And other unintended consequences of strict fuel-economy standards.
By ROBERT E. GRADY
If something seems too good to be true, it usually is. Such is the case with President Barack Obama's proposed national fuel efficiency standards for cars and trucks and a new tailpipe standard for C02 emissions. The national press has uncritically reported that the new standards will make cars "cleaner." In fact, the rules could impose substantial costs in terms of urban air pollution and human life.
The standards are designed to reduce C02 emissions from cars, with the twin goals of addressing climate change and reducing dependence on imported energy. Carbon dioxide is, of course, ubiquitous and relatively harmless on an everyday basis. It is only its long-term buildup that scientists posit will cause temperature warming. What are not so harmless in the near term are the "criteria air pollutants" currently regulated under the Clean Air Act -- ground-level ozone (or smog), particulate matter, carbon monoxide, sulfur dioxide, nitrogen oxides and lead -- all of which have been shown by the Environmental Protection Agency's (EPA) own scientists to have an adverse effect on human health.
David Gothard
The great irony of Mr. Obama's fuel efficiency proposals is that they may worsen emissions of these harmful gases. By the White House's own calculation (which many observers believe to be quite conservative), the new rules, when combined with earlier proposed increases in Corporate Average Fuel Economy (CAFE) standards, will increase the average price of a new car by $1,300. Herein lies the problem.
In today's automobile fleet, the majority of the pollution comes from the oldest, dirtiest cars. In fact, the dirtiest 10% of the cars account for more than 50% of smog and carbon monoxide. The dirtiest one-third of the fleet accounts for more than 80% of the pollution. That is because the U.S. government has, for 39 years now under successive versions of the Clean Air Act, required automakers to meet ever-tightening standards for tailpipe emissions from new cars. When it comes to smog, carbon monoxide, nitrogen oxides and particulates that new SUV is a lot cleaner than an old, poorly-tuned compact.
The Clean Air Act's requirements have sent emissions in the right direction. According to the EPA, since 1980 annual emissions of carbon monoxide are down 52%, emissions of ozone are down 41%, and emissions of nitrogen dioxide are down 37%. (Emissions of lead are down 97% thanks to taking the lead out of gasoline in the early 1980s).
The Obama plan could slow this progress. An economic phenomenon called "price elasticity of demand" is well established when it comes to automobile purchases. In other words, if you raise the price of new cars, people will buy fewer of them or, at a minimum, put off the purchase for a year or so while they drive the old clunker for a few thousand more miles. And fewer new cars means more pollution, which can cause significant health problems. Yet environmentalists and the press have ignored this issue, so as not to inject a note of complexity or doubt into the chorus of glee that greeted the president's attack on greenhouse-gas emissions.
Last fall, however, both the press and the green community paid significant attention to a study conducted by researchers from California State University at Fullerton and Sonoma Technology Inc. The study showed that, from 2005-07, California's South Coast and San Joaquin Valley air basins experienced more than 100 days in which ozone levels exceeded the National Ambient Quality Standard. In each of those areas, more than 60% of the population was exposed to unhealthy levels of fine particulate matter.
The study concluded that if these areas had simply met the federal standard, these regions could have experienced 1,950 fewer new cases of adult-onset chronic bronchitis; 3,680 fewer premature deaths among those 30 and older; 141,370 fewer asthma attacks; almost 500,000 fewer lost days of work; and, importantly, avoided approximately $28 billion in total costs to the Southern California economy.
Clearly the health risks from fine particulates especially and also from smog are substantial. It is also true that many scientists and economists predict significant long-term costs associated with climate change. But the costs associated with excessive emissions of criteria air pollutants are immediate and observable.
The Obama fuel efficiency plan may also contribute to a significant increase in highway deaths as vehicles are required to quickly meet the new CAFE standard and will likely become lighter in weight as a result. According to a study completed in 2001 by the National Research Council (NRC), the last major increase in CAFE standards, mandated by the Energy Policy and Conservation Act of 1975, required about a 50% increase in fuel economy (to 27.5 mpg by model year 1985 from an average of 18 mpg in 1978). The NRC study concluded that the subsequent downsizing and down-weighting of vehicles, "while resulting in significant fuel savings, also resulted in a safety penalty." Specifically, the NRC estimated that in 1993 there were between 1,300 and 2,600 motor vehicle crash deaths that would not have occurred if cars were as heavy as they were in 1976.
The president now proposes a fuel economy increase of similar magnitude in an even quicker time frame -- to 39 mpg by model year 2016 from 27.5 mpg now. Given the time it takes for new technologies to be developed, tested and incorporated into new car models, it is likely that down-weighting of cars will be an important means of meeting the new standard. And one result again could be highway deaths that might otherwise not have occurred.
Well, one might argue, this would not be the case if everyone drove smaller cars. The NRC study considered this countervailing fact and included it in its estimates. But nearly half of all car crashes (more than 48% in the years studied) are one-vehicle crashes. Put another way: If your car hits a tree or a post or a bridge abutment, you are most certainly better off in a larger car.
None of this is intended to argue that Mr. Obama should not be attacking the problem of climate change. Indeed, some in Congress are proposing to cap carbon emissions and allow tons of carbon credits to be traded, which at least provides the flexibility for those who must comply to reduce emissions in whatever way they choose. Others are proposing an increase in gasoline or carbon taxes. Both of these approaches have their merits, although economic conservatives like me would point out that, in order not to damage the ailing economy, any increases in gasoline or carbon taxes should be matched by a cut of at least equal size in payroll taxes.
My point is simply this: Mr. Obama's proposed fuel efficiency and CO2 tailpipe regulations should be subjected to rigorous cost-benefit analysis, as all federal regulations should be. Those at EPA charged by statute with regulating air emissions, and those at the Office of Management and Budget charged with reviewing the implementing regulations, should carefully assess whether the benefits of the president's fuel efficiency and carbon proposals outweigh their very real costs.
