Reuters, Saturday November 7 2009
* Group of 20 divided on push to reach climate finance deal
* Agreement needed before key Copenhagen summit in Dec
* Stalemate follows failure to progress at Barcelona summit
By Toni Vorobyova and Anna Willard
ST ANDREWS, Scotland, Nov 7 (Reuters) - Rich countries and developing nations fought over climate change on Saturday, failing to make progress on financing ahead of a major environmental summit in Copenhagen next month.
Britain, which was hosting a meeting of G20 finance ministers in Scotland, was determined to push toward a $100 billion deal to cover the costs of climate change by 2020.
But talks got bogged down in a row with large developing countries about who should foot the bill.
"There was a heated argument," Russian Finance Minister Alexei Kudrin said.
"I think we should be very careful in approaching the possibility of piling big new commitments onto developing countries as this can put a brake on the pursuing of other crucial tasks such as the eradication of poverty."
The climate change discussion had dragged on for hours and a French official said the debate was so intense there was a risk the final statement would not mention climate change at all.
In the end, they agreed on the need "to increase significantly and urgently the scale and predictability of finance to implement an ambitious international agreement".
European Union leaders agreed in October that developing countries would need 100 billion euros a year by 2020 to battle climate change.
About 22-50 billion euros of the total will come from the public purse in rich countries worldwide and the EU is expected to provide between 20 and 30 percent of that.
"It's a bit disappointing because we would have liked to have done a little bit more work," said French Economy Minister Christine Lagarde, adding that Europe's offer was "substantial".
STUMBLING BLOCK
China is often denounced by Western critics as the main obstacle to agreement, because it argues developing countries should not submit to binding international caps on emissions while they grow out of poverty. In turn, China and other emerging powers have said the rich countries have done far too little in vowing to cut their own greenhouse gas output, and in offering technology and money to the Third World to help cope with global warming.
"We have not come as far as we had hoped even this morning," said German Finance Minister Wolfgang Schaeuble.
"We have not reached an agreement. There is still some work to do. I hope everybody knows that Copenhagen must not be a failure."
A European source said there was also frustration in a sunny St Andrews at the stance of the United States, who were sitting on the fence over climate change financing.
A 175-nation U.N. meeting in Barcelona ended on Friday with little progress towards a global deal on climate change but narrowed options on helping the poor to adapt to climate change, sharing technology and cutting emissions from deforestation.
The final U.N. preparatory meeting before Copenhangen re-opened a rich-poor divide on sharing the burden of curbs on greenhouse gas emissions and criticism of the United States for not tabling a formal, carbon-cutting offer.
About 40 world leaders will go to Copenhagen next month to improve the chances of clinching a climate deal, the United Nations has said. [ID:nL648180]
British Prime Minister Gordon Brown, addressing the G20 delegates, said climate change was a test of global cooperation every bit as stern as the world financial crisis. (Additional reporting by Gernot Heller and Jan Strupczewski, writing by Sumeet Desai and Patrick Graham; editing by Mike Peacock)
Sunday, 8 November 2009
Row breaks out over Gordon Brown's plan to tax City profits
International levy on financial trading would help developing world deal with climate change
Kathryn Hopkins and Heather Stewart
The Observer, Sunday 8 November 2009
A row blew up last night after Gordon Brown promoted plans for an international tax on City dealing that could raise funds for the world's poor and help developing countries tackle climate change.
No sooner had the prime minister floated the idea of a tax on bank transactions than it was shot down by US treasury secretary Timothy Geithner, Canadian finance minister Jim Flaherty and Dominique Strauss-Kahn, the head of the IMF.
At a G20 meeting in St Andrews, Scotland, Brown said the "social contract" between financiers and the British public had broken down and needed to change. Keen to show that Labour would be tougher on bankers than the Conservatives, who are leading the row over bonuses, the prime minister urged fellow world leaders to back plans for a "transaction tax", which could be used to meet the costs of future banking bailouts, and to fund development projects, including helping developing countries to develop greener technology.
However, he then suffered a series of rebuffs – led by Geithner, who said that "a day-by-day financial transaction tax is not something we are prepared to support". The reality is that without American backing the move would collapse. Flaherty said: "We are not in the business of raising taxes, we are in the business of lowering taxes in Canada. It is not an idea we would look at."
Strauss-Kahn was also unimpressed, saying he believed such a tax was unlikely to be adopted as "transactions" were difficult to measure.
Brown had demanded that "there must be a better economic and social contract between financial institutions and the public based on trust and a just distribution of risks and rewards". He stressed that for the levy to work, it would need to be implemented worldwide. "Let me be clear: Britain will not move unless others move with us.
"I do not in any way underestimate the enormous and difficult practical and technical issues that will need to be overcome that a globally cohesive system raises. But I do not think these difficulties should prevent us from considering with urgency the legitimate issues I have discussed."
Following his success last year in leading the international debate on the rescue of banks, the prime minister is determined to push himself forward as a leader of other global initiatives such as the fights to limit climate change and to combat poverty in the developing world. But on this occasion his views received, at best, a mixed reception. After Brown's intervention, G20 finance ministers asked IMF experts to complete by April a detailed study on how such a tax could be levied, to allow world leaders to make a decision on whether it should be implemented.
The prime minister's conversion to the idea, which is commonly known as a "Tobin tax" after the Nobel prize-winning economist who first proposed it, stunned the anti-poverty campaigners who have long fought to force a transaction tax on to the economic agenda and have been repeatedly rebuffed by a pro-City Labour government.
"A tax on banks would be a major step towards clearing up the mess caused by their greed," said Max Lawson, senior policy adviser at Oxfam. "People aren't just losing their jobs. The economic crisis is killing people in Africa. We must see the banks pay back something."
Claire Melamed, head of policy at ActionAid, said: "If world leaders can't take the bankers by the scruff of the neck and start shaking the transaction tax out of them at this point, then they never will. This is a test of whether we can force the financiers to make a bigger contribution to society, from which they make their profits."
Global revenues from the tax could be up to £420bn a year, according to an authoritative Austrian study. They would be divided between the country where the trading took place and an international fund, which could be used to tackle poverty or climate change. For Britain, with its status as one of the world's largest financial centres, if just half the revenues were retained by the Treasury, it could bring a windfall of £45bn.
France and Germany have championed the tax, but until now the British government has resisted it.
Kathryn Hopkins and Heather Stewart
The Observer, Sunday 8 November 2009
A row blew up last night after Gordon Brown promoted plans for an international tax on City dealing that could raise funds for the world's poor and help developing countries tackle climate change.
No sooner had the prime minister floated the idea of a tax on bank transactions than it was shot down by US treasury secretary Timothy Geithner, Canadian finance minister Jim Flaherty and Dominique Strauss-Kahn, the head of the IMF.
At a G20 meeting in St Andrews, Scotland, Brown said the "social contract" between financiers and the British public had broken down and needed to change. Keen to show that Labour would be tougher on bankers than the Conservatives, who are leading the row over bonuses, the prime minister urged fellow world leaders to back plans for a "transaction tax", which could be used to meet the costs of future banking bailouts, and to fund development projects, including helping developing countries to develop greener technology.
However, he then suffered a series of rebuffs – led by Geithner, who said that "a day-by-day financial transaction tax is not something we are prepared to support". The reality is that without American backing the move would collapse. Flaherty said: "We are not in the business of raising taxes, we are in the business of lowering taxes in Canada. It is not an idea we would look at."
Strauss-Kahn was also unimpressed, saying he believed such a tax was unlikely to be adopted as "transactions" were difficult to measure.
Brown had demanded that "there must be a better economic and social contract between financial institutions and the public based on trust and a just distribution of risks and rewards". He stressed that for the levy to work, it would need to be implemented worldwide. "Let me be clear: Britain will not move unless others move with us.
"I do not in any way underestimate the enormous and difficult practical and technical issues that will need to be overcome that a globally cohesive system raises. But I do not think these difficulties should prevent us from considering with urgency the legitimate issues I have discussed."
Following his success last year in leading the international debate on the rescue of banks, the prime minister is determined to push himself forward as a leader of other global initiatives such as the fights to limit climate change and to combat poverty in the developing world. But on this occasion his views received, at best, a mixed reception. After Brown's intervention, G20 finance ministers asked IMF experts to complete by April a detailed study on how such a tax could be levied, to allow world leaders to make a decision on whether it should be implemented.
