industry. Green groups say the world's 13th biggest economy pours almost twice as much cement as Japan and is three times worse for energy inefficiency.
However, the business-oriented president says the country must turn green to improve its corporate competitiveness. To sell his green growth plans to the nation's conglomerates - known as chaebol - he has stressed that moving early on low-carbon technology will give South Korea a head start over rivals around the world.
Hi-tech companies, such as Samsung, Hyundai and SK, have already begun investing in energy-saving technologies that use their expertise in semi-conductors and information technology.
The government hopes to accelerate the move to green-tech powerhouses by offering incentives and support for research and development. Hyundai and Kia will get financial support to develop electric and hybrid vehicles. South Korea also aims to be the first country in the world to have a "smart national grid" that uses information technology to maximise the efficiency of electricity transmission.
Given the huge sums spent in other areas, the renewable energy spending share of South Korea's green new deal is a disappointingly low £80m, mostly on solar-powered homes, photovoltaic heating and geothermal power sources for apartment blocks. Part of the reason is that the government had previously announced plans to invest 37tn won from 2009 to 2022 on new power plants, including 12 nuclear plants, to improve fuel efficiency and lower emissions.
Government advisers say South Korea's relatively small and crowded land area limits the potential for large-scale wind and solar projects and the rivers have far less hydro-power potential than those in China and the US. But even before the green new deal, engineers had begun work on the world's biggest tidal power plant. When it is finished later this year, the 254MW capacity plant at Siwha will supply the energy equivalent of 862,000 barrels of oil a year. A three times bigger tidal power plant is planned at Ganghwa.
Over the next 20 years, the government says it will invest 110tn won in renewables so that by 2030, they make up 11%of the overall energy mix. While this is far less ambitious than China, Europe or the US, it is a big improvement on the 2.4% share in 2007. Chung Rae-kwon, South Korea's climate change ambassador, said that by June, the government will announce its first target for reducing greenhouse gases: "The green new deal is just the start."
John Ashton, special representative for climate change for the UK Foreign Office, said South Korea was moving fast. "There seems to be growing consensus in Korea that being an early mover in the low carbon transition is good for the Korean economy, and good for Korean manufacturers."
At the Blue House, Kim says South Korea is on the point of embracing green technology with the same fervour that it adopted broadband in the late 1990s.
"By 2020, we'd like to be at least in the top five nations for green technology," says the presidential secretary for future vision. "As a nation, we want to be charming, to get respect from global society, to be seen as more than an economic animal.
"It has been only seven months since the president made the speech calling for low-carbon, green growth, but so much is changing. Everyone is now talking about green things. It may be a strength or a weakness of Korean people, but once we reach a consensus we move very quickly," he said.
Key projects:
Housing
$6bn for the construction of 1m green homes, energy efficiency upgrades for a million more, energy conservation improvements in villages and schools, and the installation of LED lighting in public facilities.
Cars
$1.8bn to support the development of fuel-efficient vehicles, such as electric and hybrid cars, by automakers
Hyundai and Kia.
Trains and bikes
$7bn to upgrade the transport infrastructure through the expansion of electrified tracks, new high-speed rail links and the construction of more than 2,500 miles of bicycle paths.
Water
$11.1bn on river "restoration" and water resource management that will controversially include building dams
and concreting some embankments.
Forestry
$1.7bn on forestry management,
including tree planting to improve
carbon sink capacity, and new facilities to use wood as biomass energy.
Recycling
$670m on resource recycling, including rubbish incineration plants that burn methane emissions to generate electricity.
How to grow in a low-carbon future
By Richard Milne
Published: April 21 2009 03:00
When Wilh. Wilhelmsen, a Norwegian shipping company that is among the world's largest, began developing a fuelefficient propulsion system, it began a journey of discovery that led to a line of environmentally friendly changes.
Ingar Skaug, chief executive, says the group was thinking about a "low carbon" future - a world in which the company would still be able to grow but in which its emissions would have to be lower. In co-operation with Royal Dutch Shell and Det Norske Veritas, a risk management company, it examined ways to reduce fuel consumption and take out as much sulphur and nitrogen dioxide as possible from its engines.
In the process, Wilh. Wilhelmsen found opportunities for other innovations: a catalytic converter developed with Yara, a fertiliser company, that injects ammonia to neutralise nitrogen dioxide; a technology for sulphur scrubbing to cut emissions; a switch to water-based cleaning products rather than chemical ones; a better air-conditioning system; and a cleaning system for ballast water on its ships that reduced the spread of bacteria around the world.
Mr Skaug says: "What we have proven is that to focus on the environment is very good business."