Mr. Grady is managing director of the Carlyle Group in San Francisco and a former trustee of the Environmental Defense Fund. He was involved as a senior White House aide in drafting the Clean Air Act Amendments of 1990, and helped craft Gov. Arnold Schwarzenegger's Environmental Action Plan during his 2003 campaign.
Friday, 22 May 2009
Energy Groups Urge Faster U.S. Aid for Power, Pollution Projects
By STEPHEN POWER
WASHINGTON -- The Obama administration is coming under pressure from energy companies to speed up decisions on more than $100 billion of loan guarantees for projects intended to boost the use of renewable power and reduce pollution.
Nearly four years after Congress passed legislation authorizing the Department of Energy to guarantee loans for projects that "avoid, reduce or sequester air pollutants or greenhouse gas emissions," the agency has so far guaranteed only one loan, to a California-based solar-energy company, on a provisional basis.
The agency also has yet to adopt regulations governing that loan-guarantee program, as well as another program -- called for under economic-stimulus legislation passed by Congress in February -- that is intended to aid renewable-energy projects such as wind and solar power.
In a letter to President Barack Obama dated Tuesday, the heads of seven trade groups representing power companies claim that "disagreements" between the Energy Department and the White House Office of Management and Budget have held up the adoption of the regulations, which in turn have held up decisions on whether to guarantee more than $100 billion of loans to companies that want to build nuclear reactors, wind and solar projects, advanced coal-fired power plants and other ventures.
The groups -- which include the Nuclear Energy Institute, the Solar Energy Industries Association, the American Wind Energy Association and the National Hydropower Association -- said in the letter they have "little confidence" that talks between the agencies "will produce a satisfactory result in a timely manner."
A spokesman for the Office of Management and Budget didn't respond to a request Thursday for comment.
Energy Department spokeswoman Stephanie Mueller said the two agencies are working together to expedite loan guarantees while "continuing to assess whether changes in the proposed regulations are needed to improve the process."
Earlier this week, Energy Secretary Steven Chu told a Senate panel that his department would "within the next couple of weeks to a month" announce the awarding of additional loan guarantees under the program created by Congress in 2005.
Write to Stephen Power at stephen.power@wsj.com
WASHINGTON -- The Obama administration is coming under pressure from energy companies to speed up decisions on more than $100 billion of loan guarantees for projects intended to boost the use of renewable power and reduce pollution.
Nearly four years after Congress passed legislation authorizing the Department of Energy to guarantee loans for projects that "avoid, reduce or sequester air pollutants or greenhouse gas emissions," the agency has so far guaranteed only one loan, to a California-based solar-energy company, on a provisional basis.
The agency also has yet to adopt regulations governing that loan-guarantee program, as well as another program -- called for under economic-stimulus legislation passed by Congress in February -- that is intended to aid renewable-energy projects such as wind and solar power.
In a letter to President Barack Obama dated Tuesday, the heads of seven trade groups representing power companies claim that "disagreements" between the Energy Department and the White House Office of Management and Budget have held up the adoption of the regulations, which in turn have held up decisions on whether to guarantee more than $100 billion of loans to companies that want to build nuclear reactors, wind and solar projects, advanced coal-fired power plants and other ventures.
The groups -- which include the Nuclear Energy Institute, the Solar Energy Industries Association, the American Wind Energy Association and the National Hydropower Association -- said in the letter they have "little confidence" that talks between the agencies "will produce a satisfactory result in a timely manner."
A spokesman for the Office of Management and Budget didn't respond to a request Thursday for comment.
Energy Department spokeswoman Stephanie Mueller said the two agencies are working together to expedite loan guarantees while "continuing to assess whether changes in the proposed regulations are needed to improve the process."
Earlier this week, Energy Secretary Steven Chu told a Senate panel that his department would "within the next couple of weeks to a month" announce the awarding of additional loan guarantees under the program created by Congress in 2005.
Write to Stephen Power at stephen.power@wsj.com
Deutsche Bank Transfers Tech Team to Renewables
By VIVEK AHUJA and RADI KHASAWNEH
Deutsche Bank AG has transferred its European technology-coverage team into a new, broader renewable-energy unit in the latest example of banks in Europe basing their business on the biggest, most lucrative sectors in response to the downturn.
Charles Bryant, previously a managing director in the technology group, has taken the new title of global head of renewable energy, a Deutsche spokeswoman confirmed. The new renewables team will cover the previous technology group's clients, as well as other companies across the renewable energy sector such as solar energy companies, many of which rely heavily on technology.
Thierry Monjauze, previously a director in the European technology group at Deutsche Bank, left the bank last month, according to the Financial Services Authority's register of authorized individuals.
Mr. Monjauze, who has 15 years' experience in the technology-banking industry, declined to comment on the reasons for his departure, adding that he is considering his next move.
A person familiar with the changes said the moves come as Deutsche Bank focuses more on covering companies with large stock-market capitalizations rather than covering companies across the large-, mid- and small-cap spectrum.
Mr. Monjauze becomes the latest senior technology banker to leave or change role in the past year. Karl Will, global head of tech M&A at J.P. Morgan, resigned in March, while Jean Tardy-Joubert quit as head of technology investment banking for Europe, the Middle East and Africa at Merrill Lynch in January. Late last year, Mark Fisher was named head of European tech investment banking at Jefferies after resigning from a similar role at Citigroup in June.
Separately, one of Deutsche Bank's top European financial credit derivatives traders has left to join Goldman Sachs Group Inc.
Mark Tanase, a senior European financial bond credit default swaps trader at Deutsche in London has left the bank. The bank isn't expected to replace Mr. Tanase, who has been in that role since November 2007.
Mr. Tanase is set to join Goldman Sachs in a similar role, according to a person familiar with the matter. Deutsche Bank and Goldman Sachs both declined to comment.
