Europe leads on climate change but must be more ambitious by expanding carbon trading and clean development mechanism reform
Fredrik Reinfeldt and José Manuel Barroso.
guardian.co.uk, Tuesday 7 July 2009 13.52 BST
The symbolic meeting place of the G8 in L'Aquila is a signal of the world's solidarity with Italy after the terrible earthquake earlier this year. It is also a unique chance to prevent another disaster – this one man-made. Climate change is happening and it is happening fast. When G8 leaders meet in L'Aquila, a global, wide-ranging and ambitious post 2012 agreement in Copenhagen must be their top priority. An agreement which by respecting science brings real global emission reductions.
Such a deal in Copenhagen will demonstrate that we are serious about tackling the climate challenge. This will stimulate the necessary investments to create a green economy, creating new jobs and driving growth over the next two or three decades. Those who understand this today will be the winners of tomorrow.
The post-crisis economy will be very different from its predecessor. And we will not get the same chance twice. That is why the measures to tackle the economic crisis and fight climate change must be done at the same time. We know that there is ample room for improvement in the energy efficiency of businesses, consumers and the government. In fact, according to the International Energy Agency, 54% of the abatement measures needed to keep to a 2C global warming target could be reached through the introduction of existing energy efficient technologies.
The economic crisis can thus be a trigger for smart climate solutions that also save money and provide better energy security.
We go to L'Aquila with a number of key objectives. We will insist on the need to respect the 2C target. We will reiterate the need for a global goal of achieving at least a 50% reduction of global emissions by 2050. In addition, we will ask all developed countries to reduce emissions by at least 80% in the same period and underpin these efforts through robust and comparable mid-term reductions. A key part of the solution will be financing of the fight against climate change: the EU will come forward with proposals in good time on financing, and is of course ready to play its full part.
Indeed, as the largest contributors to past emissions, we of course agree that the developed countries have a special responsibility to take the lead. But this is not going to be enough. The emerging economies, for example, where growth in emissions is surging, must also join in the effort. We must all do our part, in line with the principle of common but differentiated responsibilities and respective capabilities.
The European Union and its member states are proud of the commitments we have made, to reduce emissions by 20% by 2020, and are ready to go further and reduce them by 30% in the context of an ambitious Copenhagen agreement. We are ready to share our experience, such as on emissions trading, with others. We would like to see an OECD wide emissions trading system by 2015. We would also like to reform and develop the clean development mechanism and thereby bring new investment and new technology to the poorest people on the planet.
We are determined to bring European leadership to bear in facilitating an agreement at Copenhagen of which we can all be proud. There is no alternative. If we fail now, we are breaching the contract that all parents must make with their children: to leave them a better world. Let us turn climate change into a global opportunity in L'Aquila.
• Fredrik Reinfeldt is the prime minister of Sweden, which currently holds the EU presidency. José Manuel Barroso is president of the European commission.
Wednesday, 8 July 2009
Piaggio to Unveil Hybrid Scooter
By LUCA CASIRAGHI
MILAN -- Europe's largest scooter maker by sales, Piaggio SpA, will launch the first-ever hybrid electric-and-petrol scooter on Tuesday, joining the race to manufacture fuel-saving vehicles of all kinds.
The Italian-based company, which controls 25% of the European scooter market, launches the three-wheeler in Rome Tuesday, to be rolled out across Europe by August. The company plans to sell the vehicle in the U.S. by 2010, taking advantage of 10% tax credit for plug-in motorcycles, beginning in January 2010.
The move makes Piaggio the first company to sell a hybrid scooter, but experts say it may be only a matter of time before its bigger rivals, Honda Motor Co. and Yamaha Motor Co come up with their own -- they've already presented prototypes of both hybrids and electric scooters. That could create stiff competition in the U.S., still a key vehicle market, but a small scooter market, where Piaggio is mostly famous for its Vespa.
"Piaggio has a head start over its competitors, but they may soon close the technology gap, as the hybrid scooter market is new," said Matt Mattila, hybrid engines expert at the Rocky Mountain Institute.
Still, Piaggio may have an advantage because its market is mainly among urban users and both Honda and Yamaha brands "are connected to an image of speed and high-performing motorbikes," said Manfredi Ricca, business director in Italy at the branding firm Interbrand.
An update of the company's MP3 three-wheel model, an innovative scooter marketed since 2006, the hybrid scooter costs €9,000 ($12,581) -- significantly more than its petrol-only competitors.
The company designed the three-wheel scooter to make it more stable in Italian traffic, and the model is more suited to the hybrid because, given the size of the petrol and electric engines, it still has room for storage.
