Monday, 14 December 2009

Obama Efforts Face Diplomatic Hurdles

As Obama Reaches Out to World Leaders, Challenges Await at Home
On the same day that President Barack Obama decided to commit 30,000 additional troops to Afghanistan, he reached out to global leaders in a series of phone calls and a White House meeting. When he finished talking about his military decision, he pivoted to another issue: the world's climate.
In a meeting with Australian Prime Minister Kevin Rudd, a videoconference with British Prime Minister Gordon Brown, and phone calls to the leaders of France, Russia, China, Germany, India and Poland, Mr. Obama pointed to his administration's efforts to use regulatory power to cut greenhouse-gas emissions, and made a pitch for action at the global summit in Copenhagen. After that series of calls, the White House declared that the president expected something meaningful could come from the summit.
When Mr. Obama journeys to the Danish capital Dec. 18, he will be hard-pressed to satisfy the desires of other nations for the U.S. to commit to deep cuts in greenhouse-gas emissions, or for a long-term deal to subsidize developing nations' efforts to install low-carbon energy technology and to preserve forests. Mr. Obama may offer precise numbers and pledges, but he doesn't have the votes for legislation to put them into effect.
The president's immediate challenge is convincing 60 senators to support a proposal to require sharp cuts in U.S. greenhouse-gas emissions by 2050, and institute a system that requires businesses to pay for the right to emit such gases. Most Republicans oppose the cap-and-trade bill, as do some members of Mr. Obama's own party.
Sen. James Webb (D., Va.), whose state depends on coal for 45% of its electricity, says legislation backed by Mr. Obama to require companies to pay for their greenhouse-gas emissions would lead to a "huge bureaucracy." Mr. Webb drove home his concerns about the Copenhagen summit in a public letter warning Mr. Obama not to commit the U.S. to a nationwide emission-reduction program. "As you well know from your time in the Senate, only specific legislation agreed upon in the Congress, or a treaty ratified by the Senate, could actually create such a commitment on behalf of our country," Mr. Webb wrote.
Climate politics are both national and global. Mr. Obama faces challenges in both arenas.
In June, the House of Representatives pushed through a climate measure by a seven-vote margin. But in the Senate, Republicans and Democrats from industrial states have balked, forcing Senate Majority Leader Harry Reid to delay action until next spring. The sour economy and questions about the behavior of prominent climate scientists raised by emails stolen from a British climate laboratory have complicated the politics of passing legislation.
A recent survey of 1,500 adults in the U.S. by the Pew Research Center for the People & the Press found 35% of respondents see global warming as a very serious problem today, down from 44% in April 2008. The poll found 56% of those surveyed agree that the U.S. should join other countries to address global climate change, but it found an erosion of support for the idea that human activities are the main cause of warmer temperatures.
"The disposition is to want to do something, but it's not as sharp as it would be in a different economic climate," says Andrew Kohut, the center's director.
At the same time, Mr. Obama is juggling rivalries among other major nations in an effort to forge a climate deal that doesn't put the U.S. economy at risk.
China will be the key to any world-wide climate deal. In private meetings with Chinese President Hu Jintao on Nov. 17, Mr. Obama won some promises, especially on a key issue for the U.S.: China's willingness to allow verification of its claims to curbing greenhouse-gas emissions. A joint statement that day by the two presidents included language on the issue that Mr. Obama wanted.
A little-noticed tete-a-tete with Premier Wen Jiabao the next day -- overshadowed by Mr. Obama's dash to the Great Wall -- may have been more crucial, a senior administration official said. Mr. Wen wanted Mr. Obama to outline his proposed commitments to cutting emissions before China put forward a proposal. The U.S. president assured the Chinese premier that he would lay his cards on the table soon.
On Nov. 24, Indian Prime Minister Manmohan Singh arrived in Washington for the first official state visit of the Obama presidency. Mr. Obama told Mr. Singh that China and the U.S. would put firm climate targets on the table. But if India stood on the sidelines, no progress would be made.
Messrs. Obama and Singh signed a joint statement committing to cooperation on climate change. The next day, Mr. Obama announced specific emissions targets he would personally take to Copenhagen. The Chinese put their targets on the table the following day, and a week later, India followed suit.
China and India aren't offering to cut emissions, as Mr. Obama has done. They are proposing to make their economies more energy-efficient -- which could mean their total emissions grow as their economies grow. That could further complicate the task of winning over skeptics in Congress.
China's offer to reduce carbon emissions relative to gross domestic product -- an efficiency measure -- "really doesn't mean a lot," says Sen. Webb. "I don't think China is a developing country in the sense we would want to use the word right now."
Write to Stephen Power at and Jonathan Weisman at

Summit Is Seen as U.S. Versus China

COPENHAGEN -- The political script for a big climate-change conference in this Danish city has U.S. President Barack Obama and other world leaders flying in later this week to christen a new era of global environmental cooperation. In reality, the summit is shaping up as a pivotal economic showdown between the U.S. and China.

