By Andrew Martin
Published: July 13, 2008
It wasn't too long ago that a loose coalition of anti-ethanol forces was bemoaning the futility of its fight.
After failing to block huge new ethanol mandates in the Senate last December, Jay Truitt, until recently the chief lobbyist for the National Cattlemen's Beef Association, complained about the "fervor" and "spirituality" that surrounded ethanol on Capitol Hill.
"You can't get anyone to consider that there is a consequence to these actions," he said, adding, "We think there will be a day when people ask, 'Why in the world did we do this?' "
That day has arrived sooner than Truitt, or most anyone else, anticipated.
Of course, much of the turnabout is attributable to relentless price increases at the grocery store that have caused many people to argue that the land used to grow corn for ethanol should be used for food instead.
But the changing perceptions about ethanol have been helped along by the most unlikely of characters, a bearded and mild-mannered economist with a dry sense of humor and an encyclopedic knowledge of the arcana of American farm policy.
Until January, Keith Collins was the longtime and widely respected chief economist for the Department of Agriculture. In that position, he was a frequent booster of government policies that encouraged biofuel production.
In the months after his departure, he was hired by Kraft Foods Global to analyze the impact of biofuels on food prices. He delivered a stunning, and unexpected, roundhouse to his former employers.
The Bush administration had said biofuels were a minor factor in rising food costs. In a May 1 press conference, Edward Lazear, chairman of the White House Council of Economic Advisers, said, "The bottom line is that we think that ethanol accounts for somewhere between 2 and 3 percent of the overall increase in global food prices."
A month later, in Rome at a United Nations conference on the food crisis, the agriculture secretary, Ed Schafer, echoed Lazear's analysis in defending American biofuels policy.
But Collins pointed out that the administration's analysis was more like a back-of-the-envelope calculation, and that it hadn't accounted for the impact of biofuels on crops other than corn. The push for ethanol has led farmers to grow more corn and less of other food crops, one factor in rising prices for commodities like wheat.
Based on his own analysis, Collins maintains that biofuels have caused 23 to 35 percent of the increases in food costs. (The ethanol lobby dismissed Collins's analysis as a "Krafty use of corn demand data.")
"I looked at a little bit more recent period," said Collins, who appears uncomfortable in his role as a hired gun and treads carefully so as not to insult his former employer. "I was looking at a period when corn going into ethanol was rising much faster than what they looked at."
His move to Kraft came amid an aggressive effort by the Grocery Manufacturers Association to change perceptions about ethanol while food prices were high. The association hired the Glover Park Group, a politically wired public relations firm in Washington, to help it develop a more effective strategy. Scott Faber, lobbyist for the Grocery Manufacturers Association, declined to comment.
The Glover Park Group wrote in its proposal to the association, "We must obliterate whatever intellectual justification might still exist for corn-based ethanol among policy elites."
It also recommended identifying and recruiting "third-party validators."
Collins said he didn't believe his hiring was part of an anti-ethanol campaign. Instead, he said, he was simply asked by Kraft Foods for his thoughts on biofuels' impact, and he ultimately wrote those up in a 34-page paper.
He also notes, correctly, that the turnabout in the ethanol debate has a lot more to do with relentless price increases than with PR strategists and his remarks.
"High prices are the dominant factor," Collins said. "Without that, this coalition would not have gotten the legs they have gotten."
Nonetheless, his criticism of the administration's analysis was closely followed by a more thorough analysis from the Department of Agriculture. In comments made before a Senate subcommittee last month, Joseph Glauber, Collins's successor, said the impact of biofuels on food prices was actually closer to 10 percent; the previous analysis had neglected to consider biofuels' impact on soybeans, he said.
In an interview, Glauber said his analysis simply looked at a broader set of assumptions than the earlier one by the administration; for instance, he included the impact of soybean-based biofuels on food prices. While saying he might "quibble" with some of Collins's assumptions, he said the analyses were similar.
"It just goes to show people have different ways of portraying these numbers," he said. "I don't think these analyses are all that different."
Even so, Representative Jeff Flake, Republican of Arizona, has asked the USDA inspector general to investigate why such an error was made and perpetuated. "It is unfortunate that two high-ranking officials from the same agency have made such incompatible fact-based statements," Flake wrote in a June 26 letter to the inspector general, adding that the USDA "must be able to produce and disseminate clear and accurate information, particularly when it pertains to the culpability of U.S. policy in skyrocketing food prices."
Collins said his remarks did not contradict his work at the Agriculture Department. Back then, he said, he never anticipated that corn would hit $7 a bushel.
"We expected stronger prices for corn," he said. "If we got the prices we anticipated — high $3s — everybody would be happy. Ethanol would be cruising along just fine."
Monday, 14 July 2008
In search of better (and greener) building blocks
By Amy Cortese
Published: July 13, 2008
In 1999, fresh out of architecture graduate school, Blaine Brownell was put in charge of researching materials for a high-profile renovation of Jones Plaza in Houston's theater district. He quickly became frustrated with the lack of information about new materials and the scant knowledge that some design and building professionals had about anything beyond the conventional bricks, mortar and steel of their trade.
Thus began what he calls "a very humble project" to collect and share information on innovative new materials.
Today, Brownell's Web site, transmaterial.net, has become a clearinghouse of sorts for information on the latest innovations. He has catalogued more than 1,000 products on the site as well as in a companion book, "Transmaterial," the second volume of which was published this year by Princeton Architectural Press. More than 3,000 people have signed up for his "product of the week" e-mail message, which spotlights materials like smog-eating concrete.
The first wave of materials he tracked was driven by technological advances. Now, Brownell says, the primary motivator is environmental.
Common materials like steel, concrete and drywall require vast amounts of energy to manufacture, emitting carbon dioxide in the process. And, once constructed, buildings take an enormous amount of energy to run. In the United States alone, buildings of all kinds account for 39 percent of carbon dioxide emissions, 65 percent of waste and 70 percent of electrical use, according to the United States Green Building Council, a nonprofit group.
As energy prices have skyrocketed and concerns have mounted about the effects of greenhouse gas emissions on the climate, there is a new urgency in developing alternatives to traditional building products. Buildings must not only operate more efficiently, they must be constructed from materials that are produced with less energy, waste and harmful chemicals, according to a growing chorus of industry professionals.
"It's one of the greatest challenges that architecture and building construction has ever faced," said Brownell, who will continue his research while teaching at the University of Minnesota School of Architecture this fall.
New companies — in many cases backed by venture capitalists — have responded with innovative products. Some are experimental, while others are new takes on common materials.
McGraw-Hill Construction projects that the so-called green building market will grow to $60 billion by 2010 from $12 billion today. Industry experts say that the materials can pay for themselves in energy savings and that many of the latest products are comparable in price to their conventional counterparts.
Some of the most exciting work is occurring in decidedly unglamorous markets, like that for concrete. Many of the products haven't yet hit the market, and details are sometimes scarce.
Calera, a start-up company in Los Gatos, California, that was founded by a Stanford scientist and backed by Khosla Ventures of Menlo Park, California, is developing a concrete product that the company says can trap carbon dioxide. CalStar Cement of Newark, California, says it has raised $3.4 million from venture capital firms; its Web site says it aims to "reinvent cement." For nonstructural uses such as countertops, ecoX, made by Meld USA, based in Raleigh, North Carolina, is made from recycled glass.
Kevin Surace, the president and chief executive of Serious Materials of Sunnyvale, California, says the product his company is focusing on — drywall — has essentially been produced the same way since its invention in 1917: gypsum is mined, then subjected to intense heat. A typical gypsum drywall plant consumes one trillion to two trillion BTU's of natural gas a year, according to Surace.
Later this year, his company — backed by $65 million in venture capital funding — plans to offer a zero-carbon drywall called EcoRock. It looks and performs like traditional drywall and will be priced comparably, but it uses no heat in its creation. Instead, the mix of ingredients, which Surace would not disclose but said were mainly materials diverted from landfills, are heated through a chemical reaction. "This is brand-new materials science," he said.
