Tuesday, 26 May 2009

CEOs Urge Clarity In Emissions Pact


COPENHAGEN -- Chiefs of some of the world's largest companies are urging global leaders to cut a strong deal this December to curb pollution, saying they need certainty on emissions targets to be able to make long-term investment decisions.

The World Business Summit on Climate Change, which brought together more than 500 business leaders, is being seen as a crucial milestone on the road to December's meeting here, at which governments will try to hammer out a successor agreement to the United Nations' Kyoto Protocol. Many of them said a global deal would provide the regulatory certainty and price signals they need to invest in renewable fuels and low-carbon technologies.
Business leaders said they were working on a draft statement that would call for emissions to be cut by at least 50% by 2050, an ambitious target also endorsed by the U.N.
In a speech to the summit Sunday, U.N. Secretary General Ban Ki-Moon said that only a few businesses had made climate change a priority, with most sitting on the fence and others defending "the old order." "For those who are directly or implicitly lobbying against climate action, I have a clear message: Your ideas are out-of-date and you are running out of time," he told delegates.
In some respects, the meeting served to highlight the divisions in international business over climate change. Some companies have argued that setting deep emissions-reduction targets in the midst of an economic slowdown could jeopardize recovery.
Such views are particularly prominent in the U.S., which has signed but not ratified the Kyoto Protocol, adopted in 1997. The pact doesn't require developing countries to cut emissions. The U.S. and China are the world's biggest generators of greenhouse gases, accounting for nearly half of all pollutants each year. Neither has been willing to cut emissions without a similar commitment by the other. Agreement between the two nations is seen as critical for reaching a new global climate treaty in Copenhagen that sticks.
The U.S. Chamber of Commerce has come out against moves to curb emissions, in particular the Waxman-Markey bill now making its way through Congress, saying it will cost U.S. jobs and lead to higher energy prices for consumers. Oil and gas producers and manufacturing companies have been at the forefront of opposition to the legislation, which would create a system to cap CO2 emissions and trade emission allowances.
Yet Johnson & Johnson and Nike Inc. have distanced themselves from the chamber, saying it doesn't reflect the range of views of its members on climate change.
Many CEOs speaking in Copenhagen -- who included heads of companies like PepsiCo Inc. and Unilever PLC -- said they were committed to greening their companies and reducing their carbon footprints.
Speakers said a new deal with global targets will be crucial in creating a level playing field, especially for energy-intensive industries. Failure, they warned, lead to a free-for-all and "green protectionism" -- where industries in countries with tough rules would lose out to rivals in countries with less strict policies.
Write to Guy Chazan at guy.chazan@wsj.com

The Big Question: Is America finally getting real about climate change?

By Rupert Cornwell
Tuesday, 26 May 2009

Why are we asking this question now?

