Tuesday, 14 July 2009

Climate Bill Splits Industry Coalition


WASHINGTON -- As Congress writes legislation to fight climate change, a prominent coalition in the debate is divided over the fine print.
The U.S. Climate Action Partnership, a broad group of businesses and environmental organizations, was instrumental in building support for capping U.S. emissions of greenhouse gases. Legislation to accomplish that goal recently passed the House and is now before the Senate.
But as lawmakers add provisions to win over colleagues, some USCAP members are withholding their support. They say the bill is too burdensome and contains provisions that have little to do with fighting climate change.
Caterpillar Inc., the Peoria, Ill., heavy-equipment maker and a founding member of USCAP, said it doesn't support the House legislation, citing several "problematic" provisions.
One calls for emissions standards on off-road machines like bulldozers. Others would impose tariffs on goods from countries that don't match U.S. efforts to combat climate change, and require contractors on some energy-related projects to pay employees at least the locally "prevailing wage."
Despite its criticisms of the House bill, Caterpillar said it supports "an environmentally effective, economically sustainable and fair climate-change program."
General Motors Co. also has problems with a number of the House bill's provisions, although spokesman Greg Martin said the auto maker supports the legislation's "general direction." Among the provisions it doesn't like is one authorizing the Transportation Department to require auto makers to produce vehicles that can run on methanol, or wood alcohol, a fuel not widely available.
Ford Motor Co. spokesman Mike Moran called that provision "troubling." He declined to take a position on the House bill, but said Ford would continue pushing for legislation "good for both the environment and the economy."
At least two other USCAP members -- ConocoPhillips and the U.S. unit of BP PLC -- said they don't support the House bill, on the grounds that it doesn't treat energy producers equally. The measure would initially give electric utilities roughly 30% of the government's emissions permits, while oil refiners would get 2%.
Although USCAP hasn't officially endorsed the legislation, it hailed the House vote as a "historic action" that puts the nation "on a clear path toward a long-awaited climate-change policy." Exelon Corp., Duke Energy Corp. and DuPont Co., among other USCAP members, supported the House's approval of the bill.
Jeff Sterba, chief executive of PNM Resources Inc., a New Mexico utility, said it is natural for companies to object to individual provisions and emphasized that USCAP's mission has been to build support for policy principles, not specific legislation.
Even USCAP members that have criticized the bill recently remain in the coalition, which has recommended that the U.S. limit greenhouse-gas emissions while giving away, at least initially, some permits to emit greenhouse gases.
Some lawmakers said the added provisions reflect priorities beyond simply cutting emissions.
If the methanol provision wasn't in the bill, "I wouldn't have supported it," said New York Democratic Rep. Eliot Engel. The legislation is "not just about reducing emissions" but also curbing dependence on foreign oil, he said.
House Majority Leader Steny Hoyer of Maryland said that "when the federal government helps fund new energy projects, it is only right that we ensure that the workers building them get fair wages."
Rep. Sander Levin, a Michigan Democrat, said the tariff measure helps ensure that U.S. industries "are not placed at a competitive disadvantage" to foreign rivals.
What's significant is that USCAP has demonstrated that industry and environmentalists can agree on a framework for addressing climate change, said Fred Krupp, president of the Environmental Defense Fund.
"It's very unusual for big corporations to raise their hands and say, 'We want to be regulated for something that we're not regulated for now,'" Mr. Krupp said. "When the history...is written, it will show USCAP to have played a very constructive role."—Ben Casselman in Dallas contributed to this article.
Write to Stephen Power at stephen.power@wsj.com

Britain accused of 'double counting' over climate aid to Bangladesh

£60m fund promised for sea defences and farmland protection will not be new money but come from existing aid budgets
David Adam and John Vidal
guardian.co.uk, Monday 13 July 2009 12.14 BST