From Financial News at www.efinancialnews.com.
Write to Radi Khasawneh at radi.khasawneh@dowjones.com
Deutsche Bank AG has transferred its European technology-coverage team into a new, broader renewable-energy unit in the latest example of banks in Europe basing their business on the biggest, most lucrative sectors in response to the downturn.
Charles Bryant, previously a managing director in the technology group, has taken the new title of global head of renewable energy, a Deutsche spokeswoman confirmed. The new renewables team will cover the previous technology group's clients, as well as other companies across the renewable energy sector such as solar energy companies, many of which rely heavily on technology.
Thierry Monjauze, previously a director in the European technology group at Deutsche Bank, left the bank last month, according to the Financial Services Authority's register of authorized individuals.
Mr. Monjauze, who has 15 years' experience in the technology-banking industry, declined to comment on the reasons for his departure, adding that he is considering his next move.
A person familiar with the changes said the moves come as Deutsche Bank focuses more on covering companies with large stock-market capitalizations rather than covering companies across the large-, mid- and small-cap spectrum.
Mr. Monjauze becomes the latest senior technology banker to leave or change role in the past year. Karl Will, global head of tech M&A at J.P. Morgan, resigned in March, while Jean Tardy-Joubert quit as head of technology investment banking for Europe, the Middle East and Africa at Merrill Lynch in January. Late last year, Mark Fisher was named head of European tech investment banking at Jefferies after resigning from a similar role at Citigroup in June.
Separately, one of Deutsche Bank's top European financial credit derivatives traders has left to join Goldman Sachs Group Inc.
Mark Tanase, a senior European financial bond credit default swaps trader at Deutsche in London has left the bank. The bank isn't expected to replace Mr. Tanase, who has been in that role since November 2007.
Mr. Tanase is set to join Goldman Sachs in a similar role, according to a person familiar with the matter. Deutsche Bank and Goldman Sachs both declined to comment.
From Financial News at www.efinancialnews.com.
Write to Radi Khasawneh at radi.khasawneh@dowjones.com
Scottish & Southern Energy seeks wind farm funding
Terry Macalister
guardian.co.uk, Thursday 21 May 2009 18.19 BST
Scottish & Southern Energy is in talks with the European Bank of Investment to raise funds for new wind projects in Britain while also admitting it might make a bid for parts of the electricity distribution network and is still interested in possible nuclear sites.
"We need to finance some of our future capital expenditure. We are in discussions with the EIB on that and are hopeful to reach a successful conclusion," said the chief executive, Ian Marchant.
He added that it was hard to predict whether household gas and electricity bills would rise or fall over the longer term, but pledged not to raise prices for 18 months.
"We are seeing quite low spot prices [of wholesale gas], which could imply retail prices should come down, but we are also seeing high forward prices – suggesting bills could go up," he said. Marchant was speaking as SSE announced a massive drop in pre-tax profits to £53.3m from £1.08bn last year due to a range of one-off items and accounting changes. Profit before exceptional items and certain re-measurements grew to £1.21bn, up from £1.18bn in the previous year.
guardian.co.uk, Thursday 21 May 2009 18.19 BST
Scottish & Southern Energy is in talks with the European Bank of Investment to raise funds for new wind projects in Britain while also admitting it might make a bid for parts of the electricity distribution network and is still interested in possible nuclear sites.
"We need to finance some of our future capital expenditure. We are in discussions with the EIB on that and are hopeful to reach a successful conclusion," said the chief executive, Ian Marchant.
He added that it was hard to predict whether household gas and electricity bills would rise or fall over the longer term, but pledged not to raise prices for 18 months.
"We are seeing quite low spot prices [of wholesale gas], which could imply retail prices should come down, but we are also seeing high forward prices – suggesting bills could go up," he said. Marchant was speaking as SSE announced a massive drop in pre-tax profits to £53.3m from £1.08bn last year due to a range of one-off items and accounting changes. Profit before exceptional items and certain re-measurements grew to £1.21bn, up from £1.18bn in the previous year.
Nuns arrive at eco-convent and leave behind high-carbon habit
Move sees convent swap fuel-hungry abbey for new home with solar panels, grass-covered roof and reedbed sewage system
Alok Jha
guardian.co.uk, Thursday 21 May 2009 16.48 BST
It is not often that the Benedictine nuns of the Conventus of Our Lady of Consolation leave their monastery. It is even rarer for them to move monasteries entirely.
But today, the nuns left their Worcestershire home of 171 years to take possession of their new residence in the North York Moors national park – a new building that they insisted must remain as environmentally-friendly as possible as they lead their quiet life of prayer.
Among the £4.7 million building's green features are solar panels to provide hot water, a woodchip boiler that will be fuelled by locally-sourced trees and a roof covered in sedum grass to better insulate the buildings and attract local wildlife.
Rainwater from some of the roofs will be collected and used to flush the toilets and, instead of an electrically-driven waste water treatment plant, the architects have installed a reedbed sewage system. The effluent from the monastery will filter through the reedbed and, after it is processed through natural anaerobic digestion, the resulting water will trickle out onto the surrounding land.
And the basic materials for the building – everything from timber to stone – have been sourced as locally as possible.
"A lot of building projects start out with all these environmental features and, by the value engineering stage, usually you've lost quite a few of them," said project architect Gill Smith of Feilden Clegg Bradley Studios, winners of the 2008 Stirling Prize. "The nuns have been remarkably good at sticking with their principles and not letting them drift as other clients tend to do. The list they've ended up with is quite impressive."
The nuns moved from the Victorian splendour of Stanbrook Abbey in rural Worcestershire because, according to abbess Dame Andrea Savage, manual labour was overtaking monasticism at the site. "We're running a big building, spending thousands of pounds that we don't have on looking after the place and heating it with oil and gas, which isn't good for the environment," she said last year. "We're here for the monastic life and it is being impinged upon."