He said that using EcoRock instead of gypsum drywall could reduce carbon dioxide emissions in nationwide by 25 billion pounds a year.
Beyond concrete and drywall, there is an explosion of promising new materials, from energy-harvesting glass to panels made from sorghum stalks and paint that cleans the air.
Traversing Brownell's Web site is like browsing through a catalogue of human ingenuity. A natural paint called Reben from the Suzuran Corporation in Japan contains scallop shell powder, which prevents mold, bacteria growth and the spread of flames, and titanium dioxide, which absorbs pollutants.
Want to cut down on waste? The Enviro Board Corporation in Westlake Village, California, makes low-cost, versatile building panels out of wheat straw and grass, while Kirei USA of San Diego makes woodlike panels made from sorghum stalks.
Some of the most interesting developments involve harvesting energy and sunlight in novel ways. Brownell points to "daylight delivery" systems, like the Parans Solar Lighting System by the Swedish company Parans. Its system works by collecting and intensifying sunlight on a rooftop like a solar panel, then transmitting it over a fiber optic network to unlit interior spaces for a remote-skylight effect.
Then there was Brownell's "product of the week" last week: GreenPix, a zero-energy "media wall" designed by the architects Simone Giostra & Partners and the engineering company Arup. Designed for a Beijing entertainment center, it uses polycrystalline photovoltaic cells laminated within the building's glass facade to absorb solar energy that powers thousands of tiny light-emitting diodes.
In a similar spirit, the Eco-Curtain by Inaba Electric Works in Japan integrates miniwind turbines into a building's facade. A shopping center in Nagoya, Japan, outfitted with an Eco-Curtain incorporates 775 vertically placed windmills and produces an estimated 7,551 kilowatt-hours annually — enough, Brownell says, to power the shopping center's indoor lighting.
"Buildings can play a much broader role in harvesting energy," Brownell said. And not just new buildings. He also envisions retrofitting existing facades with energy-harvesting materials. In the future, he muses, "we may look at city skylines and see gold in them thar facades."
Published: July 13, 2008
In 1999, fresh out of architecture graduate school, Blaine Brownell was put in charge of researching materials for a high-profile renovation of Jones Plaza in Houston's theater district. He quickly became frustrated with the lack of information about new materials and the scant knowledge that some design and building professionals had about anything beyond the conventional bricks, mortar and steel of their trade.
Thus began what he calls "a very humble project" to collect and share information on innovative new materials.
Today, Brownell's Web site, transmaterial.net, has become a clearinghouse of sorts for information on the latest innovations. He has catalogued more than 1,000 products on the site as well as in a companion book, "Transmaterial," the second volume of which was published this year by Princeton Architectural Press. More than 3,000 people have signed up for his "product of the week" e-mail message, which spotlights materials like smog-eating concrete.
The first wave of materials he tracked was driven by technological advances. Now, Brownell says, the primary motivator is environmental.
Common materials like steel, concrete and drywall require vast amounts of energy to manufacture, emitting carbon dioxide in the process. And, once constructed, buildings take an enormous amount of energy to run. In the United States alone, buildings of all kinds account for 39 percent of carbon dioxide emissions, 65 percent of waste and 70 percent of electrical use, according to the United States Green Building Council, a nonprofit group.
As energy prices have skyrocketed and concerns have mounted about the effects of greenhouse gas emissions on the climate, there is a new urgency in developing alternatives to traditional building products. Buildings must not only operate more efficiently, they must be constructed from materials that are produced with less energy, waste and harmful chemicals, according to a growing chorus of industry professionals.
"It's one of the greatest challenges that architecture and building construction has ever faced," said Brownell, who will continue his research while teaching at the University of Minnesota School of Architecture this fall.
New companies — in many cases backed by venture capitalists — have responded with innovative products. Some are experimental, while others are new takes on common materials.
McGraw-Hill Construction projects that the so-called green building market will grow to $60 billion by 2010 from $12 billion today. Industry experts say that the materials can pay for themselves in energy savings and that many of the latest products are comparable in price to their conventional counterparts.
Some of the most exciting work is occurring in decidedly unglamorous markets, like that for concrete. Many of the products haven't yet hit the market, and details are sometimes scarce.
Calera, a start-up company in Los Gatos, California, that was founded by a Stanford scientist and backed by Khosla Ventures of Menlo Park, California, is developing a concrete product that the company says can trap carbon dioxide. CalStar Cement of Newark, California, says it has raised $3.4 million from venture capital firms; its Web site says it aims to "reinvent cement." For nonstructural uses such as countertops, ecoX, made by Meld USA, based in Raleigh, North Carolina, is made from recycled glass.
Kevin Surace, the president and chief executive of Serious Materials of Sunnyvale, California, says the product his company is focusing on — drywall — has essentially been produced the same way since its invention in 1917: gypsum is mined, then subjected to intense heat. A typical gypsum drywall plant consumes one trillion to two trillion BTU's of natural gas a year, according to Surace.
Later this year, his company — backed by $65 million in venture capital funding — plans to offer a zero-carbon drywall called EcoRock. It looks and performs like traditional drywall and will be priced comparably, but it uses no heat in its creation. Instead, the mix of ingredients, which Surace would not disclose but said were mainly materials diverted from landfills, are heated through a chemical reaction. "This is brand-new materials science," he said.
He said that using EcoRock instead of gypsum drywall could reduce carbon dioxide emissions in nationwide by 25 billion pounds a year.
Beyond concrete and drywall, there is an explosion of promising new materials, from energy-harvesting glass to panels made from sorghum stalks and paint that cleans the air.
Traversing Brownell's Web site is like browsing through a catalogue of human ingenuity. A natural paint called Reben from the Suzuran Corporation in Japan contains scallop shell powder, which prevents mold, bacteria growth and the spread of flames, and titanium dioxide, which absorbs pollutants.
Want to cut down on waste? The Enviro Board Corporation in Westlake Village, California, makes low-cost, versatile building panels out of wheat straw and grass, while Kirei USA of San Diego makes woodlike panels made from sorghum stalks.
Some of the most interesting developments involve harvesting energy and sunlight in novel ways. Brownell points to "daylight delivery" systems, like the Parans Solar Lighting System by the Swedish company Parans. Its system works by collecting and intensifying sunlight on a rooftop like a solar panel, then transmitting it over a fiber optic network to unlit interior spaces for a remote-skylight effect.
Then there was Brownell's "product of the week" last week: GreenPix, a zero-energy "media wall" designed by the architects Simone Giostra & Partners and the engineering company Arup. Designed for a Beijing entertainment center, it uses polycrystalline photovoltaic cells laminated within the building's glass facade to absorb solar energy that powers thousands of tiny light-emitting diodes.
In a similar spirit, the Eco-Curtain by Inaba Electric Works in Japan integrates miniwind turbines into a building's facade. A shopping center in Nagoya, Japan, outfitted with an Eco-Curtain incorporates 775 vertically placed windmills and produces an estimated 7,551 kilowatt-hours annually — enough, Brownell says, to power the shopping center's indoor lighting.
"Buildings can play a much broader role in harvesting energy," Brownell said. And not just new buildings. He also envisions retrofitting existing facades with energy-harvesting materials. In the future, he muses, "we may look at city skylines and see gold in them thar facades."
Housebuilding plans are seen as neither green nor pleasant
By Jim Pickard
Published: July 13 2008 19:34
From the highest point of the village of Houghton on the Hill, you can see the rolling fields of the Stoughton estate stretching out below. A vista of golden yellow and bluey-green criss-crossed by hedgerows, this is rural England at its finest.
But the idyll is under threat. An “eco-town” called Pennbury is to be built right in the middle of what is currently home to an array of wildlife from the great crested newt to four types of owl. “This is the lungs of Leicestershire,” says Kevin Feltham, leader of Cascet, an action group opposed to the town. “There are public rights of way here and it has long been a fantastic place to take the family.”