With energy costs rising and the penalties for polluters getting harsher, many companies are thinking along similar lines. "We are entering a new time where companies are for low-carbon growth that is benefiting their bottom line . . . This is not an environmentalist's approach, this is business strategy," says Osvald Bjelland. The Norwegian entrepreneur helped set up the Global Leadership and Technology Exchange (GLTE), a venture that allows companies such as Wilh. Wilhelmsen, Tata, Gazprom and Deutsche Bank to exchange information and start environmentally friendly projects.
That awareness is not just for companies that are advanced in their thinking on cutting emissions. Collaboration can also help companies that are just beginning to address these issues, and those in relatively dirty industries.
"We are not shy of learning. We are behind as far as the world is concerned on low-carbon growth," says J.J. Irani, a director of Tata Sons, the Indian conglomerate's holding company.
Of the hundred or so companies that it owns, Tata is focusing on its five most polluting businesses; activities such as steel, power generation and cars account for more than 80 per cent of the group's emissions. "The trick is to find a business case solution at the same time as protecting the environment," says Mr Irani, who is in Europe this week discussing the issue with companies such as Ikea, Siemens and Standard Chartered.
Mr Bjelland believes there are four things that business leaders need to consider to gain low-carbon growth. The first is simply to understand the shifting science and politics of climate change and communicate that within the company. Second, and perhaps most importantly, companies must incorporate climate change in their strategies and possibly even adapt business models as a result.
One example is Interface, a US carpet company, that in the mid-1990s rethought its business model completely and in the process cut its material costs, waste and emissions by a huge amount and increased profitability. Instead of selling carpets, it leases them, replacing only the parts that are worn out (see below).
Companies are also seeing the marketing advantage that can come from putting a focus on environmentally friendly products. General Electric's Ecomagination initiative has brought it highprofile success. But Siemens, GE's German rival, was surprised to find that its "green" products - developed without any overarching initiative - last year added up to nearly double GE's in dollar terms.
"German groups have failed in marketing," admits chief executive Peter Löscher, pointing also to how German carmakers were outflanked on hybrids by the Japanese. Siemens is aiming for €25bn (£22bn) in green sales by 2011, GE for $25bn (£17bn) by next year and Philips, their smaller Dutch rival, for about €10bn by 2012.
For some, part of the answer lies in collaboration, whether informally or through a group such as GLTE, to improve sustainability in the supply chain. Tata is discussing with Wilh. Wilhelmsen how they can both reduce emissions - and also costs - in the way they transport cars around the world.
Mr Skaug points to simple possibilities, such as using more efficient routes, decreasing the frequency of service and simply sailing more slowly. "It is a theme that is sweeping through the business world: collaborative business. Two people think better than one," he says.
Mr Irani agrees: "It is a matter of not trying to reinvent the wheel. If others have trod the path first, we can learn from them."
Collaboration has led to some unlikely transfers of knowledge. Wilh. Wilhelmsen talked to GE about jet engine design to see whether any of its innovations could be used in ships, while its ballast water cleaning system was developed by a group of South African engineers after they found out about the Norwegian company's interest in the area.
The third and related suggestion made by Mr Bjelland is for leaders to embrace the changes and use them not just internally but in their dealings with regulators, customers and suppliers. Seemingly mundane decisions - such as Deutsche Bank's refurbishment of its Frankfurt headquarters - can be turned into a chance to improve energy efficiency or save costs. At Siemens, Mr Löscher says part of his role has been just to make the conglomerate see how much it was doing without realising it, and then to try to push that further.
Mr Irani says leaders should aim for a sense of urgency. Tata has created a central group of six people working on low-carbon growth to co-ordinate about 100 workers dedicated to the issue alone across all of its companies. "Eighty per cent of power generation in India comes from coal - what kind of solutions are there for this? That is a challenge but an important one for us to respond to," he says.
The fourth area is to come up with concrete projects. Many of these are for the long term, such as a study between General Motors and Gazprom to look at what infrastructure would be needed for cars powered by alternative fuels. Similarly, shipping companies are looking at ideas such as fuel cells, wind or solar energy to power vessels, although some remain sceptical.
Others ideas seem more tangible, such as Wilh. Wilhelmsen's talks with Mitsubishi Heavy Industries on the future design of ships following the widening of the Panama Canal. "We may be able to develop ships that are completely different: wider but less deep, which means more efficient and they won't burn as much fuel," says Mr Skaug.
Mr Bjelland sounds positively evangelical: "This is a time of renewal with new technologies and new business models. It could be a pioneering time."
Founder who refused to sweep climate worries under the carpet
The carpet manufacturer Interface is often held up as an example of how businesses can find growth in sustainability. Yet when he started in the 1970s, the environment was the least of founder Ray Anderson's concerns - making carpets at the time relied heavily on petroleum.
His epiphany came in the mid-1990s when he became aware of the growing importance of climate change. He swiftly moved through the other three points proposed by the Norwegian entrepreneur Osvald Bjelland (see main piece) for growth in a low-carbon economy.
