Alternative Energy

By ROB WHERRY
Promises made on the campaign trail aren't always kept. This time around, though, there seems to be bipartisan support for one particular vow: weaning the U.S. off its dependency on foreign oil.
No doubt part of the solution to that problem is alternative-energy sources. Indeed, President-elect Barack Obama said during the campaign that he would create five million jobs by heavily investing in this sector. Some of that spending could come in the form of a massive stimulus program expected to cost around $850 billion. The prospects for the sector, though, don't rest solely on a new administration. Alternative energy is growing both in the U.S. and overseas as products become more sophisticated and more affordable.
Alternative energy is a burgeoning class of mutual funds. In fact, it's so new it doesn't have its own classification in our Lipper database. That means we had to perform our fund screen this week using slightly different methods. We pulled a select group from other categories and then looked for those that had decent fees, performance track records and manager reputations. We allowed load funds. Four funds made our list. They are included below in order of return over the trailing 12-month period.
The alternative-energy industry encompasses the obvious, like solar-panel makers and wind-farm operators, but it also includes software designers working on "smart" power grids and even utilities with hydro or geothermal assets.
There are some caveats we should mention. Alternative-energy stocks tend to fall in and out of favor depending on the price of crude. When the per-barrel price approached $150 midsummer -- and gasoline crossed $4 a gallon -- alternative energy benefited because Americans quickly realized they couldn't afford to burn so much money at the pump. But when oil and gas are more affordable, Americans seem to forget about energy efficiency.
That said, whenever we encounter an investing area that seems to be on the cutting edge, we think it's wise to pay up for a good actively managed mutual fund. The alternative-energy space is one of those areas. But a word of warning: These funds have been trounced this year in the pullback in the broader energy sector. Building a position means you're looking toward the future.

EDF takeover of British Energy cleared

David Gow in Brussels
guardian.co.uk, Monday 22 December 2008 11.05 GMT

The European commission today cleared the £12.5bn takeover of Britain's main nuclear power operator British Energy by French state-owned group EDF.
The commission said the deal could go ahead after EDF agreed to sell two power stations and make a site available to a competitor to build one of the UK's planned new third-generation atomic power stations.
Its decision, removing any threat of a prolonged investigation into the deal on competition grounds, clears the way for the government to accelerate the country's planned nuclear renaissance.
Under the revised terms imposed by Brussels, EDF has agreed to sell its own generating plant at Sutton Bridge and BE's only coal-fired plant at Eggborough. It has also committed to selling minimum volumes of electricity in the UK wholesale market.
The French group, which has embarked on an aggressive expansion strategy in the US, Italy and South Africa as well, has also pledged to dispose of a site for building a new nuclear plant at either Dungeness, Kent, or Heysham in Lancashire.
The choice of this site will be left to the purchaser, possibly Centrica, owners of British Gas, or one of the two big German utilities, E.ON or RWE. All operate in the UK energy market and are keen to join the nuclear expansion programme.
EDF has also agreed to end one of the merged group's three connection agreements to the grid at Hinkley Point as the commission found that the group's capacity expansion plans rendered this unnecessary – and could have unduly delayed rivals' own generation projects.
Overall, the commission said that the merger, as initially notified, would have raised serious competition concerns even though the merged group would not have had extremely high market shares in generation, distribution and supply.
It cautioned that the combination of the two companies' activities could have made it easier for the group to withdraw power supplies in order to increase prices. The merged group could have used power internally rather than have sold it to the overall market, thereby reducing liquidity.
With a limited number of sites available for new nuclear power plants, most of them owned by BE, the group would have enjoyed a "high concentration" of ownership of suitable sites.
Today's decision is also a substantial boost to EDF's expansion plans, including its takeover of US nuclear operator Constellation after outbidding Warren Buffett. Pierre Gadonneix, chief executive, has indicated that EDF now wants to increase its presence in Italy and South Africa.
The French company, of which the state owns almost 80%, is building the first new-generation nuclear plant, the EPR, at Flamanville on the Normandy coast and was chosen by the government as the preferred bidder for its 35% stake in BE because of this expertise. It owns 58 nuclear plants in France.