The International Energy Agency projects that nearly all the growth in global greenhouse-gas emissions over the next two decades will come from developing countries -- and that fully half of that total will come from China alone. A central point of contention here is whether China, amid all its newfound economic might, still deserves billions of dollars in annual aid from the U.S. and Europe to help it shift to a cleaner pattern of growth.
China says the answer is yes. He Yafei, China's vice foreign minister, said on Friday that rich nations, which built their prosperity on fossil fuels, are like people who go out for a fancy dinner and then, when a poor guest arrives late for dessert, demand that he pay the same bill for his meal as everyone else.
"It's not fair," Mr. He said. "Whoever created this problem, they're responsible," he said. Although he said the European Union had largely lived up to its emission-reduction promises, he singled out the U.S. several times by name as a country that hadn't done its share.

Mr. He is arguing that not much has changed since the late 1990s, when the basis for the current United Nations-led international framework designed to combat global warming—a treaty called the Kyoto Protocol—was negotiated. Kyoto called on industrialized countries to cut their own emissions and help developing countries with subsidies to promote cleaner technologies, such as energy-efficient cars and solar panels.
But the U.S. argues China no longer deserves special treatment. Though poorer developing countries still need Western help to nurture clean-energy technologies, China is different, Todd Stern, the chief U.S. climate negotiator, told a news conference here last Wednesday. "I don't envision public funds—certainly not from the United States—going to China," he said. "There is no way to solve this problem by giving the major developing countries a pass."
China is willing to clinch a deal at the COP15 Climate Summit in Copenhagen this week, says China's Deputy (or Vice) Foreign Minister He Yafei, adding that it is all about money transfers and funds from the developed world to the poor countries, which are struggling with the burden of global warming. WSJ's Roman Kessler reports from Copenhagen.
Environmentally speaking, the U.S. and China, which together account for some 40% of global greenhouse-gas emissions, are the countries that matter most in the U.N. climate debate. So far, the Copenhagen summit has served mainly to illuminate their profound disagreements over climate policy.
Tensions at the summit have flared outside the negotiations too. Danish police detained more than 200 people Sunday during a second day of demonstrations, the Associated Press reported.
The arguments between the U.S. and China reflect the two countries' broader contest for economic power in the decades ahead. Many business leaders in the U.S. worry that efforts to dramatically cut fossil-fuel consumption could raise their production costs and put them at a disadvantage to rivals in a China that is becoming more efficient, but not limiting its carbon-fueled growth.
On two consecutive days last month, Washington and Beijing announced specific emission-reduction targets. The U.S. said it would cut emissions 17% below 2005 levels by 2020, a number broadly in line with climate-change legislation pending on Capitol Hill. China said it would reduce its "carbon intensity"—the amount of greenhouse-gas emissions produced per unit of economic output—40% to 45% below 2005 levels by 2020.
Even if China achieves that carbon-intensity cut, the country's total emissions still would surge more than 75% above the 2005 level by 2020, studies project. Michael Levi, a senior fellow specializing in energy and climate change at the Council on Foreign Relations, says studies by the IEA, the U.S. Department of Energy, and the Chinese government all suggest China was on track to achieve a reduction in carbon intensity in the range of 40% to 45% even before its recent announcement.
The EU and Mr. Obama have proposed that the EU and the U.S. aim to slash their total emissions on the order of 80% by 2050. Mr. He said it is easy to make such long-term promises. "I doubt the sincerity of developed countries in their commitment," he said.

Mr. He said China's environmental pledge, while perhaps less grandiose, is more real. "I would happily go to debate with any person to see whether what China has committed is less or more than another country," he said. "Facts speak louder than words."
Write to Jeffrey Ball at

Poor nations threaten climate deal showdown at Copenhagen summit

John Vidal, Jonathan Watts and Suzanne Goldenberg in Copenhagen, Sunday 13 December 2009 23.15 GMT