The prime minister's conversion to the idea, which is commonly known as a "Tobin tax" after the Nobel prize-winning economist who first proposed it, stunned the anti-poverty campaigners who have long fought to force a transaction tax on to the economic agenda and have been repeatedly rebuffed by a pro-City Labour government.
"A tax on banks would be a major step towards clearing up the mess caused by their greed," said Max Lawson, senior policy adviser at Oxfam. "People aren't just losing their jobs. The economic crisis is killing people in Africa. We must see the banks pay back something."
Claire Melamed, head of policy at ActionAid, said: "If world leaders can't take the bankers by the scruff of the neck and start shaking the transaction tax out of them at this point, then they never will. This is a test of whether we can force the financiers to make a bigger contribution to society, from which they make their profits."
Global revenues from the tax could be up to £420bn a year, according to an authoritative Austrian study. They would be divided between the country where the trading took place and an international fund, which could be used to tackle poverty or climate change. For Britain, with its status as one of the world's largest financial centres, if just half the revenues were retained by the Treasury, it could bring a windfall of £45bn.
France and Germany have championed the tax, but until now the British government has resisted it.
Chris Smith - the respectable radical who is plotting a green revolution
Alice Thomson and Rachel Sylvester
Chris Smith is the respectable radical. He was the first openly gay MP. As the Culture Secretary in Tony Blair’s Government, he pioneered free admissions to museums. Later, from the back benches, he masterminded opposition in the House of Commons to the war in Iraq. Now Lord Smith of Finsbury wants to start a green revolution — and the mild-mannered rambler might just succeed.
As chairman of the Environment Agency, his job is to persuade a sceptical public that, despite the recession, climate change remains the greatest threat to Britain.
Speaking at his office overlooking the Thames before his organisation’s conference next week, he insists that bullying does not work, and instead wants to face down the growing band of climate-change agnostics: “The number of people claiming climate change isn’t happening is minuscule, and they have no authority among the scientific community,” he says. “They are mavericks, not backed up by the evidence.”
It is irrelevant, he says, that the world has recently been getting cooler. “You have to look at the trend over 20 years, and that clearly shows global warming. There are alarming new phenomena — the floods here two years ago, the glaciers melting. The evidence is all around us.”
Managing change is not enough, he argues; Britain has to counteract it. “We are facing an average rise of two degrees over the next 50 years. That will cause difficulties with water resources — summer flows in rivers will be down 50 per cent. It will cause movements of population around the world as people flee less habitable areas. Sea rise will threaten urban areas, there will be pressure on agricultural resources.”
People need to understand the implications of global warming, he says. One stark example is that changes to the coastline will accelerate — and the Environment Agency will no longer be able to protect all the crumbling cliffs: “Suffolk, Norfolk and Lincolnshire coasts are particularly vulnerable to erosion. The risk will increase. My determination is to do what we can to defend where we can . . . But there’ll be some parts that can’t be defended in perpetuity. We can’t build a concrete wall around the whole of England.”
Lord Smith is urging the Government to provide money for local authorities to buy cliff-top properties at risk of tumbling into the sea over the next 20 years. “We estimate there are 200 to 250 properties. The local authority would purchase property from the current owner, then lease it back to them.
“Then, if it gets to a stage where they can’t live in it any more because of the erosion, they would have the funds to move somewhere else. You are talking not just about a temporary flood: it’s the permanent loss of someone’s property through no fault of their own.”
At the moment, people may be more worried about unemployment and bankers’ bonuses, but Lord Smith says that the economy and environment go together. “If we are serious about coming out of recession in a more sustainable way, we have to look at green products, carbon capture, tidal power. These are the new industries for tomorrow and hold answers to economic problems.”
The problems are real, he says, but that does not mean that “climate change deniers” should be outcast: “They are dangerous, but it’s not like racism or sexism or homophobia.” This week, an employee successfully sued a company for not taking his environmental concerns seriously. “People should be allowed to believe passionately in environmental change — for them it can be like a religion.”
The devil, in his view, is Jeremy Clarkson, presenter of the motoring show Top Gear: “He would not be my favourite TV viewing, but there will be more rejoicing in Heaven for one sinner who repents. I would like him to be up there saying what we need is to develop an electric car that can beat the world. I want the thrill of speed but from electricity not fossil fuel.”
Lord Smith is disappointed that Gordon Brown’s moral compass points more to Africa than to the environment. “The Government hasn’t done enough on developing a national energy efficiency programme on energy efficiency in people’s homes. It is the low-hanging fruit. You get amazing benefits and cheaper bills, and create a lot of jobs. It’s win-win, but there is nothing co-ordinated.”
Labour has accused David Cameron of hypocrisy on the environment for cycling to Westminster — but having his briefcase driven by a chauffeur. Lord Smith, who is now a crossbencher, says: “The Tories will be equally green, the husky hugging is genuine. The climate change debate isn’t partisan.”
Individuals rather than governments hold the key to preventing global meltdown, he says. “I try and eat more fish and less meat. I don’t have a windmill on my house — there’s some evidence that the carbon generated by making a windmill for a house outweighs the benefit — but I want to put solar panels on the roof.
“I try and be sensible about how often I flush the loo, I usually have showers although occasionally I’ll permit myself the guilty luxury of a bath. I don’t fly a huge amount, I turn lights off religiously, I recycle everything I can.”
When it comes to other people, however, he prefers bribes to bans. He is not going to force everyone to become vegans. “It’s impractical to suggest the world stops eating meat. Cows produce pollution, we can’t stop people eating beef, but we can change the nature of feed stuff and to diminish greenhouse gas.” Chicken and lamb are “probably better” than beef, but there shouldn’t be a steak duty. “Taxes aren’t the answer. We need to change agricultural production.”
He regards himself as a civil libertarian — he wants to nudge rather than bludgeon travellers away from air travel. “We can’t ban all travel. We need to find better ways of getting around. Instead of taking planes in Europe, we have to develop high-speed rail.” He was appalled by the announcement this week of Britain’s first £1,000 rail fare. “It costs more to travel by train than plane . . . I think ultimately you need more subsidy to make rail travel more attractive.”
His big idea is to give everyone a personal carbon allowance, which would limit their use of air travel, heating and fast cars. “People could choose what they wanted to do, but life would become more expensive if they went over their carbon limit. They could sell on anything they didn’t use.”
He thinks that it would be fairer to allow travellers to take a small number of cheap flights every year, rather than taxing budget airlines out of existence. “People on limited means need holidays too,” he says. But does he agree with the environmentalist and writer Jonathon Porritt, that people who have more than two children are behaving irresponsibly? “Population is a big issue but you can’t have a quota,” he says.
When dealing with the supermarkets, he says that he prefers using carrots to sticks. “Home delivery is a very good, convenient idea that saves on the carbon footprint.” The Nimbys, however, are not going to be let off so easily. “I want wind power all over the countryside. There are only a few locations in the most precious and beautiful bits of landscape that would not be appropriate. As a general principle we need more wind farms.”
Lord Smith is not a conservative environmentalist, like the Prince of Wales. So does he think that the Prince is right to intervene on controversial issues? “Prince Charles is a useful voice, but he isn’t right on everything. I disagree with his blanket opposition to GM food.”
Lord Smith’s favourite political heir apparent is Ed Miliband, the Energy and Climate Change Secretary, with whom he has worked closely since being appointed to the Environment Agency last year. “He’s been up for making big decisions. Far too often government ministers lose sight of the wood for the trees, Ed still sees the big story. He doesn’t dither.”
Unlike the Prime Minister? “You can read polls as well as I can,” says the former Blair ally. “In the twelfth year of Government, there is inevitably a sense that things are changing. The question is less who [the leader] is, and more what they are saying to the electorate about the purpose of the Government. I think Labour need to get much more vigorous about the story they are telling.”
If he were in the Cabinet, would he be privately suggesting that Mr Brown might like to retire to his compost heap in Kirkcaldy? “I wouldn’t be in the Cabinet because I would have resigned over Iraq,” he says.
The world is gathering for a summit on climate change in Copenhagen next month, but Lord Smith admits that a significant agreement is unlikely. “The Chinese have really taken this agenda forward, the Americans are very up for it, the problems lie in the American political system. Copenhagen is going to be the start not the end of the process.”