Barack Obama has launched a policy revolution which will ensure that, if successful, his presidency will be a watershed in US history. Nothing however is as consequential as his attempt to change America's energy habits and fight global warming. The US may have been overtaken by China as the planet's biggest current polluter. But it has by far the largest pollution "legacy" of any country. Without it, no credible international assault on the problem is possible. The George W Bush administration, following the path set by Ronald Reagan a generation before, virtually ignored the issue, in part because of its links to the fossil fuel industries, in part because of the Republicans' belief that free markets could solve everything.
Obama's approach is diametrically opposed. If anything, he has intensified his rhetoric on the issue since taking office. Some already talk of him as a "Green FDR" – a president who will bring the power of government into the fight against climate change and energy wastefulness, in the same way that Franklin Roosevelt used that power to fight poverty and curb market excesses three-quarters of a century ago.
What has Obama done so far, in concrete terms?
He has set a goal of ending US dependence on oil from the Middle East and Venezuela by 2020 and of cutting greenhouse gas emissions by 20 per cent from 2005 levels by the same year. He is pushing a first ever "cap-and-trade" bill on Capitol Hill. Last week he announced plans to boost average fuel economy for new vehicles on US roads to 35 miles per gallon by 2016, from about 25mpg today. Potentially most important of all, the EPA, the federal government's environmental agency, has ruled that carbon emissions are a public health hazard. That step, strenuously resisted by the Bush administration, gives Obama broad new leeway to act on pollution and emissions. Last but not least (and pardon the pun), the intellectual climate around the debate is changing too.
Is this as much about people as policies?
Indeed. The economic crisis has brought home America's energy vulnerability, and the absurdity of borrowing $400bn or more from China every year to buy oil from countries, many of them home to terrorists out to bring America down. Polls suggest that climate change is now registering as an issue for the public. And while the Bush/Cheney team resisted, even suppressed, science showing that global warming was man-made, Obama has surrounded himself with advisers who know the issue inside out – Carol Browner, his climate tsar (or rather tsarina), and Steven Chu, the Nobel prize-winning physicist who is now Energy Secretary, to name but two.
What about Congress?
There too, the stars are about as well-aligned as they could be. Democrats in the House of Representatives have introduced a "cap-and-trade" bill – the American Clean Energy and Security Act 2009 – aimed at reducing greenhouse gas emissions by 17 per cent from 2005 levels by 2020. Last week the measure cleared its first major obstacle, winning approval from the powerful House Energy Committee.
The aim is a final floor vote in the House by July, and a joint Senate and House bill on the President's desk by autumn. Without such a measure the US will have little credibility to press other big polluting countries like China, Russia and India to commit to stringent new targets at December's international climate change conference in Copenhagen.
As usual, the biggest problem is the Senate, where minorities have procedural means to block legislation they don't like. Within a few weeks however, Democrats may have the 60 Senate seats needed to prevent a Republican filibuster of the cap-and-trade bill.
But isn't the measure already getting watered down?
Yes, the original 20 per cent emissions reduction target by 2020 has been cut to 17 per cent, while the bill will give away, rather than auction, the bulk of the carbon emissions permits. As it stands, the measure is a hideously complex, 932-page monster, full of loopholes for those who read the fine print. Many in the green lobby are disappointed. But others reckon it's best to settle for an imperfect measure now, which can be improved later.
A larger threat is that the bill is squeezed out by others. Next down the legislative tracks is health-care reform, a more easily understood, and therefore more urgent priority for ordinary Americans. The saving grace for environmentalists is that if this federal bill dies, then states will be free to bring in their own stricter measures – exactly what the Bush-Cheney lobby tried to prevent.
So are we all Californians now?
President Obama certainly is. He has lavishly praised the steps taken by California to curb emissions, improve fuel efficiency and promote renewable energy. The state, the most populous and car-dependent in the US, has long had some of the country's most stringent environmental and emissions rules. It openly complained about the Bush administration's efforts to overrule its actions. California has worked with the other Pacific coast states as well as New York, to push anti-climate change policies faster than the federal government. If all else fails, that trend will continue.
But what about the car and energy lobbies?
They are less influential now than in a long while. The energy lobby, given the sheer sums of money it represents, remains powerful, though with far fewer friends in high places than in the Bush/Cheney era. As for the car companies that normally would be expected to steadfastly oppose stringent fuel efficiency and emissions standards, they are being kept afloat by the government. They are in no position right now to object to anything decided by Washington.
Will the recession make it more difficult for Obama to achieve his goals?
That is a clear risk. Republicans already claim that if implemented, this barrage of regulations and initiatives will raise corporate costs, acting as a kind of tax – the last thing the economy needs as it struggles to emerge from the slump. The longer recovery is delayed, the stronger that argument will become. The price of energy, above all the price of petrol, is another factor in the equation. If petrol remains cheap, the pressure for fuel savings and alternate sources of energy will inevitably lessen – witness the plunge in sales of fuel-efficient cars in the US since oil prices came off their 2008 peak.
For all his boldness in other areas, Obama has shied away from a direct gas tax increase to make sure a gallon of fuel never costs less than, say, $3 or $3.50 (compared with around $2.30 currently). Environmentalists say this would kill several birds with one stone: encouraging energy savings, the growth of fuel-efficient and alternative-fuel vehicles, and helping balance the budget as well.
Will Obama go down as the President who made the difference?
*The country is at last taking climate change seriously
*The financial cost of continuing as before is unsustainable
*He must do, if a climate catastrophe later this century is to be averted
*Recession-bloodied Americans are unlikely to put up with any further sacrifices
*The forces of inertia and the status quo are still too great
*Come January 2017 at the latest, Obama will be out of office

Germany set to cut industry power bills

By Chris Bryant in Berlin and Nikki Tait in Brussels
Published: May 25 2009 18:43

Berlin is preparing to help domestic industries overcome the economic crisis by cutting the electricity bills of the country’s largest energy users.
Aluminium, copper and zinc producers are among energy-intensive industrial sectors that could benefit from the plans, which are set to be agreed ahead of elections in September.