The hybrid technology is a strategic investment for the company, which could be used in different vehicles and whose benefits will pay off over time.
"The technology developed for the MP3 may be soon applied on other vehicles with similar needs," said Roberto Colaninno, Piaggio Chairman and Chief Executive, at an event Friday.
The hybrid MP3 will be the first vehicle to use a lithium battery, which lasts longer between charges than do first-generation batteries, such as the Toyota Prius battery. Piaggio will start selling the hybrid MP3 mounting a 125 cubic centimeter, 11 Kilowatt gas engine with a 2.6 Kilowatt electrical system. The company said it wouldn't rule out using the hybrid engine in its more powerful MP3 models.
The battery charges while riding in the petrol mode. The scooter also can be plugged in to normal house electricity sockets and is fully recharged in three hours.
Write to Luca Casiraghi at luca.casiraghi@dowjones.com
MILAN -- Europe's largest scooter maker by sales, Piaggio SpA, will launch the first-ever hybrid electric-and-petrol scooter on Tuesday, joining the race to manufacture fuel-saving vehicles of all kinds.
The Italian-based company, which controls 25% of the European scooter market, launches the three-wheeler in Rome Tuesday, to be rolled out across Europe by August. The company plans to sell the vehicle in the U.S. by 2010, taking advantage of 10% tax credit for plug-in motorcycles, beginning in January 2010.
The move makes Piaggio the first company to sell a hybrid scooter, but experts say it may be only a matter of time before its bigger rivals, Honda Motor Co. and Yamaha Motor Co come up with their own -- they've already presented prototypes of both hybrids and electric scooters. That could create stiff competition in the U.S., still a key vehicle market, but a small scooter market, where Piaggio is mostly famous for its Vespa.
"Piaggio has a head start over its competitors, but they may soon close the technology gap, as the hybrid scooter market is new," said Matt Mattila, hybrid engines expert at the Rocky Mountain Institute.
Still, Piaggio may have an advantage because its market is mainly among urban users and both Honda and Yamaha brands "are connected to an image of speed and high-performing motorbikes," said Manfredi Ricca, business director in Italy at the branding firm Interbrand.
An update of the company's MP3 three-wheel model, an innovative scooter marketed since 2006, the hybrid scooter costs €9,000 ($12,581) -- significantly more than its petrol-only competitors.
The company designed the three-wheel scooter to make it more stable in Italian traffic, and the model is more suited to the hybrid because, given the size of the petrol and electric engines, it still has room for storage.
The hybrid technology is a strategic investment for the company, which could be used in different vehicles and whose benefits will pay off over time.
"The technology developed for the MP3 may be soon applied on other vehicles with similar needs," said Roberto Colaninno, Piaggio Chairman and Chief Executive, at an event Friday.
The hybrid MP3 will be the first vehicle to use a lithium battery, which lasts longer between charges than do first-generation batteries, such as the Toyota Prius battery. Piaggio will start selling the hybrid MP3 mounting a 125 cubic centimeter, 11 Kilowatt gas engine with a 2.6 Kilowatt electrical system. The company said it wouldn't rule out using the hybrid engine in its more powerful MP3 models.
The battery charges while riding in the petrol mode. The scooter also can be plugged in to normal house electricity sockets and is fully recharged in three hours.
Write to Luca Casiraghi at luca.casiraghi@dowjones.com
Pickens Backs Off Plan for World's Biggest Wind Farm
By KEITH JOHNSON
T. Boone Pickens, the oilman turned wind-power maven, has backed off plans to build the world's biggest wind farm in the Texas panhandle, he said Tuesday.
Wind power, like other forms of clean electricity generation, has been battered by the financial crisis and competition from cheap natural gas, even as Congress grapples with legislation meant to promote clean energy and revamp the country's energy system.
Mr. Pickens, who has spent the last year pushing his "Pickens Plan" to reduce the nation's dependence on foreign oil, said the wind farm project was scuttled in part because of the lack of adequate transmission lines to carry the electricity from remote locations to cities. He had hoped to build new transmission lines but ultimately was unable to secure financing.
Natural gas-fired power plants are direct competitors to wind farms and other forms of clean energy. Natural gas prices have fallen about 70% from last year's high, making wind less attractive as a source of power.
In a statement, Mr. Pickens said he plans to find new homes for the turbines he has already agreed to buy. "I'm committed to 667 wind turbines," he said, "and I am going to find projects for them."
Write to Keith Johnson at keith.johnson@wsj.com
T. Boone Pickens, the oilman turned wind-power maven, has backed off plans to build the world's biggest wind farm in the Texas panhandle, he said Tuesday.