CV
Age 57
Education Pembroke College, Cambridge and Harvard
Career 1983 elected Labour MP for Islington South and Finsbury
1997-2001 Secretary of State for Culture, Media and Sport
2003-2008 chairman, Clore Leadership Programme
2005 becomes life peer, privy councillor
2007 chairman, Advertising Standards Authority
2008 chairman, Environment Agency
Quickfire
Munros or Everest? Munros
Hallowe’en or Bonfire Night? Bonfire Night
Seabed or space? Seabed
Leather or plastic? Neither
Brahms or Bob Dylan? Both
Hugh Fearnley-Whittingstall or Gordon Ramsay? Fearnley-Whittingstall
Chris Smith is the respectable radical. He was the first openly gay MP. As the Culture Secretary in Tony Blair’s Government, he pioneered free admissions to museums. Later, from the back benches, he masterminded opposition in the House of Commons to the war in Iraq. Now Lord Smith of Finsbury wants to start a green revolution — and the mild-mannered rambler might just succeed.
As chairman of the Environment Agency, his job is to persuade a sceptical public that, despite the recession, climate change remains the greatest threat to Britain.
Speaking at his office overlooking the Thames before his organisation’s conference next week, he insists that bullying does not work, and instead wants to face down the growing band of climate-change agnostics: “The number of people claiming climate change isn’t happening is minuscule, and they have no authority among the scientific community,” he says. “They are mavericks, not backed up by the evidence.”
It is irrelevant, he says, that the world has recently been getting cooler. “You have to look at the trend over 20 years, and that clearly shows global warming. There are alarming new phenomena — the floods here two years ago, the glaciers melting. The evidence is all around us.”
Managing change is not enough, he argues; Britain has to counteract it. “We are facing an average rise of two degrees over the next 50 years. That will cause difficulties with water resources — summer flows in rivers will be down 50 per cent. It will cause movements of population around the world as people flee less habitable areas. Sea rise will threaten urban areas, there will be pressure on agricultural resources.”
People need to understand the implications of global warming, he says. One stark example is that changes to the coastline will accelerate — and the Environment Agency will no longer be able to protect all the crumbling cliffs: “Suffolk, Norfolk and Lincolnshire coasts are particularly vulnerable to erosion. The risk will increase. My determination is to do what we can to defend where we can . . . But there’ll be some parts that can’t be defended in perpetuity. We can’t build a concrete wall around the whole of England.”
Lord Smith is urging the Government to provide money for local authorities to buy cliff-top properties at risk of tumbling into the sea over the next 20 years. “We estimate there are 200 to 250 properties. The local authority would purchase property from the current owner, then lease it back to them.
“Then, if it gets to a stage where they can’t live in it any more because of the erosion, they would have the funds to move somewhere else. You are talking not just about a temporary flood: it’s the permanent loss of someone’s property through no fault of their own.”
At the moment, people may be more worried about unemployment and bankers’ bonuses, but Lord Smith says that the economy and environment go together. “If we are serious about coming out of recession in a more sustainable way, we have to look at green products, carbon capture, tidal power. These are the new industries for tomorrow and hold answers to economic problems.”
The problems are real, he says, but that does not mean that “climate change deniers” should be outcast: “They are dangerous, but it’s not like racism or sexism or homophobia.” This week, an employee successfully sued a company for not taking his environmental concerns seriously. “People should be allowed to believe passionately in environmental change — for them it can be like a religion.”
The devil, in his view, is Jeremy Clarkson, presenter of the motoring show Top Gear: “He would not be my favourite TV viewing, but there will be more rejoicing in Heaven for one sinner who repents. I would like him to be up there saying what we need is to develop an electric car that can beat the world. I want the thrill of speed but from electricity not fossil fuel.”
Lord Smith is disappointed that Gordon Brown’s moral compass points more to Africa than to the environment. “The Government hasn’t done enough on developing a national energy efficiency programme on energy efficiency in people’s homes. It is the low-hanging fruit. You get amazing benefits and cheaper bills, and create a lot of jobs. It’s win-win, but there is nothing co-ordinated.”
Labour has accused David Cameron of hypocrisy on the environment for cycling to Westminster — but having his briefcase driven by a chauffeur. Lord Smith, who is now a crossbencher, says: “The Tories will be equally green, the husky hugging is genuine. The climate change debate isn’t partisan.”
Individuals rather than governments hold the key to preventing global meltdown, he says. “I try and eat more fish and less meat. I don’t have a windmill on my house — there’s some evidence that the carbon generated by making a windmill for a house outweighs the benefit — but I want to put solar panels on the roof.
“I try and be sensible about how often I flush the loo, I usually have showers although occasionally I’ll permit myself the guilty luxury of a bath. I don’t fly a huge amount, I turn lights off religiously, I recycle everything I can.”
When it comes to other people, however, he prefers bribes to bans. He is not going to force everyone to become vegans. “It’s impractical to suggest the world stops eating meat. Cows produce pollution, we can’t stop people eating beef, but we can change the nature of feed stuff and to diminish greenhouse gas.” Chicken and lamb are “probably better” than beef, but there shouldn’t be a steak duty. “Taxes aren’t the answer. We need to change agricultural production.”
He regards himself as a civil libertarian — he wants to nudge rather than bludgeon travellers away from air travel. “We can’t ban all travel. We need to find better ways of getting around. Instead of taking planes in Europe, we have to develop high-speed rail.” He was appalled by the announcement this week of Britain’s first £1,000 rail fare. “It costs more to travel by train than plane . . . I think ultimately you need more subsidy to make rail travel more attractive.”
His big idea is to give everyone a personal carbon allowance, which would limit their use of air travel, heating and fast cars. “People could choose what they wanted to do, but life would become more expensive if they went over their carbon limit. They could sell on anything they didn’t use.”
He thinks that it would be fairer to allow travellers to take a small number of cheap flights every year, rather than taxing budget airlines out of existence. “People on limited means need holidays too,” he says. But does he agree with the environmentalist and writer Jonathon Porritt, that people who have more than two children are behaving irresponsibly? “Population is a big issue but you can’t have a quota,” he says.
When dealing with the supermarkets, he says that he prefers using carrots to sticks. “Home delivery is a very good, convenient idea that saves on the carbon footprint.” The Nimbys, however, are not going to be let off so easily. “I want wind power all over the countryside. There are only a few locations in the most precious and beautiful bits of landscape that would not be appropriate. As a general principle we need more wind farms.”
Lord Smith is not a conservative environmentalist, like the Prince of Wales. So does he think that the Prince is right to intervene on controversial issues? “Prince Charles is a useful voice, but he isn’t right on everything. I disagree with his blanket opposition to GM food.”
Lord Smith’s favourite political heir apparent is Ed Miliband, the Energy and Climate Change Secretary, with whom he has worked closely since being appointed to the Environment Agency last year. “He’s been up for making big decisions. Far too often government ministers lose sight of the wood for the trees, Ed still sees the big story. He doesn’t dither.”
Unlike the Prime Minister? “You can read polls as well as I can,” says the former Blair ally. “In the twelfth year of Government, there is inevitably a sense that things are changing. The question is less who [the leader] is, and more what they are saying to the electorate about the purpose of the Government. I think Labour need to get much more vigorous about the story they are telling.”
If he were in the Cabinet, would he be privately suggesting that Mr Brown might like to retire to his compost heap in Kirkcaldy? “I wouldn’t be in the Cabinet because I would have resigned over Iraq,” he says.
The world is gathering for a summit on climate change in Copenhagen next month, but Lord Smith admits that a significant agreement is unlikely. “The Chinese have really taken this agenda forward, the Americans are very up for it, the problems lie in the American political system. Copenhagen is going to be the start not the end of the process.”
CV
Age 57
Education Pembroke College, Cambridge and Harvard
Career 1983 elected Labour MP for Islington South and Finsbury
1997-2001 Secretary of State for Culture, Media and Sport
2003-2008 chairman, Clore Leadership Programme
2005 becomes life peer, privy councillor
2007 chairman, Advertising Standards Authority
2008 chairman, Environment Agency
Quickfire
Munros or Everest? Munros
Hallowe’en or Bonfire Night? Bonfire Night
Seabed or space? Seabed
Leather or plastic? Neither
Brahms or Bob Dylan? Both
Hugh Fearnley-Whittingstall or Gordon Ramsay? Fearnley-Whittingstall
Climate change commitments of different countries
The US has said it will not sign up to a climate change deal unless developing nations also cut pollution. But what have rich and poor nations signed up to so far?
By Louise Gray, Environment CorrespondentPublished: 9:00AM GMT 07 Nov 2009
The European Union has said it will slash emissions by 20 pe rcent by 2020 compared with the 1990 level
Pledges by rich countries on 2020 levels
UN: The Intergovernmental Panel on Climate Change (IPCC) says the rich world should cut emissions by 25 to 40 per cent by 2020 on 1990 levels to keep temperature rise below 2C (3.6F).