The Copenhagen climate talks hit trouble tonight as a number of African countries indicated their leaders would refuse to take part in the final summit unless significant progress was made in the next three days.
The showdown between rich and poor countries came as ministers began arriving in Copenhagen to take over negotiations. However, negotiators failed to reach agreement in key areas such as emission cuts, long-term finance and when poor countries should start to reduce emissions.
More than 110 heads of state, mainly from developing countries, are due to begin arriving on Thursday for an intense 24 hours of final negotiations.
Delegates hope for a deal on Friday that will ensure temperatures do not rise by more than 2C, and that hundreds of billions of pounds is pledged to help poor countries adapt to climate change. But tonight it appeared that many did not want to risk being pressured into signing an agreement they believe would be against their national interests.
"The industrialised countries want to hammer out a large part of the deal on the last day, when the heads of state arrive," one senior African negotiator told the Guardian on the condition of anonymity. "It's a ploy to slip through provisions that are not amenable to developing country efforts. It's playing dirty."
One added: "It is as serious a situation as it ever has been. It is more than probable many heads of state will not come if the negotiations are not complete. Why should a head of state come to sign an agreement that is basically a non-agreement?"
High level Chinese and Indian representatives indicated they would be in Copenhagen, but they made clear they wanted key points agreed before they arrive. They also appear desperate to avoid a situation where western leaders jet in and steamroller the main points on the last day of the conference.
Su Wei, China's top climate negotiator, said he hoped there would be no outstanding issues by the time his country's premier, Wen Jiabao, arrived. "I hope the only question we will leave for leaders is how to pronounce Copenhagen."
Indian representatives also said their prime minister, Manmohan Singh, would come to the summit, but emphasised the urgency of having negotiators produce a text in advance.
Jairam Ramesh, India's environment minister, said: "We are saying that heads of state should not be negotiating a draft text. We must have a draft text already finalised. The heads of state should come to leave their imprint on the deal."
The UK's climate secretary, Ed Miliband, conceded there was some way to go before a workable deal was reached. "We're now getting close to midnight in this negotiation and we need to act like it. That means more urgency to solve problems, not just identify them."
One key point of contention is the US and EU insistence that emerging economies such as India, China and Brazil agree to peak their emissions by 2020. Developing countries argue that this would lock them into poverty.
Analysts say such hard driving tactics are typical of negotiations, but they resonate even more at the climate change talks, which are based on the idea that all 192 countries sign off on any agreement.
"This is a consensus process," said Janos Pastor, who heads Ban Ki-Moon's climate change team. "If they are really meaning that they are going to boycott, and if they are going to do that, it's serious. It would be a pity if a conflict meant that we don't reach an agreement."
Rob Bradley from the World Resource Institute, said: "Nobody wants to have their prime minister arrive and then inform them they did not strike a deal to talk about. I can certainly imagine that some of those thinking that a deal is going to look bad for them are going to try to persuade their prime ministers from coming."

Copenhagen summit: How major blocs have fared and what they want, Sunday 13 December 2009 19.20 GMT
European Union
Last week: The EU ended the week with a bang, upping its offer of climate aid to poorer nations to €2.4bn a year from next month. But the bloc's trump card – an upgrade from a 20% to a 30% cut to its emissions by 2020 – remained unplayed. Despite the stir it caused, chief negotiator Artur Runge-Metzger said the "Danish text" was "just a piece of paper".
This week: The EU will certainly need to table the 30% offer if the talks are to progress. It will also have to calm the fears of eastern European countries fearful of the costs and soothe the egos of the leaders of the big nations who will want all of the glory of success (or none of the blame). Levies on international aviation and shipping, supported by some EU nations, may help.
Last week: The US delegation aimed to show it was serious about taking action to stop global warming, despite the uncertainty of getting a law through congress. But in comments on funding the fight against climate change chief negotiator Todd Stern lived up to his name: "I don't envision public funds, certainly not from the United States, going to China." He also said the US, the biggest carbon emitter in history, did not owe reparations.
This week: The US will fiercely fight off pressure to increase its offers on both emissions cuts and long-term funding. It will stress its 17% target by 2020 on 2005 levels is more than the EU's over the same period. It does seem poised to offer up to $1.5bn for immediate assistance to poor countries.
Last week: Vice foreign minister He Yafei ripped into Todd Stern. "I don't want to say the gentleman is ignorant. I think he lacks common sense or is extremely irresponsible". Earlier top climate negotiator Su Wei lambasted rich nations for offering an immediate fund of a mere $10bn a year for developing nations to deal with climate change.
This week: The Chinese delegation are desperate to finalise a document so prime minister Wen Jiabao can avoid being leaned on in a last-minute huddle. When that happened at a recent summit in Europe, Wen was so unhappy with the pressure being put on him to offer more on curbing emissions that he ended the meeting prematurely.
Rest of the world
Last week: The world's 6 billion poor, represented by the 133 countries in the G77 plus China group, the 42 LDCs (least developed countries) and the 47-strong Association of Small Island States (Aosis), began with three objectives: to defend the Kyoto protocol, the only legal treaty that requires developed countries to reduce their emissions; to make sure that rich countries reduce their emissions; and to secure around $400bn a year by 2020.
This week: There is still no long-term money on the table, and the chances of getting really ambitious emissions cut agreements from the rich are minimal. They appear to have won the immediate battle to save the Kyoto protocol, and the poorest and most forested countries could secure more money than others; but there are fears that the eventual cash on offer will not be guaranteed, will be conditional and not additional to existing aid.