Local protesters say that, as well as lying on 750 hectares of farmland, the site has no transport infrastructure. “Major road-building would need to take place to link south-east Leicestershire with the M1 [motorway] to cope with the massive influx of people,” says Mr Feltham. “The local councils have rejected development on this site before for these reasons.”
Demand for homes is on the slide but the British government sees the country as suffering from a desperate housing shortage. The population of 61m is expected to rise to 65m by 2016 and, in addition to an influx of young immigrants, there is a shift towards people living alone.
So ministers are pressing ahead with plans for 10 “eco-towns” to be built within the next decade, to “rigorous” green standards. But the country’s political leaders are wrestling with the most surreal of dilemmas: how to make housing more affordable as well as energy-efficient while preventing a collapse in house prices that some say is the consequence of a 10-year boom in which prices trebled.
Economists are pencilling in a price crash of about 20 per cent as sales dry up. In part this is because people can no longer get hold of mortgages, as banks are in rapid retreat from risk. But the political debate seems stuck in the old grooves: how to build more homes and get more young people on to the housing ladder – a ladder that looks more precarious by the day.
Caroline Flint, housing minister, says the country faces “significant housin1g shortages”. The opposition does not disagree. “We know that the best way to improve affordability is to build more homes throughout the country,” says Grant Shapps, Conservative MP and shadow housing minister.
Such comments seem bizarre when set against the reality of new housing estates and city centre apartment blocks where units remain empty and housebuilders are taking desperate steps to sell them. House prices, having fallen for eight months in a row, are now 6 per cent down from their peak, according to Nationwide, a big lender. The share prices of Britain’s housebuilders have been in free fall. Taylor Wimpey, which failed this month to secure a £500m ($994m, €625m) rescue rights issue, ended last week 89 per cent below its 52-week peak. Its rival, Barratt Developments, was down by 93 per cent.
Yet the government’s aim is to build 3m new homes by 2020. That means 240,000 a year, compared with the 170,000 completed last year and estimates of little more than 100,000 coming on to the market this year.
Last summer, with house prices still soaring, the eco-towns must have seemed a brilliant way to help reach that target. Yvette Cooper, Ms Flint’s predecessor, compared the programme with the response to the 1950s housing crisis, which prompted a spate of “new towns”. Her plans would “increase housing and protect the environment as well”, she declared. “We need to substantially cut emissions from new homes and work towards zero-carbon housing and development.”
Critics of the schemes, however, say they are more about meeting the supposed housing shortage than improving the environment. In the words of Brian Berry, director of external affairs at the Federation of Master Builders: “Government greenwash.”
First, many of the chosen sites will occupy farmland rather than disused urban sites. Moreover, building a new town requires huge amounts of energy and materials – even if the final result is “green”. The “zero-carbon” nature of the eco-towns that the government proclaims applies only to their future energy consumption. Why not instead tackle the 600,000-800,000 existing empty homes, which could be refurbished at a lower financial and environmental cost?
Few genuine eco-towns exist anywhere. Plans drawn up by Arup, the global design and engineering firm, for a green city in Dongtan, China, have not begun to take shape. There are widespread fears that Britain’s eco-towns will be “eco” only by name. Lord Rogers, the acclaimed architect – and proponent of sustainability – describes them as the “biggest mistake this government could make”.
The scepticism rose another notch when it emerged that eco-towns, which will not be ready for at least eight years, could carry less stringent environmental standards than will by then be required for every new home. Mr Shapps, while backing the housebuilding programme, derides that as “the greatest farce of all . . . Those eco-towns will be built at a lower environmental level than the houses that will in any case be built at the same time in 2016.”
Action groups have sprung up to protest against several of the proposed sites. The Leicestershire protesters, determined to retain their piece of paradise, have tried everything from petitioning the government to protesting outside branches of the Co-operative group, the retail chain that owns the land. The Co-op is rehashing old development plans under the “pretence of eco-friendliness”, in the words of Mr Feltham.
The biggest test of all, should the eco-towns get built, is whether people will be prepared to pay much more to live in them rather than buy an older property. One report suggests that the cost of meeting the higher environmental codes varies from £19,000 for a flat to £47,000 for a larger house. Another, from Savills estate agency, shows that only one in five would pay more for good insulation and energy savings. Even fewer would pay more for green energy or water saving features.
Liz Peace, head of the British Property Federation, a building trade association, says the eco-towns could be an excellent way to showcase modern building design techniques. But she questions whether the plans will survive the slowdown. “Market forces will determine whether they are viable and if the demand isn’t there they won’t get built.”
Ms Flint argues that the cost of building sustainable homes will fall over time, thanks to economies of scale as technology becomes more widespread. She hopes to whittle down a list of 15 proposed sites down to 10 within months. But as housebuilders slash thousands of jobs, watch their share prices dive and await the first corporate collapse in the sector, the eco-town dream looks further away than ever.
Additional reporting by David Patrikarakos and Daniel Thomas
Copyright The Financial Times Limited 2008
Published: July 13 2008 19:34
From the highest point of the village of Houghton on the Hill, you can see the rolling fields of the Stoughton estate stretching out below. A vista of golden yellow and bluey-green criss-crossed by hedgerows, this is rural England at its finest.
But the idyll is under threat. An “eco-town” called Pennbury is to be built right in the middle of what is currently home to an array of wildlife from the great crested newt to four types of owl. “This is the lungs of Leicestershire,” says Kevin Feltham, leader of Cascet, an action group opposed to the town. “There are public rights of way here and it has long been a fantastic place to take the family.”
Local protesters say that, as well as lying on 750 hectares of farmland, the site has no transport infrastructure. “Major road-building would need to take place to link south-east Leicestershire with the M1 [motorway] to cope with the massive influx of people,” says Mr Feltham. “The local councils have rejected development on this site before for these reasons.”
Demand for homes is on the slide but the British government sees the country as suffering from a desperate housing shortage. The population of 61m is expected to rise to 65m by 2016 and, in addition to an influx of young immigrants, there is a shift towards people living alone.
So ministers are pressing ahead with plans for 10 “eco-towns” to be built within the next decade, to “rigorous” green standards. But the country’s political leaders are wrestling with the most surreal of dilemmas: how to make housing more affordable as well as energy-efficient while preventing a collapse in house prices that some say is the consequence of a 10-year boom in which prices trebled.
Economists are pencilling in a price crash of about 20 per cent as sales dry up. In part this is because people can no longer get hold of mortgages, as banks are in rapid retreat from risk. But the political debate seems stuck in the old grooves: how to build more homes and get more young people on to the housing ladder – a ladder that looks more precarious by the day.
Caroline Flint, housing minister, says the country faces “significant housin1g shortages”. The opposition does not disagree. “We know that the best way to improve affordability is to build more homes throughout the country,” says Grant Shapps, Conservative MP and shadow housing minister.
Such comments seem bizarre when set against the reality of new housing estates and city centre apartment blocks where units remain empty and housebuilders are taking desperate steps to sell them. House prices, having fallen for eight months in a row, are now 6 per cent down from their peak, according to Nationwide, a big lender. The share prices of Britain’s housebuilders have been in free fall. Taylor Wimpey, which failed this month to secure a £500m ($994m, €625m) rescue rights issue, ended last week 89 per cent below its 52-week peak. Its rival, Barratt Developments, was down by 93 per cent.
Yet the government’s aim is to build 3m new homes by 2020. That means 240,000 a year, compared with the 170,000 completed last year and estimates of little more than 100,000 coming on to the market this year.
Last summer, with house prices still soaring, the eco-towns must have seemed a brilliant way to help reach that target. Yvette Cooper, Ms Flint’s predecessor, compared the programme with the response to the 1950s housing crisis, which prompted a spate of “new towns”. Her plans would “increase housing and protect the environment as well”, she declared. “We need to substantially cut emissions from new homes and work towards zero-carbon housing and development.”
Critics of the schemes, however, say they are more about meeting the supposed housing shortage than improving the environment. In the words of Brian Berry, director of external affairs at the Federation of Master Builders: “Government greenwash.”