Ministers have argued for months about how best to aid domestic industries and the chancellery has also intervened in the discussions, industry sources have told the Financial Times.
Any subsidies will be examined closely by competition authorities in Brussels and could prompt renewed criticism that Berlin is undermining European Union climate legislation.
The environment and economic ministries confirmed that talks were taking place but declined to reveal details of the plans because they were still being finalised.
In a further sign of Berlin’s readiness to tackle high energy costs, leaders of the ruling coalition agreed on Monday to modify tax breaks on agricultural diesel, potentially saving struggling farmers more than €500m ($700m, £440m) over the next two years.
Officials insist that German industry pays much more for its electricity than rivals in France or Spain, putting it at a competitive disadvantage that could force companies to shut down or shift production overseas.
Joachim Pfeiffer, energy policy co-ordinator for the Christian Democratic Union of Angela Merkel, chancellor, told the FT that some companies were “fighting for their survival”.
“We are working on a package at full speed that we want to pass before the federal election,” he said. “It is in the German people’s interest that we preserve Germany’s industrial base and core competencies during the crisis.”
The bulk of any relief is likely to be found by reimbursing companies for the cost of carbon dioxide emissions trading certificates that utilities currently price into their electricity bills.
Germany successfully argued at an EU summit in December that energy-intensive industries should be not be forced to buy emission permits between 2013 and 2020 because companies would otherwise shift production overseas.
Berlin now wants to go further by compensating energy-intensive companies in the intervening years.
Officials are also considering whether to reward big power consumers for their role in balancing the electricity network during peak-load periods.
But Claudia Kemfert, head of energy policy at the German Institute of Economic Research (DIW Berlin), said it was “not the government’s job to subsidise the profits of energy companies”.
She urged utilities to pass on to consumers the benefit of a recession-induced drop in electricity prices and emission certificate costs.
European Commission antitrust officials said they had not yet been contacted by German authorities, so could not comment.
Additional reporting by Joshua Chaffin
Copyright The Financial Times Limited 2009

President Obama says energy cuts are key to saving the planet

The Times
May 26, 2009

Professor Steven Chu said that an international drive to cut energy used in buildings was crucial
Mark Henderson, Science Editor and Robin Pagnamenta, Energy Editor

A global drive to improve energy efficiency will be the centrepiece of President Obama’s strategy for fighting climate change, the US Energy Secretary has said.
An international initiative to cut the amount of energy used by buildings and vehicles is as important to reducing carbon emissions as clean energy generation, and will be more achievable in the short term, Professor Steven Chu says.
Writing exclusively in a supplement in The Times today, Professor Chu, the Nobel prize-winning physicist appointed to steer US energy and environmental policy, argues that conservation will be critical to that goal.
“The quickest and easiest way to reduce our carbon footprint is through energy efficiency,” he writes. “Energy efficiency is not just low-hanging fruit; it is fruit that is lying on the ground.”

He calls for a worldwide investment in green building design to slash the energy needs of homes and businesses. This would also reduce the cost of energy to consumers and create jobs and opportunities to boost economic growth.
“I believe building design is an area that is ripe for international collaboration,” Professor Chu says. “By working together, we can give engineers and architects the tools to design buildings that use 80 per cent less energy than today’s buildings. And, because buildings are inherently local, collaboration would not cede the competitiveness of any nation and would drive local job creation.”
The measures are likely to include tough new efficiency standards for cars and household appliances — everything from ovens to air conditioners, lamps to dishwashers, as well as fresh financial incentives to encourage the construction of “low-carbon buildings”.
His comments come as he joins 22 other Nobel prizewinners and other senior scientists, intellectuals, environmentalists and policymakers at the St James’s Palace Nobel Laureate Symposium in London, for which The Times is media partner.
The three-day climate change forum, held under the patronage of the Prince of Wales, will open today at the Royal Society, followed by two days of discussion at St James’s Palace.
Professor Chu’s move to put energy efficiency at the forefront of US climate change policy will be backed with a commitment to deploying and developing new technologies for sustainable energy generation. He wants the symposium to examine how science should contribute to this goal.
“In recent years, the United States has lagged behind the rest of the world in renewable energy deployment and we are determined to make up for lost time,” Professor Chu writes.
“But to truly solve this problem, we need to develop the next generation of energy technologies, many of which are close at hand.
“Only science can give us these breakthroughs, which is why this week’s Nobel Laureate Symposium is so important. Scientists must step up and do our part in this great effort.”
President Obama’s recent economic stimulus package included $50 billion of funding and tax incentives for energy efficiency measures such as better insulation and more sustainable sources of energy, such as wind farms, carbon capture and storage demonstration projects.
Professor Chu is the most prominent of a “dream team” of leading scientists appointed to the Obama Administration to reverse the perceived indifference of the White House to science during the Bush years. Professor John Holdren, a leading environmental scientist, was named as the President’s chief scientist and Professor Harold Varmus, who won the Nobel Prize for Medicine for his work on cancer genetics, was also appointed to a key advisory role.
The symposium will coincide with the launch of the Cambridge 100 Questions Project, a year-long initiative to identify what we need to solve to address the biggest challenges facing the world.
Readers of The Times can make their own contributions at the Science Central blog.