A flagship British government fund to help victims of global warming in Bangladesh will break a pledge to supply climate funds on top of existing overseas aid, the Guardian has learned.
The £60m promised by the government to help the country protect its people from rising sea levels will have to be found from existing budgets inside the Department for International Development (Dfid).
The Guardian has also discovered that several million pounds will never reach its intended recipients; instead it will go to the World Bank, which will administer the fund. Leaked documents show that $8m (£4.9m) will be "executed by the World Bank, as administrator". The bank needs the money to cover the costs of administration, project appraisal and capacity building, as well as a management team in the bank's office in the Bangladeshi capital, Dhaka, says the document.
The disclosure comes after a speech last month by Gordon Brown in which he called on rich countries to hand over up to $100bn each year to help the developing world cope with climate change. Brown stressed that such funding should be on top of development spending. He said the UK would contribute its "fair share to climate financing separately from and additional to our promises on aid". Green and development campaigners had praised the commitment to provide extra funds. Separately, Britain and other rich countries have pledged to raise overseas development aid (ODA) to 0.7% of GDP.
The issue of climate finance is key to the chances of a new global treaty on global warming being agreed at crucial UN talks in Copenhagen in December. China and other developing nations have asked for 1% of GDP from rich countries in the form of climate aid, in exchange for their involvement in such a deal. British officials privately dismiss the figure as unrealistic.
Sources in the Bangladesh government said they were "concerned" by Britain's move on the so-called Multi-Donor Trust Fund for Climate Change (MDTF) because they had expected the cash to be additional. "We expected this [climate change aid] to be free of the commitments the UK has already made," one said.
"The UK is very good at double counting. Although the money is new in the sense that this is the first time that money has been allocated for climate change, it's not new aid money," said Saleemul Huq, senior fellow at the London-based International Institute for Environment and Development.
Development charities said they were unhappy about the role of the World Bank in the multi-donor fund. Daleep Mukarji, director of Christian Aid, said he was "appalled by the prospect of the World Bank diverting more than $8m from a fund created to help Bangladesh". He said: "The money is urgently needed by poor people struggling with devastating cyclones, flooding and rising sea levels. For it to be devoted to the expensive administration services of the World Bank, even in Dhaka, would be scandalous."
A group of 30 British and Bangladeshi campaign groups has suggested an alternative mechanism, under which Bangladesh would distribute all of the money through a national board.
A Dfid spokesman confirmed that the £60m Britain would pay into the fund was from existing aid budgets. He said: "I can't see that this contradicts anything that the prime minister said." Brown said that, while the bulk of climate finance should be additional money, some 10% could come from within existing commitments.

A new climate of honesty

Monday, 13 July 2009

At last week's G8 meeting, the leaders of the world's wealthiest economies pledged to reduce their carbon dioxide emissions by 80 per cent by the middle of the century. But they neglected to provide any detail of how that ambitious target is to be achieved. So we should be pleased that at least part of the route map is likely to be provided this week when our government publishes its renewable energy strategy.
We are told that this will include provisions allowing households which generate surplus renewable energy for their own needs to sell it on to the national grid. This would be a step forward. Such "feed-in tariffs" have played a significant role in encouraging the domestic renewables sector in Germany, a country far ahead of Britain when it comes to zero-carbon energy production. The expected measures to boost industrial-scale UK wind-power generation should also be welcome. A windy island such as Britain has a huge renewable energy resource on its doorstep waiting to be tapped.
We shall, of course, have to wait until we see the detail to learn precisely how ambitious this strategy is. But the Energy and Climate Change Secretary Ed Miliband gave cause for optimism about the Government's seriousness yesterday when he spoke of "upward pressure on energy prices" and remarked that "the price of flying will go up over time". The threat of climate change, he argued, necessitates "big changes in people's lives". It is rare to hear a government minister talking about the costs that responding to global warming will impose on people's pockets and the lifestyle changes it will demand of them. In the past, politicians have been reluctant to spell out these costs for fear of alienating the electorate. They have attempted to present the measures needed as pain-free.
Mr Miliband is right to adopt a more candid approach, spelling out the long-term benefits, as well as the short-term costs. Unless the public are ready for the impact entailed in programmes such as subsidies for renewables and taxes on carbon emissions, public support for those programmes is at risk of dissipating when they are implemented. When it comes to climate change, honesty is, in every sense, the best policy.