EU: 20 per cent by 2020 on 1990 levels, rising to 30 per cent if other countries also agree to take action.
US: Legislation is currently going through the Senate that would commit the US to cuts of up to 20 per cent on 2005 levels by 2020. This equates to around six per cent on 1990 levels. But the US insists its target is in fact stronger than the EU target, because the EU has already made most of its cuts and only needs to cut carbon by a further 12 per cent on 2005 levels.
UK: Britain will cut emissions by 34 per cent on 1990 levels by 2020, rising to 42 per cent if there is a deal in Copenhagen.
Japan: Since a new Government came into force Japan has been committed to cutting emissions by 25 per cent on 1990 levels by 2020.
Russia: 10 to 15 per cent by 2020 on 1990 levels. However environmentalists say this equates to an increase of around 2 per cent on 2005 levels. There are also concerns that Russia could carry forward huge amount of unused cuts due to the collapse of the Soviet Union from earlier commitments.
Canada: The Government has targets of 20 per cent by 2020 on 2006 levels. But it is estimated this will only equate to six per cent on 1990 levels.
Australia: The Government has committed Australia to cuts of between 5 to 15 per cent by 2020 from 2000 levels.
Pledges by poor nations
UN: The least developed nations, that need to develop in the next ten years to fight poverty, do not have to do anything. But other developing nations like China and India must take action against “business as usual”.
China: The Chinese have committed to a 20 per cent cut in “energy intensity” from 2006 to 2010 and by a “notable margin” by 2020. China will nearly double the proportion of renewables in its overall energy mix - from 8 per cent in 2006 to 15 per cent in 2020.
India: The Government also insist they will also make cuts against “business as usual” by investing massively in renewables like solar.
Indonesia: One of the few developing countries to sign up to targets has committed to cutting emissions by 26 per cent on “business as usual” levels by 2020.
Brazil: Committed to “drastically reducing” deforestation, its principle source of carbon emissions.
Mexico: By 2012, Mexico will cut greenhouse gas emissions by 8 per cent or 50 million tonnes per year.
The Maldives: The small island in the Indian Ocean is committed to going carbon neutral in the next ten years. Other small island states in danger of sea level rises are also planning to cut emissions.
By Louise Gray, Environment CorrespondentPublished: 9:00AM GMT 07 Nov 2009
The European Union has said it will slash emissions by 20 pe rcent by 2020 compared with the 1990 level
Pledges by rich countries on 2020 levels
UN: The Intergovernmental Panel on Climate Change (IPCC) says the rich world should cut emissions by 25 to 40 per cent by 2020 on 1990 levels to keep temperature rise below 2C (3.6F).
EU: 20 per cent by 2020 on 1990 levels, rising to 30 per cent if other countries also agree to take action.
US: Legislation is currently going through the Senate that would commit the US to cuts of up to 20 per cent on 2005 levels by 2020. This equates to around six per cent on 1990 levels. But the US insists its target is in fact stronger than the EU target, because the EU has already made most of its cuts and only needs to cut carbon by a further 12 per cent on 2005 levels.
UK: Britain will cut emissions by 34 per cent on 1990 levels by 2020, rising to 42 per cent if there is a deal in Copenhagen.
Japan: Since a new Government came into force Japan has been committed to cutting emissions by 25 per cent on 1990 levels by 2020.
Russia: 10 to 15 per cent by 2020 on 1990 levels. However environmentalists say this equates to an increase of around 2 per cent on 2005 levels. There are also concerns that Russia could carry forward huge amount of unused cuts due to the collapse of the Soviet Union from earlier commitments.
Canada: The Government has targets of 20 per cent by 2020 on 2006 levels. But it is estimated this will only equate to six per cent on 1990 levels.
Australia: The Government has committed Australia to cuts of between 5 to 15 per cent by 2020 from 2000 levels.
Pledges by poor nations
UN: The least developed nations, that need to develop in the next ten years to fight poverty, do not have to do anything. But other developing nations like China and India must take action against “business as usual”.
China: The Chinese have committed to a 20 per cent cut in “energy intensity” from 2006 to 2010 and by a “notable margin” by 2020. China will nearly double the proportion of renewables in its overall energy mix - from 8 per cent in 2006 to 15 per cent in 2020.
India: The Government also insist they will also make cuts against “business as usual” by investing massively in renewables like solar.
Indonesia: One of the few developing countries to sign up to targets has committed to cutting emissions by 26 per cent on “business as usual” levels by 2020.
Brazil: Committed to “drastically reducing” deforestation, its principle source of carbon emissions.
Mexico: By 2012, Mexico will cut greenhouse gas emissions by 8 per cent or 50 million tonnes per year.
The Maldives: The small island in the Indian Ocean is committed to going carbon neutral in the next ten years. Other small island states in danger of sea level rises are also planning to cut emissions.
GREEN IDEA
American military targets biofuel Fuel companies and research institutes are pouring millions into the search for biofuels. Some of the serious work is being funded from an unlikely source, however: America’s Department of Defense. Its research agency, Darpa, has quietly been awarding biofuel research contracts to companies such as SAIC and General Dynamics. The goal? To make the military machine less reliant on fossil fuels.
For more info see darpa.mil/sto/chembio/biofuels.html
For more info see darpa.mil/sto/chembio/biofuels.html
Rise of the monster wind farms
A £125bn plan to generate a third of the UK’s energy needs offshore may prove too ambitious
Danny Fortson
Picture a field of enormous windmills, each the height of London’s Gherkin skyscraper with blades as long as a jumbo jet. Does this sound fantastical?
The government doesn’t think so. Ed Miliband, the energy secretary, recently stumped up £4.4m of public money to help finance the first of these monster turbines, to be built at a former shipyard in Blyth, Northumberland.
Dubbed the Britannia Project, the scheme is part of an ambitious plan to cut our carbon dioxide emissions by investing billions in new wind farms at sea. In the next few weeks the Crown Estate, owner of the seabed round our coast, will name the companies that have won the right to build these projects. Each will generate more power than all the world’s offshore wind farms now in operation.
In theory, the farms could provide up to a third of the country’s energy. They won’t be cheap. Executives estimate that to build them will cost more than £100 billion over the next 12 years — the same as 25 nuclear reactors.
The benefits are clear. The power generated will be emission-free as well as immune to the geopolitical machinations that affect gas and other fossil fuels. The windier conditions at sea mean they should generate maximum power about a third of the time, as opposed to a quarter for onshore turbines. They can be built on an enormous scale, giving Britain a huge boost in meeting its targets for cutting emissions.
There are, however, many obstacles and unanswered questions. Big subsidies are required — this was one of the main reasons why Ofgem, the regulator, warned recently that annual household energy bills could rocket to £2,000 by 2016, up from £1,100 today. Critics wonder if spending on household energy efficiency would be a better use of the money.
Reliability is also a concern. Nobody has ever tried to put so many power stations as far out in the North Sea. Andy Cox, energy partner at KPMG, said: “The hostile environment that awaits these projects must be a real concern to investors. Even in the more benign onshore wind sector, there have been numerous problems with gearboxes and blades failing.”
Today there are only three purpose-built ships for installing offshore turbines. The European Wind Energy Association says that more than 30 will be needed. “It’s a little scary because there are some fundamental differences from building onshore. We will have to deal with some unknowns, like wave height,” said Dave Rogers, head of renewables at Eon.
If something goes wrong, a turbine could be out of action for weeks before the weather allows a ship to go out and fix the problem.
David Still, European managing director at Clipper Windpower, the company behind the Britannia Project, envisions maintenance staff living on offshore platforms. The huge wind farms to be built after the Crown Estate’s “round three” seabed auction will be as far as 150 miles off the coast and in depths twice the 20m typical of today’s smaller projects.
“Onshore we can get to a turbine within two hours,” said Still. “You can’t be spending a lot of money on helicopters or taking a six-hour boat ride every time there is a maintenance event. The size of the new fields will bring a whole range of problems.”
Maria McCaffery, chief executive of the British Wind Energy Association, the trade group, has called the wind industry “the biggest job-creation event since North Sea oil”.
It has a long way to go. Last June Britain’s first class of certified wind turbine technicians graduated from Northumberland College outside Newcastle. The class, the only one of its kind in Britain, had six students. By Christmas their ranks will triple when another 12 pupils get their certificates.