Wind power, like other forms of clean electricity generation, has been battered by the financial crisis and competition from cheap natural gas, even as Congress grapples with legislation meant to promote clean energy and revamp the country's energy system.
Mr. Pickens, who has spent the last year pushing his "Pickens Plan" to reduce the nation's dependence on foreign oil, said the wind farm project was scuttled in part because of the lack of adequate transmission lines to carry the electricity from remote locations to cities. He had hoped to build new transmission lines but ultimately was unable to secure financing.
Natural gas-fired power plants are direct competitors to wind farms and other forms of clean energy. Natural gas prices have fallen about 70% from last year's high, making wind less attractive as a source of power.
In a statement, Mr. Pickens said he plans to find new homes for the turbines he has already agreed to buy. "I'm committed to 667 wind turbines," he said, "and I am going to find projects for them."
Write to Keith Johnson at keith.johnson@wsj.com
Coral condemned to extinction by CO2 levels, warns Attenborough
Coral is the canary in the cage as damage can be seen most quickly, veteran naturalist tells Royal Society
Alok Jha
guardian.co.uk, Tuesday 7 July 2009 11.02 BST
David Attenborough joined scientists yesterday to warn that carbon dioxide in the atmosphere is already above the level which condemns coral reefs to extinction in the future, with catastrophic effects for the oceans and the people who depend upon them.
Coral reefs support a quarter of all marine life including more than 4,000 species of fish. They also provide spawning, nursery, refuge and feeding areas for creatures such as lobsters, crabs, starfish and sea turtles. This makes them crucial in supporting a healthy marine ecosystem upon which more than 1bn people depend for food. Reefs also play a crucial role as natural breakwaters, protecting coastlines from storms.
Attenborough said the world had a "moral responsibility" to save corals.
He was speaking yesterday at the Royal Society in London, following a meeting of marine biologists. At the current rate of increase of atmospheric CO2, they said, coral would become extinct within a few decades.
"A coral reef is the canary in the cage as far as the oceans are concerned," said Attenborough. "They are the places where the damage is most easily and quickly seen. It is more difficult for us to see what is happening in, for example, the deep ocean or the central expanses of ocean."
"Anybody's who's had the privilege of diving on a coral reef will have seen the natural world at its most glorious, diverse and beautiful," said Attenborough. "[There is a] moral responsibility one has to the natural world. Also you have responsibility to future generations, to your future grandchildren and great grandchildren."
Increasing carbon dioxide in the atmosphere has a double effect on coral. Global warming means warmer seas, which causes the corals to to bleach, where the creatures lose the symbiotic algae they need to survive. Carbon dioxide also makes seas more acidic, which means the corals find it difficult to prevent their exoskeletons from dissolving.
"We've already passed a safe threshold for coral reef ecosystems in terms of climate change. We believe that a safe level for CO2 is below 350 parts per million," said Alex Rogers of the Zoological Society of London and International Programme on the State of the Ocean, who helped organise yesterday's meeting.
Carbon dioxide in the atmosphere has risen from 280 ppm before the industrial revolution to around 387ppm today. Environmentalists say that any new global deal on climate must restrict the growth of CO2 levels to 450ppm, though more pessimistic scientists say that the world is heading for 550ppm or even 650ppm.
"When we get up to and above 450ppm, that really means we're into the realms of catastrophic destruction of coral reefs and we'll be moving into a planetary-wide global extinction," said Rogers.
"The only way to get to 350ppm or below is not only to have major cuts in CO2 emissions but also to draw CO2 out of the atmosphere through measures such as geo-engineering."
Attenborough said the plight of the corals was another example of why the control of carbon was so important to the world's inhabitants. "Each ecological disaster or problem traces its cause back to carbon. To quibble about this is really fiddling while Rome burns. If we do not control the emission of carbon, this world is heading for a major catastrophe and this is one of the first to be staring us straight in the face."
Alok Jha
guardian.co.uk, Tuesday 7 July 2009 11.02 BST
David Attenborough joined scientists yesterday to warn that carbon dioxide in the atmosphere is already above the level which condemns coral reefs to extinction in the future, with catastrophic effects for the oceans and the people who depend upon them.
Coral reefs support a quarter of all marine life including more than 4,000 species of fish. They also provide spawning, nursery, refuge and feeding areas for creatures such as lobsters, crabs, starfish and sea turtles. This makes them crucial in supporting a healthy marine ecosystem upon which more than 1bn people depend for food. Reefs also play a crucial role as natural breakwaters, protecting coastlines from storms.
Attenborough said the world had a "moral responsibility" to save corals.