Reducing waste, increasing profits

Published Date: 22 December 2008
CHRISTMAS WRAPPING

THINK Christmas, think wrapping – the UK is set to produce three million tonnes of waste at yuletide.But Envirowise, the business advisory service, is calling on companies to cut the amount of packaging they produce. As well as reducing waste, companies can also save money in the process, the service said.Envirowise highlighted the case of publisher Harper Collins, which has its distribution site at Bishopbriggs, near Glasgow.Collins has already reduced its distribution packaging costs by almost 25 per cent. The Bishopbriggs site – which handles more than 90 million books each year – is on course to save £353,000 by reducing packaging and also prevent the equivalent of 12,585 tonnes of carbon being released into the atmosphere. Duncan Smith, from Harper Collins, says: "Cutting back on unnecessary packaging has been achieved by replacing cardboard cartons with reusable plastic totes for deliveries to major wholesale customers and switching large cardboard envelopes with light-weight corrugated ones."

Green Bubble Goes 'Pop'

DECEMBER 21, 2008, 7:49 P.M. ET
Clean-Energy Firms Struggle for Funding; Key Index Slides 66%

By MIKE FOSTER
A slackening in the growth rate of fossil-fuel consumption provided a little comfort to environmentalists in 2008, as recession took a grip on global economies. But, in most respects, this year was awful for the green bandwagon, which came to a halt as debt and equity finance dried up for companies with an environmental focus.
The chart of the WilderHill New Energy Global Innovation index, or Nex index, which tracks clean-energy stocks, resembles the Nasdaq Technology index in 2000. The Nex fell 66% from the start of 2008 to Dec. 2. Analysts say problems have been caused by companies not paying enough attention to operational efficiency, state subsidies distorting the market, and the failure of global leaders to find common ground as they seek a successor to the Kyoto emissions protocol, which expires in 2012.
Funds in Morningstar's ecology sector, which invest in a range of sustainability stocks, are less affected by the trend than the Nex index, but have underperformed mainstream funds. The Virgin Climate Change Fund, advised by GLG Partners, is down 48% since February. The next-worst performer is an ecological fund sponsored by Dresdner RCM, which fell 34.6%, after raising €1.5 billion ($2.1 billion) in 2007.
Doubts about the emissions market when Kyoto expires mean that carbon-emission permits for years after 2012 are trading at half the price of this year's equivalents, which have fallen in value too.
Adding to the downward pressure on prices for current permits, Slovakia sold 10 million surplus credits into the market. Russia has also accumulated credits, which it has said it won't sell.
Clean-energy projects are finding it hard to secure credit at levels that make them viable. Simon Drury, partner at Climate Change Capital Private Equity Fund, said 25% of banks are prepared to commit to clean energy, 25% aren't, and 50% are receiving phone calls, but not lending at present.
"The funding gap on some deals is 100%," meaning the companies raised no funding whatsoever.
Banks are also paying greater attention to their lenders' operational statements. "There has been a tightening," Stephen Spencer, global energy director of WestLB said earlier this month at the Financial News Green Investing conference, which WestLB sponsored. "Transactions are being done using a much more conservative structure."
Wayne Woo, director of investor Good Energies, said start-up companies' founders are becoming more willing to part with equity to fund clean-technology operations. "In the past, they resisted selling more than 50%. They are now prepared to go to 75%." He said terms from financiers had become "a bit onerous," but added this was to be expected.
From Financial News at www.efinancialnews.com.

Scientists discover new forest with undiscovered species on Google Earth

Conservationists have found a host of new species after discovering uncharted new territory on the internet map Google Earth.