The electricity network will also need to be radically overhauled and upgraded. Today Britain’s generation capacity sits at about 75 gigawatts. To take account of the variability of the winds, that will have to increase more than 50%, to about 120gw, to meet the same level of demand.
Stuart Bailey, head of balancing services at National Grid, said he will also have to double the additional buffer of “reserve” energy the system has on call at any one time in case a big plant shuts down. These are often pollution-spewing coal-and oil-fired plants.
Buildings costs, meanwhile, have rocketed. In the middle of the credit crunch the industry made desperate pleas to the government for aid on top of an already generous subsidy scheme. Without it, they warned, Britain’s wind energy revolution would die. The government responded by ratcheting up the subsidy by a third.
Within weeks, costs for turbines, cables and other equipment rose by a similar amount.
Offshore farms now cost twice what they did three years ago. Mortimer Menzel, of Augusta & Co, the bank, said prices will not come down until more companies enter the industry. “We have reached a peak in terms of building and construction costs because we have these generous government subsidies that are being passed straight through to the suppliers,” he said. “Commodity prices have halved since last year but turbine prices haven’t moved. If they don’t come down, we have a problem.”
Turbines aren’t the only problem. To bring the power ashore, hundreds of miles of undersea cable, at an estimated cost of £15 billion, will need to be laid.
Energy companies can no longer afford to build big farms on their own. Centrica recently sold half its stake in its new Lynn and Inner Dowsing farm to help finance the building of its next one. Npower has hired Merrill Lynch to find someone to take on half the £1.7 billion building cost of its Gwynt y Mor farm off the Welsh coast. Dong Energy, the Danish group that has plans to build more than £10 billion of offshore wind farms in the UK, including the London Array, a huge project in the Thames estuary, has hired the investment bank Rothschild to find investors to share the burden.
“They want to build this stuff,” a banker said, “but they simply can’t afford it.”
And the Britannia Project? It may never make it off the drawing board. Ken Rumph, an analyst at Nomura Code Securities, said that loss-making Clipper needs to raise $180m (£108m) to make it through next year. If it doesn’t, he said, “bankruptcy is a realistic scenario”.
Danny Fortson
Picture a field of enormous windmills, each the height of London’s Gherkin skyscraper with blades as long as a jumbo jet. Does this sound fantastical?
The government doesn’t think so. Ed Miliband, the energy secretary, recently stumped up £4.4m of public money to help finance the first of these monster turbines, to be built at a former shipyard in Blyth, Northumberland.
Dubbed the Britannia Project, the scheme is part of an ambitious plan to cut our carbon dioxide emissions by investing billions in new wind farms at sea. In the next few weeks the Crown Estate, owner of the seabed round our coast, will name the companies that have won the right to build these projects. Each will generate more power than all the world’s offshore wind farms now in operation.
In theory, the farms could provide up to a third of the country’s energy. They won’t be cheap. Executives estimate that to build them will cost more than £100 billion over the next 12 years — the same as 25 nuclear reactors.
The benefits are clear. The power generated will be emission-free as well as immune to the geopolitical machinations that affect gas and other fossil fuels. The windier conditions at sea mean they should generate maximum power about a third of the time, as opposed to a quarter for onshore turbines. They can be built on an enormous scale, giving Britain a huge boost in meeting its targets for cutting emissions.
There are, however, many obstacles and unanswered questions. Big subsidies are required — this was one of the main reasons why Ofgem, the regulator, warned recently that annual household energy bills could rocket to £2,000 by 2016, up from £1,100 today. Critics wonder if spending on household energy efficiency would be a better use of the money.
Reliability is also a concern. Nobody has ever tried to put so many power stations as far out in the North Sea. Andy Cox, energy partner at KPMG, said: “The hostile environment that awaits these projects must be a real concern to investors. Even in the more benign onshore wind sector, there have been numerous problems with gearboxes and blades failing.”
Today there are only three purpose-built ships for installing offshore turbines. The European Wind Energy Association says that more than 30 will be needed. “It’s a little scary because there are some fundamental differences from building onshore. We will have to deal with some unknowns, like wave height,” said Dave Rogers, head of renewables at Eon.
If something goes wrong, a turbine could be out of action for weeks before the weather allows a ship to go out and fix the problem.
David Still, European managing director at Clipper Windpower, the company behind the Britannia Project, envisions maintenance staff living on offshore platforms. The huge wind farms to be built after the Crown Estate’s “round three” seabed auction will be as far as 150 miles off the coast and in depths twice the 20m typical of today’s smaller projects.
“Onshore we can get to a turbine within two hours,” said Still. “You can’t be spending a lot of money on helicopters or taking a six-hour boat ride every time there is a maintenance event. The size of the new fields will bring a whole range of problems.”
Maria McCaffery, chief executive of the British Wind Energy Association, the trade group, has called the wind industry “the biggest job-creation event since North Sea oil”.
It has a long way to go. Last June Britain’s first class of certified wind turbine technicians graduated from Northumberland College outside Newcastle. The class, the only one of its kind in Britain, had six students. By Christmas their ranks will triple when another 12 pupils get their certificates.
The electricity network will also need to be radically overhauled and upgraded. Today Britain’s generation capacity sits at about 75 gigawatts. To take account of the variability of the winds, that will have to increase more than 50%, to about 120gw, to meet the same level of demand.
Stuart Bailey, head of balancing services at National Grid, said he will also have to double the additional buffer of “reserve” energy the system has on call at any one time in case a big plant shuts down. These are often pollution-spewing coal-and oil-fired plants.
Buildings costs, meanwhile, have rocketed. In the middle of the credit crunch the industry made desperate pleas to the government for aid on top of an already generous subsidy scheme. Without it, they warned, Britain’s wind energy revolution would die. The government responded by ratcheting up the subsidy by a third.
Within weeks, costs for turbines, cables and other equipment rose by a similar amount.
Offshore farms now cost twice what they did three years ago. Mortimer Menzel, of Augusta & Co, the bank, said prices will not come down until more companies enter the industry. “We have reached a peak in terms of building and construction costs because we have these generous government subsidies that are being passed straight through to the suppliers,” he said. “Commodity prices have halved since last year but turbine prices haven’t moved. If they don’t come down, we have a problem.”
Turbines aren’t the only problem. To bring the power ashore, hundreds of miles of undersea cable, at an estimated cost of £15 billion, will need to be laid.
Energy companies can no longer afford to build big farms on their own. Centrica recently sold half its stake in its new Lynn and Inner Dowsing farm to help finance the building of its next one. Npower has hired Merrill Lynch to find someone to take on half the £1.7 billion building cost of its Gwynt y Mor farm off the Welsh coast. Dong Energy, the Danish group that has plans to build more than £10 billion of offshore wind farms in the UK, including the London Array, a huge project in the Thames estuary, has hired the investment bank Rothschild to find investors to share the burden.
“They want to build this stuff,” a banker said, “but they simply can’t afford it.”
And the Britannia Project? It may never make it off the drawing board. Ken Rumph, an analyst at Nomura Code Securities, said that loss-making Clipper needs to raise $180m (£108m) to make it through next year. If it doesn’t, he said, “bankruptcy is a realistic scenario”.
Future of wind farms in doubt
Danny Fortson
BRITAIN’s biggest developer of offshore wind farms has hired Rothschild to sell stakes in its projects because it cannot afford to build them.
The move by Dong Energy, the Danish power giant, casts fresh doubt on the government’s carbon-reduction plans just six months after it ramped up subsidies to keep the offshore wind sector afloat.
Nuclear power and offshore wind are the main pillars of the government’s plan to slash pollution. Ed Miliband, energy secretary, will underline their importance when he delivers the national policy statement on energy tomorrow.
Construction costs, however, have soared. Dong has plans to develop wind farms with a capacity of 3 gigawatts, enough to supply more than 2m homes, but they will cost more than £10 billion to build — twice the price just three years ago. “The issue is that these projects require enormous amounts of capital and it’s getting very difficult to justify,” said an industry source. “The enthusiasm there once was has diminished.”
The crunch comes at a critical time. Within the next month the Crown Estate, owner of Britain’s seabed, will award the rights to develop a batch of enormous offshore sites that are meant to make up the bulk of the UK’s renewable energy capacity.
Dong is expected to sell down stakes in projects where it has 100% ownership, such as the £1 billion Walney farm in the Irish Sea.
BRITAIN’s biggest developer of offshore wind farms has hired Rothschild to sell stakes in its projects because it cannot afford to build them.
The move by Dong Energy, the Danish power giant, casts fresh doubt on the government’s carbon-reduction plans just six months after it ramped up subsidies to keep the offshore wind sector afloat.