First, many of the chosen sites will occupy farmland rather than disused urban sites. Moreover, building a new town requires huge amounts of energy and materials – even if the final result is “green”. The “zero-carbon” nature of the eco-towns that the government proclaims applies only to their future energy consumption. Why not instead tackle the 600,000-800,000 existing empty homes, which could be refurbished at a lower financial and environmental cost?
Few genuine eco-towns exist anywhere. Plans drawn up by Arup, the global design and engineering firm, for a green city in Dongtan, China, have not begun to take shape. There are widespread fears that Britain’s eco-towns will be “eco” only by name. Lord Rogers, the acclaimed architect – and proponent of sustainability – describes them as the “biggest mistake this government could make”.
The scepticism rose another notch when it emerged that eco-towns, which will not be ready for at least eight years, could carry less stringent environmental standards than will by then be required for every new home. Mr Shapps, while backing the housebuilding programme, derides that as “the greatest farce of all . . . Those eco-towns will be built at a lower environmental level than the houses that will in any case be built at the same time in 2016.”
Action groups have sprung up to protest against several of the proposed sites. The Leicestershire protesters, determined to retain their piece of paradise, have tried everything from petitioning the government to protesting outside branches of the Co-operative group, the retail chain that owns the land. The Co-op is rehashing old development plans under the “pretence of eco-friendliness”, in the words of Mr Feltham.
The biggest test of all, should the eco-towns get built, is whether people will be prepared to pay much more to live in them rather than buy an older property. One report suggests that the cost of meeting the higher environmental codes varies from £19,000 for a flat to £47,000 for a larger house. Another, from Savills estate agency, shows that only one in five would pay more for good insulation and energy savings. Even fewer would pay more for green energy or water saving features.
Liz Peace, head of the British Property Federation, a building trade association, says the eco-towns could be an excellent way to showcase modern building design techniques. But she questions whether the plans will survive the slowdown. “Market forces will determine whether they are viable and if the demand isn’t there they won’t get built.”
Ms Flint argues that the cost of building sustainable homes will fall over time, thanks to economies of scale as technology becomes more widespread. She hopes to whittle down a list of 15 proposed sites down to 10 within months. But as housebuilders slash thousands of jobs, watch their share prices dive and await the first corporate collapse in the sector, the eco-town dream looks further away than ever.
Additional reporting by David Patrikarakos and Daniel Thomas
Copyright The Financial Times Limited 2008
Cap and Redistribute
FROM TODAY'S WALL STREET JOURNAL ASIA July 14, 2008
The Group of Eight may be waking up to the cost of fighting global warming, but in Australia, the opposite is happening. Prime Minister Kevin Rudd has promised to implement an emissions trading scheme by 2010, claiming it would be "reckless not to act." Rhetoric aside, Mr. Rudd just wants to do what every Labor pol likes: tax industry and redistribute the proceeds, at huge cost to the economy.
The Australian public saw an outline of these plans earlier this month, when economist Ross Garnaut released a Labor-commissioned report on climate change and how to combat it. Mr. Garnaut starts with the premise that it isn't "desirable" or "feasible" to "slow living standards" to fight climate change. Yet "the solution," he argues, is in "removing the links between economic activity and greenhouse gas emissions."
If the government-directed breakdown of free-market price signals sounds like creeping socialism, it is. The Garnaut Review suggests selling artificial permits that allow companies to "pollute." Industry would either fold under the cost burden or pass those costs onto consumers. Canberra, on the other hand, would haul in huge revenues from the permit sales. Mr. Garnaut will estimate this tax take when he issues his final report in September. The Rudd government is releasing its own paper on the subject this week.
Mr. Garnaut and Mr. Rudd both acknowledge that emissions trading would be costly – especially in a country where natural resources account for around half of all exports. Agriculture and mining together represent about 9% of GDP. Taxing emissions could cripple these industries and would percolate through every corner of the economy, raising energy prices. The ultimate cost in terms of jobs and growth is unknowable.
To alleviate this government-created problem, the Garnaut Review suggests some government-directed money shuffling. Up to 30% of "sales revenues" would go to "trade-exposed, emissions-intensive export industries." In English, this means Canberra would pay companies to stay in Australia rather than move to a country that doesn't impose arbitrary costs on business.
Another 30% of this indirect tax would go to "research, development and commercialization of new, low-emissions technologies." So instead of encouraging the whole of Australian industry to invent cleaner business practices through transparent tax incentives, Mr. Garnaut wants government to give money to selected institutions to work on the problem. Australia, with one of the world's biggest supplies of uranium, already has at its disposal a cleaner form of energy that it doesn't use: nuclear power.
The bulk of the proposed handouts are reserved for "households," to relieve the "regressive income distribution effects of the emissions trading system." Translation: Poor Australians will suffer most from higher energy prices as companies pass on costs. The report doesn't specify which households would receive handouts. But it's safe to say that with the Labor Party controlling every Australian state and its federal government, it would be tempting to shovel that cash pile to Labor constituencies.
The Garnaut Review estimates that Australia accounts for only 1.5% of the world's total greenhouse gas emissions. China, the U.S. and the European Union are the biggest emitters by a long shot; what Canberra does is largely irrelevant. Mr. Rudd waves this aside, claiming that other countries will follow Australia's example. The lesson of last week's G-8 summit is that developed and developing countries alike are moving in the opposite direction.
The Group of Eight may be waking up to the cost of fighting global warming, but in Australia, the opposite is happening. Prime Minister Kevin Rudd has promised to implement an emissions trading scheme by 2010, claiming it would be "reckless not to act." Rhetoric aside, Mr. Rudd just wants to do what every Labor pol likes: tax industry and redistribute the proceeds, at huge cost to the economy.
The Australian public saw an outline of these plans earlier this month, when economist Ross Garnaut released a Labor-commissioned report on climate change and how to combat it. Mr. Garnaut starts with the premise that it isn't "desirable" or "feasible" to "slow living standards" to fight climate change. Yet "the solution," he argues, is in "removing the links between economic activity and greenhouse gas emissions."
If the government-directed breakdown of free-market price signals sounds like creeping socialism, it is. The Garnaut Review suggests selling artificial permits that allow companies to "pollute." Industry would either fold under the cost burden or pass those costs onto consumers. Canberra, on the other hand, would haul in huge revenues from the permit sales. Mr. Garnaut will estimate this tax take when he issues his final report in September. The Rudd government is releasing its own paper on the subject this week.
Mr. Garnaut and Mr. Rudd both acknowledge that emissions trading would be costly – especially in a country where natural resources account for around half of all exports. Agriculture and mining together represent about 9% of GDP. Taxing emissions could cripple these industries and would percolate through every corner of the economy, raising energy prices. The ultimate cost in terms of jobs and growth is unknowable.
To alleviate this government-created problem, the Garnaut Review suggests some government-directed money shuffling. Up to 30% of "sales revenues" would go to "trade-exposed, emissions-intensive export industries." In English, this means Canberra would pay companies to stay in Australia rather than move to a country that doesn't impose arbitrary costs on business.
Another 30% of this indirect tax would go to "research, development and commercialization of new, low-emissions technologies." So instead of encouraging the whole of Australian industry to invent cleaner business practices through transparent tax incentives, Mr. Garnaut wants government to give money to selected institutions to work on the problem. Australia, with one of the world's biggest supplies of uranium, already has at its disposal a cleaner form of energy that it doesn't use: nuclear power.
The bulk of the proposed handouts are reserved for "households," to relieve the "regressive income distribution effects of the emissions trading system." Translation: Poor Australians will suffer most from higher energy prices as companies pass on costs. The report doesn't specify which households would receive handouts. But it's safe to say that with the Labor Party controlling every Australian state and its federal government, it would be tempting to shovel that cash pile to Labor constituencies.
The Garnaut Review estimates that Australia accounts for only 1.5% of the world's total greenhouse gas emissions. China, the U.S. and the European Union are the biggest emitters by a long shot; what Canberra does is largely irrelevant. Mr. Rudd waves this aside, claiming that other countries will follow Australia's example. The lesson of last week's G-8 summit is that developed and developing countries alike are moving in the opposite direction.