EU carbon reform proposals no threat to China-official

Reuters, Tuesday July 14 2009

* Tighter carbon credit rules can still benefit China
* Sectoral approach to carbon trade will "scale up" CO2 cuts
By David Stanway
BEIJING, July 14 (Reuters) - Proposals by the European Union to tighten a U.N.-run global carbon offsetting regime will help China rather than hinder it, a policy official with the European Commission said.
China has complained it will lose out if EU proposals aimed at eliminating low-quality carbon offsets were to be implemented.
But the new system will also "scale up" the volume of carbon credits and still benefit China, said Jurgen Lefevere, European Commission policy coordinator for climate change negotiations.
"There will be a continuing and even a strengthened role for China to play in the global carbon market and added benefits to the situation we are in at the moment," he told Reuters.
China has been one of the most active countries in the carbon credit system known as the "clean development mechanism", generating 60 percent of all U.N.-backed offsets produced through the scheme.
The CDM allows industrialised countries to meet mandatory carbon dioxide (CO2) cuts by buying offsets generated from clean energy projects in the developing world. The offsets are meant as an incentive to develop projects that would not otherwise have been financially viable.
The EU has said the system has thrived on easy but environmentally dubious projects such as industrial gas abatement and that rules should be tightened.
Such projects capture and destroy powerful greenhouse gases but also generate large volumes of offsets and there are growing doubts such projects are in the spirit of the CDM.
Europe wants a "sector-based" approach instead because the current system is too limited in its scale and scope.
"We've been asking already for important reform to the CDM to strengthen its environmental integrity. For the EU, the CDM is not just about creating lots of cheap offsets," Lefevere said.
The current "project by project" basis of the CDM is not capable of delivering adequate CO2 cuts, he added.
The EU proposal will assign each sector a "benchmark" and award carbon credits if the sector makes cuts that go beyond the benchmark.
"It is beneficial in terms of scale. You can look at the entire cement sector, the entire steel sector, and it is also more ambitious for the environment because you no longer credit every reduction but only reductions beyond a baseline."
Lefevere said he had brought the proposals up during a meeting with Xie Zhenhua, vice-director of the National Development and Reform Commission responsible for climate change issues.
"He definitely confirmed China had an interest in the CDM and in strengthening the CDM," he said.
The sectoral approach to the CDM is part of the EU's negotiating text in talks for a broader global climate treaty, which the United Nations hopes to seal at a major conference at the end of the year. (Reporting by David Stanway; Editing by David Fogarty)

The rich can relax. We just need the poor world to cut emissions. By 125%

British and G8 climate strategy just doesn't add up. As soon as serious curbs are needed it turns into impossible nonsense