Mr Anderson redirected Interface's strategy to cutting waste, emissions and water use. In an interview with the Corporate Design Foundation last year, he said Interface had cut its waste by half, its greenhouse gas tonnage by 88 per cent and water use by 79 per cent compared with 1998. Half of its factories run on renewable energy.
Mr Anderson became a champion for reducing waste and emissions throughout the company. Finally, he set about thinking of long-term changes to Interface's business model. As well as trying the use of new materials, Interface asked customers to lease rather than buy carpets, and then replace only worn sections rather than the whole floor.
Nevertheless, Interface's actions are a drop in the ocean given the size of the industry; waste from the sector as a whole is still increasing.
Copyright The Financial Times Limited 2009
Published: April 21 2009 03:00
When Wilh. Wilhelmsen, a Norwegian shipping company that is among the world's largest, began developing a fuelefficient propulsion system, it began a journey of discovery that led to a line of environmentally friendly changes.
Ingar Skaug, chief executive, says the group was thinking about a "low carbon" future - a world in which the company would still be able to grow but in which its emissions would have to be lower. In co-operation with Royal Dutch Shell and Det Norske Veritas, a risk management company, it examined ways to reduce fuel consumption and take out as much sulphur and nitrogen dioxide as possible from its engines.
In the process, Wilh. Wilhelmsen found opportunities for other innovations: a catalytic converter developed with Yara, a fertiliser company, that injects ammonia to neutralise nitrogen dioxide; a technology for sulphur scrubbing to cut emissions; a switch to water-based cleaning products rather than chemical ones; a better air-conditioning system; and a cleaning system for ballast water on its ships that reduced the spread of bacteria around the world.
Mr Skaug says: "What we have proven is that to focus on the environment is very good business."
With energy costs rising and the penalties for polluters getting harsher, many companies are thinking along similar lines. "We are entering a new time where companies are for low-carbon growth that is benefiting their bottom line . . . This is not an environmentalist's approach, this is business strategy," says Osvald Bjelland. The Norwegian entrepreneur helped set up the Global Leadership and Technology Exchange (GLTE), a venture that allows companies such as Wilh. Wilhelmsen, Tata, Gazprom and Deutsche Bank to exchange information and start environmentally friendly projects.
That awareness is not just for companies that are advanced in their thinking on cutting emissions. Collaboration can also help companies that are just beginning to address these issues, and those in relatively dirty industries.
"We are not shy of learning. We are behind as far as the world is concerned on low-carbon growth," says J.J. Irani, a director of Tata Sons, the Indian conglomerate's holding company.
Of the hundred or so companies that it owns, Tata is focusing on its five most polluting businesses; activities such as steel, power generation and cars account for more than 80 per cent of the group's emissions. "The trick is to find a business case solution at the same time as protecting the environment," says Mr Irani, who is in Europe this week discussing the issue with companies such as Ikea, Siemens and Standard Chartered.
Mr Bjelland believes there are four things that business leaders need to consider to gain low-carbon growth. The first is simply to understand the shifting science and politics of climate change and communicate that within the company. Second, and perhaps most importantly, companies must incorporate climate change in their strategies and possibly even adapt business models as a result.
One example is Interface, a US carpet company, that in the mid-1990s rethought its business model completely and in the process cut its material costs, waste and emissions by a huge amount and increased profitability. Instead of selling carpets, it leases them, replacing only the parts that are worn out (see below).
Companies are also seeing the marketing advantage that can come from putting a focus on environmentally friendly products. General Electric's Ecomagination initiative has brought it highprofile success. But Siemens, GE's German rival, was surprised to find that its "green" products - developed without any overarching initiative - last year added up to nearly double GE's in dollar terms.
"German groups have failed in marketing," admits chief executive Peter Löscher, pointing also to how German carmakers were outflanked on hybrids by the Japanese. Siemens is aiming for €25bn (£22bn) in green sales by 2011, GE for $25bn (£17bn) by next year and Philips, their smaller Dutch rival, for about €10bn by 2012.
For some, part of the answer lies in collaboration, whether informally or through a group such as GLTE, to improve sustainability in the supply chain. Tata is discussing with Wilh. Wilhelmsen how they can both reduce emissions - and also costs - in the way they transport cars around the world.
Mr Skaug points to simple possibilities, such as using more efficient routes, decreasing the frequency of service and simply sailing more slowly. "It is a theme that is sweeping through the business world: collaborative business. Two people think better than one," he says.
Mr Irani agrees: "It is a matter of not trying to reinvent the wheel. If others have trod the path first, we can learn from them."
Collaboration has led to some unlikely transfers of knowledge. Wilh. Wilhelmsen talked to GE about jet engine design to see whether any of its innovations could be used in ships, while its ballast water cleaning system was developed by a group of South African engineers after they found out about the Norwegian company's interest in the area.