Tony Blair urges leaders to secure deal in Copenhagen as time runs short

• Urgency needed as world leaders prepare to join in• Deep divisions make compromise look unlikely
Jonathan Watts, Sunday 13 December 2009 21.29 GMT

Tony Blair said today it was time for the world to get moving as negotiators in Copenhagen entered the final few days of talks still deeply divided on how to avert climate catastrophe.
With ministers, tycoons and celebrities flooding to the Danish capital, the former British prime minister said a compromise was possible, though likely to fall short of the actions recommended by scientists to avoid dangerous levels of global warming.
"There can be a deal at Copenhagen. There should be a deal. It will not be all that everyone wants. But it was never going to be," he told an audience on the sidelines of the conference.
But time is running out. Major differences emerged in the first week of talks as developing nations accused richer countries of offering insufficient emissions cuts and inadequate financial and technological assistance to help poorer countries deal with climate change.
Heads of state will fly in at the end of the week to try to seal a deal. But even that is emerging as a contentious issue because developing nations want an agreement in place before they arrive and have their arms twisted.
Ed Miliband, energy and climate change secretary for Britain, warned that far more progress needed to be made before the leaders arrive.
"We're getting close to midnight in this negotiation and we need to act like it. That means more urgency to solve problems not just identify them, more willingness to shift from entrenched positions and more ambitious commitments," he said.
Blair, who is here not as a negotiator but as head of the climate group NGO, said the key was to put changes in place now and build momentum later.
"Let us get it under way. And that really is the objective for Copenhagen: to get us moving: To be the signal set that makes us switch track to low carbon future.
"And to make sure everyone is on the train, going in the same direction. Some will be at the front, some at the back. Some will pay more than others, but together we are on board for a new destination for the global economy."
Blair was prime minister when the world's last climate agreement – the Kyoto protocol – was signed in 1997 after heads were banged together by negotiators at the last minute.
Twelve years on, Blair acknowledged the flaws of that deal.
"Kyoto was a treaty that aimed at making a point, but less successful at making a policy. Copenhagen is where we need to make a policy. It is time to lift this issue firmly within the framework of a credible, achievable policy for change."
Despite the leak of damaging emails from the University of East Anglia Blair said the need for action was as evident as ever. "It is said that the science around climate change is not as certain as its proponents allege. It doesn't need to be.
"What is beyond debate, is that there is a huge amount of scientific support for the view that the climate is changing and as a result of human activity. Therefore, given the seriousness of the consequences, we should act."
But the scientists advice is not going to be fully acted upon. The Intergovernmental Panel on Climate Change – a body of the world's leading scientists – has called for deep cuts in emissions from rich nations and a significant move away from business as usual by developing countries in order to keep global warming to two degrees Celsius, the level at which climate change will start to hit catastrophic proportions.
Given everything that is currently on the table, Blair said, the developed world would reduce emissions by just under 20% by 2020 from 1990 levels. There was also a danger, he said, that rising greenhouse gas emissions from developing nations could eclipse efforts made in richer nations.
He said targets could be revised and strengthened later, it was important to send a signal to the business and science community that they should invest and develop low-carbon technology.

Al Gore shows us the way to make green from being green

Al Gore has made lots of money by lecturing us all about being green. Some say he's become the world's first "carbon billionaire".

By Garry White and Rowena Mason Published: 5:30PM GMT 13 Dec 2009

What you can be sure of is that the move toward a more environmentally sustainable future is an unstoppable trend – and Mr Gore is unlikely to be the first to get very rich from environmental policy.
One great business to be in as we move into a greener future is the copper industry. Copper is going to help us cut down on carbon.