George Monbiot
guardian.co.uk, Monday 13 July 2009 21.00 BST

Well, at least that clears up the mystery. Over the past year I've been fretting over an intractable contradiction. The government has promised spectacular cuts in greenhouse gas emissions. It is also pushing through new roads and runways, approving coal-burning power stations, bailing out car manufacturers and ditching regulations for low-carbon homes. How can these policies be reconciled?
We will find out tomorrow, when it publishes a series of papers on carbon reduction. According to one person who has read the drafts, the new policies will include buying up to 50% of the reduction from abroad. If this is true, it means that the UK will not cut its greenhouse gases by 80% by 2050, as the government promised. It means it will cut them by 40%. Offsetting half our emissions (which means paying other countries to cut them on our behalf) makes a mockery of the government's climate change programme.
The figure might have changed between the draft and final documents, but let's take it at face value for the moment, to see what happens when rich nations offload their obligations. What I am about to explain is the simple mathematical reason why any large-scale programme of offsets is unjust, contradictory and ultimately impossible.
Last week the G8 summit adopted the UK's two key targets : it proposed that developed countries should reduce their greenhouse gases by 80% by 2050 to prevent more than two degrees of global warming. This meant that it also adopted the UK's key contradiction, as there is no connection between these two aims. An 80% cut is very unlikely to prevent two degrees of warming; in fact it's not even the right measure, as I'll explain later on. But let's work out what happens if the other rich nations adopt both the UK's targets and its draft approach to carbon offsets.
Please bear with me on this: the point is an important one. There are some figures involved, but I'll use only the most basic arithmetic, which anyone with a calculator can reproduce.
The G8 didn't explain what it meant by "developed countries", but I'll assume it was referring to the nations listed in Annex 1 of the Kyoto protocol: those that have promised to limit their greenhouse gases by 2012. (If it meant the OECD nations, the results are very similar.) To keep this simple and consistent, I'll consider just the carbon emissions from burning fossil fuels, as listed by US Energy Information Administration. It doesn't publish figures for Monaco and Lichtenstein, but we can forgive that. The 38 remaining Annex 1 countries produce 15bn tonnes of CO2, or 51% of global emissions. Were they to do as the UK proposes, cutting this total by 80% and offsetting half of it, they would have to buy reductions equal to 20% of the world's total carbon production. This means that other countries would need to cut 42% of their emissions just to absorb our carbon offsets.
But the G8 has also adopted another of the UK's targets: a global cut of 50% by 2050. Fifty per cent of world production is 14.6bn tonnes. If the Annex 1 countries reduce their emissions by 80% (including offsets), they will trim global output by 12bn tonnes. The other countries must therefore find further cuts of 2.6bn tonnes. Added to the offsets they've sold, this means that their total obligation is 8.6bn tonnes, or 60% of their current emissions.
So here's the outcome. The rich nations, if they follow the UK's presumed lead, will cut their carbon pollution by 40%. The poorer nations will cut their carbon pollution by 60%.
If global justice means anything, the rich countries must make deeper cuts than the poor. We have the most to cut and can best afford to forgo opportunities for development. If nations like the UK cannot make deep reductions, no one can. We could, as I showed in my book Heat, reduce emissions by 90% without seriously damaging our quality of life. But this carries a political price. Business must be asked to write off sunk costs, people must be asked to make minor changes in the way they live. This country appears to be doing what it has done throughout colonial and postcolonial history: dumping its political problems overseas, rather than confronting them at home.
Befuddled yet? I haven't explained the half of it. As the G8 leaders know, a global cut of 50% offers only a faint to nonexistent chance of meeting their ultimate objective: preventing more than two degrees of warming. In its latest summary of climate science, published in 2007, the Intergovernmental Panel on Climate Change suggested that a high chance of preventing more than two degrees of warming requires a global cut of 85% by 2050. In drafting the climate change act, the UK government promised to keep matching the target to the science. It has already raised its cut from 60% to 80% by 2050. If it sticks to its promise it will have to raise it again.
Global average CO2 emissions are 4.48 tonnes per person per year. Cutting the world total by 85% means reducing this to 0.67 tonnes. Average per capita output in the 38 Annex 1 countries is 10 tonnes; to hit this target they must cut their emissions by 93.3% by 2050. If the rich persist in offsetting 50% of this cut, the poorer countries would have to reduce their emissions by 7bn tonnes to absorb our offsets. To meet a global average of 0.67 tonnes, they would also need to chop their own output by a further 10.8bn tonnes. This means a total cut of 17.8bn tonnes, or 125% of their current emissions. I hope you have spotted the flaw.
In fact, even the IPCC's proposal has been superseded. Two recent papers in Nature show that the measure that counts is not the proportion of current emissions produced on a certain date, but the total amount of greenhouse gases we release. An 85% cut by 2050 could produce completely different outcomes. If most of the cut took place at the beginning of the period, our cumulative emissions would be quite low. If, as the US Waxman- Markey bill proposes, it takes place towards the end, they would be much higher. To deliver a high chance of preventing two degrees of warming, we would need to cut global emissions by something like 10% by the end of next year and 25% by 2012. This is a challenge no government is yet prepared to accept.
Carbon offsetting makes sense if you are seeking a global cut of 5% between now and for ever. It is the cheapest and quickest way of achieving an insignificant reduction. But as soon as you seek substantial cuts, it becomes an unfair, impossible nonsense, the equivalent of pulling yourself off the ground by your whiskers. Yes, let us help poorer nations to reduce deforestation and clean up pollution. But let us not pretend that it lets us off the hook.

