By Andrew Hill, Christian Oliver and Haig Simonian
Published: May 6 2009 03:00
Four wheels bad, two wheels good. Anything that can wean gas-guzzling South Korea, the world's sixth-biggest oil importer, off cars should be good news.
Shares in bicycle makers surged by the 15 per cent daily limit after Lee Myung-bak, the Korean president, vowed to promote the industry and turn the bike importer into one of the world's biggest producers.
The proposal came as part of Korea's "green new deal" in which Mr Lee envisages the country criss-crossed by 3,000km of bicycle lanes and hosting a "Tour de Korea".
However, soaring shares in asphalt makers exposed the fundamental problem with Korea's new green deal. Mr Lee is a former construction executive and likes green projects as long as they create jobs involving shovels and concrete.
Environmentalists are outraged about the construction of cycle paths and hotels down the banks of all the main rivers in Korea, destroying fragile waterway ecosystems.
Nature lovers point out that such development contravenes Korea's commitments under international accords on wetland conservation, such as the Ramsar convention. The environment ministry argues it will study any threat to endangered species but there seems little chance of stopping the asphalt.
Korea has no coherent definition of what constitutes "green" so can happily class whatever it likes, including concreting river banks, as part of its new deal.
Shell and standards
The clock indicates you came in fourth by a fraction of a second but, hey, there was a headwind, you were trying harder than the other guy and, what's more, those stopwatches are all wrongly calibrated. Have bronze, instead, with our compliments.
The decision by Royal Dutch Shell's remuneration committee to overrule its own pay policy for top executives - for the second year running - looks terrible.
But Shell is no Bellway, the UK housebuilder that last year retroactively scrapped its performance targets without consulting shareholders, earning itself a justified beating at its annual meeting. In fact, the directors on Shell's remuneration committee have done almost everything right.
They asked shareholders for the opportunity to use discretion - either in favour or against pay awards - three years ago to avoid being forced into making an anomalous award. They rightly identified that, as a performance gauge, total shareholder return - which has grown like a poorly pruned hedge at many companies, overshadowing better measures - risked distorting the outcome. They then reviewed the policy in the light of shareholder concerns and added some new relative measures for 2009. Finally, they managed all this without having to rely heavily on external compensation consultants (though Towers Perrin supplied supporting data).
That shows a reassuring independence of mind. After all, if the likes of Sir Peter Job (former chief executive of Reuters), Lord Kerr (once Britain's ambassador to the US), Deutsche Bank's Josef Ackermann and Jorma Ollila of Nokia needed their hands held, Shell really would be in a pickle.
Where, then, did they go wrong? The committee exercised its discretion twice in two years to grant shares that executives did not, under a strict interpretation of Shell's own rules, deserve, and did so without further shareholder consultation.
These are not hanging offences. Not all investors will follow the recommendations of shareholder advisory groups to rebel. Shell could further refine its procedure next year simply by scheduling a couple of days between meetings of its remuneration committee and its board meetings to flag issues to big investors. But the titans and titled folk on the committee can't complain about being called to account, if only because mere mortals at other companies look to the race leaders to set the standard.
Wednesday, 6 May 2009
Deal Struck on 'Cash for Clunkers'
As Part of Climate Bill, Consumers Trading In Cars Would Get Up to $4,500
By STEPHEN POWER and GREG HITT
WASHINGTON -- Consumers would get vouchers for as much as $4,500 from the government to trade in their gas-guzzling cars under a compromise plan that could help advance a broad measure to combat climate change.
The so-called cash-for-clunkers plan could be part of climate-change legislation being pieced together in the House. Rep. Edward Markey (D., Mass.), a co-sponsor of the climate bill, said the auto deal -- forged by Democrats on the Energy and Commerce Committee and endorsed by President Barack Obama -- "demonstrates how representatives from both coasts and the Rust Belt can reach agreement on difficult issues."
The cash-for-clunkers plan would run for one year, offering vouchers to people who trade in vehicles with average city/highway fuel economy of less than 18 miles a gallon to buy a more-efficient new car or light truck. The proposed program would offer the maximum $4,500 voucher for people to use to buy a car that gets at least 10 more mpg or a truck that is at least five mpg more efficient. The program is designed to spur some one million purchases of new cars or trucks to support the ailing auto industry.
Big hurdles remain before passage of the bigger climate measure.
The legislation is mired in disagreements among lawmakers over potential costs to consumers and businesses. Republicans are stepping up attacks on the climate initiative, branding it a "national energy tax." Meanwhile, committee Democrats are haggling privately over details of the proposal to curb greenhouse-gas emissions.
Mr. Obama summoned committee Democrats to the White House to urge them to intensify efforts to agree on a bill ahead of a Memorial Day deadline to ready legislation for House floor action.
"The message of the meeting was, I need everybody on board, and we need to make this happen," said Iowa Rep. Bruce Braley. He added Mr. Obama wanted Democrats to move because health-care reform looms "just around the corner."
Mr. Obama did not dictate specifics, participants said, but made clear he wants a bill that eases the costs imposed on consumers and businesses, creates a predictable set of rules, and addresses concerns that some regions of the country could shoulder disproportionately heavy costs.
"He's giving us a lot of latitude," said Energy and Commerce Chairman Henry Waxman (D., Calif.). "He wants us to move."
Mr. Waxman's bill calls for curbing U.S. emissions by roughly 80% below 2005 levels by mid-century, by placing a cap on overall emissions and forcing companies to hold permits allowing them to emit greenhouse gases. The bill is generally silent on the degree to which companies will have to pay for those permits, and how revenue raised from selling them would be used by the government.
In order to speed the bill along, Mr. Waxman is considering bypassing a key subcommittee on the Energy and Commerce panel and bringing the climate bill directly to the full committee. The chairman had hoped for a subcommittee vote, but winning consensus among subcommittee Democrats has proven difficult. Mr. Waxman said Tuesday that "no final decisions on process have been made," but that he is "consulting with members" of the committee "about the best way forward."
Mr. Obama has called for using the bulk of the money raised by auctioning the permits to fund tax credits for the middle class, but lawmakers from Rust Belt and coal states are pressing him to give some permits to industries in their regions for free.
Rep. Gene Green (D., Texas) said Mr. Obama's message on Tuesday was "work it out, so we can have a broad-based bill that will have Democratic support." Mr. Green is among the lawmakers leaning on Mr. Waxman to give away some permits to ease the impact on businesses, such as the oil and gas refiners in his district.
As recently as March, Mr. Obama emphasized he wanted all greenhouse-gas emissions to be covered by permits that businesses would have to buy. On Tuesday, he signaled he would accept some amount of credits to be given away, said some participants in the meeting.—Jonathan Weisman contributed to this article.
Write to Stephen Power at stephen.power@wsj.com and Greg Hitt at greg.hitt@wsj.com
By STEPHEN POWER and GREG HITT
WASHINGTON -- Consumers would get vouchers for as much as $4,500 from the government to trade in their gas-guzzling cars under a compromise plan that could help advance a broad measure to combat climate change.
The so-called cash-for-clunkers plan could be part of climate-change legislation being pieced together in the House. Rep. Edward Markey (D., Mass.), a co-sponsor of the climate bill, said the auto deal -- forged by Democrats on the Energy and Commerce Committee and endorsed by President Barack Obama -- "demonstrates how representatives from both coasts and the Rust Belt can reach agreement on difficult issues."
The cash-for-clunkers plan would run for one year, offering vouchers to people who trade in vehicles with average city/highway fuel economy of less than 18 miles a gallon to buy a more-efficient new car or light truck. The proposed program would offer the maximum $4,500 voucher for people to use to buy a car that gets at least 10 more mpg or a truck that is at least five mpg more efficient. The program is designed to spur some one million purchases of new cars or trucks to support the ailing auto industry.
Big hurdles remain before passage of the bigger climate measure.
The legislation is mired in disagreements among lawmakers over potential costs to consumers and businesses. Republicans are stepping up attacks on the climate initiative, branding it a "national energy tax." Meanwhile, committee Democrats are haggling privately over details of the proposal to curb greenhouse-gas emissions.
Mr. Obama summoned committee Democrats to the White House to urge them to intensify efforts to agree on a bill ahead of a Memorial Day deadline to ready legislation for House floor action.
"The message of the meeting was, I need everybody on board, and we need to make this happen," said Iowa Rep. Bruce Braley. He added Mr. Obama wanted Democrats to move because health-care reform looms "just around the corner."
Mr. Obama did not dictate specifics, participants said, but made clear he wants a bill that eases the costs imposed on consumers and businesses, creates a predictable set of rules, and addresses concerns that some regions of the country could shoulder disproportionately heavy costs.
"He's giving us a lot of latitude," said Energy and Commerce Chairman Henry Waxman (D., Calif.). "He wants us to move."
Mr. Waxman's bill calls for curbing U.S. emissions by roughly 80% below 2005 levels by mid-century, by placing a cap on overall emissions and forcing companies to hold permits allowing them to emit greenhouse gases. The bill is generally silent on the degree to which companies will have to pay for those permits, and how revenue raised from selling them would be used by the government.
In order to speed the bill along, Mr. Waxman is considering bypassing a key subcommittee on the Energy and Commerce panel and bringing the climate bill directly to the full committee. The chairman had hoped for a subcommittee vote, but winning consensus among subcommittee Democrats has proven difficult. Mr. Waxman said Tuesday that "no final decisions on process have been made," but that he is "consulting with members" of the committee "about the best way forward."
Mr. Obama has called for using the bulk of the money raised by auctioning the permits to fund tax credits for the middle class, but lawmakers from Rust Belt and coal states are pressing him to give some permits to industries in their regions for free.
Rep. Gene Green (D., Texas) said Mr. Obama's message on Tuesday was "work it out, so we can have a broad-based bill that will have Democratic support." Mr. Green is among the lawmakers leaning on Mr. Waxman to give away some permits to ease the impact on businesses, such as the oil and gas refiners in his district.
As recently as March, Mr. Obama emphasized he wanted all greenhouse-gas emissions to be covered by permits that businesses would have to buy. On Tuesday, he signaled he would accept some amount of credits to be given away, said some participants in the meeting.—Jonathan Weisman contributed to this article.