Aviation industry examines alternative fuels
By Erica Gies
Published: July 13, 2008
SAN FRANCISCO: Aviation emits 2 percent of carbon dioxide emissions worldwide, and 3 percent of total greenhouse gas emissions, according to the Intergovernmental Panel on Climate Change, the scientific body set up by the United Nations and the World Meteorological Organization to review the evidence on human-induced global warming. And according to environmental advocates, including some scientists, greenhouse gases released at high altitude may trap more heat than the same gases released on the ground.
Before the current economic downturn global air travel was growing about 5 percent a year, according to the International Air Transport Association, which represents 230 airlines worldwide that carry 93 percent of passenger traffic. The association says that it expects the industry will recover and that growth will continue at least through 2011. In the United States the Federal Aviation Administration also is still predicting growth of 4 percent to 5 percent through 2011 and beyond.
Against that background, the aviation industry is scrambling to improve fuel efficiency, in part by researching alternative fuels.
At a meeting in Geneva in April, aircraft and engine manufacturers, fuel suppliers, airlines and airports signed a voluntary declaration committing them to work toward carbon-neutral growth, and, ultimately, an aviation industry that, over all, expels no carbon dioxide into the atmosphere. While the document did not set a target date, the airline association has challenged the industry to achieve zero emissions in 50 years. Companies and organizations have made a variety of interim commitments.
The declaration highlights four areas for improvement: technology, operations, infrastructure and economic instruments. According to Airbus Industrie, the leading European plane maker, the target is an extension of ongoing efficiency improvements. Over the last 40 years the aviation industry has reduced CO2 emissions from aircraft by 70 percent and the dumping of unburned fuel by 90 percent, it says.
One technology initiative is to find a replacement for kerosene jet fuel, derived from crude oil.
"Only about 5 percent of a barrel of oil is a candidate for commercial aviation fuel," said Bill Glover, managing director of environmental strategy for Boeing. "Up to 40 percent of a barrel of plant oil can be converted into aviation jet fuel. So the chemistry is closer to what we need."
In searching the plant world for fuel sources, the industry has set guidelines.
"The biomass should not compete with food production in terms of land and water use," said Ross Walker, program manager for alternative fuels for Airbus. "Nor should it compete with existing carbon sinks such as rainforests or temperate forests."
Some plant-based fuels are out of contention: Ethanol cannot be used because it freezes in the upper atmosphere, interacts chemically with material finishes on planes and lacks the necessary energy content.
Among leading possible candidates as fuel feedstocks are algae; halophytes, a group of salt-tolerant plants; and Jatropha curcas, a bush native to Central America that can grow in poor soils. Some Asian countries, including India and Myanmar, are already growing jatropha for biodiesel.
Besides meeting environmental and performance criteria, any potential fuel must win approval from airframe and engine manufacturers and government safety authorities.
"Safety is No.1," said Steve Lott, the North American spokesman for the airline association.
Another consideration is compatibility with current systems. Walker, the Airbus official, said, "It's important that the fuel is a drop-in replacement, so there's no major changes required to the air frames, the air engines, or the infrastructure because that would be very expensive and also would generate its own CO2 emissions in changing everything."
Milton Sommerfeld, a professor at Arizona State University, has studied algae for more than 40 years. At the university's algae research laboratory, he and a colleague, Qiang Hu, conducted preliminary research last year on converting algal oil to aviation fuel for the U.S. Defense Advanced Research Projects Agency.
Algae "fits into the existing processing system quite well because it mimics the oil that we mine from the earth," he said, adding that "there are theories that the oil that we are taking out of the ground had its origin in algae."
The industry is conducting trials to test the efficacy of various fuels. Approval by manufacturers can help make the business case for production.
Walker at Airbus said, "Unless we have the fuel certified, it's unlikely that somebody will invest the billions of dollars necessary for an industrial plant."
The Virgin Green Fund, which has a $3 billion commitment over the next decade from Richard Branson, the founder of Virgin Atlantic Airways, is investing in alternative fuel and solar power companies. Other airlines and aircraft manufacturers have arrangements with university researchers and entrepreneurs.
Boeing and Airbus both tested hydrogen fuel cell technology this year, with an eye toward use in the auxiliary power units that supply backup power, electricity and compressed air.
Airbus flew an A380, the world's largest passenger aircraft, on a gas-to-liquid fuel derived from converting natural gas to liquid kerosene, a conversion process similar to the one that extracts liquid fuel from plant biomass.
Virgin Atlantic flew an experimental flight in February on a Boeing 747, using a blend of babassu palm and coconut oils although, since both are used in food, those oils will not be pursued as a long-term solution.
Air New Zealand plans a test this year on a Boeing 747 using jatropha oil. Japan Airlines and Continental Airlines are also planning tests, on a Boeing 747 and a Boeing 737, respectively. Neither airline has yet selected a biofuel.
Emissions reports on these tests, which involved feeding biofuel, or a biofuel-kerosene mix, to just one engine of the aircraft, are eagerly awaited.
At this stage, elements of the industry are sharing research. "The airline industry is very competitive like any other industry," said Lott, the industry spokesman. "But when it comes to something like this, it's important that there's transparency and sharing of information because that's the only way we can keep momentum."
Paul Charles, communications director for Virgin Atlantic Airways, spoke of a time beyond fuel. "Ultimately, the ideal solution would be a plane which runs on solar power," he said. "Solar panels on the wings could take the sun's energy and regenerate it through the aircraft.
"If I were Boeing or Airbus, that's precisely what I'd be working on."
In the nearer term, though, Sommerfeld, the Arizona State University researcher, hopes to see commercial algae facilities in three to five years. Although he has been working on algae as a transportation fuel source for 20 years, he said that limited capital investment had hindered progress in the past.
"If the price of oil continues at the current rate or increases, that's going to bring things in faster than if we have a significant price drop," he said. "When the price gets high, we begin to look for alternatives; when the price drops, we stop."
While reducing emissions is a factor, industry insiders concede that the high price of oil is the strongest motivator in the search for an alternative fuel.
"Every dollar increase in the price of crude oil leads to $1.6 billion additional cost to the industry worldwide," said Lott.
Or, as Charles put it: "If you ever needed a real incentive, oil at $138 a barrel is it."
Published: July 13, 2008
SAN FRANCISCO: Aviation emits 2 percent of carbon dioxide emissions worldwide, and 3 percent of total greenhouse gas emissions, according to the Intergovernmental Panel on Climate Change, the scientific body set up by the United Nations and the World Meteorological Organization to review the evidence on human-induced global warming. And according to environmental advocates, including some scientists, greenhouse gases released at high altitude may trap more heat than the same gases released on the ground.
Before the current economic downturn global air travel was growing about 5 percent a year, according to the International Air Transport Association, which represents 230 airlines worldwide that carry 93 percent of passenger traffic. The association says that it expects the industry will recover and that growth will continue at least through 2011. In the United States the Federal Aviation Administration also is still predicting growth of 4 percent to 5 percent through 2011 and beyond.
Against that background, the aviation industry is scrambling to improve fuel efficiency, in part by researching alternative fuels.
At a meeting in Geneva in April, aircraft and engine manufacturers, fuel suppliers, airlines and airports signed a voluntary declaration committing them to work toward carbon-neutral growth, and, ultimately, an aviation industry that, over all, expels no carbon dioxide into the atmosphere. While the document did not set a target date, the airline association has challenged the industry to achieve zero emissions in 50 years. Companies and organizations have made a variety of interim commitments.
The declaration highlights four areas for improvement: technology, operations, infrastructure and economic instruments. According to Airbus Industrie, the leading European plane maker, the target is an extension of ongoing efficiency improvements. Over the last 40 years the aviation industry has reduced CO2 emissions from aircraft by 70 percent and the dumping of unburned fuel by 90 percent, it says.