The new monastery will give its new inhabitants broadband-ready bedrooms for up to 30 nuns, plus a church, library and other ancillary buildings. There is also space for up to 15 guests.
Smith said the project had been a learning process for the nuns and the architects. "For them it was thinking about buildings in the way we think about them, and for us it was getting to grips with the monastic life. The building is their whole world, they're there 24 hours a day all their lives and there's no other building [we have built] that has to meet that challenge. You have to provide everything they could want in life, which is hard. You really want to create a variety of different worlds within it."
Alok Jha
guardian.co.uk, Thursday 21 May 2009 16.48 BST
It is not often that the Benedictine nuns of the Conventus of Our Lady of Consolation leave their monastery. It is even rarer for them to move monasteries entirely.
But today, the nuns left their Worcestershire home of 171 years to take possession of their new residence in the North York Moors national park – a new building that they insisted must remain as environmentally-friendly as possible as they lead their quiet life of prayer.
Among the £4.7 million building's green features are solar panels to provide hot water, a woodchip boiler that will be fuelled by locally-sourced trees and a roof covered in sedum grass to better insulate the buildings and attract local wildlife.
Rainwater from some of the roofs will be collected and used to flush the toilets and, instead of an electrically-driven waste water treatment plant, the architects have installed a reedbed sewage system. The effluent from the monastery will filter through the reedbed and, after it is processed through natural anaerobic digestion, the resulting water will trickle out onto the surrounding land.
And the basic materials for the building – everything from timber to stone – have been sourced as locally as possible.
"A lot of building projects start out with all these environmental features and, by the value engineering stage, usually you've lost quite a few of them," said project architect Gill Smith of Feilden Clegg Bradley Studios, winners of the 2008 Stirling Prize. "The nuns have been remarkably good at sticking with their principles and not letting them drift as other clients tend to do. The list they've ended up with is quite impressive."
The nuns moved from the Victorian splendour of Stanbrook Abbey in rural Worcestershire because, according to abbess Dame Andrea Savage, manual labour was overtaking monasticism at the site. "We're running a big building, spending thousands of pounds that we don't have on looking after the place and heating it with oil and gas, which isn't good for the environment," she said last year. "We're here for the monastic life and it is being impinged upon."
The new monastery will give its new inhabitants broadband-ready bedrooms for up to 30 nuns, plus a church, library and other ancillary buildings. There is also space for up to 15 guests.
Smith said the project had been a learning process for the nuns and the architects. "For them it was thinking about buildings in the way we think about them, and for us it was getting to grips with the monastic life. The building is their whole world, they're there 24 hours a day all their lives and there's no other building [we have built] that has to meet that challenge. You have to provide everything they could want in life, which is hard. You really want to create a variety of different worlds within it."
It is not hypocritical to fly if I'm campaigning for the environment
There's no way I could raise millions for the rainforest if I only travelled by boat or train
Trudie Styler
guardian.co.uk, Thursday 21 May 2009 22.38 BST
Given the Guardian's reputation for a positive stance on the environment, I was angered and saddened by the cheap and scathing tone of your "Lost in showbiz" article about me (Trudie Styler: saving the world one private jet flight at a time, 15 May).
It sought to demolish my credibility as an environmental campaigner by laying charges of hypocrisy against my readily admitted occasional use of private aviation fuel as well as many (less reported) flights on scheduled commercial flights. The article's gripe extended to a sour attempt to create some sort of faux class envy around me in seeking to "focus … on madam's most cherished public pose: that of eco warrior".
The piece turned on the curious assertion that "Trudie's lifestyle compromises her environmental message so fatally that she can only be a big oil double agent created … with the sole aim of undermining an important message with her rank hypocrisy". Ironically the publication of this article, with its unsustainable attack on my integrity, actually casts the Guardian in the role of double agent. You have given succour to what I would have assumed was a mutual foe, the Chevron oil company.
For many years much of my work as an environmental campaigner has focused on exposing the devastation caused to large parts of Ecuador by Chevron during its exploitation of drilling rights. The recent documentary, Crude, in which I played a substantial role, has effectively concentrated global opposition to Chevron's continued refusal to make proper recompense for damage to thousands of lives.
Your article will be invaluable to those working on behalf of Chevron who seek to undermine this 14-year campaign through attacking my reputation.
Of course I use aeroplanes. Even the most dogmatic and dictatorial advocates of environmental reform would be hard pressed to suggest that Ecuador (and, yes, Washington) are practical places to reach by wagon train or boat.
Each year I fly thousands of miles to campaign for environmental change. It would have been inconceivable to raise tens of millions of pounds for the Rainforest Foundation – which protects the forests and their indigenous people and of which I was a joint founder 21 years ago – on horseback. It would have been similarly impracticable to have served as a global Unicef ambassador on a bicycle.
I am fortunate to receive occasional access to world leaders and those who can influence and implement environmental change. Hence trips to affluent world capitals as well as lands laid waste by the environmental vandals.
The Global Canopy Programme, an alliance of leading scientists, says one day's deforestation equates to the carbon footprint of 8 million people flying from London to New York. According to Nicholas Stern, over the next four years alone the destruction of forests in the Amazon, the Congo basin and Indonesia will pump more CO2 into the atmosphere than every flight in the history of aviation to 2025.
Being criticised for devoting large amounts of my time and our (earned) money to a cause which offends so many vested interests is an occupational hazard. But to be so undermined by the Guardian, albeit on its showbiz pages, feels like being hit by a particularly vicious burst of friendly fire.
Trudie Styler is co-founder of the Rainforest Foundation and a Unicef global ambassador
Trudie Styler
guardian.co.uk, Thursday 21 May 2009 22.38 BST
Given the Guardian's reputation for a positive stance on the environment, I was angered and saddened by the cheap and scathing tone of your "Lost in showbiz" article about me (Trudie Styler: saving the world one private jet flight at a time, 15 May).