By Louise Gray, Environment Correspondent Last Updated: 6:56PM GMT 21 Dec 2008

A British-led expedition found 7,000 hectares of forest, rich in biodiversity, known as Mount

The mountainous area of northern Mozambique in southern Africa had been overlooked by science due to inhospitable terrain and decades of civil war in the country.
However, while scrolling around on Google Earth, an internet map that allows the viewer to look at satellite images of anywhere on the globe, scientists discovered an unexpected patch of green.
A British-led expedition was sent to see what was on the ground and found 7,000 hectares of forest, rich in biodiversity, known as Mount Mabu.
In just three weeks, scientists led by a team from the Royal Botanic Gardens in Kew found hundreds of different plant species, birds, butterflies, monkeys and a new species of giant snake.
The samples which the team took are now back in Britain for analysis.
So far three new butterflies and one new species of snake have been discovered but it is believed there are at least two more new species of plants and perhaps more new insects to discover.
Julian Bayliss, a scientist for Kew based in the region, discovered Mount Mabu while searching on Google Earth for a possible conservation project. He was looking at areas of land 5,400ft (1,600m) above sea level where more rainfall means there is likely to be forest.
To his surprise he found the patches of green that denote wooded areas, in places that had not previously been explored. After taking a closer look on more detailed satellite maps, he went to have a look.
An expedition was organised for this autumn with 28 scientists from the UK, Mozambique, Malawi, Tanzania and Switzerland. The group was able to stay at an abandoned tea estate but had to hack through difficult terrain and use 70 porters in order to carry out their investigations.
Within weeks they had discovered three new species of Lepidoptera butterfly and a new member of the Gaboon viper family of snakes that can kill a human in a single bite. There were also blue duiker antelope, samango monkeys, elephant shrews, almost 200 different types of butterflies and thousands of tropical plants.
Jonathan Timberlake, expedition leader, said digital imagery has helped scientists to discover more about the world. He believes there may be other small pockets of biodiversity around the world that are yet to be discovered that could be stumbled upon by searching on Google Earth, especially in areas like Mozambique or Papua New Guinea which have not been fully explored yet.
Mr Timberlake said discovering new species is not only important to science but helps to highlight conservation efforts in parts of the world threatened by logging and development.
Mount Mabu itself is under threat as Mozambique's economy grows and people use the wood for fuel or clear the land to grow crops.
"We cannot say we have discovered all the biodiversity areas in the world, there are still ones to discover and it helps to find new species to make people realise what is out there," he said.

GM reveals more fuel-efficient 2010 Equinox

The Associated Press
Published: December 21, 2008

DETROIT: General Motors Corp. revealed details Sunday about the redesigned 2010 Chevrolet Equinox crossover sport utility vehicle that will debut at next month's North American International Auto Show in Detroit.
Calling it the "Swiss army knife" of cars for an average family, because it can serve a variety of needs, GM has moved away from the boxier style of the earlier Equinox, which debuted in 2004. The new design draws from the Chevrolet Malibu sedan, which has been one of GM's best-selling vehicles, and the Traverse, a larger crossover that went on sale this fall.
The 2010 Equinox offers direct-injection engines. GM said the 2.4-liter, four-cylinder model is expected to get 30 miles per gallon (12.75 kilometers per liter) on the highway and 21 mpg (8.93 kpl) in the city — a 25 percent improvement over the previous model. A 3.0-liter, six-cylinder engine increases horsepower from 182 to 255 and gets an estimated 25 mpg (10.63 kpl) on the highway and 18 mpg (7.65 kpl) in the city.
The current version of the Equinox, with its 3.4-liter six-cylinder engine, gets 24 mpg (10.2 kpl) on the highway and up to 17 mpg (7.23 kpl) in the city, according to Environmental Protection Agency estimates.
Direct-injection engines put fuel directly into the engine's cylinder, rather than mixing it with air first, making the engine more powerful and efficient. GM said last week that such engines will be available in 38 of its 2010 models, up from 18 models in the 2009 model year.