One technology initiative is to find a replacement for kerosene jet fuel, derived from crude oil.
"Only about 5 percent of a barrel of oil is a candidate for commercial aviation fuel," said Bill Glover, managing director of environmental strategy for Boeing. "Up to 40 percent of a barrel of plant oil can be converted into aviation jet fuel. So the chemistry is closer to what we need."
In searching the plant world for fuel sources, the industry has set guidelines.
"The biomass should not compete with food production in terms of land and water use," said Ross Walker, program manager for alternative fuels for Airbus. "Nor should it compete with existing carbon sinks such as rainforests or temperate forests."
Some plant-based fuels are out of contention: Ethanol cannot be used because it freezes in the upper atmosphere, interacts chemically with material finishes on planes and lacks the necessary energy content.
Among leading possible candidates as fuel feedstocks are algae; halophytes, a group of salt-tolerant plants; and Jatropha curcas, a bush native to Central America that can grow in poor soils. Some Asian countries, including India and Myanmar, are already growing jatropha for biodiesel.
Besides meeting environmental and performance criteria, any potential fuel must win approval from airframe and engine manufacturers and government safety authorities.
"Safety is No.1," said Steve Lott, the North American spokesman for the airline association.
Another consideration is compatibility with current systems. Walker, the Airbus official, said, "It's important that the fuel is a drop-in replacement, so there's no major changes required to the air frames, the air engines, or the infrastructure because that would be very expensive and also would generate its own CO2 emissions in changing everything."
Milton Sommerfeld, a professor at Arizona State University, has studied algae for more than 40 years. At the university's algae research laboratory, he and a colleague, Qiang Hu, conducted preliminary research last year on converting algal oil to aviation fuel for the U.S. Defense Advanced Research Projects Agency.
Algae "fits into the existing processing system quite well because it mimics the oil that we mine from the earth," he said, adding that "there are theories that the oil that we are taking out of the ground had its origin in algae."
The industry is conducting trials to test the efficacy of various fuels. Approval by manufacturers can help make the business case for production.
Walker at Airbus said, "Unless we have the fuel certified, it's unlikely that somebody will invest the billions of dollars necessary for an industrial plant."
The Virgin Green Fund, which has a $3 billion commitment over the next decade from Richard Branson, the founder of Virgin Atlantic Airways, is investing in alternative fuel and solar power companies. Other airlines and aircraft manufacturers have arrangements with university researchers and entrepreneurs.
Boeing and Airbus both tested hydrogen fuel cell technology this year, with an eye toward use in the auxiliary power units that supply backup power, electricity and compressed air.
Airbus flew an A380, the world's largest passenger aircraft, on a gas-to-liquid fuel derived from converting natural gas to liquid kerosene, a conversion process similar to the one that extracts liquid fuel from plant biomass.
Virgin Atlantic flew an experimental flight in February on a Boeing 747, using a blend of babassu palm and coconut oils although, since both are used in food, those oils will not be pursued as a long-term solution.
Air New Zealand plans a test this year on a Boeing 747 using jatropha oil. Japan Airlines and Continental Airlines are also planning tests, on a Boeing 747 and a Boeing 737, respectively. Neither airline has yet selected a biofuel.
Emissions reports on these tests, which involved feeding biofuel, or a biofuel-kerosene mix, to just one engine of the aircraft, are eagerly awaited.
At this stage, elements of the industry are sharing research. "The airline industry is very competitive like any other industry," said Lott, the industry spokesman. "But when it comes to something like this, it's important that there's transparency and sharing of information because that's the only way we can keep momentum."
Paul Charles, communications director for Virgin Atlantic Airways, spoke of a time beyond fuel. "Ultimately, the ideal solution would be a plane which runs on solar power," he said. "Solar panels on the wings could take the sun's energy and regenerate it through the aircraft.
"If I were Boeing or Airbus, that's precisely what I'd be working on."
In the nearer term, though, Sommerfeld, the Arizona State University researcher, hopes to see commercial algae facilities in three to five years. Although he has been working on algae as a transportation fuel source for 20 years, he said that limited capital investment had hindered progress in the past.
"If the price of oil continues at the current rate or increases, that's going to bring things in faster than if we have a significant price drop," he said. "When the price gets high, we begin to look for alternatives; when the price drops, we stop."
While reducing emissions is a factor, industry insiders concede that the high price of oil is the strongest motivator in the search for an alternative fuel.
"Every dollar increase in the price of crude oil leads to $1.6 billion additional cost to the industry worldwide," said Lott.
Or, as Charles put it: "If you ever needed a real incentive, oil at $138 a barrel is it."
Airlines under pressure to turn skies green
By Fiona Harvey, Environment Correspondent
Published: July 14 2008 03:00
The European Parliament last week approved a measure that will be the biggest environmental constraint yet placed on airlines anywhere in the world.
They voted to include air traffic in the European Union's emissions trading scheme from 2012. All flights taking off or landing within the EU's borders will be included.
Airlines, including non-EU carriers, will be issued with permits to produce carbon dioxide. In the first year, they will be issued with enough permits to cover only 97 per cent of their estimated emissions, based on previous levels. From 2013, that will fall to 95 per cent. Airlines will be issued with most of their carbon permit allocation for nothing, but will have to buy 15 per cent of their quota at auction, a proportion that may rise.
The US has vowed to fight the measure in the international courts. Airlines, too, joined the chorus of protest.
The European Commission remains determined to push ahead with the plans. Shipping and other transport may be covered in future.
Airlines account for about 3 per cent of Europe's greenhouse gas emissions, but that is rising, as air travel is forecast to double across the EU by 2020. Green campaigners say the sector is the fastest-growing source of emissions, and their effect is under-estimated because greenhouse gases from aeroplane engines have a more damaging effect on the climate when emitted at a high altitude.
The prospect of having to cut emissions has concentrated minds on environmental questions.
Bill Glover, managing director of environmental strategy for Boeing Commercial Airplanes, says there has been much more emphasis on technologies that would "help the industry continue to improve its environmental performance".
He says: "In terms of noticeable developments [in the past year], I would say [there has been] increased industry unity around environmental issues, including signing an industry declaration among aviation leaders; strong progress in efforts to identify renewable forms of sustainable biofuel plant sources, [including a] successful demonstration flight with [Virgin Atlantic Airlines] and GE Aviation, and the first flight powered entirely by fuel-cell technology."
The Virgin test flight fulfilled a promise by Sir Richard Branson to investigate ways to use biofuels - those derived from plants - in aircraft. Although the technology could become important, many aircraft makers are wary of controversy over biofuels, which have been blamed for raising the prices of food.
However, research is under way to find methods of producing biofuels from waste products such as straw, so-called "secondgeneration" biofuels.
Aircraft makers seek to improve the efficiency of their engines and body designs all the time, and high oil prices have given an impetus to this effort, says Kevin Bell, managing director of the aerospace and defence group at Bearing Point, the consultancy.
There are two main ways to do this: to concentrate on changes to engine design, or to look at the airframe.
He explains: "The airframe is historically built out of metal, but there is a move to use more modern materials such as fibreglass and carbon composite. Using those lighter materials means you are hauling less weight across the sky."
Other technical developments include making engine blades capable of operating at higher temperatures, which can be used in conjunction with a more efficient combustion process, says Mr Bell.
But airlines need not wait for fancy new engines or aircraft bodies to make fleets more efficient. Substantial savings can be wrung from more frequent maintenance, he says. "The more effective the maintenance schedule, the more efficient the craft will be in operation."
Moreover, the aircraft itself is only part of the story. Flying techniques can make an enormous difference to how much fuel an aircraft uses - and therefore its rate of emissions.
Pilots can be trained to make gentler ascents and descents, while air traffic controllers could save an estimated 10 per cent or more of greenhouse gas output by how they route aircraft.
Mr Glover believes the industry is getting to grips with climate change. He says: "The two most important things the industry can do - aside from new technology development - are: First, to help guide the establishment of a global emissions standard versus regional ones. Second, to help move the transformation of the global air traffic management system forward."