Write to Stephen Power at stephen.power@wsj.com and Greg Hitt at greg.hitt@wsj.com
Bursting the carbon bubble
The world economy may be recovering, but inaction on climate change could cost far more than the current financial crisis
Kevin Gallagher
guardian.co.uk, Tuesday 5 May 2009 15.00 BST
A new Economist survey found over 100 articles in the month of April hailing "green shoots" of recovery for the world economy. Not so fast. Ultimately, recovery should be judged by the extent to which global demand is revived in the short term, global imbalances are corrected in the medium term and the world economy is put on a climate-friendly trajectory in the longer term.
As the IMF's recent World Economic Outlook shows, most economists predict growth for 2010, the glimmerings of which are now evident in such indicators as mortgage re-financings. Even if this is true, it is only the first step. If we stop here, the effort to date may be a mere bridge loan to the next bubble.
That's what happened last time, and what got us into this mess. After the dotcom bubble burst and the US slumped into a recession in 2001, low interest rates and fiscal stimulus (of tax cuts) followed. Such actions made credit cheap and spending in vogue.
So borrow and spend we did. We borrowed to buy homes. We filled them with goods from China. With the profits, China loaned us more. We spent even more. The results were massive and unsustainable global imbalances – a huge US current account deficit and an equally large Chinese surplus. This, along with deregulation and no regulation in the case of the shadow banking system, sowed the seeds of the crisis.
True, expansionary policy is needed in the short term to boost global demand. But in the medium and long term, the US has to consume less and the world's poorer countries have to consume more in order to correct global imbalances. Yet this has to be done in a cleaner way than ever before.
Global imbalances also swelled the carbon dioxide emissions bubble that is yet to burst. Since the turn of the century, emissions surged as China became the world's factory, and US emission remained large. China and the US are now the two largest emitters at 46% of the annual world total.
On climate change, there are true glimmerings of hope amid the response to the financial crisis. Yet we will need to be much more audacious in order to recover.
In the US, a new ICF study says $52bn of the $787bn stimulus package is "green" (6% of total). The report cites the home weatherisation programme, smart grid, loan guarantees for renewable energy and some of the transportation funding as examples of measures that will remove 61m tons of carbon dioxide from the atmosphere, the equivalent of taking 13m cars off the road.
Up to 12% of China's $500bn stimulus package is climate-friendly. China will be spending stimulus funds on high-speed rail, low-carbon car production, renewable energy and energy-efficient buildings. China already leads the world in installed renewable energy capacity with 42 gigawatts of capacity (compared to 23 in the US).
It is true that China and the US have stimulus packages with climate-friendly components that couldn't have been dreamed of in either country seven years ago. Yet these measures are far from adequate. China's green industrial policy is swamped by a "brown" energy policy based on cheap coal – a policy that accounts for over 80% of its emissions.
The US still hasn't passed climate legislation, let alone put together a green industrial policy.
Last week the journal Nature published a study that shows how we may exhaust our "carbon budget" in 20 years. In other words, without a drastic reduction in global emissions within the decade, we lose our chance to prevent dangerous climate change. This could lead to more than two degrees (celsius) of global warming – a tipping point that could trigger catastrophic global change.
Economist Frank Ackerman points out in a new book, Can We Afford the Future: The Economics of a Warming World, that most economists who look at climate change don't consider worst-case events. When factored in, the costs of doing nothing on climate change that have been put at 5-20% of global GDP by economists such as Nicholas Stern, don't look so out of this world.
In other words, the costs of inaction on climate change could be far worse than affects of the current financial crisis.
Some shoots may get us through the season, but we have to plant the seeds for medium- and long-run sustainability. Such efforts also need to be treated like a bank bailout. Rather than asking "How much does it cost?", we need to ask "What does it take?" The benefits of living in a more stable and healthy economy far outweigh the costs of a warming world more susceptible to crises.
Kevin Gallagher
guardian.co.uk, Tuesday 5 May 2009 15.00 BST
A new Economist survey found over 100 articles in the month of April hailing "green shoots" of recovery for the world economy. Not so fast. Ultimately, recovery should be judged by the extent to which global demand is revived in the short term, global imbalances are corrected in the medium term and the world economy is put on a climate-friendly trajectory in the longer term.
As the IMF's recent World Economic Outlook shows, most economists predict growth for 2010, the glimmerings of which are now evident in such indicators as mortgage re-financings. Even if this is true, it is only the first step. If we stop here, the effort to date may be a mere bridge loan to the next bubble.
That's what happened last time, and what got us into this mess. After the dotcom bubble burst and the US slumped into a recession in 2001, low interest rates and fiscal stimulus (of tax cuts) followed. Such actions made credit cheap and spending in vogue.
So borrow and spend we did. We borrowed to buy homes. We filled them with goods from China. With the profits, China loaned us more. We spent even more. The results were massive and unsustainable global imbalances – a huge US current account deficit and an equally large Chinese surplus. This, along with deregulation and no regulation in the case of the shadow banking system, sowed the seeds of the crisis.
True, expansionary policy is needed in the short term to boost global demand. But in the medium and long term, the US has to consume less and the world's poorer countries have to consume more in order to correct global imbalances. Yet this has to be done in a cleaner way than ever before.
Global imbalances also swelled the carbon dioxide emissions bubble that is yet to burst. Since the turn of the century, emissions surged as China became the world's factory, and US emission remained large. China and the US are now the two largest emitters at 46% of the annual world total.
On climate change, there are true glimmerings of hope amid the response to the financial crisis. Yet we will need to be much more audacious in order to recover.
In the US, a new ICF study says $52bn of the $787bn stimulus package is "green" (6% of total). The report cites the home weatherisation programme, smart grid, loan guarantees for renewable energy and some of the transportation funding as examples of measures that will remove 61m tons of carbon dioxide from the atmosphere, the equivalent of taking 13m cars off the road.
Up to 12% of China's $500bn stimulus package is climate-friendly. China will be spending stimulus funds on high-speed rail, low-carbon car production, renewable energy and energy-efficient buildings. China already leads the world in installed renewable energy capacity with 42 gigawatts of capacity (compared to 23 in the US).
It is true that China and the US have stimulus packages with climate-friendly components that couldn't have been dreamed of in either country seven years ago. Yet these measures are far from adequate. China's green industrial policy is swamped by a "brown" energy policy based on cheap coal – a policy that accounts for over 80% of its emissions.
The US still hasn't passed climate legislation, let alone put together a green industrial policy.
Last week the journal Nature published a study that shows how we may exhaust our "carbon budget" in 20 years. In other words, without a drastic reduction in global emissions within the decade, we lose our chance to prevent dangerous climate change. This could lead to more than two degrees (celsius) of global warming – a tipping point that could trigger catastrophic global change.
Economist Frank Ackerman points out in a new book, Can We Afford the Future: The Economics of a Warming World, that most economists who look at climate change don't consider worst-case events. When factored in, the costs of doing nothing on climate change that have been put at 5-20% of global GDP by economists such as Nicholas Stern, don't look so out of this world.
In other words, the costs of inaction on climate change could be far worse than affects of the current financial crisis.
Some shoots may get us through the season, but we have to plant the seeds for medium- and long-run sustainability. Such efforts also need to be treated like a bank bailout. Rather than asking "How much does it cost?", we need to ask "What does it take?" The benefits of living in a more stable and healthy economy far outweigh the costs of a warming world more susceptible to crises.
Australia delays carbon trading scheme
Kevin Rudd blames recession for one-year postponement and offers deeper cut in emissions
guardian.co.uk, Tuesday 5 May 2009 17.40 BST
Australia's government has postponed taxing polluting industries by a year until 2011 because of the economic slowdown and concerns it would hurt business, the prime minister said today.
But in a bid for support from the opposition Greens party, the prime minister, Kevin Rudd, said he would seek to increase the planned carbon emissions cuts when his proposal is presented to the senate for a votenext month.
"The worst global recession since the Great Depression means we must adapt our climate change measures but not abandon them," Rudd said.
Under the revised plan, Rudd said Australia would cut more deeply into its carbon emissions by 2020 if the United Nations reaches a new pact on cutting global pollution at a summit in December in Copenhagen.
Originally, the emissions-cutting target was set at up to 15% below 2000 levels by 2020. The new target announced yesterday is 25% if the Copenhagen summit can agree on tough global targets.
Without the changes, Rudd's emissions trading scheme faced almost certain defeat by opposition lawmakers. The changes give him hope of negotiating an agreement with opposition parties in the senate, where the ruling centre-left Labor party is outnumbered by the main opposition Liberal party.
The Liberals have argued that the scheme should be delayed because of the economic slowdown. Industry groups want the scheme put off for three years.
The Greens said it would accept a 25% carbon reduction target, after earlier calling for 40%. Netting the support of the Greens plus two independent lawmakers would give the Labor-led bloc a majority.
Under the new government proposals, the price of a ton of carbon pollution would be fixed at A$10 (£4.90) for a year after the scheme goes into effect in July 2011. The number of permits, which businesses would purchase in the form of a tax, would be unlimited for the first year.
The original proposal called for the government to issue a limited number of permits to create a ton of carbon, which companies could buy and sell on a national market.
Ed Miliband, the energy and climate secretary, said: "I very much welcome Australia's more ambitious targets for 2020. This will provide significant momentum towards a global deal in Copenhagen. We need all developed countries to set ambitious targets to cut greenhouse gas emissions by 2020."
guardian.co.uk, Tuesday 5 May 2009 17.40 BST
Australia's government has postponed taxing polluting industries by a year until 2011 because of the economic slowdown and concerns it would hurt business, the prime minister said today.
But in a bid for support from the opposition Greens party, the prime minister, Kevin Rudd, said he would seek to increase the planned carbon emissions cuts when his proposal is presented to the senate for a votenext month.
"The worst global recession since the Great Depression means we must adapt our climate change measures but not abandon them," Rudd said.
Under the revised plan, Rudd said Australia would cut more deeply into its carbon emissions by 2020 if the United Nations reaches a new pact on cutting global pollution at a summit in December in Copenhagen.
Originally, the emissions-cutting target was set at up to 15% below 2000 levels by 2020. The new target announced yesterday is 25% if the Copenhagen summit can agree on tough global targets.
Without the changes, Rudd's emissions trading scheme faced almost certain defeat by opposition lawmakers. The changes give him hope of negotiating an agreement with opposition parties in the senate, where the ruling centre-left Labor party is outnumbered by the main opposition Liberal party.
The Liberals have argued that the scheme should be delayed because of the economic slowdown. Industry groups want the scheme put off for three years.