In his pre-Budget report last week, Alistair Darling announced that electric vehicles would be made exempt from company car tax from 2010 – and that a 100pc first-year capital allowance would be introduced for electric vans. This means buying such vans would be taxed as an investment in the business, rather than a company vehicle.
Although electric cars are often used by high-profile "green" celebrities to drive to their private jets, they have not really caught on with the wider public.
Despite the recession, more than 900,000 vehicles have been sold to businesses in the UK so far this year, but as little as 50 of these are believed to have been electric.
According to research by the European Copper Institute, hybrid cars need a staggering 33kg of copper in their construction – about the weight of an average 12-year-old child. This compares with 20kg – 25kg of copper in a conventional car.
About 3kg extra is needed for the electric compressor, the converter/rectifier needs 2kg, the lithium-ion battery needs 8kg and high voltage wiring requires a further 8kg.
"2010 could be the year of the electric car," says Harvey Perkins, associate partner at KPMG. "By exempting electric company cars from company car tax and giving them 100pc first year capital allowances, it will encourage fleets to invest and encourage production.
Although the incentive is not huge because of the expense of electric vehicles, Mr Perkins thinks it will "seed the market".
On Tuesday last week, Ford said that it would invest up to $500m (£307m) to assemble hybrid and plug-in hybrid cars, as well as the construction lithium-ion batteries in Michigan, if it received tax credits from the state. Currently only the development of batteries for plug-in vehicles garners these credits in the US.
Lithium is another commodity that should do very well out of the rush to sustainability. The US Department of Energy is supporting the development of lithium batteries, with President Obama President Barack Obama unveiling $2.4bn of funding in March to develop generation plug-in hybrid electric vehicles. Lithium battery development is key to this strategy, although the more immediate beneficiary is likely to be copper.
Fears are growing that a serious shortage of mine capacity across the world will lead to the copper market moving into a serious deficit from 2013 and beyond.
The financial crisis has also led to a lack of investment in finding news sources – and this will takes a long time to reverse. Discovering, obtaining permits and developing a new resource actually takes many years, with five to seven years a reasonable assumption.
Current producing mines are also experiencing a whole range of problems according to Helen Henton, Standard Chartered's head of commodity research.
"In the past, copper supply increases have always been dominated by a handful of large projects, but as the huge Chilean assets mature, the growth burden will increasingly be on Africa," she said in a recent note to clients.
Ore grades are declining, with many mines well into their life cycle, so the highest grades have already been utilised.
Strip ratios are also increasing, which increases the cost of production. This is the ratio of waste to ore produced by the mine. There are also infrastructure issues at existing copper deposits.
Africa has shown string growth in copper mine supply over the past three years, but the location of its reserves has created a headache.
"Zambia and the Democratic Republic of Congo (DRC) account for more than 86pc of Africa's mined output," according to Ms Henton. "However, while the existence of large, feasible reserves in these countries is not in doubt, the ability of the industry to exploit them is subject to significant risks."
There are risks to the bull case for copper, however. Prices have fallen recently as copper inventories worldwide started to rise.
Stocks of copper in London Metals Exchange's (LME) warehouses rose 5,200 tonnes to 458,500 tonnes last week, the highest level since late April.
However, it is likely that the copper price will be supported by strong fundamental factors over the medium term, so recent weakness could represent a good entry point for copper bulls. GW
Water consumption set to double
A serious crisis is building in the most undervalued commodity in the world – water.
In a presentation to the UN last month, Dr Colin Chartres, director general of the International Water Management Institute, said that within the next 40 years the world would have an additional 2.5bn mouths to feed and global food production will have to double.
Given that one litre of water is needed to produce one calorie of food, the Dr Chartres has calculated that, by 2050, the world will need to find another 6,000 cubic kilometres of water each and every year. That's twice the amount of water than is used today. GW
Demand for corn
A recovering ethanol sector may boost demand for corn, according to research from brokers at Rabobank.
The Dutch bank is forecasting an average price of $4.00 a bushel in the first quarter of 2010, rising to $4.20 in the second quarter.
The current price is $3.04 ½ a bushel., with March futures rising 5pc last week. Snow and strong winds in the Mid West also prompted fears that the 12pc of crops still to be harvested in the region could be damaged. GW

Negotiations Will Precede Heads of State

COPENHAGEN -- The final stretch of the Copenhagen begins Monday with national ministers discussing the text drafted following last week's lower-level negotiations.
The United Nations ended the first week of negotiations Friday by presenting a draft text that would push the world to possibly halve greenhouse-gas emissions by 2050. National ministers will negotiate disagreements over that text at the start of the week -- exploiting their ability to make more decisions on the ground than the diplomats who represented them last week. Finally, on Thursday and Friday, more than 100 government heads, including U.S. President Barack Obama, plan to join the summit to come up with a final deal.
Still to be ironed out is some wording that has industrialized countries worried they will be putting in too much effort to cut emissions compared with developing nations, including China. The text requires them to make commitments to cut carbon emissions by 2020, while poorer countries "may undertake autonomous mitigation actions," aimed at limiting the increase of their emissions. Leaders will also address funding. The U.N. estimates $10 billion a year will be needed through 2012 to jump-start the fight against climate change in developing countries.
Write to Alessandro Torello at