Copyright The Financial Times Limited 2008
Published: July 14 2008 03:00
The European Parliament last week approved a measure that will be the biggest environmental constraint yet placed on airlines anywhere in the world.
They voted to include air traffic in the European Union's emissions trading scheme from 2012. All flights taking off or landing within the EU's borders will be included.
Airlines, including non-EU carriers, will be issued with permits to produce carbon dioxide. In the first year, they will be issued with enough permits to cover only 97 per cent of their estimated emissions, based on previous levels. From 2013, that will fall to 95 per cent. Airlines will be issued with most of their carbon permit allocation for nothing, but will have to buy 15 per cent of their quota at auction, a proportion that may rise.
The US has vowed to fight the measure in the international courts. Airlines, too, joined the chorus of protest.
The European Commission remains determined to push ahead with the plans. Shipping and other transport may be covered in future.
Airlines account for about 3 per cent of Europe's greenhouse gas emissions, but that is rising, as air travel is forecast to double across the EU by 2020. Green campaigners say the sector is the fastest-growing source of emissions, and their effect is under-estimated because greenhouse gases from aeroplane engines have a more damaging effect on the climate when emitted at a high altitude.
The prospect of having to cut emissions has concentrated minds on environmental questions.
Bill Glover, managing director of environmental strategy for Boeing Commercial Airplanes, says there has been much more emphasis on technologies that would "help the industry continue to improve its environmental performance".
He says: "In terms of noticeable developments [in the past year], I would say [there has been] increased industry unity around environmental issues, including signing an industry declaration among aviation leaders; strong progress in efforts to identify renewable forms of sustainable biofuel plant sources, [including a] successful demonstration flight with [Virgin Atlantic Airlines] and GE Aviation, and the first flight powered entirely by fuel-cell technology."
The Virgin test flight fulfilled a promise by Sir Richard Branson to investigate ways to use biofuels - those derived from plants - in aircraft. Although the technology could become important, many aircraft makers are wary of controversy over biofuels, which have been blamed for raising the prices of food.
However, research is under way to find methods of producing biofuels from waste products such as straw, so-called "secondgeneration" biofuels.
Aircraft makers seek to improve the efficiency of their engines and body designs all the time, and high oil prices have given an impetus to this effort, says Kevin Bell, managing director of the aerospace and defence group at Bearing Point, the consultancy.
There are two main ways to do this: to concentrate on changes to engine design, or to look at the airframe.
He explains: "The airframe is historically built out of metal, but there is a move to use more modern materials such as fibreglass and carbon composite. Using those lighter materials means you are hauling less weight across the sky."
Other technical developments include making engine blades capable of operating at higher temperatures, which can be used in conjunction with a more efficient combustion process, says Mr Bell.
But airlines need not wait for fancy new engines or aircraft bodies to make fleets more efficient. Substantial savings can be wrung from more frequent maintenance, he says. "The more effective the maintenance schedule, the more efficient the craft will be in operation."
Moreover, the aircraft itself is only part of the story. Flying techniques can make an enormous difference to how much fuel an aircraft uses - and therefore its rate of emissions.
Pilots can be trained to make gentler ascents and descents, while air traffic controllers could save an estimated 10 per cent or more of greenhouse gas output by how they route aircraft.
Mr Glover believes the industry is getting to grips with climate change. He says: "The two most important things the industry can do - aside from new technology development - are: First, to help guide the establishment of a global emissions standard versus regional ones. Second, to help move the transformation of the global air traffic management system forward."
Copyright The Financial Times Limited 2008
Airlines need more bouquets not brickbats
By Tim Clark
Published: July 13 2008 19:10
Oil at $140-plus has changed all aviation realities. While Emirates remains one of the more optimistic airlines, the overall view of our industry is dire. This year many airlines have grounded aircraft or gone bankrupt and an estimated 100,000 jobs will be cut.
Some environmental ideologists would applaud this loss – but aviation, on which almost 33m jobs and 7.5 per cent of global gross domestic product depend, is vital for the world’s economic future. This truth is too often lost in countries where environmental arguments have escaped all reason.
We are in uncharted territory. This is the greatest crisis in aviation’s history – bigger than the Gulf wars, the attacks of September 11 2001, severe acute respiratory syndrome and past oil shocks.
There is a myth that only a high oil price is capable of forcing airlines to reduce energy demand. Over many decades, airlines have, hand-in-hand with the manufacturers, helped to develop more efficient aircraft. Yes, the oil price is accelerating further efficiency. But reducing energy demand has always been part of our business models. Ultra-efficient new aircraft, such as the Airbus A380, are the direct result of airlines such as Emirates working with the aerospace industry to create the most aerodynamic, fuel- and emission-efficient, lightest aircraft possible.
Our industry was too slow to communicate this and respond to the shifting political sentiment on the environment. We are correcting this misconception and, of course, we have more to do to become more eco-efficient businesses. However we will not achieve this – or indeed survive as profitable entities – if punitive taxes, charges and unfair trading schemes continue on their present trajectory.
When the European Union emissions trading scheme was first devised, it was based on $40 oil. The most ideological parliamentarians hoped the ETS would be the equivalent of pushing oil above $100. They got their wish on price – without ever enacting the legislation. But they are not finished. They want significant further increases in the cost of business and leisure.
Our industry understands the logic of the original ETS proposal: encourage efficiency and price those not pursuing it into action. It is a shame the current EU ETS is now nothing more than an aggressive tax designed to hurt one of the world’s most important industries.
The UK government’s aviation duty proposal is equally alarming. This “environmental” tax is essentially a billion-pound grab by government from the pockets of passengers and airlines. None of this tax windfall will go into environmental research but, instead, into general revenue. Excuse my cynicism.
Incredibly, UK policymakers want to punish heavier aircraft and longer-haul flights. This is despite the fact that aircraft such as the part British-built A380 are deliberately heavier because efficiency means flying more passengers per aircraft. These aircraft reduce fuel burn, emissions and noise by up to 30 per cent per passenger, yet will be disproportionately taxed. Why, as an island nation, would Britain want to increase tax on long-haul aviation? This insularity can only punish exports and hurt important trading relationships.
In spite of all of these hurdles, Emirates remains cautiously optimistic. We operate in an environment in Dubai where it is survival of the fit-test, with no government protection, subsidy, cheap fuel or restrictions on competitors.
Long-haul has seen most of aviation’s greatest recent environmental improvements. For every new aircraft we order, our fuel use and emissions per passenger improve. This must be our industry’s model. There is certainly a good argument that those airlines with old gas-guzzlers need to retire such aged aircraft quickly.
Notwithstanding an oil Armageddon, aviation should be able to grow and facilitate economic prosperity through greater efficiency. Sadly, the policy levers I mentioned above offer few positive incentives to do so. Profitable airlines that reinvest in new aircraft allow manufacturers to create better models. Without profitability, the eco-efficiency model fails.
Governments should be encouraging, not punishing, such a formula. Why can there not be positive discrimination in favour of efficient aircraft? Why not reward a new A380 with slots at congested airports? Why not recognise lower-emission aircraft? Why do governments not earmark funds for research and development?
Instead, they seek to use blunt instruments to tax punitively an entire industry.
The writer is president, Emirates Airline
Copyright The Financial Times Limited 2008
Published: July 13 2008 19:10
Oil at $140-plus has changed all aviation realities. While Emirates remains one of the more optimistic airlines, the overall view of our industry is dire. This year many airlines have grounded aircraft or gone bankrupt and an estimated 100,000 jobs will be cut.
Some environmental ideologists would applaud this loss – but aviation, on which almost 33m jobs and 7.5 per cent of global gross domestic product depend, is vital for the world’s economic future. This truth is too often lost in countries where environmental arguments have escaped all reason.
We are in uncharted territory. This is the greatest crisis in aviation’s history – bigger than the Gulf wars, the attacks of September 11 2001, severe acute respiratory syndrome and past oil shocks.