It sought to demolish my credibility as an environmental campaigner by laying charges of hypocrisy against my readily admitted occasional use of private aviation fuel as well as many (less reported) flights on scheduled commercial flights. The article's gripe extended to a sour attempt to create some sort of faux class envy around me in seeking to "focus … on madam's most cherished public pose: that of eco warrior".
The piece turned on the curious assertion that "Trudie's lifestyle compromises her environmental message so fatally that she can only be a big oil double agent created … with the sole aim of undermining an important message with her rank hypocrisy". Ironically the publication of this article, with its unsustainable attack on my integrity, actually casts the Guardian in the role of double agent. You have given succour to what I would have assumed was a mutual foe, the Chevron oil company.
For many years much of my work as an environmental campaigner has focused on exposing the devastation caused to large parts of Ecuador by Chevron during its exploitation of drilling rights. The recent documentary, Crude, in which I played a substantial role, has effectively concentrated global opposition to Chevron's continued refusal to make proper recompense for damage to thousands of lives.
Your article will be invaluable to those working on behalf of Chevron who seek to undermine this 14-year campaign through attacking my reputation.
Of course I use aeroplanes. Even the most dogmatic and dictatorial advocates of environmental reform would be hard pressed to suggest that Ecuador (and, yes, Washington) are practical places to reach by wagon train or boat.
Each year I fly thousands of miles to campaign for environmental change. It would have been inconceivable to raise tens of millions of pounds for the Rainforest Foundation – which protects the forests and their indigenous people and of which I was a joint founder 21 years ago – on horseback. It would have been similarly impracticable to have served as a global Unicef ambassador on a bicycle.
I am fortunate to receive occasional access to world leaders and those who can influence and implement environmental change. Hence trips to affluent world capitals as well as lands laid waste by the environmental vandals.
The Global Canopy Programme, an alliance of leading scientists, says one day's deforestation equates to the carbon footprint of 8 million people flying from London to New York. According to Nicholas Stern, over the next four years alone the destruction of forests in the Amazon, the Congo basin and Indonesia will pump more CO2 into the atmosphere than every flight in the history of aviation to 2025.
Being criticised for devoting large amounts of my time and our (earned) money to a cause which offends so many vested interests is an occupational hazard. But to be so undermined by the Guardian, albeit on its showbiz pages, feels like being hit by a particularly vicious burst of friendly fire.
Trudie Styler is co-founder of the Rainforest Foundation and a Unicef global ambassador
Obama's Fuel Rules Risk Complicating Car Rescue
By NEIL KING JR.
WASHINGTON -- The Obama administration's push to boost fuel-efficiency standards could complicate its bid to revive two of the country's largest auto makers, making the task both riskier and more costly.
Under a plan announced this week, the administration intends to impose rules mandating that U.S. car makers raise overall fuel economy to 35.5 miles per gallon by 2016, up from about 25 mpg.
The Obama administration's push to ramp up fuel economy standards for all American cars and trucks could complicate its multi-billion-dollar effort to remake General Motors and Chrysler. WSJ reporter Neil King explains.
Pulling that off could be particularly hard for General Motors Corp. and Chrysler LLC, the two companies the administration is trying to save. Both have for years drawn most of their profits from large sport-utility vehicles and pickup trucks, while having less success marketing the sort of cars envisioned under the stricter efficiency rules.
In the short term, GM and Chrysler need to generate cash flow by building and selling many more of the comparatively fuel-thirsty vehicles -- pickups such as the Chevrolet Silverado and Dodge Ram, and family haulers such as the Chrysler minivan and Chevrolet Traverse.
GM warned last month in a government filing that the tightened standards -- then meant to take effect in 2020, instead of 2016 -- could significantly disrupt its operations, leading it to cut sales of its more profitable models and ramp up production of hybrid and electric cars.
GM said in the same filing that complying with the new standards would cost the U.S. auto industry at least $100 billion.
Obama aides say there is no conflict between the administration's dual role as both a major investor in GM and Chrysler, and a regulator of the industry.
Retooling to meet the new standards will be expensive, Obama aides acknowledge. The Energy Department plans to grant $25 billion in loan guarantees to support more-efficient cars. The climate bill now in the House would double that amount to $50 billion, a provision the White House supports.
The White House insists that the more-efficient technologies will add no more than $1,300 to the price of a car by 2016. Analysts at the auto research firm Edmunds.com dispute that math, pointing out that within similar models today, an extra 10 miles per gallon in added mileage can add well over $2,200 to the price.
The same analysts also pointed out Thursday that a discrepancy exists between the fuel-efficiency numbers put out by the administration -- known as the corporate average fuel economy, or CAFE -- and the numbers issued by the Environmental Protection Agency. The difference could be confusing for consumers as they try to figure out whether new models meet the government's aspirations.
Under the CAFE numbers, car fleets are supposed to average 39 mpg in 2016. But that is comparable to 29 mpg under the EPA figures consumers will find on the stickers affixed to new models.
Write to Neil King Jr. at neil.king@wsj.com
WASHINGTON -- The Obama administration's push to boost fuel-efficiency standards could complicate its bid to revive two of the country's largest auto makers, making the task both riskier and more costly.
Under a plan announced this week, the administration intends to impose rules mandating that U.S. car makers raise overall fuel economy to 35.5 miles per gallon by 2016, up from about 25 mpg.
The Obama administration's push to ramp up fuel economy standards for all American cars and trucks could complicate its multi-billion-dollar effort to remake General Motors and Chrysler. WSJ reporter Neil King explains.
Pulling that off could be particularly hard for General Motors Corp. and Chrysler LLC, the two companies the administration is trying to save. Both have for years drawn most of their profits from large sport-utility vehicles and pickup trucks, while having less success marketing the sort of cars envisioned under the stricter efficiency rules.