The third and related suggestion made by Mr Bjelland is for leaders to embrace the changes and use them not just internally but in their dealings with regulators, customers and suppliers. Seemingly mundane decisions - such as Deutsche Bank's refurbishment of its Frankfurt headquarters - can be turned into a chance to improve energy efficiency or save costs. At Siemens, Mr Löscher says part of his role has been just to make the conglomerate see how much it was doing without realising it, and then to try to push that further.
Mr Irani says leaders should aim for a sense of urgency. Tata has created a central group of six people working on low-carbon growth to co-ordinate about 100 workers dedicated to the issue alone across all of its companies. "Eighty per cent of power generation in India comes from coal - what kind of solutions are there for this? That is a challenge but an important one for us to respond to," he says.
The fourth area is to come up with concrete projects. Many of these are for the long term, such as a study between General Motors and Gazprom to look at what infrastructure would be needed for cars powered by alternative fuels. Similarly, shipping companies are looking at ideas such as fuel cells, wind or solar energy to power vessels, although some remain sceptical.
Others ideas seem more tangible, such as Wilh. Wilhelmsen's talks with Mitsubishi Heavy Industries on the future design of ships following the widening of the Panama Canal. "We may be able to develop ships that are completely different: wider but less deep, which means more efficient and they won't burn as much fuel," says Mr Skaug.
Mr Bjelland sounds positively evangelical: "This is a time of renewal with new technologies and new business models. It could be a pioneering time."
Founder who refused to sweep climate worries under the carpet
The carpet manufacturer Interface is often held up as an example of how businesses can find growth in sustainability. Yet when he started in the 1970s, the environment was the least of founder Ray Anderson's concerns - making carpets at the time relied heavily on petroleum.
His epiphany came in the mid-1990s when he became aware of the growing importance of climate change. He swiftly moved through the other three points proposed by the Norwegian entrepreneur Osvald Bjelland (see main piece) for growth in a low-carbon economy.
Mr Anderson redirected Interface's strategy to cutting waste, emissions and water use. In an interview with the Corporate Design Foundation last year, he said Interface had cut its waste by half, its greenhouse gas tonnage by 88 per cent and water use by 79 per cent compared with 1998. Half of its factories run on renewable energy.
Mr Anderson became a champion for reducing waste and emissions throughout the company. Finally, he set about thinking of long-term changes to Interface's business model. As well as trying the use of new materials, Interface asked customers to lease rather than buy carpets, and then replace only worn sections rather than the whole floor.
Nevertheless, Interface's actions are a drop in the ocean given the size of the industry; waste from the sector as a whole is still increasing.
Copyright The Financial Times Limited 2009
Group Urges Beijing to Cut Coal Emissions
By SHAI OSTER
BEIJING -- The International Energy Agency warned that China must clean up its coal sector or face dire environmental consequences for itself and the world.
The Paris-based body outlined steps to mitigate pollution in China, including tougher enforcement of regulations, more foreign investment in energy, and putting a price on carbon emissions.
"Without strong action, CO2 emissions could rise in an unsustainable way," IEA Executive Director Nobuo Tanaka said at a launch of a report on clean coal technology in China. The report was done in cooperation with the Chinese government, reflecting growing awareness in Beijing of the hazards posed by current energy trends.
The IEA's list of recommendations included calls for greater openness of China's domestic energy sector to outside investment, and a continued pursuit of new technologies to capture carbon emissions from power plants and sequester them in the ground or elsewhere. China has said it is making cleaning up its coal-fired power sector a priority and has implemented reforms, such as shutting hundreds of small and inefficient power plants, and instituting national energy-efficiency standards.
But Mr. Tanaka also suggested that China will have to eventually charge for carbon emissions -- a move Beijing has vigorously resisted out of fears it could stymie economic growth. Making companies pay for how much carbon they produce could be a part of setting national limits on emissions.
"Ultimately, a market in which emissions of carbon are priced will emerge," Mr. Tanaka said. "I see that a debate is taking place in China about how quickly China should move in that direction."
Developed countries participating in the United Nations' Kyoto Protocol on global warming have already accepted national caps on greenhouse-gas emissions, requiring industries that pollute more to buy so-called carbon credits.
China has no national limits on carbon emissions. It has earned billions of dollars through the Kyoto plan because companies in developed countries can invest in pollution-reduction programs in China in exchange for credits to apply to their emissions back home.
China has surpassed the U.S. as the world's leading source of global-warming greenhouse gases. That status is the byproduct of roaring economic growth that has lifted millions from poverty, but relied heavily on coal as the primary source of energy.
Write to Shai Oster at shai.oster@wsj.com
BEIJING -- The International Energy Agency warned that China must clean up its coal sector or face dire environmental consequences for itself and the world.
The Paris-based body outlined steps to mitigate pollution in China, including tougher enforcement of regulations, more foreign investment in energy, and putting a price on carbon emissions.