He was speaking yesterday at the Royal Society in London, following a meeting of marine biologists. At the current rate of increase of atmospheric CO2, they said, coral would become extinct within a few decades.
"A coral reef is the canary in the cage as far as the oceans are concerned," said Attenborough. "They are the places where the damage is most easily and quickly seen. It is more difficult for us to see what is happening in, for example, the deep ocean or the central expanses of ocean."
"Anybody's who's had the privilege of diving on a coral reef will have seen the natural world at its most glorious, diverse and beautiful," said Attenborough. "[There is a] moral responsibility one has to the natural world. Also you have responsibility to future generations, to your future grandchildren and great grandchildren."
Increasing carbon dioxide in the atmosphere has a double effect on coral. Global warming means warmer seas, which causes the corals to to bleach, where the creatures lose the symbiotic algae they need to survive. Carbon dioxide also makes seas more acidic, which means the corals find it difficult to prevent their exoskeletons from dissolving.
"We've already passed a safe threshold for coral reef ecosystems in terms of climate change. We believe that a safe level for CO2 is below 350 parts per million," said Alex Rogers of the Zoological Society of London and International Programme on the State of the Ocean, who helped organise yesterday's meeting.
Carbon dioxide in the atmosphere has risen from 280 ppm before the industrial revolution to around 387ppm today. Environmentalists say that any new global deal on climate must restrict the growth of CO2 levels to 450ppm, though more pessimistic scientists say that the world is heading for 550ppm or even 650ppm.
"When we get up to and above 450ppm, that really means we're into the realms of catastrophic destruction of coral reefs and we'll be moving into a planetary-wide global extinction," said Rogers.
"The only way to get to 350ppm or below is not only to have major cuts in CO2 emissions but also to draw CO2 out of the atmosphere through measures such as geo-engineering."
Attenborough said the plight of the corals was another example of why the control of carbon was so important to the world's inhabitants. "Each ecological disaster or problem traces its cause back to carbon. To quibble about this is really fiddling while Rome burns. If we do not control the emission of carbon, this world is heading for a major catastrophe and this is one of the first to be staring us straight in the face."
A new take on Kyoto
Obama faces major challenges on carbon emissions at the G8 – but the best solution is a new, global system of regulation
Oliver Tickell
guardian.co.uk, Tuesday 7 July 2009 12.00 BST
President Obama is facing a problem at this week's G8 meeting in L'Aquila, Italy. Having promised serious action on climate change, the legacy of GW Bush's inaction will be hard for him to overcome. Under the Kyoto protocol, the US should have reduced its emissions by 7% from 1990 levels. But last year it emitted 16% more than in 1990, or almost 25% above its Kyoto target. And to persuade the rest of the world to make meaningful cuts in emissions, the US will need to take on deep cuts for 2020 based on its Kyoto targets, rather than on where it is now.
Obama's fear is the US will be unable to cut fast enough. And if it fails, US taxpayers could have to pay for a billion tonnes of carbon credits. At $20 per tonne of CO2, that would add up to serious money. But with a large forced buyer like the US, the carbon price could soar. Just how high, no one knows. Obama is understandably reluctant to take on such a huge open-ended commitment – one which could prove highly unpopular with electors demanding spending on health, education and pensions.
Can Obama find a way out? Yes he can! He should ditch the whole system of national emissions targets and move instead to a genuinely global system for regulating emissions. It sounds revolutionary, and it is. But a proposal along these lines could garner widespread international support. The talks leading up to the Copenhagen climate conference in December are stuck. Governments are all reluctant to take on ambitious targets – because doing so could cost their taxpayers dear, and because they fear competitive disadvantage compared to countries with weaker targets.
So a US proposal for a new world climate order is just what's needed to break the deadlock. Here's what the new order could look like. Define a global cap on emissions, and sell permits up to that cap in a worldwide auction. The permits would have to be bought, then surrendered, by fossil-fuel producers based on the carbon content of their production. That cost would then be passed on to consumers anywhere in the world through the supply chain. And all governments would have to do is to supervise the system within their territories.
This may sound scary to developing countries who already struggle to pay the high price of oil. But they would be the biggest beneficiaries. The permit auction could easily raise $1trn per year to spend on climate solutions, and most of that money would be spent in developing countries – paying for them to conserve their forests, farm sustainably, and "leapfrog" the carbon-intensive development path by paying for new energy infrastructure based on renewables and the efficient use of energy.
The system would also finance an adaptation fund similar to that put forward by Gordon Brown last week – but with over $200bn a year to spend, rather than the $60bn he proposed. This would be enough to provide widespread protection against the flood, drought and disease that global warming is expected to bring, and to finance emergency responses to climate-related disasters.