Taliban stalls key hydroelectric turbine project in Afghanistan

Convoy diverted British troops from front but generator may never be used
Jon Boone in Kabul, Sunday 13 December 2009 22.18 GMT
An enormous hydroelectric turbine dragged at huge cost by British troops through Taliban heartlands last year may never be installed because Nato has been unable to secure a 30-mile stretch of road leading to an isolated dam in northern Helmand.
The daring mission to deliver 220 tonnes of equipment to the Kajaki dam in Afghanistan in September 2008 was hailed as one of the biggest success stories of the British Army's three-year deployment in Helmand.
Two thousand British troops took part in the five-day convoy through enemy territory, which was launched because the main road leading to the dam was too vulnerable to Taliban attacks.
Senior British officers privately say the enormous diversion of scarce military resources for the operation allowed the Taliban to make major gains in other critical areas of the province, including Nad Ali, which subsequently saw some of the most intense fighting between British forces and insurgents.
Within a couple of months of the Kajaki operation, areas close to the British base in Lashkar Gah had deteriorated so badly that troops had to be resupplied by air drop.
The dam continues to be besieged by Taliban fighters and, 15 months after the mission by the UK troops, the turbine's components remain unassembled because huge amounts of cement that are required to install the equipment cannot be delivered safely.
Now the United States Agency for International Development (USAID), the wing of the United States government which has so far pumped $47m (£29m) into the project, intended to electrify much of southern Afghanistan, says it is packing the turbine parts away and looking for other energy projects to invest in across Afghanistan.
"Our message is that until we have a secure road we cannot continue with the installation of turbine two," said John Smith-Sreen, head of energy and water projects for USAID in Kabul.
"When the turbine was moved in by British and American forces it was a huge effort and it was done in a point of time. But we can't move in the large quantity of cement and aggregate that we need in a point of time, we need a sustained effort," he said.
The road would need to be secured for about half a year.
While the cement required could probably be transported in around half that time, civilian contractors would need to see the road had been secured for about three months to attract them to the project, Smith-Sreen said.
He added that CMIC, a Chinese company contracted to install the turbine, "left due to security concerns overnight" when it was clear that the road would not be secured. The agency has not been able to find another subcontractor prepared to do the work.
USAID says about 30 miles of road is affected, but at a time when General Stanley McChrystal, the commander of Nato forces in Afghanistan, is pursuing a strategy of concentrating effort on protecting large towns and cities from Taliban influence, securing a stretch of road in a sparsely populated area of northern Helmand is unlikely to be a priority.
A spokesman for Task Force Helmand said there are no plans to change the current security operations at Kajaki, where British soldiers are responsible for an ongoing effort to provide a security "bubble" around the plant.
While insurgents have been unable to get close to the dam and its turbine hall, heavy fighting around the perimeter of the area of British control is an almost daily occurrence.
Smith-Sreen said USAID was currently "deciding what to do" with the turbine, but that the process of mothballing it had already begun in the run up to the contract expiring in April.
"Unless we are told otherwise we are going to continue the process of inventorying the parts and storing them away securely," he said. He said the agency had other areas where it was considering investing resources, including smaller electricity projects across country.
The problem of Kajaki highlights an dilemma for Nato forces trying to use development to win hearts and minds in an area where construction work is impossible or hugely expensive.
When the dam was built by US engineers in the 1950s as part of the cold war gamesmanship with the Soviet Union two turbines were installed, but a third bay was constructed and left empty. The intention had been to put the turbine in that slot when it was delivered last year.
Smith-Sreen said USAID was satisfied with the work it has been able to do to rehabilitate the two existing turbines, which since October have been transmitting around 33 megawatts to the southern provinces – "more power than either Kandahar or Helmand has seen for 30 years".
However, the same fighting that has made the road leading to the dam insecure has also led to frequent blackouts for Kandahar city and Lashkar Gah, with the power transmission lines from the remote generating plant regularly cut.
"We've had to slice the line back together many times," he said.

Venture Capitol: New VC Force

When tiny Fisker Automotive Inc. hit a financing glitch last year, threatening its plan to build a fancy gasoline-electric hybrid car in Finland, it turned to the U.S. Department of Energy.
The DOE had a bolder idea. Why not also step up the company's plans to develop a less-expensive model, and assemble it in a closed U.S. auto plant?
Within months, Vice President Joe Biden, the former senator from Delaware, was helping lure the embryonic car company to a shuttered General Motors Co. factory four miles from his house in Wilmington, right across the tracks from Biden Park. Soon, Fisker Automotive, a two-year-old business that has yet to sell a car, won loans from the federal government totaling $528 million.

Fisker had joined a flock of other businesses seeking cash from the biggest venture capitalist of all, the U.S. government.
The DOE hopes to lend or give out more than $40 billion to businesses working on "clean technology," everything from electric cars and novel batteries to wind turbines and solar panels. In the first nine months of 2009, the DOE doled out $13 billion in loans and grants to such firms. By contrast, venture-capital firms -- which have long been the chief funders of fledgling tech firms, taking equity stakes in the start-ups that will pay off if they go public -- poured just $2.68 billion into the sector in that time, according to data tracker Cleantech Group.
Thus, while much attention has been focused on the federal government's involvement in banking, Washington also is gaining sway in another swath of the economy. By financing clean-tech ventures on a large scale, the government has become a kingmaker in one of technology's hottest sectors.
Some young companies are tailoring their business plans to win DOE cash. Private investors, meanwhile, are often pulling back, waiting to see which projects the government blesses. Success in winning federal funds can attract a flood of private capital, companies say, while conversely, bad luck in Washington can sour their chances with private investors. The result is an intertwining of public and private-sector interests in an arena where politics is never far from the surface.