"Without strong action, CO2 emissions could rise in an unsustainable way," IEA Executive Director Nobuo Tanaka said at a launch of a report on clean coal technology in China. The report was done in cooperation with the Chinese government, reflecting growing awareness in Beijing of the hazards posed by current energy trends.
The IEA's list of recommendations included calls for greater openness of China's domestic energy sector to outside investment, and a continued pursuit of new technologies to capture carbon emissions from power plants and sequester them in the ground or elsewhere. China has said it is making cleaning up its coal-fired power sector a priority and has implemented reforms, such as shutting hundreds of small and inefficient power plants, and instituting national energy-efficiency standards.
But Mr. Tanaka also suggested that China will have to eventually charge for carbon emissions -- a move Beijing has vigorously resisted out of fears it could stymie economic growth. Making companies pay for how much carbon they produce could be a part of setting national limits on emissions.
"Ultimately, a market in which emissions of carbon are priced will emerge," Mr. Tanaka said. "I see that a debate is taking place in China about how quickly China should move in that direction."
Developed countries participating in the United Nations' Kyoto Protocol on global warming have already accepted national caps on greenhouse-gas emissions, requiring industries that pollute more to buy so-called carbon credits.
China has no national limits on carbon emissions. It has earned billions of dollars through the Kyoto plan because companies in developed countries can invest in pollution-reduction programs in China in exchange for credits to apply to their emissions back home.
China has surpassed the U.S. as the world's leading source of global-warming greenhouse gases. That status is the byproduct of roaring economic growth that has lifted millions from poverty, but relied heavily on coal as the primary source of energy.
Write to Shai Oster at shai.oster@wsj.com
Electric cars labelled 'overhype' at Shanghai Auto Show
The technology that will power a new generation of electric cars has been overhyped, leading industry sources said at the Shanghai Auto Show yesterday.
By Malcolm Moore in Shanghai Last Updated: 6:34PM BST 20 Apr 2009
Chinese companies, such as BYD, have been lauded for developing advanced batteries that could power a revolution in motoring.
BYD, a former battery maker, was the first company in the world to start selling a heavily-electrified hybrid car last December, easily beating larger rivals such as Toyota to the market.
As a result, Warren Buffett, the US investment manager who runs Berkshire Hathaway, bought 10pc of BYD last December for $230m (£158m).
The Chinese government has also committed to funding new technologies, such as BYD's iron-phosphate-based lithium ion batteries, with £1bn of research subsidies.
In a bid to demonstrate the safety of his batteries to the environment, Wang Chuan-Fu, BYD's chief executive, has actually drunk a vial of his own battery fluid.
Henry Li, the company's export manager, said BYD is currently in talks with "American and European automakers to supply powertrain systems, including batteries".
However, other executives at the Shanghai Auto show suggested that electric car technology was still in its infancy.
"From what we have seen so far the technology is not that advanced in terms of battery life, range, and recharging," said Nick Reilly, the head of General Motors in the Asia-Pacific region. "If you look at the detail, they tend to not to perform as well on these measures. But they have a good price and we know the Chinese government is investing a lot of money."
Dr Peter Pleus, the head of the engine systems division of Shaeffler, an automotive parts supplier, said: "I am trying to find someone who can explain to me why these batteries are so advanced, but so far no one can do so."
The government plans to tempt buyers into switching to electric cars with a subsidy of up to £5,000 per vehicle, but the plan has been criticized by the automotive industry because of a lack of recharging stations.
Meanwhile, Paul Withrington at Transport Watch concluded that carbon dioxide emissions could rise if electric cars become widespread, especially in China, because electricity would have to be generated by fossil fuel power stations.
By Malcolm Moore in Shanghai Last Updated: 6:34PM BST 20 Apr 2009
Chinese companies, such as BYD, have been lauded for developing advanced batteries that could power a revolution in motoring.
BYD, a former battery maker, was the first company in the world to start selling a heavily-electrified hybrid car last December, easily beating larger rivals such as Toyota to the market.
As a result, Warren Buffett, the US investment manager who runs Berkshire Hathaway, bought 10pc of BYD last December for $230m (£158m).
The Chinese government has also committed to funding new technologies, such as BYD's iron-phosphate-based lithium ion batteries, with £1bn of research subsidies.
In a bid to demonstrate the safety of his batteries to the environment, Wang Chuan-Fu, BYD's chief executive, has actually drunk a vial of his own battery fluid.
Henry Li, the company's export manager, said BYD is currently in talks with "American and European automakers to supply powertrain systems, including batteries".
However, other executives at the Shanghai Auto show suggested that electric car technology was still in its infancy.
"From what we have seen so far the technology is not that advanced in terms of battery life, range, and recharging," said Nick Reilly, the head of General Motors in the Asia-Pacific region. "If you look at the detail, they tend to not to perform as well on these measures. But they have a good price and we know the Chinese government is investing a lot of money."