The Greens said it would accept a 25% carbon reduction target, after earlier calling for 40%. Netting the support of the Greens plus two independent lawmakers would give the Labor-led bloc a majority.
Under the new government proposals, the price of a ton of carbon pollution would be fixed at A$10 (£4.90) for a year after the scheme goes into effect in July 2011. The number of permits, which businesses would purchase in the form of a tax, would be unlimited for the first year.
The original proposal called for the government to issue a limited number of permits to create a ton of carbon, which companies could buy and sell on a national market.
Ed Miliband, the energy and climate secretary, said: "I very much welcome Australia's more ambitious targets for 2020. This will provide significant momentum towards a global deal in Copenhagen. We need all developed countries to set ambitious targets to cut greenhouse gas emissions by 2020."
Car ads 'should carry climate health warnings'
MP Colin Challen accuses motor manufacturers of not telling whole truth in green claims
James Randerson
guardian.co.uk, Tuesday 5 May 2009 15.16 BST
Car adverts should carry prominent climate change "health warnings" akin to those on cigarette packets, according to a Labour MP who is critical of the government's progress on climate change legislation.
Colin Challen MP, who is chair of the all-party climate change group, said that government warnings on car ads might force car companies to be more "honest". He said many cars are promoted as being "greener" when they are actually environmentally damaging.
He said the car industry was spending £800m a year on UK advertising prior to the recession, while the government's public education campaign ActOnCO2 cost just £12m over three years. "It's no contest," said Challen, writing in an online comment piece for the Guardian. He added that it is "wholly counter-intuitive to expect people to change their behaviour when most of the daily messages they receive tell them it's business as usual".
Car promotions should carry climate change message, said Challen, who is a member of the Commons Energy and Climate Change select committee. "You maybe have 25 or 35% of the space of any promotional material given over to a health warning. These warnings would be graded depending on the emissions from the vehicle, with the worst gas-guzzlers carrying the most severe warnings. "It would have to counter the impression given by some manufacturers that their vehicles are greener," Challen added.
The warnings would be based on the Intergovernmental Panel on Climate Change's 4th Assessment report, regarded as the foremost authority on the state of climate change science. The warnings would highlight the consequences of dangerous climate change such as sea level rise, increasing deaths, species extinctions, food and water security, and heightened regional conflicts.
A spokeswoman for the Society of Motor Vehicle Manufacturers and Traders, a UK trade body, said that vehicle advertising was already heavily regulated and that print adverts had to carry information about CO2 emissions and fuel consumption. "People are a lot more savvy as to what CO2 from vehicles means," she said, "People understand that they will have an impact on climate change."
She also questioned why motoring should be singled out ahead of advertising for, say, aviation or plasma TV. To be fair, any such health warnings should apply to any activity that generates CO2, she added.
Challen said that society is only just beginning to wake up to the threat posed by climate change. "We are still playing footsie with climate change," he wrote. "Our effort is improving, but in dribs and drabs, suggesting that we've not entirely convinced ourselves that the threat is real." Drawing an analogy with the second war he said Britain was "staggering between appeasement and phoney war".
Challen said he favoured a personal carbon trading scheme to get on top of emissions in which every citizen has an annual carbon allowance. Those who went beyond their carbon budget would need to buy carbon credits from people who had not. "It would be no more difficult to operate than a Nectar card," he said, "Good behaviour would be rewarded. Bad behaviour would have to be paid for."
James Randerson
guardian.co.uk, Tuesday 5 May 2009 15.16 BST
Car adverts should carry prominent climate change "health warnings" akin to those on cigarette packets, according to a Labour MP who is critical of the government's progress on climate change legislation.
Colin Challen MP, who is chair of the all-party climate change group, said that government warnings on car ads might force car companies to be more "honest". He said many cars are promoted as being "greener" when they are actually environmentally damaging.
He said the car industry was spending £800m a year on UK advertising prior to the recession, while the government's public education campaign ActOnCO2 cost just £12m over three years. "It's no contest," said Challen, writing in an online comment piece for the Guardian. He added that it is "wholly counter-intuitive to expect people to change their behaviour when most of the daily messages they receive tell them it's business as usual".
Car promotions should carry climate change message, said Challen, who is a member of the Commons Energy and Climate Change select committee. "You maybe have 25 or 35% of the space of any promotional material given over to a health warning. These warnings would be graded depending on the emissions from the vehicle, with the worst gas-guzzlers carrying the most severe warnings. "It would have to counter the impression given by some manufacturers that their vehicles are greener," Challen added.
The warnings would be based on the Intergovernmental Panel on Climate Change's 4th Assessment report, regarded as the foremost authority on the state of climate change science. The warnings would highlight the consequences of dangerous climate change such as sea level rise, increasing deaths, species extinctions, food and water security, and heightened regional conflicts.
A spokeswoman for the Society of Motor Vehicle Manufacturers and Traders, a UK trade body, said that vehicle advertising was already heavily regulated and that print adverts had to carry information about CO2 emissions and fuel consumption. "People are a lot more savvy as to what CO2 from vehicles means," she said, "People understand that they will have an impact on climate change."
She also questioned why motoring should be singled out ahead of advertising for, say, aviation or plasma TV. To be fair, any such health warnings should apply to any activity that generates CO2, she added.
Challen said that society is only just beginning to wake up to the threat posed by climate change. "We are still playing footsie with climate change," he wrote. "Our effort is improving, but in dribs and drabs, suggesting that we've not entirely convinced ourselves that the threat is real." Drawing an analogy with the second war he said Britain was "staggering between appeasement and phoney war".
Challen said he favoured a personal carbon trading scheme to get on top of emissions in which every citizen has an annual carbon allowance. Those who went beyond their carbon budget would need to buy carbon credits from people who had not. "It would be no more difficult to operate than a Nectar card," he said, "Good behaviour would be rewarded. Bad behaviour would have to be paid for."
Why global warming could make or break south-east Asia
South-east Asia has the most to lose from global warming but could gain much by developing a low-carbon future
Nicholas Stern and Haruhiko Kuroda
guardian.co.uk, Tuesday 5 May 2009 08.10 BST
In the middle of this financial crisis there is a debate taking place over whether governments can afford both massive tax-funded spending programmes needed to revive ailing economies, and the emissions cuts that are needed to combat climate change.
Few regions on Earth throw this tension into sharper contrast than south-east Asia, where many nations are highly vulnerable to the effects of global warming while also having the chance to develop low-carbon economies.
The plain truth is that nations can no longer afford to delay action on climate change, even temporarily, and such spending can serve as effective fiscal stimulus. Despite the global economic downturn the world is still warming. A major new report from the Asian Development Bank – The Economics of Climate Change in Southeast Asia: A Regional Review – explains how countries that invest now in climate change adaptation will better protect their people, economy and environment. Even with aggressive adaptation efforts, the negative impacts of climate change will continue to worsen. Only concerted global action to reduce greenhouse gas emissions can ultimately steer the world off its current calamitous course.
The report examines a wide range of climate change impacts in Indonesia, Philippines, Singapore, Thailand and Vietnam. It finds a "business as usual" approach will result in a difficult future for the region and its people.
By the end of this century temperatures in south-east Asia will rise significantly, tens of millions will experience water shortages, rice production will decline, and large swaths of forests will disappear. Rising sea levels will force the relocation of millions of island dwellers and coastal communities, and there will be a surge in dengue, malaria and other diseases.
With population centres and economic activity concentrated along south-east Asia's coastlines and livelihoods particularly dependent on agriculture, fishing and natural resources, the region is acutely vulnerable. Adopting a similar modelling approach to that used in the 2007 Stern Review, the report concludes the region is twice as economically vulnerable to climate change compared with the rest of the world.
The good news is that far from the world's policy makers being captive to the economic crisis, the opposite is true: the crisis may offer opportunities if we can boost programmes to improve water, sanitation, climate-proofing and reduce carbon dependency and protect forests.
At their recent London Summit, G20 leaders agreed that current stimulus programmes should be used to foster a green, sustainable recovery. As was outlined in the recent joint report from the UK's Grantham Research Institute on Climate Change and the Environment and the Centre for Climate Change Economics and Policy – an outline of the case for a "green" stimulus – energy efficient and low carbon technologies are not simply means for reducing carbon emissions. They are also extremely effective as a fiscal stimulus because they can be implemented quickly and are relatively labour intensive.
For Asia's governments, these kinds of public investments, in both adaptation and mitigation, will be essential to eradicating extreme poverty, achieving the Millennium Development Goals, and making structural transformations that are needed to place the region on a low-carbon path.
Over the next 50 years, much of the world's new energy and urban infrastructure will be built in Asia, locking in the region's greenhouse gas emission pattern. Encouragingly, there are vast, untapped opportunities for energy efficiency improvements, cleaner transport, and for increasing the use of renewable energy sources including biomass, solar, wind, hydro and geothermal.
Some of these schemes can be financed through the government's own fiscal stimulus programmes, others with international assistance, including both additional funding sources and the transfer of knowledge and technologies.
That might seem like a lot to ask in the midst of the worst financial crisis since the Great Depression. But the benefits will be enormous.
We have no time to delay. The financial crisis will come to an end. Without action, the same cannot be said for climate change.
• Lord Stern is chairman of the Grantham Institute for Climate Change and the Environment and the IG Patel professor of economics and government at the London School of Economics. Haruhiko Kuroda is president of the Asian Development Bank.
Nicholas Stern and Haruhiko Kuroda
guardian.co.uk, Tuesday 5 May 2009 08.10 BST
In the middle of this financial crisis there is a debate taking place over whether governments can afford both massive tax-funded spending programmes needed to revive ailing economies, and the emissions cuts that are needed to combat climate change.
Few regions on Earth throw this tension into sharper contrast than south-east Asia, where many nations are highly vulnerable to the effects of global warming while also having the chance to develop low-carbon economies.
The plain truth is that nations can no longer afford to delay action on climate change, even temporarily, and such spending can serve as effective fiscal stimulus. Despite the global economic downturn the world is still warming. A major new report from the Asian Development Bank – The Economics of Climate Change in Southeast Asia: A Regional Review – explains how countries that invest now in climate change adaptation will better protect their people, economy and environment. Even with aggressive adaptation efforts, the negative impacts of climate change will continue to worsen. Only concerted global action to reduce greenhouse gas emissions can ultimately steer the world off its current calamitous course.