Honda to Expand Hybrid Lineup

Japanese Car Maker Plans Two New Models Amid Tough Competition From Rival Toyota
TOKYO -- Honda Motor Co. on Monday said it plans to launch two new gasoline-electric hybrids next year, part of the Japanese car maker's aggressive push to expand its hybrid lineup and boost its flagging sales.
Agence France-Presse/Getty Images
Honda Chief Executive Takanobu Ito, answering questions in Tokyo Monday after the company announced two new hybrid models, says all new vehicles could be hybrid-propelled in 20 years.
Honda -- No. 2 by sales among hybrid makers after leader Toyota Motor Corp. -- in February will launch the CR-Z hybrid sports car plus a hybrid version of its Fit compact by the end of 2010, both in Japan. The CR-Z hybrid will eventually be sold in the U.S. and Europe, but there are no plans yet to sell the Fit hybrid overseas.
Hybrid-car sales have been gathering momentum in Japan this year thanks to lowered prices of recently introduced models as well as tax breaks for fuel-efficient vehicles. Honda's new Insight hybrid, which has been marketed as an "affordable" hybrid at $20,000, has become a best seller in Japan.
Now Honda is eager to use its hybrid technology in other compact car models like the Fit while also developing a new hybrid system for midsize and larger vehicles.
"We want to focus on how quickly we can widen our hybrid lineup," said Honda President and Chief Executive Officer Takanobu Ito, speaking Monday at his first press conference since his appointment last month.
Honda continues to face tough competition from Toyota, which has dominated the hybrid market. Its redesigned Prius has outsold the Insight in Japan and abroad.
Other major car makers, such as Daimler AG, also plan to release more hybrid vehicles because of the promising market outlook. Global sales could grow to 11.28 million vehicles by 2020, well above the 487,000 hybrids sold in 2008, according to an estimate by J.P. Morgan.
As the second-largest maker of hybrids after Toyota, Honda hopes its hybrid sales drive its recovery after it posted its first quarterly loss in 15 years in March. Mr. Ito said all new vehicles may be propelled by hybrid systems in 20 years' time as demand for low-emission cars accelerates.
Mr. Ito is also looking to the emerging markets to lift Honda's motorcycle and car sales. Unlike his predecessor, former Honda President and CEO Takeo Fukui, Mr. Ito said he wants Honda to enter the fast-growing, ultra-low-cost vehicle market in India and other parts of the developing world.
Mr. Fukui had insisted that Honda's broad motorcycle lineup offered the best, inexpensive entry-level transportation for first time drivers. But the growing demand for Tata Motors Ltd.'s $2,500 car, the Nano, and plans by other car makers to produce inexpensive vehicles pose a threat that must be answered, Mr. Ito said.
Write to Yoshio Takahashi at yoshio.takahashi@dowjones.com and John Murphy at john.murphy@wsj.com

E.ON and EDF have drawn the battle lines between renewables and nuclear

Energy bosses don't like the idea that renewable energy delivers power to the people – both literally and metaphorically