The 2010 Equinox also has an electric power steering system that improves fuel efficiency enough to give drivers an extra 11 miles (17.7 kilometers) on each tank of gas, GM said. The new exterior adds other fuel-efficiency improvements, including a windshield whose base is about 3 inches (7.5 centimeters) farther forward for a sleeker profile.
The Equinox has an electronically controlled six-speed transmission. GM's OnStar service and XM Satellite Radio come standard, and there's a remote-starting system that can also activate the heater or air conditioner and the optional heated seats.
The rear row of seats in the five-passenger vehicle can move forward and back nearly 8 inches (20 centimeters) to improve legroom but also expand the rear storage to 31.4 cubic feet (0.9 cubic meters) when the back row is pushed completely forward.
The Equinox will be available in mid-2009 to compete against vehicles like the Ford Escape and Hyundai Santa Fe. Pricing has not been disclosed.
GM also plans to unveil a new 2010 Cadillac SRX midsize luxury crossover and a redesigned 2010 Buick LaCrosse sedan at the Detroit auto show.

Promoters overstated the environmental benefit of wind farms

The wind farm industry has been forced to admit that the environmental benefit of wind power in reducing carbon emissions is only half as big as it had previously claimed.

By Patrick Sawer Last Updated: 8:14AM GMT 21 Dec 2008

It will be regarded as a concession that twice as many wind turbines as previously calculated will be needed to provide the same degree of reduction in Britain's carbon emissions Photo: PA
The British Wind Energy Association (BWEA) has agreed to scale down its calculation for the amount of harmful carbon dioxide emission that can be eliminated by using wind turbines to generate electricity instead of burning fossil fuels such as coal or gas.
The move is a serious setback for the advocates of wind power, as it will be regarded as a concession that twice as many wind turbines as previously calculated will be needed to provide the same degree of reduction in Britain's carbon emissions.
A wind farm industry source admitted: "It's not ideal for us. It's the result of pressure by the anti-wind farm lobby."
For several years the BWEA – which lobbies on behalf of wind power firms – claimed that electricity from wind turbines 'displaces' 860 grams of carbon dioxide emission for every kilowatt hour of electricity generated.
However it has now halved that figure to 430 grams, following discussions with the Advertising Standards Authority (ASA).
Hundreds of wind farms are being planned across the country, adding to the 198 onshore and offshore farms - a total of 2,389 turbines - already in operation. Another 40 farms are currently under construction.
Experts have previously calculated that to help achieve the Government's aim of saving around 200 million tons of CO2 emissions by 2020 - through generating 15 per cent of the country's electricity from wind power - would require 50,000 wind turbines.
But the new figure for carbon displacement means that twice as many turbines would now be needed to save the same amount of CO2 emissions.
While their advocates regard wind farms as a key part of Britain's fight against climate change, opponents argue they blight the landscape at great financial cost while bringing little environmental benefit.
Dr Mike Hall, an anti-wind farm campaigner from the Friends of Eden, Lakeland and Lunesdale Scenery group in the Lake District, said: "Every wind farm application says it will lead to a big saving in the amount of carbon dioxide produced. This has been greatly exaggerated and the reduction in the carbon displacement figure is a significant admission of this.
"As we get cleaner power stations on line, the figure will get even lower. It further backs the argument that wind farms are one of the most inefficient and expensive ways of lowering carbon emissions."
Because wind farms burn no fuel, they emit no carbon dioxide during regular running. The revised calculation for the amount of carbon emission they save has come about because the BWEA's earlier figure did not take account of recent improvements to the technology used in conventional, fossil-fuel-burning power stations.
The figure of 860 grams dates back to the days of old-style coal-fired power stations. However, since the early 1990s, many of the dirty coal-fired stations have been replaced by cleaner-burning stations, with a consequent reduction in what the industry calls the "grid average mix" figure for carbon dioxide displacement.
As a result, a modern 100MW coal or gas power station is now calculated to produce half as many tonnes of carbon dioxide as its predecessor would have done.
The BWEA's move follows a number of rulings by the ASA against claims made by individual wind farm promoters about the benefits their schemes would have in reducing carbon emissions.
In one key adjudication, the ASA ruled that a claim by Npower Renewables that a wind farm planned for the southern edge of Exmoor National Park, in Devon, would help prevent the release of 33,000 tonnes of carbon dioxide into the atmosphere was "inaccurate and likely to mislead". This claim was based on the 860-gram figure.
The watchdog concluded: "We told Npower to ensure that future carbon savings claims were based on a more representative and rigorous carbon emissions factor."
The ASA has now recommended that the BWEA and generating companies use the far lower figure of 430 grams.
In a letter to its members, the BWEA's head of onshore, Jan Matthiesen, said: "It was agreed to recommend to all BWEA members to use the single static figure of 430 g CO2/kWh for the time being. The advantage is that it is well accepted and presents little risk as it understates the true figure."
This is now the figure given on the BWEA's website. The organisation will also be forced to lower its claim for the total amount of carbon dioxide emission saved by the 2,389 wind turbines currently operating around Britain.
But the association denied the change weakened the case for wind farms.
Nick Medic, spokesman for the BWEA, said: "Wind farms are still eliminating emissions. The fact is that fossil fuel burning power stations belch out CO2 and wind farms don't. That has not changed.
"The fact is we need to reduce carbon emissions, however you account for them. But there are people who just don't like wind farms and will use any argument against them."