Dr Peter Pleus, the head of the engine systems division of Shaeffler, an automotive parts supplier, said: "I am trying to find someone who can explain to me why these batteries are so advanced, but so far no one can do so."
The government plans to tempt buyers into switching to electric cars with a subsidy of up to £5,000 per vehicle, but the plan has been criticized by the automotive industry because of a lack of recharging stations.
Meanwhile, Paul Withrington at Transport Watch concluded that carbon dioxide emissions could rise if electric cars become widespread, especially in China, because electricity would have to be generated by fossil fuel power stations.
Allies against democracy
Both the police and the government appear to be taking their instructions from a multinational energy company
George Monbiot
guardian.co.uk, Monday 20 April 2009 10.30 BST
This isn't the first time that the Department for Business and the energy company E.ON have been caught conspiring against the public interest. In 2008, Greenpeace obtained an exchange of emails between the power company and Gary Mohammed, a civil servant at the Department for Business, concerning the department's policy on carbon capture and storage (CCS).
The government had told the public that any new coal-burning power station at E.ON's Kingsnorth plant in Kent should be CCS-ready: in other words that it could be retro-fitted with CCS equipment. In private, the Department for Business took a different line.
"Drafting the conditions for Kingsnorth. If possible I would like to cover CCS," Mohammed wrote to E.ON. "I admit this suggested condition could be without justification and premature but no harm in trying to gauge your opinion."
E.ON replied by claiming that the secretary of state "has no right to withhold approval for conventional plant". All it would allow the government to specify was that the potential for CCS "will be investigated."
Mohammed replied after just six minutes: "Thanks. I won't include. Hope to get the set of draft conditions out today or tomorrow."
Nor is it the first time that the police have danced to E.ON's tune. Their treatment of the climate camp protesters at Kingsnorth last year was wildly disproportionate and repressive. They also appear to have misled the press on the power company's behalf. The police claimed that if the protesters reached the power station, "there would have been a possible loss of power to over 300,000 homes".
In fact E.ON had already shut down the power station, with no consequences for local people: hardly surprising in view of the fact that its electricity is sold on to the grid rather than supplied locally.
Now we learn that the police, the Department for Business and E.ON have been working together to thwart a peaceful protest, and sharing information obtained by bugging or informants. This is partisan policing: siding with one social sector against another. (I'll examine the implications in my column tomorrow). Worse, both the police and the government appear to be taking their instructions from a multinational company.
Just who is running this country? And at what point do we decide that corporate power is making a mockery of democracy?
George Monbiot
guardian.co.uk, Monday 20 April 2009 10.30 BST
This isn't the first time that the Department for Business and the energy company E.ON have been caught conspiring against the public interest. In 2008, Greenpeace obtained an exchange of emails between the power company and Gary Mohammed, a civil servant at the Department for Business, concerning the department's policy on carbon capture and storage (CCS).
The government had told the public that any new coal-burning power station at E.ON's Kingsnorth plant in Kent should be CCS-ready: in other words that it could be retro-fitted with CCS equipment. In private, the Department for Business took a different line.
"Drafting the conditions for Kingsnorth. If possible I would like to cover CCS," Mohammed wrote to E.ON. "I admit this suggested condition could be without justification and premature but no harm in trying to gauge your opinion."
E.ON replied by claiming that the secretary of state "has no right to withhold approval for conventional plant". All it would allow the government to specify was that the potential for CCS "will be investigated."
Mohammed replied after just six minutes: "Thanks. I won't include. Hope to get the set of draft conditions out today or tomorrow."
Nor is it the first time that the police have danced to E.ON's tune. Their treatment of the climate camp protesters at Kingsnorth last year was wildly disproportionate and repressive. They also appear to have misled the press on the power company's behalf. The police claimed that if the protesters reached the power station, "there would have been a possible loss of power to over 300,000 homes".
In fact E.ON had already shut down the power station, with no consequences for local people: hardly surprising in view of the fact that its electricity is sold on to the grid rather than supplied locally.
Now we learn that the police, the Department for Business and E.ON have been working together to thwart a peaceful protest, and sharing information obtained by bugging or informants. This is partisan policing: siding with one social sector against another. (I'll examine the implications in my column tomorrow). Worse, both the police and the government appear to be taking their instructions from a multinational company.
Just who is running this country? And at what point do we decide that corporate power is making a mockery of democracy?
Interpublic Expands Start-Up Incubator
By EMILY STEEL
Interpublic Group, hoping to heat up ad spending on new types of media, is trying to create a greenhouse effect.
The big advertising holding company has been experimenting with an incubator program designed to help young companies with promising technology and ideas develop viable business models. It is opening the program to more start-ups this week.
The six-month program, called Greenhaus, aims to give new-media and tech companies an insider's look at how Madison Avenue works and what advertisers want.