Jeremy Leggett
guardian.co.uk, Monday 13 July 2009 16.13 BST
In 2003, the nuclear industry was very nearly killed off in Britain. In 2009, it is so resurgent that captains of the energy industry are arguing it is renewables that should be killed off, or at least kept on a starvation diet.
Today, the Confederation of British Industry has thrown its weight behind the nuclear industry's calls for the government to scale back "overambitious" wind power targets in favour of atomic energy. Two foreign-owned energy giants, E.ON and EDF, have recently told the government it must essentially choose between new nuclear and major renewables developments. With global warming, energy security and fuel poverty all rendering energy policy a matter of life and death today, in their own ways, this new polarisation in the nuclear debate is a desperately dangerous development.
In 2003, just before the government completed its first energy white paper, nuclear power was kept alive only because a few mandarins insisted language be inserted about a review in five years. Five years of half-hearted government efforts to mobilise renewables and efficiency ensued. Looking back now, many of us in the renewables industries see the dead hand of a civil service Sir Humphrey in the slow-motion episodes of real-life Yes Minister that we lived through. The proportion of renewables in the UK energy mix was about 3% back in 2003. It is about 3% now. With the best renewable resources in Europe, the UK is third from bottom of a European league table topped by Sweden with 40% renewables in the energy mix.
Meanwhile, renewables industries globally have been, and are, growing faster than almost all other industries. 2008 was the first year in which more renewables capacity came onstream than fossil fuels and nuclear combined, in both Europe and America. Over the past five years, the solar photovoltaics industry (PV) has grown 600%. Wind has grown 250%. Hundreds of thousands of jobs have been created.
Renewables companies that didn't exist at the turn of the century ride high in stock exchanges. The German government has shown, in a national scaled experiment, that national economies can be run entirely on renewables, overcoming intermittency and covering "baseload" by mixing and matching different members of the renewables family. The renewables industries claim they can run the global economy entirely within 20-40 years.
Swimming against this optimistic tide, EDF and E.ON are now warning the UK government that efforts to get to 20% renewables in the energy mix – the official EU target – are not only unrealistic but damaging to nuclear plans. Additional carbon-generating plants will be needed because of intermittency, they say, ignoring the German experience. The EDF CEO, Vincent de Rivaz, says he is concerned that high levels of wind construction will require new British nuclear plants to be shut down when the wind output is high.
The truth is that there is only so much money available, and the nuclear advocates – scared by the growth rates of renewables – are scrabbling to ensure most of it goes to them. De Rivaz has yet to persuade his owners, the French government, that his plan to build four British reactors at well over £4bn each makes commercial sense. He has made it clear to Whitehall that he will need major subsidies.
And so the battle lines have been drawn for a new phase in the long-running fight to win hearts and minds. The backers of nuclear will argue that grown ups can't expect to get enough energy from renewables, that renewables are too expensive, that they can't cover baseload: arguments that increasingly struggle in the face of fast-emerging real renewables experience abroad. The renewables advocates will argue the reverse.
We will push our trump card hard: that our costs, on the whole, are falling, while nuclear's are rising. This means that most renewable electricity will soon be cheaper than nuclear electricity in most markets, and will inevitably fall yet further. This in turn means that the market-enablement mechanisms we need of government – feed-in tariffs, renewables obligations and the like – can be temporary, while the nuclear industry will need subsidies that extend essentially forever.
Whatever the logic of the arguments, though, one thing is clear to me, after all these years. This is a battle of cultures. In the big energy companies, and across much of the top of the civil service, many people with grey hair find great difficulty thinking that things can be done differently in energy policy, and/or want to hold on the centralised power that centralised power plants offer.
In the renewables industries, a lot of people (generally without grey hair) know that things can be done both differently and better. We know too that decentralised power democratises energy: it delivers power to the people both literally and metaphorically. This is an idea that makes many aged civil servants and energy bosses reach for the dirty tricks manual.
Meanwhile, behind the arcane language of the public debate, energy policy remains a matter of life and death.
• Social entrepreneur and author Jeremy Leggett is founder and chairman of Solarcentury, the UK's largest solar solutions company.

Toyota to build Auris hybrid in UK - paper

Reuters, Tuesday July 14 2009
TOKYO, July 14 (Reuters) - Toyota Motor Corp plans to produce a gasoline-electric version of its Auris hatchback at its British factory around 2012, in what would mark its first locally produced hybrid car in Europe, an industry daily said.
The Nikkan Jidosha Shimbun said, without citing a source, that The Auris was due for a full remodelling around 2012, and Toyota would offer a hybrid version for production and sale locally in Europe, where diesel engines are popular.
A spokeswoman said Toyota could not comment on future product plans.
The Auris, part of the popular Corolla series, was Toyota's third-best-selling model in Europe during the first five months of this year after the Yaris and Aygo subcompact models.
Days after taking the helm at the company founded by his grandfather, President Akio Toyoda said last month that the world's biggest automaker would be more selective in utilising its resources, dropping a strategy of becoming a full-line maker in all regions.
One example of that was to focus on offering hybrid vehicles in Europe, Toyoda said, implying that it may drop a plan it shelved earlier to cooperate with affiliate Isuzu Motors Ltd to beef up its diesel line-up for Europe.
Toyota builds most of its hybrid vehicles in Japan, but also produces a small number of Prius cars in China and the Camry hybrid in Kentucky. It has already announced plans to also begin production of the Camry hybrid in Thailand and Australia, and the Prius in Mississippi.
Toyota has a goal of selling at least 1 million hybrid vehicles a year within the next few years and has said it would offer the hybrid option on all of its models around 2020. (Reporting by Chang-Ran Kim; Editing by Joseph Radford)