Preparing the ground for an industrial revolution at National Grid

The Times
December 22, 2008
Steve Holliday, head of the utility company, has challenges ahead, but not necessarily that of recession
Robin Pagnamenta

It's a bitter December day and outside his office the chill winds of recession are blowing hard, but Steve Holliday is unfazed. Banks may be tumbling, retailers and airlines plunging into bankruptcy and unemployment soaring, but he is chief executive of what must be Britain's most recession-proof company.
From his office overlooking Trafalgar Square, Mr Holliday, a 52-year-old former rugby player, oversees Britain's biggest utility company — a £16 billion empire of pipes and wires that employs 17,500 people and distributes gas and electricity to tens of millions of people across Britain and a great swath of the northeastern United States. National Grid, Mr Holliday says, is doing fine. “By its nature, this is a very defensive business.”
As a provider of two things that many people take for granted, it is a company that is intrinsic to our way of life and, fortunately for Mr Holliday, one that remains largely shielded from the ups and downs of the regular economy. “Our cashflows are guaranteed, so the impact of the recession on our business is small,” he said, adding that about 95 per cent of National Grid's revenues come from fixed charges paid by power companies and consumers through their bills, with the levels set — usually for five years — by the regulator.
As a business model, this is about as steady as it gets. Mr Holliday is, therefore, at pains to point out that this does not mean that National Grid is a dull company. Quite the opposite, he argues, because of the vital role that infrastructure operators need to play in facing up to some of the toughest challenges facing society — those of climate change and energy security.