The report examines a wide range of climate change impacts in Indonesia, Philippines, Singapore, Thailand and Vietnam. It finds a "business as usual" approach will result in a difficult future for the region and its people.
By the end of this century temperatures in south-east Asia will rise significantly, tens of millions will experience water shortages, rice production will decline, and large swaths of forests will disappear. Rising sea levels will force the relocation of millions of island dwellers and coastal communities, and there will be a surge in dengue, malaria and other diseases.
With population centres and economic activity concentrated along south-east Asia's coastlines and livelihoods particularly dependent on agriculture, fishing and natural resources, the region is acutely vulnerable. Adopting a similar modelling approach to that used in the 2007 Stern Review, the report concludes the region is twice as economically vulnerable to climate change compared with the rest of the world.
The good news is that far from the world's policy makers being captive to the economic crisis, the opposite is true: the crisis may offer opportunities if we can boost programmes to improve water, sanitation, climate-proofing and reduce carbon dependency and protect forests.
At their recent London Summit, G20 leaders agreed that current stimulus programmes should be used to foster a green, sustainable recovery. As was outlined in the recent joint report from the UK's Grantham Research Institute on Climate Change and the Environment and the Centre for Climate Change Economics and Policy – an outline of the case for a "green" stimulus – energy efficient and low carbon technologies are not simply means for reducing carbon emissions. They are also extremely effective as a fiscal stimulus because they can be implemented quickly and are relatively labour intensive.
For Asia's governments, these kinds of public investments, in both adaptation and mitigation, will be essential to eradicating extreme poverty, achieving the Millennium Development Goals, and making structural transformations that are needed to place the region on a low-carbon path.
Over the next 50 years, much of the world's new energy and urban infrastructure will be built in Asia, locking in the region's greenhouse gas emission pattern. Encouragingly, there are vast, untapped opportunities for energy efficiency improvements, cleaner transport, and for increasing the use of renewable energy sources including biomass, solar, wind, hydro and geothermal.
Some of these schemes can be financed through the government's own fiscal stimulus programmes, others with international assistance, including both additional funding sources and the transfer of knowledge and technologies.
That might seem like a lot to ask in the midst of the worst financial crisis since the Great Depression. But the benefits will be enormous.
We have no time to delay. The financial crisis will come to an end. Without action, the same cannot be said for climate change.
• Lord Stern is chairman of the Grantham Institute for Climate Change and the Environment and the IG Patel professor of economics and government at the London School of Economics. Haruhiko Kuroda is president of the Asian Development Bank.
Time to grasp the reality of climate threat
The scientific case has been made but politicians and the public are arguing over the facts of global warming
Colin Challen
guardian.co.uk, Tuesday 5 May 2009 13.00 BST
The good news about the recession is that reduced fossil fuel demand should reduce greenhouse gas emissions, although by how much is not yet observed; the bad news is that the price of carbon allowances in the carbon markets has also been reduced as a result of falling demand. This makes investing in low-carbon technologies harder since they usually start off with higher marginal costs. That then rebounds on the ambitious talk of a "green industrial strategy" to get us out of the recession. Hence, there is now an abundance of reports showing a slowdown in all kinds of green investment, not least in renewable energy. This means that when an economic upturn does arrive, it will be just as or even more likely to be fuelled by fossil fuels.
Alistair Darling's budget was roundly criticised by environmental NGOs for not doing enough to break this cycle. Indeed, on the face of it the budget and all the other measures announced in the last few months to restore our economy to full steam ahead do far less to fulfil our green industrial strategising than is conscionable. The headline 'environmental' element was £1.4bn, which the government said would leverage over £10bn in total. But in today's market conditions, it is hard to see how much of that will actually be spent. For example, the £250m for electric vehicles will have little or no immediate effect, and some argue that since it doesn't kick in for two years, it will actually delay the current take-up of electric vehicles. The sum of £250m would have been better spent on reducing the age limit for concessionary bus travel, and if the car scrappage grants totalling £300m also announced in the budget were targeted at public transport, many more immediate carbon savings could be made, and it might go some way towards answering the age-old objection motorists have to buses especially: they're never there when you want them. Support for car sharing schemes might also have been more welcome. Two people sharing a car to work on my simple reckoning could cut carbon emissions by half.
So why can't we do more to encourage immediate, low-tech behavioural changes? If there were a conspiracy theory as to why a government that has recently committed itself to a massive renewal of the nuclear power industry would want to promote the idea of electric vehicles, then the cynical explanation is obvious. Alternatively, without spending a penny the government could introduce tobacco advertising-style health warnings on all car promotional material. That might introduce some honesty into the green claims made by manufacturers. I discovered that the motor industry before the recession spent £800m a year on advertising in the UK alone. In the three-year period of the government's ActOnCO2 campaign, which cost £12m, the competition will have spent £2.4bn. It's no contest and wholly counter-intuitive to expect people to change their behaviour when most of the daily messages they receive tell them it's business as usual.
But even when it does come to supporting proven green technologies, we don't quite seem to have grasped it. Ministers often cite climate change and energy security as equal challenges. Yet the budget allocated just £10m to the development of a long-standing, proven technology – anaerobic digestion. Manure (both human and animal) and other biological wastes could be used to create biogas – a carbon neutral fuel. According to that dangerously radical green group, National Grid, if we really pushed ahead with anaerobic digestion then 50% of our domestic gas supply could be biogas by 2020. So much for reliance on unreliable gas from "Gasakstan". The "keeping the lights on" scare, often used when it comes to justifying new coal or nuclear, simply does not stand up to close examination.
We are in a four-stage process of addressing the challenge of climate change, as Britain was in a four-stage process meeting the challenge of Adolf Hitler: denial, appeasement, phoney war then total war. I believe we are staggering between appeasement and phoney war at the present time. Our effort is improving, but in dribs and drabs, suggesting that we've not entirely convinced ourselves that the threat is real. It is as if we have grasped that the scientific debate has been settled but the hard, practical choices still have to pass through a multitude of sceptical arguments.
Just as Lord Halifax, a member of Churchill's government in 1940, could still contemplate some form of deal with Hitler, so we are still playing footsy with climate change, searching all the options that might buy us a little more time before we finally admit that our backs are truly against the wall. The political establishment is not as fully convinced of the scientific case as it ought to be. In political terms, climate change has the feel of something that we don't know enough about and which we're not sure we care very deeply about either. It's still "other people", either living in the present but who live far away, as in Bangladesh, or the unborn. Neither constituency is well represented amid the immediate claims of voters who are wondering when they can next safely have a splurge on their plastic.
Colin Challen has been a Labour MP for Morley and Rothwell since 2001. He is chair of the all-party parliamentary group on climate change. His latest book, Too Little Too Late: the politics of climate change, is published by Picnic Publishing
Colin Challen
guardian.co.uk, Tuesday 5 May 2009 13.00 BST
The good news about the recession is that reduced fossil fuel demand should reduce greenhouse gas emissions, although by how much is not yet observed; the bad news is that the price of carbon allowances in the carbon markets has also been reduced as a result of falling demand. This makes investing in low-carbon technologies harder since they usually start off with higher marginal costs. That then rebounds on the ambitious talk of a "green industrial strategy" to get us out of the recession. Hence, there is now an abundance of reports showing a slowdown in all kinds of green investment, not least in renewable energy. This means that when an economic upturn does arrive, it will be just as or even more likely to be fuelled by fossil fuels.
Alistair Darling's budget was roundly criticised by environmental NGOs for not doing enough to break this cycle. Indeed, on the face of it the budget and all the other measures announced in the last few months to restore our economy to full steam ahead do far less to fulfil our green industrial strategising than is conscionable. The headline 'environmental' element was £1.4bn, which the government said would leverage over £10bn in total. But in today's market conditions, it is hard to see how much of that will actually be spent. For example, the £250m for electric vehicles will have little or no immediate effect, and some argue that since it doesn't kick in for two years, it will actually delay the current take-up of electric vehicles. The sum of £250m would have been better spent on reducing the age limit for concessionary bus travel, and if the car scrappage grants totalling £300m also announced in the budget were targeted at public transport, many more immediate carbon savings could be made, and it might go some way towards answering the age-old objection motorists have to buses especially: they're never there when you want them. Support for car sharing schemes might also have been more welcome. Two people sharing a car to work on my simple reckoning could cut carbon emissions by half.
So why can't we do more to encourage immediate, low-tech behavioural changes? If there were a conspiracy theory as to why a government that has recently committed itself to a massive renewal of the nuclear power industry would want to promote the idea of electric vehicles, then the cynical explanation is obvious. Alternatively, without spending a penny the government could introduce tobacco advertising-style health warnings on all car promotional material. That might introduce some honesty into the green claims made by manufacturers. I discovered that the motor industry before the recession spent £800m a year on advertising in the UK alone. In the three-year period of the government's ActOnCO2 campaign, which cost £12m, the competition will have spent £2.4bn. It's no contest and wholly counter-intuitive to expect people to change their behaviour when most of the daily messages they receive tell them it's business as usual.
But even when it does come to supporting proven green technologies, we don't quite seem to have grasped it. Ministers often cite climate change and energy security as equal challenges. Yet the budget allocated just £10m to the development of a long-standing, proven technology – anaerobic digestion. Manure (both human and animal) and other biological wastes could be used to create biogas – a carbon neutral fuel. According to that dangerously radical green group, National Grid, if we really pushed ahead with anaerobic digestion then 50% of our domestic gas supply could be biogas by 2020. So much for reliance on unreliable gas from "Gasakstan". The "keeping the lights on" scare, often used when it comes to justifying new coal or nuclear, simply does not stand up to close examination.
We are in a four-stage process of addressing the challenge of climate change, as Britain was in a four-stage process meeting the challenge of Adolf Hitler: denial, appeasement, phoney war then total war. I believe we are staggering between appeasement and phoney war at the present time. Our effort is improving, but in dribs and drabs, suggesting that we've not entirely convinced ourselves that the threat is real. It is as if we have grasped that the scientific debate has been settled but the hard, practical choices still have to pass through a multitude of sceptical arguments.
Just as Lord Halifax, a member of Churchill's government in 1940, could still contemplate some form of deal with Hitler, so we are still playing footsy with climate change, searching all the options that might buy us a little more time before we finally admit that our backs are truly against the wall. The political establishment is not as fully convinced of the scientific case as it ought to be. In political terms, climate change has the feel of something that we don't know enough about and which we're not sure we care very deeply about either. It's still "other people", either living in the present but who live far away, as in Bangladesh, or the unborn. Neither constituency is well represented amid the immediate claims of voters who are wondering when they can next safely have a splurge on their plastic.