Firms Pursue Solar Power From Sahara

MUNICH -- A group of 12 European companies agreed to push forward on a solar-power project intended to feed electricity to Europe from the Sahara.
European finance, technology and energy giants, including Deutsche Bank AG, Siemens AG, ABB Ltd. and E.On AG, signed a memorandum of understanding to develop a feasible plan over the next three years.
If the plan is workable, the group would aim to build its first thermal solar power plant by 2015, said Munich Re management board member Torsten Jeworrek, who is coordinating the initiative for his company and the others. The project -- dubbed Desertec -- would aim to provide up to 15% of Europe's electricity by 2050, as well as address growing energy needs in North Africa and the Middle East.
Member companies will contribute about €1.8 million ($2.5 million) in the first year, Mr. Jeworrek said. If the plan goes forward, the group will look for more members and a bigger financing base, he said.
The project would likely face political, financial and technological issues. The Club of Rome, a global think tank connected with the project, in a recent study estimated that roughly €400 billion would be needed to build enough thermal solar power plants to meet the target.
Power plants -- which would cover an area of 16,900 square kilometers -- would cost €350 billion; €50 billion would be required for the high-voltage direct current transmission lines to transport the electricity to Europe from North Africa.
Hermann Scheer, a member of Germany's lower house of parliament and president of Eurosolar, a nongovernment organization promoting renewable energy, criticized the project's costs estimates as too low and said he was in favor of decentralized production of Europe's supply with renewable energies within Europe, rather than trying to rely on a new outside source for a big share of it.
Write to Ulrike Dauer at ulrike.dauer@dowjones.com

Money back for homeowners with solar panels and wind turbines

Ben Webster, Environment Editor

Homeowners who install solar panels and wind turbines will be paid for any electricity that they feed back into the National Grid, the Government confirmed yesterday.
The payments will be based on a fixed price per unit of electricity and will be set high enough to encourage hundreds of thousands of homes to invest in renewable sources of power.
Local energy suppliers will adjust the bills that they issue according to the number of units fed back into the grid. Homeowners with low energy consumption and a solar panel could receive net payments from their energy company.
Ed Miliband, the Energy and Climate Change Secretary, said that the “feed-in tariffs” would be available from next April. He added: “The crucial thing about feed-in tariffs is that they do speak to people’s wish to do their bit and to see benefits flowing back to their community from renewable energy generation.
“We can harness people’s enthusiasm for getting involved, doing their bit, to help create the clean energy of the future.”
However, small-scale electricity production is expensive and the feed-in scheme will need to be funded either by a government subsidy or through higher bills for ordinary households without their own generators.

Conservatives urge government to avoid feed-in tariff 'valley of death'

Greg Clark called on the government to reassure businesses over feed-in tariff fears

guardian.co.uk, Monday 13 July 2009 17.48 BST

The Conservatives are urging the government to avoid a "valley of death" between the end of the current grants scheme for small-scale renewable energy projects and the launch of the so-called "feed-in tariff" over the next two years.
The shadow energy and climate change secretary, Greg Clark, today called on the government to guarantee that any qualifying technologies that are installed without public funding before the tariffs commence will still be eligible for the feed-in tariff once the tariffs begin.
"Government policy should offer a haven of stability to business in these turbulent economic times. This government's stop-start approach to energy policy is instead doing the very opposite; adding to the sense of uncertainty rather than providing shelter from it," said Clark.
The government's controversial Low Carbon Buildings Programme, which has intermittently provided support for technologies like ground source heat pumps, solar panels and wind turbines, is being phased out in the coming months as its funding is exhausted.
The government has promised to bring in feed-in tariffs – which reward people financially for the renewable energy they produce – in spring 2010 for electricity-producing technologies and 2011 for heat installations.
Installers across the country worry, though, that they could have very little work during interim times if people fear they will lose out on any financial support. The stop-go nature of the LCBP over recent years has already caused such problems.
"The fiasco around the LCBP funding is a sorry case in point," said Clark.
"Policy doesn't need to be this complicated. ."
The energy minister, Joan Ruddock, said today during a meeting of the "We Support Solar" campaign that the feed-in tariff would be called the "Clean Energy Cashback" to make it easier for people to understand.
She said the FIT for electricity would definitely come in next spring, and the heat tariff a year later because of its added complexity. But the industry is waiting for clarity about the levels the various tariffs will be set in terms of pence per kilowatt hour of energy produced.
"It is crucial that the tariff be set high enough to kickstart the sort of change we need to see," said the shadow energy minister, Charles Hendry.
Leonie Greene of the Renewable Energy Association said: "The REA welcomes Greg Clark's important statement on how the Conservatives would give clarity on the implementation of the Renewable Heat Incentive.
"The industry is seeking similar clarity as a matter of urgency from the government as there are many renewable heat projects being delayed, because the developers are understandably waiting to hear whether they would qualify for the future Heat Incentive or not."