“This is an extraordinary time for the industry,” said Mr Holliday, who worked in the oil industry before joining National Grid in 2001 and was appointed chief executive two years ago. “Just look at the agenda we are facing: these are difficult problems that need clever people to help fix. This is an industry that is not evolving, it is in revolution.”
It would be hard to underplay the challenges. Britain is facing an energy shortfall in the years ahead as ageing coal and nuclear power stations, which have churned out reliable, inexpensive electricity since the 1960s and 1970s, are retired from service. By 2020, about 20 gigawatts of generating capacity, nearly a third of the present UK total, will have been lost, according to Mr Holliday. To avoid a future of blackouts and huge economic disruption, all of this will need to be replaced, at an estimated cost of £100 billion.
But that's not all. The UK aims to replace it with a completely different mix of lower-carbon fuels - including a vast expansion of offshore wind energy and a set of giant new nuclear reactors, up to three times more powerful than the existing fleet.
All of this is happening as supplies of North Sea gas — Britain's fallback fuel for a generation — are rapidly running out, leaving us increasingly reliant on imports.
Building the infrastructure needed for this transformation in the way we heat our homes and power our businesses will not be easy, especially in a severe recession that has dried up access to credit. “Clearly, investor confidence is a lot lower than it was a year ago,” Mr Holliday said. “No one had forecast the huge speed with which this recession has come about.”
The stakes could not be much higher. Although Mr Holliday insists that Britain's energy supplies look secure “for the next few years”, he argues that new laws will be needed to ensure that there is sufficient investment to avoid a supply crunch around 2015.
“When you look out to the medium term, there is not enough generation being built,” he said. “I continue to worry that we are not making enough progress on that front. How can we incentivise investments that we can all agree are the right thing to do and get on with them earlier?”
New planning laws that came into force this year should help, but Mr Holliday suggests that the Government will need to take a firmer approach by intervening in the market directly, placing a floor on the price of carbon or creating other incentives.
In particular, big new offshore wind farms - which the Government has earmarked as a key future source of power for Britain - will not arrive without legislative changes, Mr Holliday believes. “The regime that's in place at the moment for offshore wind does not in any shape or form,” he said.
Nevertheless, rather than retreating from these challenges, Mr Holliday put a positive gloss on them. “The reality is that we do have an energy system that is now quite old...but I think that is a fantastic opportunity,” he said. “We need to replace a third of our generation fleet. We need to green up our fuel mix. So what a great opportunity to replace assets that need replacing.”
For its part, National Grid has already agreed to invest £18 billion by 2012 reinforcing the network by tying in new power plants and wind farms and building a liquefied natural gas import terminal on the Isle of Grain in Kent. However, further investments will be needed to build links to remote wind farms planned off the coast of Scotland and potentially to bind the UK's power grid more closely to Europe, with new sub-sea power connections to Norway, Belgium and the Republic of Ireland.
National Grid plans to fund half of its current investment programme through cashflow, with the rest raised as debt. This is where the company's relative isolation from the turmoil in the wider economy starts to fray. “It has been significantly harder to raise debt in the past 12 months,” Mr Holliday admitted.
He pointed out that Grid has already managed to raise all the money it needs for this year and next, but that some investors have grumbled about the rising cost of all this debt. Others have complained about the performance of its American business, the former Keyspan, which it acquired for £4.2 billion just under three years ago and which some view as a drag on its more profitable UK operation.
Mr Holliday insisted that the US integration was “going very well”, with plans to strip out $100 million (£66 million) of costs this year, but such concerns may explain why he seemed keen to scotch any talk of further deals: “There is not a focus on further M&A activity. We don't have a growth profile predicated on buying something in 2009.”
Instead, Grid is focused on its investment programme and its pledge to raise its dividend by 8 per cent a year over the next few years. It is, again, an unusual position to be in.
Moreover, while most chief executives worry about cutting jobs, Mr Holliday is considering another rarity — hiring new staff. “We will hire 200 to 300 people in the UK this year and 120 next year — everyone from foundation engineers to finance and HR people,” he said. “You have to continue to bring people into this business. It's going to be here for a long time to come.”
Profile: Steve Holliday
Age: 52
Education: BSc in mining engineering, University of Nottingham
Career: worked for Exxon, the US oil group, overseeing variety of projects, and later British Borneo Oil & Gas before joining National Grid in 2001 as a board director. He was appointed deputy chief executive in 2006 and chief executive on January 1, 2007. Also a non-executive director of Marks & Spencer
Family: married with three children
Interests: Following the England rugby team, the arts

Obama names 4 top science advisers

By Gardiner Harris
Published: December 21, 2008

WASHINGTON: In his selection of four top scientific advisers, President-elect Barack Obama has signaled what are likely to be significant changes in policies governing global warming, ocean protections and stem cell research.
"It's time we once again put science at the top of our agenda and worked to restore America's place as the world leader in science and technology," Obama said in a radio address on Saturday, when he announced the appointments.
John Holdren, a physicist and environmental policy professor at Harvard, will serve as the president's science adviser as director of the White House Office of Science and Technology. Jane Lubchenco, a marine biologist from Oregon State University, will lead the National Oceanic and Atmospheric Administration, which overseas ocean and atmospheric studies and performs much of the government's research on global warming.
Holdren will also be a co-chairman the President's Council of Advisers on Science and Technology along with the Nobel Prize-winning cancer research Harold Varmus, a former director of the National Institutes of Health, and Eric Lander, a genomic researcher.
"Whether it's the science to slow global warming; the technology to protect our troops and confront bioterror and weapons of mass destruction; the research to find life-saving cures; or the innovations to remake our industries and create 21st century jobs — today more than ever, science holds the key to our survival as a planet and our security and prosperity as a nation," Obama said.