In the short term, GM and Chrysler need to generate cash flow by building and selling many more of the comparatively fuel-thirsty vehicles -- pickups such as the Chevrolet Silverado and Dodge Ram, and family haulers such as the Chrysler minivan and Chevrolet Traverse.
GM warned last month in a government filing that the tightened standards -- then meant to take effect in 2020, instead of 2016 -- could significantly disrupt its operations, leading it to cut sales of its more profitable models and ramp up production of hybrid and electric cars.
GM said in the same filing that complying with the new standards would cost the U.S. auto industry at least $100 billion.
Obama aides say there is no conflict between the administration's dual role as both a major investor in GM and Chrysler, and a regulator of the industry.
Retooling to meet the new standards will be expensive, Obama aides acknowledge. The Energy Department plans to grant $25 billion in loan guarantees to support more-efficient cars. The climate bill now in the House would double that amount to $50 billion, a provision the White House supports.
The White House insists that the more-efficient technologies will add no more than $1,300 to the price of a car by 2016. Analysts at the auto research firm Edmunds.com dispute that math, pointing out that within similar models today, an extra 10 miles per gallon in added mileage can add well over $2,200 to the price.
The same analysts also pointed out Thursday that a discrepancy exists between the fuel-efficiency numbers put out by the administration -- known as the corporate average fuel economy, or CAFE -- and the numbers issued by the Environmental Protection Agency. The difference could be confusing for consumers as they try to figure out whether new models meet the government's aspirations.
Under the CAFE numbers, car fleets are supposed to average 39 mpg in 2016. But that is comparable to 29 mpg under the EPA figures consumers will find on the stickers affixed to new models.
Write to Neil King Jr. at neil.king@wsj.com
House Panel Clears Plan to Cut Greenhouse Gases
U.S. Bill Moves a Step Closer, but a Global Deal on Climate Change Presents a Bigger Challenge for Obama Administration
By IAN TALLEY and STEPHEN POWER
WASHINGTON -- A landmark proposal to curb U.S. greenhouse-gas emissions cleared a key congressional panel, bolstering prospects that the government will put a price on carbon for the first time and portending a major shift in how the U.S. uses energy.
At the same time, China's government asserted a new, tougher stance in the face of pressure to cut its emissions, underscoring the challenge that the Obama administration will face in trying to forge a global deal to combat climate change.
The U.S. proposal -- which aims to cut emissions roughly 17% below 2005 levels by 2020, and roughly 80% by midcentury -- won approval from the House Energy and Commerce Committee on a vote of 33-25 that fell largely along partisan lines. It followed weeks of negotiations between liberal and moderate Democrats over how to soften the measure's impact on consumers and various sectors of the economy. If enacted, it could transform the way the U.S. manufactures a range of products, heats offices and builds homes.
"We are now one step closer to delivering on the promise of a new clean energy economy that will make America less dependent on foreign oil, crack down on polluters, and create millions of new jobs all across America," President Barack Obama said in a statement within minutes of the vote.
The measure, sponsored by Reps. Henry Waxman (D., Calif.) and Edward Markey (D., Mass.), still faces significant hurdles, particularly in the Senate, where a similar proposal failed last year. But the committee's action gives the measure a major boost in both chambers of Congress, because the panel is among the largest and most ideologically and geographically diverse in Congress, with members from Rust Belt, oil patch, farm and coastal states.
The bill proposes a cap-and-trade system, in which the government would set caps on emissions, issue permits allowing companies to pollute consistent with those limits, and let companies trade the permits among themselves. Initially, 85% of permits would be given away free, with the bulk of them going to utilities, auto makers, oil refiners, and trade-sensitive industries. The rest would be auctioned off, at a minimum initial price of $10 per ton of emissions.
The measure also contains a mechanism aimed at holding down the maximum price of permits, by allowing the government to issue a limited number of additional permits once the price hits $28 in the first year of the program.
The legislation also would require utilities to obtain a chunk of their electricity from renewable sources -- 6% by 2012 and 20% by 2020, though utilities could claim credit for energy efficiency to offset part of that requirement.
Republicans and some business groups, such as the U.S. Chamber of Commerce, have assailed the bill as a measure that would cripple the U.S. economy and impose costly mandates on a range of products, including hot tubs. As evidence that the bill would cause job losses, they highlighted a provision in the measure that would entitle any worker "adversely affected" by the legislation to a "climate change adjustment allowance." They also offered amendments that would have canceled the cap-and-trade program if power prices doubled, gas prices hit $5 a gallon or thousands of mining or steel jobs were lost as a result of the climate program.
But the Republicans' proposals failed, as Democrats trumpeted a list of companies that they said have expressed support for carbon caps, including Duke Energy Corp., Royal Dutch Shell PLC, Alcoa Inc., U.S. Steel Corp., Dow Chemical Co., Deere & Co. and Exelon Corp. Many companies say they now see carbon controls as inevitable and would like regulatory certainty.
The Chinese proposal, which asks for much deeper cuts than the Waxman-Markey bill is proposing, highlights one of the challenges facing the Obama administration and other supporters of more aggressive U.S. action to reduce greenhouse gases. Many U.S. lawmakers worry that U.S. businesses could suffer if they are subject to carbon caps that add costs to their operations and their Chinese rivals aren't. In response, some have proposed imposing tariffs on goods imported from countries that don't have strong greenhouse-gas controls. China has resisted any mandatory quotas on carbon emissions, and has said that such tariffs would violate international trade law.
Write to Ian Talley at ian.talley@dowjones.com and Stephen Power at stephen.power@wsj.com
By IAN TALLEY and STEPHEN POWER
WASHINGTON -- A landmark proposal to curb U.S. greenhouse-gas emissions cleared a key congressional panel, bolstering prospects that the government will put a price on carbon for the first time and portending a major shift in how the U.S. uses energy.