Microsoft promoted its Halo Wars videogame on Justin.tv's games channel.
Interpublic isn't charging for the program. Nor is it investing in the start-ups that participate. Instead, it hopes to build relationships with fledgling ventures that could turn into the next Facebook or YouTube.
"We get barraged -- as most media agencies do -- with phone calls from start-ups whose products are starting to gain traction, but they haven't sold advertising," says Quentin George, chief digital officer at Mediabrands, the Interpublic media-buying unit that runs Greenhaus.
"Most of the calls either go unanswered, or if we do interact, the companies don't understand how media is bought or how to monetize their product," Mr. George adds. "We want to make the connection."
The effort comes as a crunch in ad spending makes dollars for experimental advertising options increasingly scarce. Marketers typically plan their ad budgets by first allocating money to established media like TV. Only then are the remaining funds allocated to testing newer technologies from mobile and interactive TV to social media and digital in-store ads.
The result has been a series of small projects that have yet to produce a consensus on how best to use many new technologies. "That's the reason why experimental budgets are the first thing to go," Mr. George says.
Media and ad companies are finding they have to take the lead to attract more money to fledgling ad formats. Earlier this year, Publicis Groupe agencies joined forces with media companies to try to create standards for advertising around online video.
Most of the early Greenhaus participants have been tech start-ups that have raised venture-capital funding and generated some buzz, but their founders mostly have engineering backgrounds and little experience in the media and ad worlds.
"We didn't totally understand some of the agency-speak and their motivations for what they do," says Brett Wilson, chief executive at TubeMogul, an online-video-technology company. "We definitely didn't understand how to sell to them."
After completing the Greenhaus program last year, TubeMogul, which tracks online-video audiences, revamped the range of data it offers to advertisers.
Justin.tv, a live-streaming-video venture added advertising to its chat section, offered customized marketing campaigns instead of one-size-fits-all banner and video ads, and added more predictable content to the site to assuage marketers' concerns about advertising next to riskier user-generated material.
The partnership has paid off for some of the start-ups. Because of Greenhaus, Interpublic ad agency Universal McCann turned to Justin.tv on behalf of its client Microsoft, which ended up promoting the release of its Halo Wars videogame via Justin.tv's games channel.
About three years ago, Publicis launched a unit with Denuo, a Publicis agency that focuses on emerging media and technologies, to help start-ups develop new ad models. Through the relationship, Publicis got paid with equity, and took small stakes in several companies.
"If we help them, and they make money, we want to participate in the upside," Denuo Chief Executive Rishad Tobaccowala says
Write to Emily Steel at emily.steel@wsj.com
Interpublic Group, hoping to heat up ad spending on new types of media, is trying to create a greenhouse effect.
The big advertising holding company has been experimenting with an incubator program designed to help young companies with promising technology and ideas develop viable business models. It is opening the program to more start-ups this week.
The six-month program, called Greenhaus, aims to give new-media and tech companies an insider's look at how Madison Avenue works and what advertisers want.
Microsoft promoted its Halo Wars videogame on Justin.tv's games channel.
Interpublic isn't charging for the program. Nor is it investing in the start-ups that participate. Instead, it hopes to build relationships with fledgling ventures that could turn into the next Facebook or YouTube.
"We get barraged -- as most media agencies do -- with phone calls from start-ups whose products are starting to gain traction, but they haven't sold advertising," says Quentin George, chief digital officer at Mediabrands, the Interpublic media-buying unit that runs Greenhaus.
"Most of the calls either go unanswered, or if we do interact, the companies don't understand how media is bought or how to monetize their product," Mr. George adds. "We want to make the connection."
The effort comes as a crunch in ad spending makes dollars for experimental advertising options increasingly scarce. Marketers typically plan their ad budgets by first allocating money to established media like TV. Only then are the remaining funds allocated to testing newer technologies from mobile and interactive TV to social media and digital in-store ads.
The result has been a series of small projects that have yet to produce a consensus on how best to use many new technologies. "That's the reason why experimental budgets are the first thing to go," Mr. George says.
Media and ad companies are finding they have to take the lead to attract more money to fledgling ad formats. Earlier this year, Publicis Groupe agencies joined forces with media companies to try to create standards for advertising around online video.
Most of the early Greenhaus participants have been tech start-ups that have raised venture-capital funding and generated some buzz, but their founders mostly have engineering backgrounds and little experience in the media and ad worlds.
"We didn't totally understand some of the agency-speak and their motivations for what they do," says Brett Wilson, chief executive at TubeMogul, an online-video-technology company. "We definitely didn't understand how to sell to them."
After completing the Greenhaus program last year, TubeMogul, which tracks online-video audiences, revamped the range of data it offers to advertisers.
Justin.tv, a live-streaming-video venture added advertising to its chat section, offered customized marketing campaigns instead of one-size-fits-all banner and video ads, and added more predictable content to the site to assuage marketers' concerns about advertising next to riskier user-generated material.