Another benefit would be to shift the debate from the current negative discourse on "burden-sharing" to a positive engagement on how to apportion the benefits of rapid and meaningful action on climate change. This truly global approach offers our best chance to break the deadlock in climate negotiations, and put in place, at Copenhagen, a climate agreement that would be fair, affordable, and effective.
Oliver Tickell
guardian.co.uk, Tuesday 7 July 2009 12.00 BST
President Obama is facing a problem at this week's G8 meeting in L'Aquila, Italy. Having promised serious action on climate change, the legacy of GW Bush's inaction will be hard for him to overcome. Under the Kyoto protocol, the US should have reduced its emissions by 7% from 1990 levels. But last year it emitted 16% more than in 1990, or almost 25% above its Kyoto target. And to persuade the rest of the world to make meaningful cuts in emissions, the US will need to take on deep cuts for 2020 based on its Kyoto targets, rather than on where it is now.
Obama's fear is the US will be unable to cut fast enough. And if it fails, US taxpayers could have to pay for a billion tonnes of carbon credits. At $20 per tonne of CO2, that would add up to serious money. But with a large forced buyer like the US, the carbon price could soar. Just how high, no one knows. Obama is understandably reluctant to take on such a huge open-ended commitment – one which could prove highly unpopular with electors demanding spending on health, education and pensions.
Can Obama find a way out? Yes he can! He should ditch the whole system of national emissions targets and move instead to a genuinely global system for regulating emissions. It sounds revolutionary, and it is. But a proposal along these lines could garner widespread international support. The talks leading up to the Copenhagen climate conference in December are stuck. Governments are all reluctant to take on ambitious targets – because doing so could cost their taxpayers dear, and because they fear competitive disadvantage compared to countries with weaker targets.
So a US proposal for a new world climate order is just what's needed to break the deadlock. Here's what the new order could look like. Define a global cap on emissions, and sell permits up to that cap in a worldwide auction. The permits would have to be bought, then surrendered, by fossil-fuel producers based on the carbon content of their production. That cost would then be passed on to consumers anywhere in the world through the supply chain. And all governments would have to do is to supervise the system within their territories.
This may sound scary to developing countries who already struggle to pay the high price of oil. But they would be the biggest beneficiaries. The permit auction could easily raise $1trn per year to spend on climate solutions, and most of that money would be spent in developing countries – paying for them to conserve their forests, farm sustainably, and "leapfrog" the carbon-intensive development path by paying for new energy infrastructure based on renewables and the efficient use of energy.
The system would also finance an adaptation fund similar to that put forward by Gordon Brown last week – but with over $200bn a year to spend, rather than the $60bn he proposed. This would be enough to provide widespread protection against the flood, drought and disease that global warming is expected to bring, and to finance emergency responses to climate-related disasters.
Another benefit would be to shift the debate from the current negative discourse on "burden-sharing" to a positive engagement on how to apportion the benefits of rapid and meaningful action on climate change. This truly global approach offers our best chance to break the deadlock in climate negotiations, and put in place, at Copenhagen, a climate agreement that would be fair, affordable, and effective.
White House Presses Cap and Trade to Senate
By ROBERT SCHROEDER MarketWatch
WASHINGTON -- Cabinet officials pressed President Barack Obama's case for climate-change and clean-energy legislation at a Senate hearing on Tuesday as lawmakers clashed over whether a "cap-and-trade" system for cutting greenhouse gases would help the U.S. economy or hurt it.
"Denial of the climate-change problem will not change our destiny; a comprehensive energy and climate bill that caps and then reduces carbon emissions will," said Energy Secretary Steven Chu in remarks before the Senate Environment and Public Works Committee.
Mr. Chu and the secretaries of agriculture and interior joined the chief of the Environmental Protection Agency in making Mr. Obama's case to generally supportive Democrats and skeptical Republicans.
Members of the Senate Environment and Public Works Committee are taking up cap-and-trade legislation Tuesday following a narrow victory for it in the House last month. Under the system, pollution permits are bought and sold to meet emissions limits.
Sen. James Inhofe of Oklahoma, the panel's top Republican, said the cap-and-trade system would amount to the largest tax increase in American history, a statement echoed by many Republicans but shot down by Democrats including Sen. Barbara Boxer of California, who chairs the committee.
"There are no new taxes," Ms. Boxer said Tuesday morning.
Debate over the bill played out along similar lines in the House. A bill aiming to slash greenhouse-gas emissions to 17% below 2005 levels by 2020 cleared that chamber by a vote of 219-212 last month. By the middle of the century, it would cut emissions to 80% below 2005 levels.