At the same time, China's government asserted a new, tougher stance in the face of pressure to cut its emissions, underscoring the challenge that the Obama administration will face in trying to forge a global deal to combat climate change.
The U.S. proposal -- which aims to cut emissions roughly 17% below 2005 levels by 2020, and roughly 80% by midcentury -- won approval from the House Energy and Commerce Committee on a vote of 33-25 that fell largely along partisan lines. It followed weeks of negotiations between liberal and moderate Democrats over how to soften the measure's impact on consumers and various sectors of the economy. If enacted, it could transform the way the U.S. manufactures a range of products, heats offices and builds homes.
"We are now one step closer to delivering on the promise of a new clean energy economy that will make America less dependent on foreign oil, crack down on polluters, and create millions of new jobs all across America," President Barack Obama said in a statement within minutes of the vote.
The measure, sponsored by Reps. Henry Waxman (D., Calif.) and Edward Markey (D., Mass.), still faces significant hurdles, particularly in the Senate, where a similar proposal failed last year. But the committee's action gives the measure a major boost in both chambers of Congress, because the panel is among the largest and most ideologically and geographically diverse in Congress, with members from Rust Belt, oil patch, farm and coastal states.
The bill proposes a cap-and-trade system, in which the government would set caps on emissions, issue permits allowing companies to pollute consistent with those limits, and let companies trade the permits among themselves. Initially, 85% of permits would be given away free, with the bulk of them going to utilities, auto makers, oil refiners, and trade-sensitive industries. The rest would be auctioned off, at a minimum initial price of $10 per ton of emissions.
The measure also contains a mechanism aimed at holding down the maximum price of permits, by allowing the government to issue a limited number of additional permits once the price hits $28 in the first year of the program.
The legislation also would require utilities to obtain a chunk of their electricity from renewable sources -- 6% by 2012 and 20% by 2020, though utilities could claim credit for energy efficiency to offset part of that requirement.
Republicans and some business groups, such as the U.S. Chamber of Commerce, have assailed the bill as a measure that would cripple the U.S. economy and impose costly mandates on a range of products, including hot tubs. As evidence that the bill would cause job losses, they highlighted a provision in the measure that would entitle any worker "adversely affected" by the legislation to a "climate change adjustment allowance." They also offered amendments that would have canceled the cap-and-trade program if power prices doubled, gas prices hit $5 a gallon or thousands of mining or steel jobs were lost as a result of the climate program.
But the Republicans' proposals failed, as Democrats trumpeted a list of companies that they said have expressed support for carbon caps, including Duke Energy Corp., Royal Dutch Shell PLC, Alcoa Inc., U.S. Steel Corp., Dow Chemical Co., Deere & Co. and Exelon Corp. Many companies say they now see carbon controls as inevitable and would like regulatory certainty.
The Chinese proposal, which asks for much deeper cuts than the Waxman-Markey bill is proposing, highlights one of the challenges facing the Obama administration and other supporters of more aggressive U.S. action to reduce greenhouse gases. Many U.S. lawmakers worry that U.S. businesses could suffer if they are subject to carbon caps that add costs to their operations and their Chinese rivals aren't. In response, some have proposed imposing tariffs on goods imported from countries that don't have strong greenhouse-gas controls. China has resisted any mandatory quotas on carbon emissions, and has said that such tariffs would violate international trade law.
Write to Ian Talley at ian.talley@dowjones.com and Stephen Power at stephen.power@wsj.com
China strikes tough pose for climate talks
By Jamil Anderlini in Beijing
Published: May 21 2009 11:11
China adopted a hard line on Thursday ahead of climate change negotiations, calling on rich countries to cut greenhouse gas emissions 40 per cent by 2020 from 1990 levels and help pay for reduction schemes in poorer countries.
Beijing reiterated its belief that developing countries, including China, should curb their emissions on a purely voluntary basis, and only if the curbs “accord with their national situations and sustainable development strategies”.
China also demanded that developed countries be legally bound to give at least 0.5-1.0 per cent of their annual economic worth to help poorer countries, including China, to cut their greenhouse gas emissions and cope with global warming
Although it only spells out China’s initial bargaining position, the strident stance will encourage other developing nations to take tougher positions.
It will not be welcomed in Washington and Brussels, where policymakers yesterday made tackling climate change a central theme in bilateral discussions with Beijing.
China’s proposals are one of a series of demands made by developing countries as part of this year’s crucial climate change talks.
Formal negotiations begin officially on June 1 in Bonn, with three or more meetings to follow before the final summit in Copenhagen in December to forge a successor to the Kyoto protocol.
Other developing nations have asked for higher percentages of the rich world’s GDP to be transferred to poorer countries, and have demanded emissions cuts of up to 80 per cent by 2020 from certain rich nations.
Officials in Europe and the US privately dismissed the Chinese demands as posturing. “They’re hoping that if you ask for 1 per cent, you may get a small fraction of a per cent,” said one.
They said China had taken a more helpful stance at the negotiating table, for instance by discussing the many measures the Chinese government has taken and promised to take on improving energy efficiency and expanding renewable energy.
Rich countries accept that China, India and other emerging economies will not agree to absolute cuts in their emissions in the medium term. But before they agree to finance packages to help poor countries tackle global warming, they want commitments from those countries to curb their emissions so that they do not rise to the levels they would reach under “business as usual”.
China’s unwillingness to offer any early concessions could signal a tough road ahead for policymakers who were hoping progress on this issue could lead to breakthroughs on other topics of contention, such as trade, human rights and the military buildup in Asia.
Beijing is also very resistant to the idea of differentiation between developing countries, despite the obvious incongruity of categorising an industrial giant such as China - which has recently overtaken the US as the world’s biggest emitter of greenhouse gases - with countries such as Angola when it comes to emissions.