The partnership has paid off for some of the start-ups. Because of Greenhaus, Interpublic ad agency Universal McCann turned to Justin.tv on behalf of its client Microsoft, which ended up promoting the release of its Halo Wars videogame via Justin.tv's games channel.
About three years ago, Publicis launched a unit with Denuo, a Publicis agency that focuses on emerging media and technologies, to help start-ups develop new ad models. Through the relationship, Publicis got paid with equity, and took small stakes in several companies.
"If we help them, and they make money, we want to participate in the upside," Denuo Chief Executive Rishad Tobaccowala says
Write to Emily Steel at emily.steel@wsj.com
Shell's Plan to Lead in Storage of Carbon Dioxide Hits a Snag
Royal Dutch Shell PLC's push to become a world leader in the technology to capture and store carbon dioxide has hit a snag in the Netherlands, where locals are trying to block the company's plan to bury CO2 under their town.
The idea of stripping CO2 from the emissions of coal-fired power plants and other big polluters and injecting it deep underground is seen as a crucial weapon in the battle against climate change. But the technical and economic hurdles are immense, and it has never been tested on a commercial scale.
The case of the Dutch town of Barendrecht shows there are other obstacles, too: grassroots opposition from locals who say it's unsafe. Barendrecht shows how not-in-my-backyard activism can trump efforts to stop global warming, even in countries with powerful green movements like the Netherlands.
Greenpeace activists in front of the Chancellery in Berlin on March 25 called on the German government to be aware of risks of CO2 storage. Even in countries with powerful green movements like the Netherlands, such activism can trump efforts to stop global warming.
Shell's plan is designed to reduce emissions from its Pernis oil refinery near the port of Rotterdam. Already, the company diverts some of Pernis's CO2 to nearby greenhouses and the local soft-drinks industry. Its aim is to pipe the rest to Barendrecht, 10.6 miles to the south, where it would be injected into two nearly exhausted gas fields operated by NAM, a joint venture between Shell and Exxon Mobil Corp. The Dutch government says it will allocate $39.2 million to the project if it gets the go-ahead.
Barendrecht is a small-scale demonstration project. Initially, Shell will be pumping only about 400,000 tonnes of CO2 a year into its gas fields, or about 0.2% of the Netherlands' total annual emissions of the pollutant. But with lots of aging natural gas reservoirs coming to the end of their productive life, the Netherlands has vast potential for carbon storage. Shell says Barendrecht should lay the foundation for an industry that could sequester about 30 million tonnes of CO2 a year by 2020.
Success is also crucial for Shell's public image. The Anglo-Dutch major came under fire from environmentalists last month when it said it no longer planned big investments in wind and solar energy. Barendrecht, and two similar endeavors in Germany and Canada, would protect it from accusations that it is dropping its green agenda.
In fact, pumping CO2 deep into the earth is already common practice in the oil industry. For years, Shell and other big energy companies have been injecting carbon dioxide into oil reservoirs to boost crude recovery rates. That's why some of them, such as Norway's StatoilHydro ASA, now lead the way in carbon-capture technology. Since 1996, StatoilHydro has been stripping CO2 out of natural gas produced at its Sleipner field in the North Sea and storing it in an acquifer more than half a mile below the seabed.
But in Barendrecht, Shell failed to account for local opposition. The company drew up an environmental-impact assessment for the project earlier this year and put it up for public consultation. Some 1,300 locals raised objections to the plan. Last month, the town council came out against it, citing "numerous reservations."
"It's not just Nimby-ism," said Anne-Marie van het Erve, a spokeswoman for Barendrecht's council. "A large part of the carbon-storage technology is unproved. And we're saying if it's an experiment, you shouldn't be doing it in an urban environment."
Council members argue that Barendrecht, located in one of the most densely populated, built-up parts of Europe, is already playing host to a number of big infrastructure projects such as new housing developments, high-speed rail links and freeways, and there's only so much it can take.
Ms. Van het Erve said locals also fear a catastrophic leak or explosion of gas. Some of them cite an incident in Cameroon in 1986, when Lake Nyos released a lethal cloud of naturally occurring carbon dioxide into the atmosphere, suffocating about 1,700 people and thousands of cattle. Locals say CO2 should be stored in offshore fields in the North Sea rather than on land.
The council's objections have been submitted to an independent commission, which is due to give its verdict on whether the project should go ahead later this week. Shell, which is backed by the Dutch government and regional authorities, is confident it will get a green light. It says a lot of the objections raised by local people are irrational.
"We say look at the facts and the risk analysis and you'll see that it's safe," said Wim van de Wiel, a Shell spokesman. "CO2 is not poisonous and can't explode. A lot of the complaints are based on emotions."
Write to Guy Chazan at guy.chazan@wsj.com
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