Colin Challen has been a Labour MP for Morley and Rothwell since 2001. He is chair of the all-party parliamentary group on climate change. His latest book, Too Little Too Late: the politics of climate change, is published by Picnic Publishing
US climate change denier James Inhofe joins Al Gore in fight against soot
In a surprise U-turn, the Republican senator has put forward a bill to review the dangers of black carbon to health and the environment
Suzanne Goldenberg, US environment correspondent
guardian.co.uk, Tuesday 5 May 2009 13.23 BST
He has called global warming a hoax, compared the Environmental Protection Agency with the Gestapo, and over the years dismissed Al Gore as desperate and "full of crap". So it was startling when America's arch climate change denier came out ahead of the green curve in the fight to save the Arctic and other icy regions.
Could James Inhofe, a conservative Republican senator from Oklahoma, be the newest recruit to Barack Obama's green revolution?
Inhofe, in a surprise move, joined Democratic senators in putting forward a bill for an official review of the dangers of soot or "black carbon" to public health and the environment late last month.
"Black carbon ... is thought to be the second largest contributor to global warming after carbon dioxide," the bill said. It gave experts from the Environmental Protection Agency a year to make suggestions to Congress on reducing the pollutant, caused by old diesel engines and burning wood.
Inhofe has been fighting for years against the growing body of science that claims human activity causes climate change. Obama's determination to move America off fossil fuels – and a series of new green measures – initially appeared to have no effect on the Oklahoman.
In Senate hearings, the Republican continued in his self-appointed mission of heckling Gore and experts on climate change and squabbling with the chair of the environment and public works committee, Barbara Boxer.
His support for the black carbon bill met with astonishment from left and right.
A former aide to Inhofe went so far as to suggest that his staff had been duped into allowing him to support the review. A blogger on the liberal website Daily Kos suggested he had been afflicted with "sudden onset dementia".
Inhofe, in an interview with the Guardian, insisted that there was nothing out-of-step between his concern about soot and his broader views on climate change.
"It's not a pollutant, it's a particulate matter. So we are talking about two different things and I am surprised that anyone would be at all surprised that I would be trying to find out about black carbon while I don't buy the idea that anthropogenic gases are causing global warming."
He said his concern about the health effects of soot grew from his interest in Africa, where poor families who cook on wood stoves can suffer lung diseases from the soot.
As for the oddness of his alliance with the climate evangelist Gore, Inhofe said: "Al Gore probably would be against automobile accidents and I am too. This has nothing to do with the CO2 issue."
But the convergence of interests has raised hopes among environmentalists that it might be easier to reach consensus on the need to act on soot – which is familiar and can be felt and touched – than it has been on greenhouse gases.
"This is a very significant breakthrough from his past positions so we are very pleased," said Erika Rosenthal of EarthJustice.
In a further twist, Inhofe came out a few days ahead of Gore in drawing the public's attention to what scientists have recently identified as the main cause of global warming after carbon dioxide.
Soot was not even mentioned as a cause of global warming in the United Nations' report on climate science in 2007. But scientists now see the pollutant as the main cause of global warming after carbon dioxide – and say it may require even more urgent action because of the speed of which ice in the Arctic is disappearing.
Gore told a conference in Norway last week that soot, from diesel and wood burning stoves, was creating a dangerous haze of pollution in the Arctic that absorbed sunlight and warmed the air.
"A new understanding is emerging of soot," said Gore. "Black carbon is settling in the Himalayas. The air pollution levels in the upper Himalayas are now similar to those in Los Angeles."
Inhofe for now says he does not support the idea of limiting black carbon emissions, saying he is concerned about the cost to poor families in Africa. In Washington, there is little expectation that Inhofe will be an enthusiastic joiner of Obama's green revolution, but some are hoping this might be a tiny first step.
If it is, Inhofe is not telling. "I want to know more about it – nothing sinister about this at all," he said. "Should I apologise that Al Gore and Barbara Boxer agree that we need to know more about black carbon. I don't think so."
Suzanne Goldenberg, US environment correspondent
guardian.co.uk, Tuesday 5 May 2009 13.23 BST
He has called global warming a hoax, compared the Environmental Protection Agency with the Gestapo, and over the years dismissed Al Gore as desperate and "full of crap". So it was startling when America's arch climate change denier came out ahead of the green curve in the fight to save the Arctic and other icy regions.
Could James Inhofe, a conservative Republican senator from Oklahoma, be the newest recruit to Barack Obama's green revolution?
Inhofe, in a surprise move, joined Democratic senators in putting forward a bill for an official review of the dangers of soot or "black carbon" to public health and the environment late last month.
"Black carbon ... is thought to be the second largest contributor to global warming after carbon dioxide," the bill said. It gave experts from the Environmental Protection Agency a year to make suggestions to Congress on reducing the pollutant, caused by old diesel engines and burning wood.
Inhofe has been fighting for years against the growing body of science that claims human activity causes climate change. Obama's determination to move America off fossil fuels – and a series of new green measures – initially appeared to have no effect on the Oklahoman.
In Senate hearings, the Republican continued in his self-appointed mission of heckling Gore and experts on climate change and squabbling with the chair of the environment and public works committee, Barbara Boxer.
His support for the black carbon bill met with astonishment from left and right.
A former aide to Inhofe went so far as to suggest that his staff had been duped into allowing him to support the review. A blogger on the liberal website Daily Kos suggested he had been afflicted with "sudden onset dementia".
Inhofe, in an interview with the Guardian, insisted that there was nothing out-of-step between his concern about soot and his broader views on climate change.
"It's not a pollutant, it's a particulate matter. So we are talking about two different things and I am surprised that anyone would be at all surprised that I would be trying to find out about black carbon while I don't buy the idea that anthropogenic gases are causing global warming."
He said his concern about the health effects of soot grew from his interest in Africa, where poor families who cook on wood stoves can suffer lung diseases from the soot.
As for the oddness of his alliance with the climate evangelist Gore, Inhofe said: "Al Gore probably would be against automobile accidents and I am too. This has nothing to do with the CO2 issue."
But the convergence of interests has raised hopes among environmentalists that it might be easier to reach consensus on the need to act on soot – which is familiar and can be felt and touched – than it has been on greenhouse gases.
"This is a very significant breakthrough from his past positions so we are very pleased," said Erika Rosenthal of EarthJustice.
In a further twist, Inhofe came out a few days ahead of Gore in drawing the public's attention to what scientists have recently identified as the main cause of global warming after carbon dioxide.
Soot was not even mentioned as a cause of global warming in the United Nations' report on climate science in 2007. But scientists now see the pollutant as the main cause of global warming after carbon dioxide – and say it may require even more urgent action because of the speed of which ice in the Arctic is disappearing.
Gore told a conference in Norway last week that soot, from diesel and wood burning stoves, was creating a dangerous haze of pollution in the Arctic that absorbed sunlight and warmed the air.
"A new understanding is emerging of soot," said Gore. "Black carbon is settling in the Himalayas. The air pollution levels in the upper Himalayas are now similar to those in Los Angeles."
Inhofe for now says he does not support the idea of limiting black carbon emissions, saying he is concerned about the cost to poor families in Africa. In Washington, there is little expectation that Inhofe will be an enthusiastic joiner of Obama's green revolution, but some are hoping this might be a tiny first step.
If it is, Inhofe is not telling. "I want to know more about it – nothing sinister about this at all," he said. "Should I apologise that Al Gore and Barbara Boxer agree that we need to know more about black carbon. I don't think so."
Barack Obama's $1.8bn vision of greener biofuel
• President takes on the powerful farming lobby• Switch from food crops to fight climate change
Suzanne Goldenberg, US environment correspondent
The Guardian, Wednesday 6 May 2009
The Obama administration took on the powerful farming interests in America's heartland today, making clear it does not see corn-based ethanol as part of the long-term solution to climate change.
The new proposals on the biofuel – in the face of intense pressure from agricultural companies and members of Congress from corn-growing states – were seen as the first test of Barack Obama's promise to put science above politics in deciding America's energy future.
Ethanol had once appeared to provide a transport fuel which did not increase carbon dioxide. But studies have suggested that the fuel needed to process the corn meant the ethanol could be more polluting than the fossil fuel it was meant to replace. Furthermore, the use of food crops for biofuel was blamed for a substantial part of the large price rises seen in 2008.
Administration officials set out a $1.8bn (£1.19bn) plan to develop a new generation of more environmentally-friendly biofuels that are not made from food crops and have a lower carbon footprint, while also providing an immediate bail-out of existing corn ethanol producers, which are suffering in the global economic crisis: falling petrol prices have undercut demand for ethanol at the pump.
Lisa Jackson, head of the Environmental Protection Agency, made clear she does not see corn-based ethanol as a permanent part of America's clean energy mix. "Corn-based ethanol is a bridge... to the next generation of fuels ," she said.
The EPA proposed a new standard for advanced biofuels, ensuring they are at least 50% cleaner than petrol. Jackson said existing bio-ethanol resulted in a 16% reduction in greenhouse gas emissions.
The agency said it would also take into account the environmental impact of turning land over to biofuel crops, a key demand of the industry's critics.
Environmentalists saw the move as an early indication that the Obama administration would stand its ground against powerful industrial interests.
"For an administration that has already staked so much on restoring science to the process of governing, this was a really critical test," said Nathanael Greene, a renewable energy expert at the National Resources Defence Council. "This was the first big industry where we are starting to see some of the potential changes required by climate policy and the administration is ready to stick to the science and not get rolled by industry."
The country's fuel producers gave a cautious welcome to the announcement, but added that they would continue to challenge the EPA's criteria for measuring the environmental cost of fuel crops.
The impact on the ethanol industry of the agency's proposal, which now undergoes public review, was softened by Obama's decision to put the agriculture secretary, Tom Vilsack, who is from the corn growing state of Iowa, in charge of a new task force that will oversee biofuel development. The officials also said there would be considerable sums available to farmers to make the transition from using corn to make biofuels to using pulp and agricultural waste.
The programme envisages $1.1bn to help ethanol producers market the fuel, and to convert their processing plants from fossil fuels to renewable energy. "There is over $1.1 billion of opportunity here," Vilsack said.