In Delaware, "We had five individuals beating the band -- the three members of the [congressional] delegation, the governor and the vice president," said the state's chief of economic development, Alan Levin. "We had in the vice president a secret weapon, except there is nothing secret about Joe Biden."
A spokeswoman for Mr. Biden said he made no direct appeals to DOE on Fisker's behalf before the loan was approved, though he did talk to the company several times afterward to put in a plug for his home state.
At the DOE, Matthew Rogers, who helps oversee the department's loans, said proposals are vetted by "deal teams" insulated as much as possible from outside pressure. "Lots of people can call the [energy] secretary, but that doesn't mean that any of that necessarily flows down to the deal-team level," he said.
More than 40 auto-related companies have sought government money to build parts or vehicles, ranging from hybrid roadsters and delivery vans to all-electric three-wheelers that could go 120 miles on a charge. They are chasing $25 billion in federal low-interest loans for a sector that has attracted less than a tenth that much in venture capital over the past five years, according to Cleantech.
"The existence of an 800-pound gorilla putting massive capital behind select start-ups is sucking the air away from the rest of the venture-capital ecosystem," said Darryl Siry, former head of marketing at Tesla Motors Inc., a San Carlos, Calif., company that got a $365 million DOE loan in June to build high-end electric cars. "Being anointed by DOE has become everything for companies looking to move ahead."
Bright Automotive Inc. is still seeking anointment. Based in a small warren of offices outside Indianapolis, Bright looked set to take off in September 2008. Investors were poised to give it more than $100 million to move ahead on a lightweight hybrid delivery van, and it had lined up major corporations as potential customers.
When the financial crisis hit in that same month, investors bowed out. Though a few have since tiptoed back, enabling Bright to build a prototype, its principal hope for now lies in the DOE, from which it is seeking a large loan to get under way.
"We are caught in this blender of historically new forces, somewhere between the public and private worlds," said Bright's chief executive, John Waters. Without a government loan, private investors are reluctant to jump in, he says, while the DOE loan team is wary of backing ventures that haven't already won significant support in the private sector.
The DOE acknowledges it looks to back companies that already have substantial private funding, with the hope that federal money will in turn attract more private investment.
Fisker, based in Irvine, Calif., got rolling two years ago with seed money from two of Silicon Valley's largest venture-capital firms, Palo Alto Investors LLC and Kleiner Perkins Caufield & Byers. They and some smaller investors put up nearly $160 million to move Fisker's first car, called the Karma, off the design table and into early production. But to fine-tune the engineering and put it into full production, Fisker needed at least $200 million more.
In December 2008, Fisker turned to the DOE's $25 billion Advanced Technology Vehicle Manufacturing loan program, which Congress had funded to launch new, high-efficiency vehicles.
Fisker applied for about $170 million to get the Karma rolling. It also put in a second application, hoping eventually to win financing to build a cheaper model, code-named the Kx, which the company didn't envision bringing to market until around 2015.
DOE officials and their advisers expressed strong interest in the Karma proposal, say people involved in the talks, but they were wary of the Kx. Its engineering remained vague, and Fisker was far from having a prototype.
By late spring, DOE was pushing ahead briskly on the Karma loan, say people involved in the deal. But the Karma presented a political challenge: It was already being assembled, under contract, at a plant in Finland. Though it used mainly U.S.-made components, so a federal loan would help U.S. parts makers, the boost for U.S. workers would be limited.
DOE then came to Fisker with a surprising proposal: Find a U.S. site to build the Kx, and DOE would agree to fund both projects together. Fisker could then start gearing up to make the Kx even before the Karma hit the market. Close advisers to Fisker said the issue of job creation had become key to officials within the administration.
"The government's interest sped it all up," said David Anderson, a partner at the Palo Alto Investors venture-capital firm, who followed the DOE process closely. "The government basically said, 'Let's make this happen sooner rather than later.'"
On June 1, GM said it was closing 14 plants, including the one in Delaware. This gave fresh urgency to the DOE's quest for Fisker, say officials involved in the loan discussions.
GM's Delaware factory, called the Boxwood Road plant and dating from 1947, once employed 5,000. It was the last auto assembly plant in the Northeast. State officials and politicians were determined to keep it alive.
In the middle of August, they learned the plant had drawn interest from Fisker. CEO Henrik Fisker came to see it and dropped by the office of a Delaware senator, Tom Carper, a Democrat. The visit unleashed a flurry of activity. Gov. Jack Markell, also a Democrat, quickly called an old friend at Kleiner Perkins to check on Fisker. "Basically, we wanted to know, 'Are they for real?'" said Mr. Levin.
Kleiner Perkins itself has political roots. A leading partner, John Doerr, sits on President Barack Obama's economic advisory board, and another partner is former Vice President Al Gore.
The DOE, in August, hadn't yet ruled on Fisker's loan request. Delaware's governor and congressional delegation began peppering U.S. Energy Secretary Steven Chu with calls on Fisker's behalf. They also had repeated discussions with Vice President Biden and his staff, according to Mr. Levin and several others.
In early September, Gov. Markell told Fisker that if it occupied the shuttered GM plant it would get an array of state incentives worth up to $22 million, including $9 million in cash for utilities. He promised to buy the first car off the line.
On Sept. 17, he ran into Mr. Chu at an event in Pennsylvania. "I know, I know -- Fisker," Mr. Chu said as soon as he saw him, according to the governor, who said Mr. Chu told him he was "hearing from everyone in Delaware."