Nuclear power and offshore wind are the main pillars of the government’s plan to slash pollution. Ed Miliband, energy secretary, will underline their importance when he delivers the national policy statement on energy tomorrow.
Construction costs, however, have soared. Dong has plans to develop wind farms with a capacity of 3 gigawatts, enough to supply more than 2m homes, but they will cost more than £10 billion to build — twice the price just three years ago. “The issue is that these projects require enormous amounts of capital and it’s getting very difficult to justify,” said an industry source. “The enthusiasm there once was has diminished.”
The crunch comes at a critical time. Within the next month the Crown Estate, owner of Britain’s seabed, will award the rights to develop a batch of enormous offshore sites that are meant to make up the bulk of the UK’s renewable energy capacity.
Dong is expected to sell down stakes in projects where it has 100% ownership, such as the £1 billion Walney farm in the Irish Sea.
Sainsbury's to go greener with carbon dioxide
Sainsbury's is to become the first UK supermarket to ban the use of "super-global-warming" chemicals in its refrigerators – instead cooling its food by carbon dioxide.
By Rowena MasonPublished: 11:34PM GMT 07 Nov 2009
The decision, due to be announced this week by Sir Justin King, the chief executive of Sainsbury's, will come into force as a group of MPs and green campaigners lobby for a ban on so-called F-gas (hydrofluorocarbons) chemicals by 2015.
Experts have calculated that F-gases, the currently used refrigerants, are 1,420 times more damaging to the climate than carbon dioxide, making the annual leakage from UK supermarkets the equivalent of one billion trips to the shops by car.
The refrigerants became widely used during the 1990s to replace gases that harmed the ozone layer – but have turned out to be equally attacked by environmentalists.
Sainsbury's, which is expected to report first half pre-tax profit on Wednesday of £300m, up 16pc from £259m last year, will make a multi-million pound investment in the new refrigeration. It claims the move will cut overall emissions by one third.
However, Sir Justin has raised fears that Britain's workforce is ill-equipped to deal with the cuts in emissions demanded by the Government, after the supermarket had to ship in engineers from abroad to tackle the move to carbon dioxide refrigeration.
He described the lack of specialist engineers in the UK as a "serious barrier" preventing companies from helping Britain meet its targets on climate change.
"The Government needs to seize the opportunity here by helping people re-train to work in the rapidly expanding green sector," Sir Justin said.
Earlier this year, Asda trialled green refrigeration at its "eco-store" near Liverpool, while Marks & Spencer and Morrisons have said they will not use F-gases in new equipment. So far, no other supermarkets have announced full plans to switch to carbon dioxide as a refrigerant.
Doug Parr, chief scientist of Greenpeace UK, said the Government ought to learn from industry's lead on removing F-gases from the environment, and called on others to make similar pledges.
Carbon-copy supermarkets
The past few years have seen a war among supermarkets claiming to have the greenest stores of them all.
Asda says its Bootle site cuts emissions by 35pc, Sainsbury says its Dartmouth store will reduce emissions by 40pc and Tesco claims its Shrewsbury store lowers emissions by 60pc.
Tesco is considering whether to build its own windfarm to become a zero-carbon business by 2050.
Also, Morrisons wants to cut road miles by 6pc before the end of 2010, M&S aims to make UK & Irish operations carbon neutral in three years and Waitrose will recycle 75pc of all waste by 2012.
By Rowena MasonPublished: 11:34PM GMT 07 Nov 2009
The decision, due to be announced this week by Sir Justin King, the chief executive of Sainsbury's, will come into force as a group of MPs and green campaigners lobby for a ban on so-called F-gas (hydrofluorocarbons) chemicals by 2015.
Experts have calculated that F-gases, the currently used refrigerants, are 1,420 times more damaging to the climate than carbon dioxide, making the annual leakage from UK supermarkets the equivalent of one billion trips to the shops by car.
The refrigerants became widely used during the 1990s to replace gases that harmed the ozone layer – but have turned out to be equally attacked by environmentalists.
Sainsbury's, which is expected to report first half pre-tax profit on Wednesday of £300m, up 16pc from £259m last year, will make a multi-million pound investment in the new refrigeration. It claims the move will cut overall emissions by one third.
However, Sir Justin has raised fears that Britain's workforce is ill-equipped to deal with the cuts in emissions demanded by the Government, after the supermarket had to ship in engineers from abroad to tackle the move to carbon dioxide refrigeration.
He described the lack of specialist engineers in the UK as a "serious barrier" preventing companies from helping Britain meet its targets on climate change.
"The Government needs to seize the opportunity here by helping people re-train to work in the rapidly expanding green sector," Sir Justin said.
Earlier this year, Asda trialled green refrigeration at its "eco-store" near Liverpool, while Marks & Spencer and Morrisons have said they will not use F-gases in new equipment. So far, no other supermarkets have announced full plans to switch to carbon dioxide as a refrigerant.
Doug Parr, chief scientist of Greenpeace UK, said the Government ought to learn from industry's lead on removing F-gases from the environment, and called on others to make similar pledges.
Carbon-copy supermarkets
The past few years have seen a war among supermarkets claiming to have the greenest stores of them all.
Asda says its Bootle site cuts emissions by 35pc, Sainsbury says its Dartmouth store will reduce emissions by 40pc and Tesco claims its Shrewsbury store lowers emissions by 60pc.
Tesco is considering whether to build its own windfarm to become a zero-carbon business by 2050.
Also, Morrisons wants to cut road miles by 6pc before the end of 2010, M&S aims to make UK & Irish operations carbon neutral in three years and Waitrose will recycle 75pc of all waste by 2012.
China lower risk than UK for green investors, claims Deutsche Bank
Study condemning UK energy strategy set to embarrass government as it prepares to unveil new climate change initiative
Terry Macalister
The Observer, Sunday 8 November 2009
Britain's claim to be a world leader in green energy investment has been called into question by an authoritative new study that will embarrass ministers as they prepare to launch an important climate change initiative tomorrow.
A report from Deutsche Bank says that the UK does not have the right climate change strategy to attract international investment and is lagging behind other countries, such as Germany, France and China.
Britain's energy strategy lacks the level of transparency and certainty required to encourage investment, according to Deutsche Bank's study on the best places to do business. It comes as ministers prepare to launch six draft national policy statements on energy and climate change policies tomorrow.
"What investors want is transparency, longevity and certainty – TLC – in policy regimes to mobilise capital," said Kevin Parker, global head of Deutsche Bank's asset management division, which is based in New York.
"Many major emitters such as the US and the UK do not have enough TLC in their policy frameworks. Our rankings show that China has a lower risk for climate change investors, as does Germany, but the research also shows that in order to avoid catastrophic climate change, they have demonstrated their ability to deliver scale."
The Department of Energy and Climate Change said its host of new initiatives to streamline planning and ensure the building of new infrastructure, such as clean coal plants, is proof of its positive commitment to moving to a low-carbon economy.
"You will have seen [from] the recent announcement from RWE and E.ON about spending £15bn and creating thousands of jobs here in new nuclear plants that investment does seem to be coming," said a DECC spokesman.
But Deutsche Bank says Japan and Australia are among the countries that represent lower risk profiles than the UK because they have more comprehensive and integrated government plans.
Parker and his colleagues are particularly keen on feed-in tariffs – which pay consumers to generate their own electricity and sell it back to the grid – to encourage green power, which have been very successfully used in Germany. Britain was originally opposed to this kind of incentive but has recently accepted that they should be introduced, although, crucially, ministers have yet to indicate what price utilities will pay to those consumers who generate their own power.
Deutsche Bank claims that the UK has attracted $17bn (£10bn) in capital investment as a result of climate change policies, compared to $36bn in Germany and $41bn in China. It admits the UK figure is still "substantial" but largely puts this down to the fact that the City is a major centre for the capital markets.
The national policy documents the government will unveil tomorrow will cover energy sectors including gas, the electricity grid and, in particular, nuclear. The nuclear document will give detailed analysis of the 11 sites put forward by developers for new plants and give initial verdicts on their suitability.
Those areas are expected to include those nominated already by EDF and RWE, such as Sizewell in Suffolk and Wylfa on the Isle of Anglesey..
Ed Miliband, the energy secretary, is also expected to give a draft "justification" statement explaining there is a national need for new nuclear stations.
Terry Macalister
The Observer, Sunday 8 November 2009
Britain's claim to be a world leader in green energy investment has been called into question by an authoritative new study that will embarrass ministers as they prepare to launch an important climate change initiative tomorrow.