Professor Steven Chu is clearly switched on with energy-saving ideas

The Times
May 26, 2009
Robin Pagnamenta: Analysis

They have been called “negawatts” — the vast amounts of electricity and heat wasted around the world every day from homes, businesses and appliances as well as ageing power plants.
Energy efficiency may sound unglamorous set against plans for shimmering new solar power plants or giant offshore wind farms.
But it is hard to dispute Professor Chu’s assertion that it represents the easiest route to large reductions in global carbon dioxide emissions.
The US Government claims that better buildings alone could cut US energy use by a third. Modest improvements to existing buildings would allow cuts of 10 per cent.

About half the energy produced by burning coal or gas at a British power station is lost immediately as heat. More goes in transmission to consumers and more still at household level with inefficient use of appliances, lights and devices needlessly left on.
A true revolution would affect almost every facet of modern life, but the technology exists. Finland has heat and power plants where more than 90 per cent of raw energy produced is delivered. In Italy, 30 million “smart meters” — encouraging efficiency — sit on walls of homes and businesses.
But the shift takes time and can be expensive. Britain faces real challenges because of the age of its housing stock. The Government talks of energy efficiency as a key plank in its wider aim of slashing emissions by 34 per cent by 2020, but concrete achievements are rare.
Stop-start funding has hit the Low Carbon Building Programme, while the carbon emissions reduction target has been open to abuse with many power companies finding the cheapest way to meet their obligations is to distribute vast numbers of low-energy light bulbs – with no need to show how many are actually used.

Pelosi Takes Low-Key Approach in China

Associated Press

SHANGHAI -- House Speaker Nancy Pelosi, long a fierce critic of Beijing, toured China's financial capital Monday on a visit focused on environmental issues rather than human rights, though her presence emboldened protesters.
Ms. Pelosi took a low-key approach as she prepared for meetings in Beijing just days ahead of the 20th anniversary of the 1989 crackdown on the Tiananmen Square democracy protests.

The apparent shift approach dovetails with President Barack Obama's new emphasis on engagement with Beijing, rather than confrontation over its human rights record. Visits by Ms. Pelosi and other senior U.S. figures have been aimed at highlighting cooperation between the two countries on a slew of issues.
Still, the leading Democratic lawmaker's reputation as a strong human rights defender galvanized petitioners in Beijing, where several hundreds gathered Monday morning near the capital's South Railway Station to air their grievances. Dozens of police stood guard and most protesters were kept behind police lines.
While many complaints were about individual cases, photos posted on the Chinese-language Web site Boxun.com, a U.S.-hosted Web site banned in China, showed one group of demonstrators holding up a black-and-white cloth banner that said: "Welcome Pelosi. Pay close attention to human rights. SOS."
Speaking to U.S. business figures Monday in Shanghai, Ms. Pelosi noted her commitment to human rights issues over the years.
During a 1991 visit to Beijing, the Democrat from California unfurled a banner that read "To those who died for democracy in China" in the square. Years later, she attempted to present human rights petitions to then-visiting President Hu Jintao. When Tibetans staged protests against Chinese rule last year, Ms. Pelosi visited their exiled spiritual leader, the Dalai Lama.
"I will continue to speak out for human rights in China and around the world," Ms. Pelosi told members of the American Chamber of Commerce in Shanghai.
"Indeed, protecting the environment is a human rights issue," she said according to a copy of the speech distributed to journalists. "We hope to send a clear message that transparency, accountability, enforcement, and respect for the rule of law are essential if we are to protect our planet," she added.
Ms. Pelosi did castigate North Korea after Pyongyang announced that it had successfully carried out an underground nuclear test, weeks after threatening to restart its rogue atomic program.
"If today's announcement is true, these tests would be a clear violation of United Nations Security Council Resolution 1718, which requires that North Korea not conduct any further nuclear tests. Such action by North Korea is unacceptable and cause for great alarm," Ms. Pelosi said in a written statement.
Ms. Pelosi said she and other members of her delegation planned to urge Chinese leaders to use their influence to get the North to return to six-nation talks aimed at ending its nuclear program.
The lawmaker arrived over the weekend accompanied by a delegation of four Democrats and one Republican, all members of the House Select Committee on Energy Independence and Global Warming. The main focus of their visit is the shared goal of promoting clean energy and combating climate change.
Ms. Pelosi met Monday with Shanghai Mayor Han Zheng. The two exchanged pleasantries but made no substantive remarks before reporters. The delegation will later meet in Beijing with Mr. Hu and other leaders.
U.S. Senate Foreign Relations Committee chairman and Democrat Sen. John Kerry is also in China, and Treasury Secretary Timothy Geithner will arrive next week. He is expected to reassure Beijing about the strength of the U.S. dollar and thus the value of China's vast holdings of U.S. Treasury notes.
Copyright © 2009 Associated Press