Energy white paper is set to shake up the green industry

Energy secretary Ed Miliband says legally binding carbon budgets will revolutionise policy-making
Tim Webb and Nicholas Watt
guardian.co.uk, Monday 13 July 2009 19.57 BST

Watching the US political drama the West Wing one night, Ed Miliband found he had something in common with Josh Lyman, who plays the deputy White House chief of staff. Both, Miliband says, have been exasperated by the infighting within the energy industry.
The energy and climate change secretary recounts the episode in which Lyman crashes his SUV into a Prius, symbol of the environmentally conscious. As penance for such sacrilege, the White House staffer has to attend an industry summit where people are promoting different low-carbon technologies. "They end up having a big fall-out with each other," Miliband says. "Sometimes the UK debate feels a bit like that: the renewables lot say you should only do renewables and shouldn't do nuclear or coal. Nuclear people say all this wind will lead to big problems. Coal people say, 'Why are you going on about renewables and nuclear?'"
On Wednesday Miliband will publish a white paper outlining how the UK will make the transition to a low-carbon economy. Companies of all shades of green are on tenterhooks, waiting to find out if their lobbying for subsidies (although they would never profess to use such a dirty word) for their industry or particular technology has been successful. Everyone has an opinion on how best to solve climate change.
This week, it was the turn of the CBI. The business group told Miliband to water down the target to produce about a third of the UK's electricity by 2020 from renewables such as wind. It claims this will jeopardise plans to build low-carbon forms of generation such as nuclear reactors and clean coal plants.
Miliband says: "You have to be ambitious on nuclear. I know that's hard for some people." It's brave, not just because he risks incurring the wrath of the environmentalists, but also that of his family. His brother David, the foreign secretary, is president of Sera, the Socialist Environment and Resources Association, a staunch opponent of nuclear power. Their father, Ralph, campaigned for nuclear disarmament. "I didn't grow up in a terribly pro-nuclear family, as you can imagine. But lots of people have changed their mind about nuclear as a result of climate change."
Miliband calls himself a "hard-headed environmentalist", not favouring one technology over the other. "Hard-headed environmentalism is about saying we're not going to operate on the basis of preconceived notions," he says.
The white paper will unveil the world's first legally binding carbon budgets, which will eventually commit the UK to cutting its greenhouse gas emissions by at least 80% below 1990 levels by 2050. In April, the chancellor outlined the first five-year budgets. Between 2008 and 2012, the country is required to cut its emissions by 22%, ratcheting up to 34% in 2022. If the UK exceeds the limit, it will have to buy in credits from overseas, but Miliband stresses that the aim is to stay within the budget by domestic reductions only.
He says that this will revolutionise policymaking: "Every major policy will be scrutinised for its carbon impact. Government will have to operate within a carbon budget in the same way it has to operate in a financial budget. If we go over the carbon budget, there will be financial penalties – that is going to be a big cultural change across government."
Not all the government's decisions are predicated on the need to slash emissions, as the decision to approve a third runway at Heathrow demonstrated. Miliband was said to be one of the cabinet voices who spoke out most strongly against the plans, although he has never publicly dissented. Instead, he argues that increased emissions from aviation can be accommodated within the carbon budgets by, for example, promoting sustainable forms of transport, such as electric cars.
Not surprisingly, Miliband isn't too impressed by David Cameron's professed support for renewables. The wind farm that Miliband opened on Monday – built by RWE npower renewables at Little Cheyne Court in Kent and the largest onshore wind farm in the south-east – was opposed by the local Tory MP and former home secretary Michael Howard. The Tories also want to abolish the new central planning commission designed to help projects like wind farms overcome local opposition.
Miliband says: "It is not coherent to say you are in favour of renewable energy, which they say they are, to oppose our planning reform and for local councils all over the place to oppose the building of wind farms."
He is optimistic about the chances of avoiding catastrophic climate change. You have to give people "green hope, not green despair", he says, by explaining what they can do to help.