Energy legislation that cuts emissions and invests in renewable sources of energy is one of President Barack Obama's top legislative priorities. Senate Majority Leader Harry Reid of Nevada has said he is hopeful the Senate will debate and pass a climate and energy bill this fall.
Mr. Obama is expected to tout U.S. efforts to cut greenhouse gases at the Group of Eight summit in Italy this week.
Meanwhile, the political climate for the cap-and-trade system remains tough in the Senate. Democrats hold a 60-seat majority thanks to the victory of Al Franken in the long-disputed race for a Senate seat from Minnesota. However, the cap-and-trade system makes even some Democrats nervous, especially those from states that extract energy and minerals and rely on heavy industry.
Ms. Boxer's committee won't be the only one to work on cap-and-trade. She and Senate Energy and Natural Resources Committee Chairman Jeff Bingaman and other Democrats in the Senate will work together on climate-change legislation.
WASHINGTON -- Cabinet officials pressed President Barack Obama's case for climate-change and clean-energy legislation at a Senate hearing on Tuesday as lawmakers clashed over whether a "cap-and-trade" system for cutting greenhouse gases would help the U.S. economy or hurt it.
"Denial of the climate-change problem will not change our destiny; a comprehensive energy and climate bill that caps and then reduces carbon emissions will," said Energy Secretary Steven Chu in remarks before the Senate Environment and Public Works Committee.
Mr. Chu and the secretaries of agriculture and interior joined the chief of the Environmental Protection Agency in making Mr. Obama's case to generally supportive Democrats and skeptical Republicans.
Members of the Senate Environment and Public Works Committee are taking up cap-and-trade legislation Tuesday following a narrow victory for it in the House last month. Under the system, pollution permits are bought and sold to meet emissions limits.
Sen. James Inhofe of Oklahoma, the panel's top Republican, said the cap-and-trade system would amount to the largest tax increase in American history, a statement echoed by many Republicans but shot down by Democrats including Sen. Barbara Boxer of California, who chairs the committee.
"There are no new taxes," Ms. Boxer said Tuesday morning.
Debate over the bill played out along similar lines in the House. A bill aiming to slash greenhouse-gas emissions to 17% below 2005 levels by 2020 cleared that chamber by a vote of 219-212 last month. By the middle of the century, it would cut emissions to 80% below 2005 levels.
Energy legislation that cuts emissions and invests in renewable sources of energy is one of President Barack Obama's top legislative priorities. Senate Majority Leader Harry Reid of Nevada has said he is hopeful the Senate will debate and pass a climate and energy bill this fall.
Mr. Obama is expected to tout U.S. efforts to cut greenhouse gases at the Group of Eight summit in Italy this week.
Meanwhile, the political climate for the cap-and-trade system remains tough in the Senate. Democrats hold a 60-seat majority thanks to the victory of Al Franken in the long-disputed race for a Senate seat from Minnesota. However, the cap-and-trade system makes even some Democrats nervous, especially those from states that extract energy and minerals and rely on heavy industry.
Ms. Boxer's committee won't be the only one to work on cap-and-trade. She and Senate Energy and Natural Resources Committee Chairman Jeff Bingaman and other Democrats in the Senate will work together on climate-change legislation.
Manmohan Singh blames West for India's climate change problems
India's prime minister has launched a strongly-worded attack on developed nations, blaming them for climate change and the global slowdown.
By Dean Nelson, South Asia Editor Published: 5:37PM BST 07 Jul 2009
On the eve of the G8 summit in L'Aquila, Dr Manmohan Singh said the West must bear the "historical responsibility" for the climate change now affecting India and other developing countries, which had been caused by decadent lifestyles and centuries of industrialisation.
The Indian economy, which is still growing despite a fall in exports, is suffering the affects of a slowdown caused by unsustainable patterns of development in the West, he said.
"The global financial and economic slowdown has not been a crisis of our making, but we have had to bear its consequences. The slowdown in the advanced economies has affected our exports, strengthened protectionist sentiments and impacted credit and capital flows," he said.
His comments mark a new determination that India should make its presence more strongly felt on the international stage, and a backlash against growing calls for India and other developing countries to do more to reduce emissions.
India's economy is still growing by 6.7 per cent, which critics say is contributing to global warming, while its government is being accused of not doing enough to meet emission targets. Indian ministers fear Western governments, which have urged India to open up its economy to foreign investors, may impose 'green' trade barriers on goods from countries which do not meet their own emission targets.