Energy secretary Steven Chu said there would be an additional $786m towards the development of new biofuel refineries and the design of flex-fuel cars.
The administration's move on ethanol comes nearly two years after Congress ordered fuel refineries to increase their use of ethanol, and by 2022 to step up the share of advanced biofuels in the country's fuel mix.
The law ordered all ethanol produced after 2007 to meet a standard 20% reduction in greenhouse gas emissions, and for advanced biofuels to meet a 50% reduction target.
Existing ethanol producers will be exempt from those targets, but new plant will be required to make the grade. That represents a big challenge for the production technology.
Suzanne Goldenberg, US environment correspondent
The Guardian, Wednesday 6 May 2009
The Obama administration took on the powerful farming interests in America's heartland today, making clear it does not see corn-based ethanol as part of the long-term solution to climate change.
The new proposals on the biofuel – in the face of intense pressure from agricultural companies and members of Congress from corn-growing states – were seen as the first test of Barack Obama's promise to put science above politics in deciding America's energy future.
Ethanol had once appeared to provide a transport fuel which did not increase carbon dioxide. But studies have suggested that the fuel needed to process the corn meant the ethanol could be more polluting than the fossil fuel it was meant to replace. Furthermore, the use of food crops for biofuel was blamed for a substantial part of the large price rises seen in 2008.
Administration officials set out a $1.8bn (£1.19bn) plan to develop a new generation of more environmentally-friendly biofuels that are not made from food crops and have a lower carbon footprint, while also providing an immediate bail-out of existing corn ethanol producers, which are suffering in the global economic crisis: falling petrol prices have undercut demand for ethanol at the pump.
Lisa Jackson, head of the Environmental Protection Agency, made clear she does not see corn-based ethanol as a permanent part of America's clean energy mix. "Corn-based ethanol is a bridge... to the next generation of fuels ," she said.
The EPA proposed a new standard for advanced biofuels, ensuring they are at least 50% cleaner than petrol. Jackson said existing bio-ethanol resulted in a 16% reduction in greenhouse gas emissions.
The agency said it would also take into account the environmental impact of turning land over to biofuel crops, a key demand of the industry's critics.
Environmentalists saw the move as an early indication that the Obama administration would stand its ground against powerful industrial interests.
"For an administration that has already staked so much on restoring science to the process of governing, this was a really critical test," said Nathanael Greene, a renewable energy expert at the National Resources Defence Council. "This was the first big industry where we are starting to see some of the potential changes required by climate policy and the administration is ready to stick to the science and not get rolled by industry."
The country's fuel producers gave a cautious welcome to the announcement, but added that they would continue to challenge the EPA's criteria for measuring the environmental cost of fuel crops.
The impact on the ethanol industry of the agency's proposal, which now undergoes public review, was softened by Obama's decision to put the agriculture secretary, Tom Vilsack, who is from the corn growing state of Iowa, in charge of a new task force that will oversee biofuel development. The officials also said there would be considerable sums available to farmers to make the transition from using corn to make biofuels to using pulp and agricultural waste.
The programme envisages $1.1bn to help ethanol producers market the fuel, and to convert their processing plants from fossil fuels to renewable energy. "There is over $1.1 billion of opportunity here," Vilsack said.
Energy secretary Steven Chu said there would be an additional $786m towards the development of new biofuel refineries and the design of flex-fuel cars.
The administration's move on ethanol comes nearly two years after Congress ordered fuel refineries to increase their use of ethanol, and by 2022 to step up the share of advanced biofuels in the country's fuel mix.
The law ordered all ethanol produced after 2007 to meet a standard 20% reduction in greenhouse gas emissions, and for advanced biofuels to meet a 50% reduction target.
Existing ethanol producers will be exempt from those targets, but new plant will be required to make the grade. That represents a big challenge for the production technology.
Anaconda wave-power generator snakes into next stage of production
The device is said to be at the forefront of a new generation of wave-power machines that could slash renewables costs
Alok Jha, green technology correspondent
guardian.co.uk, Wednesday 6 May 2009 00.05 BST
Giant rubber sea snakes could harness the plentiful clean power off Britain's coasts within five years, according to the inventors of a new type of wave-energy generator.
Yesterday, Checkmate Sea Energy unveiled the final stages of a proof-of-concept trial of its Anaconda device, seen by many experts as at the forefront of the next generation of robust, cheap wave-power machines that could slash the costs of making renewable electricity.
Made from a composite of fabric and natural rubber, the Anaconda rides oncoming waves and uses the motion to drive a turbine in its tail. The test device is nine metres long but its developers say that a full-scale device could be up to 200m in length and be capable of producing 1MW of power, enough for a thousand homes, and cost £2m to build. Farms of 50 or more could be placed underwater a few miles from the coast.
Harnessing wave power could contribute significantly to the UK's target of sourcing 15% of its energy from renewable sources by 2020. The Carbon Trust found that wave and tidal stream technologies could add 10-20GW of electricity capacity to the UK by 2050, in particular from areas such as north-west Scotland and south-west England.
"It's a completely new kind of wave power machine," said Rod Rainey, a chief engineer with engineering design consultants Atkins and inventor of the Anaconda. "The beauty of wave energy is its consistency. However, the problem holding back wave energy machines is they tend to deteriorate over time in the harsh marine environment. Anaconda is non-mechanical: it is mainly rubber, a natural material with a natural resilience and so it has very few moving parts to maintain."
Each Anaconda device is tethered to the sea floor and positioned head-on into the coming waves. Floating under the sea surface, the water-filled rubber tube swims with the waves – as a swell hits the front of the device, it creates a bulge that travels to the back of the tube, in the same way a pulse of blood travels along an artery. When the bulge wave reaches the Anaconda's tail, the energy is used to drive a turbine and create electricity.
"Wave power has always been the poor relation of wind energy, but a lot of people are resentful of wind turbines on their doorstep, or in vast tracts of coastal waters," said Paul Auston, chairman of Checkmate. "What we're offering […] is a new technology which you can't see, it's under the water so it's not as intrusive and it's made of a natural material."
The device has already been given a significant vote of confidence by the Carbon Trust. The Anaconda has been chosen as one of only two technologies to take part in the Trust's marine accelerator programme, which aims to push new low-carbon technology ideas closer commercial reality.
"We were attracted to it because of its simplicity – in theory it's just a rubber structure," said the Carbon Trust's Stephen Wyatt. "It has the potential to be robust and quite easy and cheap to manufacture. When you look at some of the severe offshore conditions that wave and tidal devices have to face, then we realise that a structure this simple could be quite cheap."
Their analysis of the technology concluded that, because of this simplicity, Anaconda could create a "step-change" in how soon wave devices became commercial. Their research showed that, while wave energy in general costs around 25p per KWh to make, the anaconda had the potential to bring prices down to around 9p per KWh. Mains electricity today form fossil fuels costs around 6p per KWh.
Marine energy devices that are nearing commercial reality today include the SeaGen and Pelamis, a tidal and wave generator respectively. Both went into trials in the sea last year, SeaGen in Strangfod Lough and Pelamis off the coast of Portugal. Like Anaconda, Pelamis also uses a snake-like motion to capture wave energy by flexing its articulated metal sections on the sea surface. Both devices have had technical problems however, mainly due to the harsh conditions at sea.
The Anaconda's designers stress that its key advantage is its survivability. "If the worst comes to the worst it'll only be washed up on the beach, and you can patch it up and put it back out there," said Rainey.
The proof-of-concept trials have been carried out for the past few weeks in a wave tank defence company QinetiQ in Gosport, Hampshire. When these are complete, Checkmate hopes to build a quarter-size version of Anaconda for possible sea trials. If all goes well, the Checkmate thinks the first devices in commercial production could be floating in the seas off Britain as early as 2014.
Alok Jha, green technology correspondent
guardian.co.uk, Wednesday 6 May 2009 00.05 BST
Giant rubber sea snakes could harness the plentiful clean power off Britain's coasts within five years, according to the inventors of a new type of wave-energy generator.
Yesterday, Checkmate Sea Energy unveiled the final stages of a proof-of-concept trial of its Anaconda device, seen by many experts as at the forefront of the next generation of robust, cheap wave-power machines that could slash the costs of making renewable electricity.
Made from a composite of fabric and natural rubber, the Anaconda rides oncoming waves and uses the motion to drive a turbine in its tail. The test device is nine metres long but its developers say that a full-scale device could be up to 200m in length and be capable of producing 1MW of power, enough for a thousand homes, and cost £2m to build. Farms of 50 or more could be placed underwater a few miles from the coast.
Harnessing wave power could contribute significantly to the UK's target of sourcing 15% of its energy from renewable sources by 2020. The Carbon Trust found that wave and tidal stream technologies could add 10-20GW of electricity capacity to the UK by 2050, in particular from areas such as north-west Scotland and south-west England.
"It's a completely new kind of wave power machine," said Rod Rainey, a chief engineer with engineering design consultants Atkins and inventor of the Anaconda. "The beauty of wave energy is its consistency. However, the problem holding back wave energy machines is they tend to deteriorate over time in the harsh marine environment. Anaconda is non-mechanical: it is mainly rubber, a natural material with a natural resilience and so it has very few moving parts to maintain."
Each Anaconda device is tethered to the sea floor and positioned head-on into the coming waves. Floating under the sea surface, the water-filled rubber tube swims with the waves – as a swell hits the front of the device, it creates a bulge that travels to the back of the tube, in the same way a pulse of blood travels along an artery. When the bulge wave reaches the Anaconda's tail, the energy is used to drive a turbine and create electricity.
"Wave power has always been the poor relation of wind energy, but a lot of people are resentful of wind turbines on their doorstep, or in vast tracts of coastal waters," said Paul Auston, chairman of Checkmate. "What we're offering […] is a new technology which you can't see, it's under the water so it's not as intrusive and it's made of a natural material."
The device has already been given a significant vote of confidence by the Carbon Trust. The Anaconda has been chosen as one of only two technologies to take part in the Trust's marine accelerator programme, which aims to push new low-carbon technology ideas closer commercial reality.
"We were attracted to it because of its simplicity – in theory it's just a rubber structure," said the Carbon Trust's Stephen Wyatt. "It has the potential to be robust and quite easy and cheap to manufacture. When you look at some of the severe offshore conditions that wave and tidal devices have to face, then we realise that a structure this simple could be quite cheap."