“China’s pronouncements have been pretty strident but I wouldn’t read them as an attempt to torpedo the whole process,” said Leo Horn-Phathanothai, vice chairman of the China Carbon Forum. “There’s room for movement, negotiation and even big policy shifts but it depends on what the US and EU are able to offer.”
The Chinese government estimates it would need to spend Rmb1,000bn ($146bn) per year to limit the country’s greenhouse gas emissions.
It hopes developed countries will foot some of the bill and agree to share green technology.
Copyright The Financial Times Limited 2009
Published: May 21 2009 11:11
China adopted a hard line on Thursday ahead of climate change negotiations, calling on rich countries to cut greenhouse gas emissions 40 per cent by 2020 from 1990 levels and help pay for reduction schemes in poorer countries.
Beijing reiterated its belief that developing countries, including China, should curb their emissions on a purely voluntary basis, and only if the curbs “accord with their national situations and sustainable development strategies”.
China also demanded that developed countries be legally bound to give at least 0.5-1.0 per cent of their annual economic worth to help poorer countries, including China, to cut their greenhouse gas emissions and cope with global warming
Although it only spells out China’s initial bargaining position, the strident stance will encourage other developing nations to take tougher positions.
It will not be welcomed in Washington and Brussels, where policymakers yesterday made tackling climate change a central theme in bilateral discussions with Beijing.
China’s proposals are one of a series of demands made by developing countries as part of this year’s crucial climate change talks.
Formal negotiations begin officially on June 1 in Bonn, with three or more meetings to follow before the final summit in Copenhagen in December to forge a successor to the Kyoto protocol.
Other developing nations have asked for higher percentages of the rich world’s GDP to be transferred to poorer countries, and have demanded emissions cuts of up to 80 per cent by 2020 from certain rich nations.
Officials in Europe and the US privately dismissed the Chinese demands as posturing. “They’re hoping that if you ask for 1 per cent, you may get a small fraction of a per cent,” said one.
They said China had taken a more helpful stance at the negotiating table, for instance by discussing the many measures the Chinese government has taken and promised to take on improving energy efficiency and expanding renewable energy.
Rich countries accept that China, India and other emerging economies will not agree to absolute cuts in their emissions in the medium term. But before they agree to finance packages to help poor countries tackle global warming, they want commitments from those countries to curb their emissions so that they do not rise to the levels they would reach under “business as usual”.
China’s unwillingness to offer any early concessions could signal a tough road ahead for policymakers who were hoping progress on this issue could lead to breakthroughs on other topics of contention, such as trade, human rights and the military buildup in Asia.
Beijing is also very resistant to the idea of differentiation between developing countries, despite the obvious incongruity of categorising an industrial giant such as China - which has recently overtaken the US as the world’s biggest emitter of greenhouse gases - with countries such as Angola when it comes to emissions.
“China’s pronouncements have been pretty strident but I wouldn’t read them as an attempt to torpedo the whole process,” said Leo Horn-Phathanothai, vice chairman of the China Carbon Forum. “There’s room for movement, negotiation and even big policy shifts but it depends on what the US and EU are able to offer.”
The Chinese government estimates it would need to spend Rmb1,000bn ($146bn) per year to limit the country’s greenhouse gas emissions.
It hopes developed countries will foot some of the bill and agree to share green technology.
Copyright The Financial Times Limited 2009
China Looks for Big Cuts in Emissions
China, in a new document outlining its stance ahead of December climate talks in Copenhagen, says it wants developed nations to cut their greenhouse-gas emissions by at least 40% by 2020 from 1990 levels. But that is a far more aggressive cut than the level proposed in the U.S.'s Waxman-Markey bill. Europe, in turn, has pledged to cut emissions by at least 20% by 2020 from 1990 levels, and by 30% if other advanced economies follow suit.
The divergent views come as negotiations begin in earnest for a successor to the Kyoto Protocol, which expires at the end of 2012. China's 40% target represents the high end of cuts in emissions mentioned in the 2007 Bali road map, which stopped short of endorsing a specific target.
China is also asking rich countries to donate at least 0.5% to 1% of annual gross domestic product to help poorer countries cope with climate change and greenhouse-gas emissions, it said in the document, which was posted on the Web site of the National Development and Reform Commission, its economic policy-making body.
China has resisted any mandatory quotas on carbon emissions. The country is widely considered to have surpassed the U.S. as the world's top polluter.
But the Obama administration's push to adopt limits on carbon emissions is also isolating China, which has argued that the U.S. should take steps before poorer nations do.
India has also refused to accept any carbon caps, arguing like China that they would limit economic growth and unfairly penalize late-developing nations. Europe and the U.S. generated the bulk of the carbon gas already in the atmosphere, they argue, and should bear a greater burden of the cost to fix it.—Jing Yang and Shai Oster contributed to this article.
The divergent views come as negotiations begin in earnest for a successor to the Kyoto Protocol, which expires at the end of 2012. China's 40% target represents the high end of cuts in emissions mentioned in the 2007 Bali road map, which stopped short of endorsing a specific target.
China is also asking rich countries to donate at least 0.5% to 1% of annual gross domestic product to help poorer countries cope with climate change and greenhouse-gas emissions, it said in the document, which was posted on the Web site of the National Development and Reform Commission, its economic policy-making body.
China has resisted any mandatory quotas on carbon emissions. The country is widely considered to have surpassed the U.S. as the world's top polluter.
But the Obama administration's push to adopt limits on carbon emissions is also isolating China, which has argued that the U.S. should take steps before poorer nations do.
India has also refused to accept any carbon caps, arguing like China that they would limit economic growth and unfairly penalize late-developing nations. Europe and the U.S. generated the bulk of the carbon gas already in the atmosphere, they argue, and should bear a greater burden of the cost to fix it.—Jing Yang and Shai Oster contributed to this article.
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