A report from Deutsche Bank says that the UK does not have the right climate change strategy to attract international investment and is lagging behind other countries, such as Germany, France and China.
Britain's energy strategy lacks the level of transparency and certainty required to encourage investment, according to Deutsche Bank's study on the best places to do business. It comes as ministers prepare to launch six draft national policy statements on energy and climate change policies tomorrow.
"What investors want is transparency, longevity and certainty – TLC – in policy regimes to mobilise capital," said Kevin Parker, global head of Deutsche Bank's asset management division, which is based in New York.
"Many major emitters such as the US and the UK do not have enough TLC in their policy frameworks. Our rankings show that China has a lower risk for climate change investors, as does Germany, but the research also shows that in order to avoid catastrophic climate change, they have demonstrated their ability to deliver scale."
The Department of Energy and Climate Change said its host of new initiatives to streamline planning and ensure the building of new infrastructure, such as clean coal plants, is proof of its positive commitment to moving to a low-carbon economy.
"You will have seen [from] the recent announcement from RWE and E.ON about spending £15bn and creating thousands of jobs here in new nuclear plants that investment does seem to be coming," said a DECC spokesman.
But Deutsche Bank says Japan and Australia are among the countries that represent lower risk profiles than the UK because they have more comprehensive and integrated government plans.
Parker and his colleagues are particularly keen on feed-in tariffs – which pay consumers to generate their own electricity and sell it back to the grid – to encourage green power, which have been very successfully used in Germany. Britain was originally opposed to this kind of incentive but has recently accepted that they should be introduced, although, crucially, ministers have yet to indicate what price utilities will pay to those consumers who generate their own power.
Deutsche Bank claims that the UK has attracted $17bn (£10bn) in capital investment as a result of climate change policies, compared to $36bn in Germany and $41bn in China. It admits the UK figure is still "substantial" but largely puts this down to the fact that the City is a major centre for the capital markets.
The national policy documents the government will unveil tomorrow will cover energy sectors including gas, the electricity grid and, in particular, nuclear. The nuclear document will give detailed analysis of the 11 sites put forward by developers for new plants and give initial verdicts on their suitability.
Those areas are expected to include those nominated already by EDF and RWE, such as Sizewell in Suffolk and Wylfa on the Isle of Anglesey..
Ed Miliband, the energy secretary, is also expected to give a draft "justification" statement explaining there is a national need for new nuclear stations.
Ethical investments: What shade of green will you choose?
With National Ethical Investment Week about to start, Sarah Pennells guides newcomers through the three main types of fund and suggests where to go to find out more
Sarah Pennnells
The Guardian, Saturday 7 November 2009
You recycle, switch off lights and have a water butt. But is your wallet green? Tomorrow sees the start of National Ethical Investment Week (NEIW), a campaign designed to spread the message of ethical and green investing. Only 8% of people invest ethically, although 33% of those questioned by YouGov for NEIW said they would consider it in the next five years.
Ethical investing can be tricky to get to grips with if you are a first-timer. With dozens of different funds and some off-putting jargon, it is not surprising that some just plonk their cash in the first fund they come across.
But this is not the route to investing happiness. You might end up with a fund that bears no relation to your own ethical views or one with a great track record in ... abysmal performance. You do not need to be an ethical expert to invest £50 a month in an Isa, but it helps if you understand the basics.
There is no foolproof way to categorise funds because they tend to overlap, but they can be – broadly – broken down into ethical, green and engagement funds (which put pressure on companies to improve their behaviour). Don't expect funds in the same category to invest in the same companies: it will be down to their focus and investment approach.
Ethical funds either refuse to invest in certain companies or sectors, positively invest in others, or both. Those on the banned list will vary but could include cigarette and alcohol producers, armaments manufacturers and businesses supporting regimes with a bad record on human rights.
Of all the categories, it is the easiest to explain, according to Amanda Davidson, of independent financial adviser Baigrie Davies: "If you ask a client what they want to do with their money, they'll always start with a list of what they don't want to invest in."
The first green fund launched 21 years ago. Now there are dozens; some exclude companies with a bad environmental record, others invest in specific sectors, such as renewable energy.
But if you think green funds buy only solar panel and wind turbine makers, you will be disappointed. For example, Jupiter Ecology fund, the oldest green fund, invests in a producer of free range and organic sausages.
Funds that take engagement seriously can have a far bigger influence than traditional ethical funds. By "engaging", fund managers lobby chief executives of companies they invest in and use their vote at shareholder meetings to bring about change.
The providers
Ethical funds use either in-house or external research (or both) to assess companies before they invest and while some funds are very strict, with a long list of companies they cannot invest in, others are not. In theory, the stricter the fund the worse the performance should be, but Aegon's Equity fund, with one of the strictest screening criteria, has (until recently) performed well. "It has very simple negative screens covering activities such as human rights, armaments and labour relations," says John Ditchfield, director of ethical independent financial adviser Barchester Green Investment. "It also has consistent fund management."
However, its performance has taken something of a battering in recent months; falling from the top 25% in its sector – over both five and 10 years – to the bottom 25% (which Aegon says is because it cannot invest in large banks or oil and mining companies).
The biggest and best-known ethical funds are the Stewardship group, launched by Friends Provident 25 years ago and now managed by F&C. They are unusual in that fund managers can only invest in companies approved by an external committee.
Green funds Jupiter's Ecology fund was the first green fund and remains popular. Its negative screens are important, but it actively invests in companies that benefit the environment. Julian Parrott, from Ethical Futures, based in Edinburgh, says: "It's a broad-based fund with a strong environmental focus which includes shares in UK companies."
However, Lee Coates, at independent financial adviser Ethical Investors, likes the Guinness Alternative Energy fund's pure environmental approach. "Some [other] green funds invest in companies that use renewable energy, not because they're generating it."
Engagement funds A number of fund managers use a mixture of positive and negative screening and engagement and some, including Aviva Investors, are particularly active at engaging (on anything from disclosing carbon emissions to improving employee relations). Steve Waygood, Aviva Investors' head of sustainability, research and engagement, believes there are real benefits to this approach: "First, to support business behaviour that generates long-term value for investors and second, to ensure that the board is behaving with integrity in its dealings."
Other fund managers that engage include Henderson, Co-operative Investments and F&C. Before you invest, find out when the fund introduced its engagement policy, how active it is and what information it publishes.
Poor performers
You are likely to have more short-term volatility if you invest ethically, but some funds – such as Sovereign's Ethical fund – stand out for the wrong reasons. Figures from Trustnet show it made a loss of 16.9% over five years, while another ethical fund, run by Old Mutual, produced just 9.6% over five years (well below the sector average).
The advisers
If you want an adviser with relevant expertise, look at the website Yourethicalmoney.org, which has a directory of ethical IFAs. A good one should ask about your approach and not simply recommend funds on the basis that you're interested in "ethical" investment.
Useful contacts
Yourethicalmoney.org is a one-stop shop for information on green and ethical investments; neiw.org has consumer-friendly information on ethical investing; Trustnet.com tracks funds' performance and has an 'ethical' filter.
Sarah Pennnells
The Guardian, Saturday 7 November 2009
You recycle, switch off lights and have a water butt. But is your wallet green? Tomorrow sees the start of National Ethical Investment Week (NEIW), a campaign designed to spread the message of ethical and green investing. Only 8% of people invest ethically, although 33% of those questioned by YouGov for NEIW said they would consider it in the next five years.
Ethical investing can be tricky to get to grips with if you are a first-timer. With dozens of different funds and some off-putting jargon, it is not surprising that some just plonk their cash in the first fund they come across.
But this is not the route to investing happiness. You might end up with a fund that bears no relation to your own ethical views or one with a great track record in ... abysmal performance. You do not need to be an ethical expert to invest £50 a month in an Isa, but it helps if you understand the basics.
There is no foolproof way to categorise funds because they tend to overlap, but they can be – broadly – broken down into ethical, green and engagement funds (which put pressure on companies to improve their behaviour). Don't expect funds in the same category to invest in the same companies: it will be down to their focus and investment approach.
Ethical funds either refuse to invest in certain companies or sectors, positively invest in others, or both. Those on the banned list will vary but could include cigarette and alcohol producers, armaments manufacturers and businesses supporting regimes with a bad record on human rights.
Of all the categories, it is the easiest to explain, according to Amanda Davidson, of independent financial adviser Baigrie Davies: "If you ask a client what they want to do with their money, they'll always start with a list of what they don't want to invest in."