Their analysis of the technology concluded that, because of this simplicity, Anaconda could create a "step-change" in how soon wave devices became commercial. Their research showed that, while wave energy in general costs around 25p per KWh to make, the anaconda had the potential to bring prices down to around 9p per KWh. Mains electricity today form fossil fuels costs around 6p per KWh.
Marine energy devices that are nearing commercial reality today include the SeaGen and Pelamis, a tidal and wave generator respectively. Both went into trials in the sea last year, SeaGen in Strangfod Lough and Pelamis off the coast of Portugal. Like Anaconda, Pelamis also uses a snake-like motion to capture wave energy by flexing its articulated metal sections on the sea surface. Both devices have had technical problems however, mainly due to the harsh conditions at sea.
The Anaconda's designers stress that its key advantage is its survivability. "If the worst comes to the worst it'll only be washed up on the beach, and you can patch it up and put it back out there," said Rainey.
The proof-of-concept trials have been carried out for the past few weeks in a wave tank defence company QinetiQ in Gosport, Hampshire. When these are complete, Checkmate hopes to build a quarter-size version of Anaconda for possible sea trials. If all goes well, the Checkmate thinks the first devices in commercial production could be floating in the seas off Britain as early as 2014.
‘Sea-snake’ wave machine could provide power for 1,000 homes
The Times
May 6, 2009
Home Staff
A “sea-snake” wave machine could be generating energy off the coast of Britain within five years. Each device, up to 200m (650ft) long and made almost entirely of a rubber tube, could be capable of producing enough electricity to power 1,000 homes.
The plan is to have “shoals” of the snakes around the coast, where they would be harnessed to “swim” just below the surface, their developers Checkmate Group said.
A 9m version is in final tests in a 270m wave test tank run by QinetiQ in Gosport, Hampshire. The tank is Britain’s largest and simulates waves that the device would encounter in the sea. A seagoing prototype snake is likely within three years.
Unlike other wave machines, the snake “swims” head-on to the waves, like a ship in a storm, said Professor Rod Rainey, who came up with the idea.
He added that the design was “tremendously survivable”. “If the worst comes to the worst it’ll only be washed up on the beach, and you can patch it up and put it back out there,” he said.
May 6, 2009
Home Staff
A “sea-snake” wave machine could be generating energy off the coast of Britain within five years. Each device, up to 200m (650ft) long and made almost entirely of a rubber tube, could be capable of producing enough electricity to power 1,000 homes.
The plan is to have “shoals” of the snakes around the coast, where they would be harnessed to “swim” just below the surface, their developers Checkmate Group said.
A 9m version is in final tests in a 270m wave test tank run by QinetiQ in Gosport, Hampshire. The tank is Britain’s largest and simulates waves that the device would encounter in the sea. A seagoing prototype snake is likely within three years.
Unlike other wave machines, the snake “swims” head-on to the waves, like a ship in a storm, said Professor Rod Rainey, who came up with the idea.
He added that the design was “tremendously survivable”. “If the worst comes to the worst it’ll only be washed up on the beach, and you can patch it up and put it back out there,” he said.
US windpower industry eyes govt mandate for growth
Reuters, Wednesday May 6 2009
* Investment in wind energy to be down in 2009
* Recovery seen in 2010, depending on natgas
* Consolidation seen in wind turbine industry
By Andrew Stern
CHICAGO, May 5 (Reuters) - Lost financing, low prices for natural gas and political uncertainty have stymied a potential boom in the U.S. wind power industry this year.
Investment in new wind power capacity that exploded from $3 billion in 2005 to $17 billion in 2008 was projected to fall to $13 billion this year. The fallout for the U.S. industry, the world's largest producer of wind power at 28,000 Megawatts, could usher in a period of consolidation, analysts said.
Financial institutions no longer provide credit to wind farms based on the tax incentives and projected electricity revenues, and natural gas prices have tumbled from $12 per million BTU to under $4.
The industry is now counting on a government bailout of a different sort -- legislation that would mandate that 25 percent of the country's electricity be generated from renewable sources by 2025, up from around 7 percent now, with wind making up 1.5 percent.
"To get to the levels of energy that we're talking about, we have to produce a wind turbine every 15 minutes for the next 20 years," Vic Abate of General Electric Co , the largest U.S. wind turbine supplier, said in an interview on Tuesday on the sidelines of an industry conference.
GE had $6.7 billion in wind-related sales last year. The company has built and installed 12,000 wind turbines, which can cost $3 million each and provide power to up to 1,700 homes.
Some 20,000 attendees at the Windpower 2009 conference this week were exhorted by industry leaders and U.S. Interior Secretary Ken Salazar to lobby for congressional passage of legislation to create a national renewable energy standard.
"A renewable energy standard I think is very important to drive growth," Salazar told reporters after his address to the conference. "We have a new beginning here. The new beginning is to look at the broad energy portfolio."
Twenty-eight states have enacted standards requiring an escalating percentage of power generation come from "green" sources such as wind, solar, hydropower and biomass.
Supporters of a national standard say it would provide a target and boost demand for the "credits" wind farms and other renewable projects create, lifting revenues for the hard-pressed industry.
U.S. grants to wind power projects anticipated from the recently passed stimulus bill will help some, industry members said. But the industry's problems may persist for a while, which Abate attributed to growing pains.
DEPRESSED GAS
The biggest hurdle for the moment is the depressed price of competing natural gas, which in effect sets the price of electricity for wind power producers.
"The price of natural gas at $4 (per million BTU) is the single biggest threat the wind industry faces. The bright side is that many industry analysts don't expect gas prices to stay at $4 once the global economy begins to recover," said Joshua Magee of market research firm Emerging Energy Research in Cambridge, Massachusetts.
Magee's firm predicted a rebound in wind power growth in 2010, with an estimated 9,000 megawatts of capacity added through $18 billion in investments. The firm predicted 15,500 megawatts of capacity would be added in 2020.
Magee said the increasingly crowded field of wind turbine manufacturers, many from Europe, along with a drop in prices of steel and other raw materials, will lower the prices of wind power turbines by 10 percent or more in the next two years. But it may also create a climate for industry consolidation.
"If you have cash there are a lot of distressed assets that are looking for buyers," Magee said.
The U.S. renewable standard, a twist on long-standing efforts in Denmark and other European nations to mandate a "greener" energy mix, may rub some free-market advocates the wrong way. Denmark gets 20 percent of its power from wind.
"I heard those arguments in Nevada when I worked to put in the (state's) renewable portfolio standard. Now they love the fact they have it," said Jon Wellinghoff of the Federal Energy Regulatory Commission. "What it's done is provided for rural economic development and diversification."
Jose Donoso, of Spain's Gamesa, a leading wind turbine manufacturer, said the U.S. approach still leaves uncertainty for wind farm investors.
Spain has set a firm target of 45,000 megawatts of wind power by 2020, more than double its target for next year.
"The key is stability. This gives more security. With a percentage it depends on consumption. If consumption falls, the level will be less. With Spain's system, it's clear for the investors. With a percentage, it's less clear," Donoso said. (Reporting by Andrew Stern; Editing by Richard Chang)
* Investment in wind energy to be down in 2009
* Recovery seen in 2010, depending on natgas
* Consolidation seen in wind turbine industry
By Andrew Stern
CHICAGO, May 5 (Reuters) - Lost financing, low prices for natural gas and political uncertainty have stymied a potential boom in the U.S. wind power industry this year.
Investment in new wind power capacity that exploded from $3 billion in 2005 to $17 billion in 2008 was projected to fall to $13 billion this year. The fallout for the U.S. industry, the world's largest producer of wind power at 28,000 Megawatts, could usher in a period of consolidation, analysts said.
Financial institutions no longer provide credit to wind farms based on the tax incentives and projected electricity revenues, and natural gas prices have tumbled from $12 per million BTU to under $4.
The industry is now counting on a government bailout of a different sort -- legislation that would mandate that 25 percent of the country's electricity be generated from renewable sources by 2025, up from around 7 percent now, with wind making up 1.5 percent.
"To get to the levels of energy that we're talking about, we have to produce a wind turbine every 15 minutes for the next 20 years," Vic Abate of General Electric Co , the largest U.S. wind turbine supplier, said in an interview on Tuesday on the sidelines of an industry conference.
GE had $6.7 billion in wind-related sales last year. The company has built and installed 12,000 wind turbines, which can cost $3 million each and provide power to up to 1,700 homes.
Some 20,000 attendees at the Windpower 2009 conference this week were exhorted by industry leaders and U.S. Interior Secretary Ken Salazar to lobby for congressional passage of legislation to create a national renewable energy standard.
"A renewable energy standard I think is very important to drive growth," Salazar told reporters after his address to the conference. "We have a new beginning here. The new beginning is to look at the broad energy portfolio."
Twenty-eight states have enacted standards requiring an escalating percentage of power generation come from "green" sources such as wind, solar, hydropower and biomass.
Supporters of a national standard say it would provide a target and boost demand for the "credits" wind farms and other renewable projects create, lifting revenues for the hard-pressed industry.
U.S. grants to wind power projects anticipated from the recently passed stimulus bill will help some, industry members said. But the industry's problems may persist for a while, which Abate attributed to growing pains.
DEPRESSED GAS
The biggest hurdle for the moment is the depressed price of competing natural gas, which in effect sets the price of electricity for wind power producers.
"The price of natural gas at $4 (per million BTU) is the single biggest threat the wind industry faces. The bright side is that many industry analysts don't expect gas prices to stay at $4 once the global economy begins to recover," said Joshua Magee of market research firm Emerging Energy Research in Cambridge, Massachusetts.
Magee's firm predicted a rebound in wind power growth in 2010, with an estimated 9,000 megawatts of capacity added through $18 billion in investments. The firm predicted 15,500 megawatts of capacity would be added in 2020.
Magee said the increasingly crowded field of wind turbine manufacturers, many from Europe, along with a drop in prices of steel and other raw materials, will lower the prices of wind power turbines by 10 percent or more in the next two years. But it may also create a climate for industry consolidation.
"If you have cash there are a lot of distressed assets that are looking for buyers," Magee said.
The U.S. renewable standard, a twist on long-standing efforts in Denmark and other European nations to mandate a "greener" energy mix, may rub some free-market advocates the wrong way. Denmark gets 20 percent of its power from wind.
"I heard those arguments in Nevada when I worked to put in the (state's) renewable portfolio standard. Now they love the fact they have it," said Jon Wellinghoff of the Federal Energy Regulatory Commission. "What it's done is provided for rural economic development and diversification."