The United States Congress passed the 'Cap and Trade Bill' last month, which by 2020 will require the president to levy punitive import taxes on products from countries which have not set legal limits to control their emissions.
India has strongly rejected any legal emission targets, which it believes would harm its continuing economic growth. Its environment minister has insisted per capita emissions in India are still considerably lower than in the West.
Jairam Ramesh said India had 16 per cent of the world's population India but contributed only 4.6 per cent to greenhouse gas emissions, while the United States accounts for five per cent of the world population but contributes to 20 per cent of emissions.
Dr Singh has now sought to put Washington and other Western governments on the back foot, blaming them for both economic and climatic crises, and urging them to work in partnership with India and other developing countries.
He said India wanted to see a co-ordinated global response and a "much higher level of stability and sustainability in the growth patterns of the developed world".
Developing countries, like India, had also borne the brunt of climate change, caused by the West. "What we are witnessing today is the consequence of over two centuries of industrial activity and high consumption lifestyles in the developed world. They have to bear this historical responsibility," he said.
By Dean Nelson, South Asia Editor Published: 5:37PM BST 07 Jul 2009
On the eve of the G8 summit in L'Aquila, Dr Manmohan Singh said the West must bear the "historical responsibility" for the climate change now affecting India and other developing countries, which had been caused by decadent lifestyles and centuries of industrialisation.
The Indian economy, which is still growing despite a fall in exports, is suffering the affects of a slowdown caused by unsustainable patterns of development in the West, he said.
"The global financial and economic slowdown has not been a crisis of our making, but we have had to bear its consequences. The slowdown in the advanced economies has affected our exports, strengthened protectionist sentiments and impacted credit and capital flows," he said.
His comments mark a new determination that India should make its presence more strongly felt on the international stage, and a backlash against growing calls for India and other developing countries to do more to reduce emissions.
India's economy is still growing by 6.7 per cent, which critics say is contributing to global warming, while its government is being accused of not doing enough to meet emission targets. Indian ministers fear Western governments, which have urged India to open up its economy to foreign investors, may impose 'green' trade barriers on goods from countries which do not meet their own emission targets.
The United States Congress passed the 'Cap and Trade Bill' last month, which by 2020 will require the president to levy punitive import taxes on products from countries which have not set legal limits to control their emissions.
India has strongly rejected any legal emission targets, which it believes would harm its continuing economic growth. Its environment minister has insisted per capita emissions in India are still considerably lower than in the West.
Jairam Ramesh said India had 16 per cent of the world's population India but contributed only 4.6 per cent to greenhouse gas emissions, while the United States accounts for five per cent of the world population but contributes to 20 per cent of emissions.
Dr Singh has now sought to put Washington and other Western governments on the back foot, blaming them for both economic and climatic crises, and urging them to work in partnership with India and other developing countries.
He said India wanted to see a co-ordinated global response and a "much higher level of stability and sustainability in the growth patterns of the developed world".
Developing countries, like India, had also borne the brunt of climate change, caused by the West. "What we are witnessing today is the consequence of over two centuries of industrial activity and high consumption lifestyles in the developed world. They have to bear this historical responsibility," he said.
Renewable Energy's Power Outage
Stalled Stimulus Programs Deter Investment; 'Artificially Slowed Recovery'
By YULIYA CHERNOVA
The U.S. government stimulus package passed in February promised to reinvigorate the renewable-energy industry with new capital and programs, but the prospect of large flows of government money to the industry is holding up private-sector investment.
New incentive programs haven't yet been defined, and uncertainty about program rules has deterred investors from backing companies that also may get government money. At the same time, companies are holding off from accepting private capital because of the possibility of getting it more cheaply from the government.
"It artificially slowed the recovery," Matt Cheney, chief executive of Renewable Ventures, the U.S. subsidiary of Fotowatio SL, a Spanish developer of renewable-energy projects, said of the stimulus plan.
Three new stimulus programs were hailed by analysts as likely to have the biggest effect in boosting renewable energy: a cash incentive from the U.S. Treasury for 30% of the cost of a renewable energy project, loan guarantees for renewable energy projects, and loan guarantees for renewable energy manufacturing.
None of these incentives has yet been defined with specific rules and none of the programs are yet accepting applications, though both the U.S. Treasury Department and the U.S. Department of Energy, which administers the loan-guarantee programs, promise to issue rules and open up to applications soon, possibly in July.
Keith Martin, a partner at law firm Chadbourne & Parke LLP who has advised on tax and project finance in renewable energy, said the absence of those rules is chilling project finance.