Five days later, Mr. Chu announced the government had signed a provisional agreement to lend Fisker nearly $170 million to complete engineering of the Karma, as well as $360 million to develop the less-expensive model Kx, which the company then began to call the Nina. Fisker still plans to assemble the Karma in Finland but will make the Nina in Delaware. Mr. Chu said the DOE funding would help reduce dependence on foreign oil as well as create "thousands of new American jobs."
People familiar with the loan say the government based the amount partly on its assessment that the Nina, which will sell for about $40,000 after government tax rebates, could draw world-wide annual sales of around 130,000 -- nearly twice Fisker's own projection.
Mr. Fisker, a former designer of sleek sports cars for BMW and Aston Martin, said he is sure his company would have won DOE funding without the Delaware politicians' support but credits it with speeding the approval. He added that Fisker picked the Delaware plant because it made economic sense.
Though its first model, the Karma, won't be available for test drives for months, Fisker says more than 1,500 potential buyers have put down refundable deposits on the car, expected to sell for $88,000.
On Oct. 27, about a month after the DOE approved loans to Fisker, its executives and Delaware politicians gathered in Wilmington for an announcement. In the morning, Mr. Biden played host to United Auto Workers brass for breakfast at his house near the Boxwood Road plant.
Then they joined hundreds of auto workers and local dignitaries at the factory. Gov. Markell announced Fisker was buying it from the post-Chapter 11 remnant of GM called Motor Liquidation Co. for just $18 million. The deal includes a high-end paint facility and other equipment that industry experts say would cost more than $300 million to replace.
In a rousing speech, Mr. Biden recalled how every election year, including his first in 1972, "I would stand here at this gate and shake hands at every shift." He told of many "long talks" he said he had had with Mr. Fisker. He called the project "a metaphor for the rebirth of the country."
Afterward, Mr. Fisker escorted the dignitaries behind a curtain for their first look at a mock-up of the planned second model, the Nina. It was a sporty car body, bright red, but with no drivetrain or engine. Gov. Markell, though, was impressed. "It was just a beautiful car," he said.
Write to Neil King Jr. at

Bank of England urged to give climate scientist a warm welcome

• MPC needs green advocate, says former scientific adviser • Economic policy must not overlook low-carbon projects

Patrick Wintour, Monday 14 December 2009
The government's former chief scientific adviser is calling for a climate scientist to be given a seat on the Bank of England's monetary policy committee, saying the bank currently operates without regard for the environment.
The proposal today from Sir David King, scientific adviser under Tony Blair and Gordon Brown, is known to have the support in principle of some MPC members.
King also criticises the Treasury under Alistair Darling, saying "it is pulling in the wrong direction" and not doing enough to promote a green economy. Writing in Prospect magazine, King lambasts the Treasury "for a wasted opportunity", saying it was "shaming and frustrating" that only 10% of its economic stimulus package could be classified as green.
"Most of that money could have been directed into low-carbon projects, such as energy-efficiency boosts for our ageing housing stock. This also would put unemployed construction workers back to work," he writes.
He points out that South Korea committed 80% of its stimulus money to low-carbon growth and China managed 50%.
He suggests that in Britain: "At best, the Treasury sees carbon reduction as a distraction from their primary focus: GDP growth, reducing unemployment and raising productivity. At worst, they follow the Nigel Lawson school: that even if climate change is real, we should let pure markets operate to solve it.
"The same is sadly often true for central bankers, who rarely even consider carbon as an important by-product of a stable money supply and low inflation".
He writes that the only effective international response to the threat of climate change is market intervention through a global carbon price. But at a national level, effective government interventions to reduce carbon can be undone by monetary policy including the setting of interest rates very low to stimulate growth.
"The problem is that any big levers the government might support – carbon pricing, long-term rules forcing more renewables and nuclear energy into the grid, much higher road tax and congestion charges – could be partially undone by the Bank if monetary policy is used to push for less sustainable patterns of growth."
He suggests the current arms-length climate change committee, chaired by Lord Turner, should be relocated to the Bank.
Traditionally, the Bank has been wary of anything that might dilute its aim of targeting inflation. But MPC members such as Andrew Sentance, who is on the green fiscal commission, could be interested in discussing King's ideas.