Jose Donoso, of Spain's Gamesa, a leading wind turbine manufacturer, said the U.S. approach still leaves uncertainty for wind farm investors.
Spain has set a firm target of 45,000 megawatts of wind power by 2020, more than double its target for next year.
"The key is stability. This gives more security. With a percentage it depends on consumption. If consumption falls, the level will be less. With Spain's system, it's clear for the investors. With a percentage, it's less clear," Donoso said. (Reporting by Andrew Stern; Editing by Richard Chang)
Mafia link to Sicily wind farms probed
By Guy Dinmore in Palermo, Italy
Published: May 4 2009 19:01
Anti-Mafia magistrates in Sicily have opened a sweeping investigation into the wind power sector where local officials, entrepreneurs and crime gangs are suspected of collusion in the construction of lucrative wind farms before their eventual sale to multinational companies.
Italian and EU subsidies for the building of wind farms and the world’s highest guaranteed rates, €180 ($240, £160) per kwh, for the electricity they produce have turned southern Italy into a highly attractive market exploited by organised crime.
Roberto Scarpinato, a veteran anti-Mafia prosecutor in the regional capital Palermo, told the Financial Times that his investigation, which began last week, was focused on the three large provinces of Palermo, Trapani and Agrigento.
An earlier investigation into a case near Trapani in western Sicily resulted in eight arrests in February, leading to accusations of a suspected nexus between a leading Mafia family that offered money and votes in exchange for permits to construct wind farms.
“Operation Wind” revealed Mafia promises to local officials in Mazara del Vallo of money and votes in exchange for help in approving wind farm projects.
The Mafia suspects were alleged to be linked to Matteo Messina “Diabolik” Denaro, a fugitive clan boss on ltaly’s most wanted list.
Prosecutors suspect the hand of the Mafia in fixing permits and building wind farms that are then sold on to Italian and eventually foreign companies.
In an effort to assert its control over the sector, the Mafia is suspected of destroying two wind towers that were in storage in the port of Trapani after their delivery by ship from northern Europe, local officials told the FT.
“It is a refined system of connections to business and politicians. A handful of people control the wind sector. Many companies exist but it is the same people behind them,” said Mr Scarpinato, whose investigations have focused on the evolution of the Mafia into a modern business organisation.
Sicily’s Cosa Nostrais evolving and finding new business opportunities, including the renewable energy sector, by exploiting its historic grip over territory, construction and ability to corrupt local officials.
Several wind farms built by companies suspected of being linked to the Mafia have not functioned for one or two years, in some cases because of shoddy construction. “This is the amazing thing, that developers got public money to build wind farms which did not produce electricity,” the prosecutor said.
The regional governments in Sicily, as well as Calabria and Basilicata on the mainland, have suspended the authorisation of new wind farms in part because of suspected criminal involvement and confusion over the real ownership of the ventures.
Most, if not all, of Sicily’s wind farms began as projects by local developers, some of whom speculated in a secondary market for permits. Once built, the majority were sold on through Italian intermediaries to multinationals. International Power of the UK is the largest wind power operator in Italy. Others include Italy’s Enel and Germany’s Eon through its purchase of part of Endesa of Spain in 2007. France’s EDF also has assets. While the international companies knew the identity of their Sicilian developers, there is no evidence they were aware of Mafia involvement.
Although Italy is lagging badly in meeting its EU 2020 emissions targets, the renewable energy sector is growing strongly and attracting considerable foreign investment. International Power became the single largest operator in 2007 with its purchase of the Maestrale portfolio of mostly Italian wind farms, including five in Sicily, for €1.8bn
Italy ranks fourth in Europe in terms of installed wind power capacity.
Copyright The Financial Times Limited 2009
Published: May 4 2009 19:01
Anti-Mafia magistrates in Sicily have opened a sweeping investigation into the wind power sector where local officials, entrepreneurs and crime gangs are suspected of collusion in the construction of lucrative wind farms before their eventual sale to multinational companies.
Italian and EU subsidies for the building of wind farms and the world’s highest guaranteed rates, €180 ($240, £160) per kwh, for the electricity they produce have turned southern Italy into a highly attractive market exploited by organised crime.
Roberto Scarpinato, a veteran anti-Mafia prosecutor in the regional capital Palermo, told the Financial Times that his investigation, which began last week, was focused on the three large provinces of Palermo, Trapani and Agrigento.
An earlier investigation into a case near Trapani in western Sicily resulted in eight arrests in February, leading to accusations of a suspected nexus between a leading Mafia family that offered money and votes in exchange for permits to construct wind farms.
“Operation Wind” revealed Mafia promises to local officials in Mazara del Vallo of money and votes in exchange for help in approving wind farm projects.
The Mafia suspects were alleged to be linked to Matteo Messina “Diabolik” Denaro, a fugitive clan boss on ltaly’s most wanted list.
Prosecutors suspect the hand of the Mafia in fixing permits and building wind farms that are then sold on to Italian and eventually foreign companies.
In an effort to assert its control over the sector, the Mafia is suspected of destroying two wind towers that were in storage in the port of Trapani after their delivery by ship from northern Europe, local officials told the FT.
“It is a refined system of connections to business and politicians. A handful of people control the wind sector. Many companies exist but it is the same people behind them,” said Mr Scarpinato, whose investigations have focused on the evolution of the Mafia into a modern business organisation.
Sicily’s Cosa Nostrais evolving and finding new business opportunities, including the renewable energy sector, by exploiting its historic grip over territory, construction and ability to corrupt local officials.
Several wind farms built by companies suspected of being linked to the Mafia have not functioned for one or two years, in some cases because of shoddy construction. “This is the amazing thing, that developers got public money to build wind farms which did not produce electricity,” the prosecutor said.
The regional governments in Sicily, as well as Calabria and Basilicata on the mainland, have suspended the authorisation of new wind farms in part because of suspected criminal involvement and confusion over the real ownership of the ventures.
Most, if not all, of Sicily’s wind farms began as projects by local developers, some of whom speculated in a secondary market for permits. Once built, the majority were sold on through Italian intermediaries to multinationals. International Power of the UK is the largest wind power operator in Italy. Others include Italy’s Enel and Germany’s Eon through its purchase of part of Endesa of Spain in 2007. France’s EDF also has assets. While the international companies knew the identity of their Sicilian developers, there is no evidence they were aware of Mafia involvement.
Although Italy is lagging badly in meeting its EU 2020 emissions targets, the renewable energy sector is growing strongly and attracting considerable foreign investment. International Power became the single largest operator in 2007 with its purchase of the Maestrale portfolio of mostly Italian wind farms, including five in Sicily, for €1.8bn
Italy ranks fourth in Europe in terms of installed wind power capacity.
Copyright The Financial Times Limited 2009
Siemens to Build $50 Million Wind Power Factory in Kansas
By PAUL GLADER
Siemens AG plans to announce today that it will open a $50 million facility in Hutchinson, Kan., to make wind-turbine parts for the North American market.
Siemens, the No. 3 turbine producer in North America with a 9% market share of installed megawatts, plans to break ground on the facilities this summer and expects to have 400 workers producing the wind-turbine drive trains, known as nacelles, at the 300,000 square foot facility by the end of 2010. Nacelles are 90-ton boxes that sit atop the tower of a wind turbine and connect the blades to a drive train and gear box. Siemens used to import the nacelles from Denmark.
An adjacent 80,000 square foot facility will provide repair and services for wind turbines.
A wind mill supplies water to a stock tank, surrounded by wind turbines of the Smoky Hills Wind Project near Wilson, Kansas.
Companies like Siemens and Denmark's Vestas Wind Systems A/S are building facilities near planned wind farms in the Great Plains states to minimize transportation costs for the gargantuan equipment – blades larger than a 747 wingspan, nacelles the size of motor homes and towers as high as a football field is long.
The U.S. wind power market expanded dramatically in 2008, adding a record 8,500 megawatts of power generation, as well as factories and workers to produce the turbines. In the past six months, the credit markets have affected orders and growth in the wind turbine market. But the large turbine makers are still expanding and improving production capabilities in the U.S., expecting stimulus funds to eventually take effect.
Siemens says it plans to increase employment in its wind unit in the U.S. by 25% to 1,000 in the U.S., for a total of 5,500 worldwide.
"Vestas and GE were a little bit ahead of us. They started in the wind business a little bit earlier," said Randy Zwirn, President and CEO of Siemens Energy Inc., noting Siemens entered wind power in 2005 with the acquisition of a Danish firm. "We have had solid growth."
Write to Paul Glader at paul.glader@wsj.com
Siemens AG plans to announce today that it will open a $50 million facility in Hutchinson, Kan., to make wind-turbine parts for the North American market.
Siemens, the No. 3 turbine producer in North America with a 9% market share of installed megawatts, plans to break ground on the facilities this summer and expects to have 400 workers producing the wind-turbine drive trains, known as nacelles, at the 300,000 square foot facility by the end of 2010. Nacelles are 90-ton boxes that sit atop the tower of a wind turbine and connect the blades to a drive train and gear box. Siemens used to import the nacelles from Denmark.
An adjacent 80,000 square foot facility will provide repair and services for wind turbines.
A wind mill supplies water to a stock tank, surrounded by wind turbines of the Smoky Hills Wind Project near Wilson, Kansas.
Companies like Siemens and Denmark's Vestas Wind Systems A/S are building facilities near planned wind farms in the Great Plains states to minimize transportation costs for the gargantuan equipment – blades larger than a 747 wingspan, nacelles the size of motor homes and towers as high as a football field is long.
The U.S. wind power market expanded dramatically in 2008, adding a record 8,500 megawatts of power generation, as well as factories and workers to produce the turbines. In the past six months, the credit markets have affected orders and growth in the wind turbine market. But the large turbine makers are still expanding and improving production capabilities in the U.S., expecting stimulus funds to eventually take effect.
Siemens says it plans to increase employment in its wind unit in the U.S. by 25% to 1,000 in the U.S., for a total of 5,500 worldwide.
"Vestas and GE were a little bit ahead of us. They started in the wind business a little bit earlier," said Randy Zwirn, President and CEO of Siemens Energy Inc., noting Siemens entered wind power in 2005 with the acquisition of a Danish firm. "We have had solid growth."
Write to Paul Glader at paul.glader@wsj.com
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