Like Steven Chu, the energy secretary-designate, Drs. Holdren and Lubchenco advocate mandatory limits on greenhouse gas emissions, which the Bush administration opposed. Both served as president of the American Association for the Advancement of Science. Holdren said last year that the world needed to undertake "a massive effort to slow the pace of global climatic disruption before intolerable consequences become inevitable."
Lubchenco has documented enormous dead zones in oceans that have resulted from climate change and has advocated placing vast ocean areas off-limits to fishing and mineral exploitation. In an e-mail message on Saturday, she wrote: "NOAA will play a central role in addressing pressing challenges of our time — stabilizing the climate, restoring ocean health and coastal vitality. Jobs and a healthy environment go hand in hand — and both are enabled by good science."
Varmus is president of Memorial Sloan-Kettering Cancer Center in New York. Lander is a professor of biology at MIT and helped lead the effort to sequence the human genome.

Obama's revolution on climate change

• Leading green scientist joins team• Appointment signals new US policy
Edward Helmore in New York
The Observer, Sunday 21 December 2008

Barack Obama ushered in a revolution in America's response to global warming yesterday when he appointed one of the world's leading climate change experts as his administration's chief scientist.
The president-elect's decision to make Harvard physicist John Holdren director of the White House Office of Science and Technology Policy reveals a new determination to draw a line under eight years of US policy that have seen George Bush steadfastly reject overwhelming evidence of climate change.
News of the appointment was hailed by scientists around the world, including former UK chief government scientific adviser Sir David King. "This is a superb appointment," he told the Observer. "Holdren is a top-rate scientist and his position on climate change is as clear as you could get. This is a signal from Barack Obama that he means business when it comes to dealing with global warming."
Obama also used his weekend radio address to announce that respected climatologist Jane Lubchenco is to head the National Oceanic and Atmospheric Administration. The appointments follow Obama's selection of Steven Chu, a Nobel prizewinner, to the Department of Energy, where he has been directed to lead the development of alternative energy sources.
"Today, more than ever before, science holds the key to our survival as a planet and our security and prosperity as a nation," Obama announced. "It's time we once again put science at the top of our agenda and ... worked to restore America's place as the world leader in science and technology."
In one telling remark, he added that respect for the scientific process was not "just about providing investment and resources. It's about ensuring that facts and evidence are never twisted nor obscured by politics nor ideology."
Obama's appointments are outspoken proponents of the need for urgent action over climate change, and they come after eight years of inaction, during which the Bush administration resisted international emission-reduction accords and the introduction of US laws to protect threatened species.
Holdren, whose expertise runs from nuclear-weapons proliferation to global warming, recently warned in a speech at Harvard that he considered "global warming" to be a misnomer. "It implies something gradual, something uniform, something quite possibly benign, and what we're experiencing is none of those. There is already widespread harm ... occurring from climate change. This is not just a problem for our children and our grandchildren."
As he pointed out, new figures point to a rapid acceleration in the loss of Arctic sea ice, as well as dramatic acidification of the ocean.
With the international community looking to America for leadership, Obama has made it clear that, despite the global economic crisis, the success of his presidency will hinge on a revolution in America's use and production of carbon-based energy. The selection of marine expert Lubchenco underscores that. She has warned that even if the world abruptly shifts away from fossil fuels, the oceans will continue to soak up carbon dioxide and become more acidic. She recommends protecting marine life by reducing overfishing, cutting back on nutrient run-off and creating marine reserves to protect marine eco-systems.
"The Bush administration has not been respectful of the science," she said earlier this year. "I am very much looking forward to a new administration that does respect scientific information and considers it very seriously in making environmental policies."
In another signal of his determination to move on the environment, Obama appointed Carol M Browner as his climate tsar last week. She was quoted as saying: "Time and time again, when the nation has set a new environmental standard, the naysayers have warned it will cost too much. But, once we have set those standards, American ingenuity and innovation have found a solution at a far lower cost than predicted."
For Obama, the creation of this green team is part of a broader push toward economic and environmental self-enlightenment. He has expressed hope that engaging technology with environmental and energy policy will lead to significant job creation.