The first green fund launched 21 years ago. Now there are dozens; some exclude companies with a bad environmental record, others invest in specific sectors, such as renewable energy.
But if you think green funds buy only solar panel and wind turbine makers, you will be disappointed. For example, Jupiter Ecology fund, the oldest green fund, invests in a producer of free range and organic sausages.
Funds that take engagement seriously can have a far bigger influence than traditional ethical funds. By "engaging", fund managers lobby chief executives of companies they invest in and use their vote at shareholder meetings to bring about change.
The providers
Ethical funds use either in-house or external research (or both) to assess companies before they invest and while some funds are very strict, with a long list of companies they cannot invest in, others are not. In theory, the stricter the fund the worse the performance should be, but Aegon's Equity fund, with one of the strictest screening criteria, has (until recently) performed well. "It has very simple negative screens covering activities such as human rights, armaments and labour relations," says John Ditchfield, director of ethical independent financial adviser Barchester Green Investment. "It also has consistent fund management."
However, its performance has taken something of a battering in recent months; falling from the top 25% in its sector – over both five and 10 years – to the bottom 25% (which Aegon says is because it cannot invest in large banks or oil and mining companies).
The biggest and best-known ethical funds are the Stewardship group, launched by Friends Provident 25 years ago and now managed by F&C. They are unusual in that fund managers can only invest in companies approved by an external committee.
Green funds Jupiter's Ecology fund was the first green fund and remains popular. Its negative screens are important, but it actively invests in companies that benefit the environment. Julian Parrott, from Ethical Futures, based in Edinburgh, says: "It's a broad-based fund with a strong environmental focus which includes shares in UK companies."
However, Lee Coates, at independent financial adviser Ethical Investors, likes the Guinness Alternative Energy fund's pure environmental approach. "Some [other] green funds invest in companies that use renewable energy, not because they're generating it."
Engagement funds A number of fund managers use a mixture of positive and negative screening and engagement and some, including Aviva Investors, are particularly active at engaging (on anything from disclosing carbon emissions to improving employee relations). Steve Waygood, Aviva Investors' head of sustainability, research and engagement, believes there are real benefits to this approach: "First, to support business behaviour that generates long-term value for investors and second, to ensure that the board is behaving with integrity in its dealings."
Other fund managers that engage include Henderson, Co-operative Investments and F&C. Before you invest, find out when the fund introduced its engagement policy, how active it is and what information it publishes.
Poor performers
You are likely to have more short-term volatility if you invest ethically, but some funds – such as Sovereign's Ethical fund – stand out for the wrong reasons. Figures from Trustnet show it made a loss of 16.9% over five years, while another ethical fund, run by Old Mutual, produced just 9.6% over five years (well below the sector average).
The advisers
If you want an adviser with relevant expertise, look at the website Yourethicalmoney.org, which has a directory of ethical IFAs. A good one should ask about your approach and not simply recommend funds on the basis that you're interested in "ethical" investment.
Useful contacts
Yourethicalmoney.org is a one-stop shop for information on green and ethical investments; neiw.org has consumer-friendly information on ethical investing; Trustnet.com tracks funds' performance and has an 'ethical' filter.
New 'smart' electrical meters raise fresh privacy issues
Relax News
Saturday, 7 November 2009
The new "smart meters" utilities are installing in homes around the world to reduce energy use raise fresh privacy issues because of the wealth of information about consumer habits they reveal, experts said Friday.
The devices send data on household energy consumption directly to utilities on a regular basis, allowing the firms to manage demand more efficiently and advise households when it is cheaper to turn on appliances.
But privacy experts gathered in Madrid for a three-day conference which wraps up Friday warned that the meters can also reveal intimate details about customers' habits such as when they eat, what time they go to sleep or how much television they watch.
With cars expected to be fuelled increasingly by electricity in the coming years, the new meters could soon be used to gather information on consumer behaviour beyond the home, they added.
"The collection and storage and retention of the data makes it vulnerable to security breaches as well as to government access," Christopher Wolf, the co-chairman and founder of the Washington-based Future of Privacy Forum, told AFP.
"It is really an issue of how much information about us can be collected by a third party, how much do they really need, how long do they need to keep it, what should the rules be on retention and when should destruction of it occur."
More than eight million "smart meters" have already been installed in the United States and the number is projected by the government to rise to 52 million by 2012.
Last month US President Barack Obama announced 3.4 billion dollars (2.3 billion euros) in grants to modernise the country's electricity grid, part of which will pay for about 18 million "smart meters."
The European Parliament passed an energy package in April which proposed that 80 percent of electricity consumers have "smart meters" by 2020.
In Italy 85 percent of homes already have smart meters installed, the highest penetration rate in Europe, according to the Future of Privacy Forum. France is second with a 25 percent penetration rate.
"This is certainly the next stage, the new frontier, in the potential for privacy invasion," Elias Quinn, a senior policy analyst at the Center for Energy and Environmental Security at the University of Colorado, told AFP.
"The potential is great for privacy invasion depending on who can have access to this information. We are kind of walking into 'smart meter' development blindly. There is no general informed consent."
Utilities could be tempted to sell the data on their customers' behaviour to marketers who use it to pitch advertising geared to their habits, said Quinn.
A restless sleeper who gets up frequently throughout the night -- identified by electricity consumption records that show he frequently turns on the lights -- could be targeted with adverts for sleep aids for example.
Insurance firms, meanwhile, could use the data to justify charging higher fees to a driver whose electricity consumption records indicate he often drives while sleep deprived or regularly gets home at around the time the bars close.
The utilities would be following the lead of Internet service providers which already gear online advertising based on the content of the Web page being viewed by their customers.
"The personal benefits of the 'smart meters' outweigh the risks. The real danger is that people do not know what the risks are," said Quinn, who recommends laws that restrict the resale of data as a way to prevent abuses.
Saturday, 7 November 2009
The new "smart meters" utilities are installing in homes around the world to reduce energy use raise fresh privacy issues because of the wealth of information about consumer habits they reveal, experts said Friday.
The devices send data on household energy consumption directly to utilities on a regular basis, allowing the firms to manage demand more efficiently and advise households when it is cheaper to turn on appliances.
But privacy experts gathered in Madrid for a three-day conference which wraps up Friday warned that the meters can also reveal intimate details about customers' habits such as when they eat, what time they go to sleep or how much television they watch.
With cars expected to be fuelled increasingly by electricity in the coming years, the new meters could soon be used to gather information on consumer behaviour beyond the home, they added.
"The collection and storage and retention of the data makes it vulnerable to security breaches as well as to government access," Christopher Wolf, the co-chairman and founder of the Washington-based Future of Privacy Forum, told AFP.
"It is really an issue of how much information about us can be collected by a third party, how much do they really need, how long do they need to keep it, what should the rules be on retention and when should destruction of it occur."
More than eight million "smart meters" have already been installed in the United States and the number is projected by the government to rise to 52 million by 2012.
Last month US President Barack Obama announced 3.4 billion dollars (2.3 billion euros) in grants to modernise the country's electricity grid, part of which will pay for about 18 million "smart meters."
The European Parliament passed an energy package in April which proposed that 80 percent of electricity consumers have "smart meters" by 2020.
In Italy 85 percent of homes already have smart meters installed, the highest penetration rate in Europe, according to the Future of Privacy Forum. France is second with a 25 percent penetration rate.
"This is certainly the next stage, the new frontier, in the potential for privacy invasion," Elias Quinn, a senior policy analyst at the Center for Energy and Environmental Security at the University of Colorado, told AFP.
"The potential is great for privacy invasion depending on who can have access to this information. We are kind of walking into 'smart meter' development blindly. There is no general informed consent."
Utilities could be tempted to sell the data on their customers' behaviour to marketers who use it to pitch advertising geared to their habits, said Quinn.
A restless sleeper who gets up frequently throughout the night -- identified by electricity consumption records that show he frequently turns on the lights -- could be targeted with adverts for sleep aids for example.
Insurance firms, meanwhile, could use the data to justify charging higher fees to a driver whose electricity consumption records indicate he often drives while sleep deprived or regularly gets home at around the time the bars close.
The utilities would be following the lead of Internet service providers which already gear online advertising based on the content of the Web page being viewed by their customers.
"The personal benefits of the 'smart meters' outweigh the risks. The real danger is that people do not know what the risks are," said Quinn, who recommends laws that restrict the resale of data as a way to prevent abuses.
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