One uncertainty, he said, is what will happen when a project changes hands and whether, for example, the ownership change would prompt the government to reclaim its money. Typically, renewable-energy projects are structured so that investors own 95% and then "flip" the project back to its developers after 10 years. Many backers of such projects are "tax equity" investors who use tax credits available from the federal government to offset their taxable income.
Though a number of tax-equity deals "looked in May like they would push over the finish line, negotiations are stretching out," Mr. Martin said, a situation that he ties directly to questions surrounding government programs.
A similar uncertainty haunts project lenders, Mr. Martin said. These bankers are worried about how the government would handle a situation in which a bank forecloses on a project within five years. "Will it come in and take part of the collateral?" Mr. Martin said.
Very few large project-financing deals that weren't carryovers from last year actually closed in the first half of 2009. The ones that did include a $100 million commitment from Wells Fargo & Co. to finance SunPower Corp.'s 2009 projects and an undisclosed amount of tax equity finance for SolarCity Inc.'s solar projects from U.S. Bancorp. These financings worked under the assumption that the underlying projects won't take advantage of the new stimulus provisions, according to the developers involved.
For companies that need the money, on the other hand, government debt and capital are tantalizingly cheap.
"We will not close on anything until we finally hear from the DOE on the loan guarantee," said Keshav Prasad, vice president of business development at Signet Solar Inc.
Signet applied for a loan guarantee under the federal government's previous set of applications in February. The company will need at least $200 million to proceed with its goal to build a thin-film manufacturing facility in New Mexico. Signet is talking to private-equity investors, said Mr. Prasad, in parallel to working with the Department of Energy on its application.
Write to Yuliya Chernova at yuliya Chernova@dowjones.com
By YULIYA CHERNOVA
The U.S. government stimulus package passed in February promised to reinvigorate the renewable-energy industry with new capital and programs, but the prospect of large flows of government money to the industry is holding up private-sector investment.
New incentive programs haven't yet been defined, and uncertainty about program rules has deterred investors from backing companies that also may get government money. At the same time, companies are holding off from accepting private capital because of the possibility of getting it more cheaply from the government.
"It artificially slowed the recovery," Matt Cheney, chief executive of Renewable Ventures, the U.S. subsidiary of Fotowatio SL, a Spanish developer of renewable-energy projects, said of the stimulus plan.
Three new stimulus programs were hailed by analysts as likely to have the biggest effect in boosting renewable energy: a cash incentive from the U.S. Treasury for 30% of the cost of a renewable energy project, loan guarantees for renewable energy projects, and loan guarantees for renewable energy manufacturing.
None of these incentives has yet been defined with specific rules and none of the programs are yet accepting applications, though both the U.S. Treasury Department and the U.S. Department of Energy, which administers the loan-guarantee programs, promise to issue rules and open up to applications soon, possibly in July.
Keith Martin, a partner at law firm Chadbourne & Parke LLP who has advised on tax and project finance in renewable energy, said the absence of those rules is chilling project finance.
One uncertainty, he said, is what will happen when a project changes hands and whether, for example, the ownership change would prompt the government to reclaim its money. Typically, renewable-energy projects are structured so that investors own 95% and then "flip" the project back to its developers after 10 years. Many backers of such projects are "tax equity" investors who use tax credits available from the federal government to offset their taxable income.
Though a number of tax-equity deals "looked in May like they would push over the finish line, negotiations are stretching out," Mr. Martin said, a situation that he ties directly to questions surrounding government programs.
A similar uncertainty haunts project lenders, Mr. Martin said. These bankers are worried about how the government would handle a situation in which a bank forecloses on a project within five years. "Will it come in and take part of the collateral?" Mr. Martin said.
Very few large project-financing deals that weren't carryovers from last year actually closed in the first half of 2009. The ones that did include a $100 million commitment from Wells Fargo & Co. to finance SunPower Corp.'s 2009 projects and an undisclosed amount of tax equity finance for SolarCity Inc.'s solar projects from U.S. Bancorp. These financings worked under the assumption that the underlying projects won't take advantage of the new stimulus provisions, according to the developers involved.
For companies that need the money, on the other hand, government debt and capital are tantalizingly cheap.
"We will not close on anything until we finally hear from the DOE on the loan guarantee," said Keshav Prasad, vice president of business development at Signet Solar Inc.
Signet applied for a loan guarantee under the federal government's previous set of applications in February. The company will need at least $200 million to proceed with its goal to build a thin-film manufacturing facility in New Mexico. Signet is talking to private-equity investors, said Mr. Prasad, in parallel to working with the Department of Energy on its application.
Write to Yuliya Chernova at yuliya Chernova@dowjones.com
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