There is a myth that only a high oil price is capable of forcing airlines to reduce energy demand. Over many decades, airlines have, hand-in-hand with the manufacturers, helped to develop more efficient aircraft. Yes, the oil price is accelerating further efficiency. But reducing energy demand has always been part of our business models. Ultra-efficient new aircraft, such as the Airbus A380, are the direct result of airlines such as Emirates working with the aerospace industry to create the most aerodynamic, fuel- and emission-efficient, lightest aircraft possible.
Our industry was too slow to communicate this and respond to the shifting political sentiment on the environment. We are correcting this misconception and, of course, we have more to do to become more eco-efficient businesses. However we will not achieve this – or indeed survive as profitable entities – if punitive taxes, charges and unfair trading schemes continue on their present trajectory.
When the European Union emissions trading scheme was first devised, it was based on $40 oil. The most ideological parliamentarians hoped the ETS would be the equivalent of pushing oil above $100. They got their wish on price – without ever enacting the legislation. But they are not finished. They want significant further increases in the cost of business and leisure.
Our industry understands the logic of the original ETS proposal: encourage efficiency and price those not pursuing it into action. It is a shame the current EU ETS is now nothing more than an aggressive tax designed to hurt one of the world’s most important industries.
The UK government’s aviation duty proposal is equally alarming. This “environmental” tax is essentially a billion-pound grab by government from the pockets of passengers and airlines. None of this tax windfall will go into environmental research but, instead, into general revenue. Excuse my cynicism.
Incredibly, UK policymakers want to punish heavier aircraft and longer-haul flights. This is despite the fact that aircraft such as the part British-built A380 are deliberately heavier because efficiency means flying more passengers per aircraft. These aircraft reduce fuel burn, emissions and noise by up to 30 per cent per passenger, yet will be disproportionately taxed. Why, as an island nation, would Britain want to increase tax on long-haul aviation? This insularity can only punish exports and hurt important trading relationships.
In spite of all of these hurdles, Emirates remains cautiously optimistic. We operate in an environment in Dubai where it is survival of the fit-test, with no government protection, subsidy, cheap fuel or restrictions on competitors.
Long-haul has seen most of aviation’s greatest recent environmental improvements. For every new aircraft we order, our fuel use and emissions per passenger improve. This must be our industry’s model. There is certainly a good argument that those airlines with old gas-guzzlers need to retire such aged aircraft quickly.
Notwithstanding an oil Armageddon, aviation should be able to grow and facilitate economic prosperity through greater efficiency. Sadly, the policy levers I mentioned above offer few positive incentives to do so. Profitable airlines that reinvest in new aircraft allow manufacturers to create better models. Without profitability, the eco-efficiency model fails.
Governments should be encouraging, not punishing, such a formula. Why can there not be positive discrimination in favour of efficient aircraft? Why not reward a new A380 with slots at congested airports? Why not recognise lower-emission aircraft? Why do governments not earmark funds for research and development?
Instead, they seek to use blunt instruments to tax punitively an entire industry.
The writer is president, Emirates Airline
Copyright The Financial Times Limited 2008
Carbon credit market hit by UN crackdown
By Ben Bland
Last Updated: 12:47am BST 14/07/2008
Chaos theory is often explained in terms of the "butterfly effect", whereby an insect flaps its wings on one side of the world and causes a tornado on the other.
Cows produce methane, a potent greenhouse gas
At first glance, the global carbon market seems like a pastiche of this model - when a cow farts in Brazil, Britain somehow moves nearer to meeting its requirement to cut emissions under the Kyoto Protocol.
Unlike chaos theory, this process can be explained reasonably simply: The cow fart is captured and put through a bio-digester, which converts the methane into bio-gas, which can be used to meet everyday energy needs.
This reduces carbon emissions in Brazil and allows the project operator to sell a carbon credit on to a manufacturer in Britain that has exceeded its carbon allowance.
However, as it grew rapidly over the past couple of years, the nascent carbon offset market became too chaotic for the UN, which has started taking a more stringent view on the projects it allows to produce official carbon credits - known as Certified Emission Reductions (CERs).
The key criteria for the UN officials operating the so-called Clean Development Mechanism is that projects must do something to combat climate change that wouldn't have happened without the added incentive of selling CERs.
Otherwise profiteers would be given a blank cheque to squeeze extra cash from projects that were going to be developed anyway, with no net environmental benefit.
This crackdown has hit early movers in the carbon credit business - such as EcoSecurities, Camco and AgCert - in two ways.
Firstly, some of their projects (which range from Brazilian cow fart capture to Chinese hydroelectric dams) have not been certified. Secondly, there have been long delays in the approval process because of the large backlog of projects the UN is trying to verify.
AgCert was forced into examinership (the Irish equivalent of administration) in April after running short of cash and EcoSecurities and Camco, which have seen their shares tumble (see graph), both delivered disappointing updates to the market last week.
The major concern for these carbon credit firms, as for any early-stage company, is that they run out of cash before they can start turning a regular profit.
"The reason that everyone is in trouble and blaming the UN is that there's a growing fear that they're running out of money," claimed one industry source. "Once the market thinks they need a refinancing, the shares tank in expectation."
But while the carbon credit producers have been struggling, Climate Exchange, which owns the European and Chicago carbon exchanges, has seen its share price surge by more than 500pc over the past two years.
The dramatic rise of Climate Exchange, which has become one of the 10 biggest companies on Aim, has prompted some sceptical investors to question its fundamentals.
Although Climate Exchange views itself more as commodity exchange than any sort of green business, it still faces the same challenges as other developmental companies.
The intense hype surrounding the global carbon market - which was worth £30bn in the first half of this year alone and is forecast to grow to trillions of pounds over the next 10 years - has benefited Climate Exchange, which operates the leading markets for carbon trading in Europe and the US.
However, the company, which generates its revenue from trading and membership fees, is yet to produce a profit.
Climate Exchange, which has a market capitalisation of more than £800m, made a pre-tax loss of £8.3m on revenues of just £13.8m in 2007. It trades on a staggering 2009 price/earnings ratio of 116, according to forecasts from Morgan Stanley that are based on a move into profitability next year.
That's in stark contrast to an average 2007 P/E ratio of 26 for global exchange stocks and an average 2009 forecast P/E of 18.
One of the reasons that Climate Exchange is trading on such a high multiple is the hope that it will be taken over by one of the large US commodities exchanges, such as the IntercontinentalExchange or NYMEX.
However, any predators are unlikely to move at this kind of valuation, especially in this troubled market.
Last Updated: 12:47am BST 14/07/2008
Chaos theory is often explained in terms of the "butterfly effect", whereby an insect flaps its wings on one side of the world and causes a tornado on the other.
Cows produce methane, a potent greenhouse gas
At first glance, the global carbon market seems like a pastiche of this model - when a cow farts in Brazil, Britain somehow moves nearer to meeting its requirement to cut emissions under the Kyoto Protocol.
Unlike chaos theory, this process can be explained reasonably simply: The cow fart is captured and put through a bio-digester, which converts the methane into bio-gas, which can be used to meet everyday energy needs.
This reduces carbon emissions in Brazil and allows the project operator to sell a carbon credit on to a manufacturer in Britain that has exceeded its carbon allowance.
However, as it grew rapidly over the past couple of years, the nascent carbon offset market became too chaotic for the UN, which has started taking a more stringent view on the projects it allows to produce official carbon credits - known as Certified Emission Reductions (CERs).
The key criteria for the UN officials operating the so-called Clean Development Mechanism is that projects must do something to combat climate change that wouldn't have happened without the added incentive of selling CERs.
Otherwise profiteers would be given a blank cheque to squeeze extra cash from projects that were going to be developed anyway, with no net environmental benefit.
This crackdown has hit early movers in the carbon credit business - such as EcoSecurities, Camco and AgCert - in two ways.
Firstly, some of their projects (which range from Brazilian cow fart capture to Chinese hydroelectric dams) have not been certified. Secondly, there have been long delays in the approval process because of the large backlog of projects the UN is trying to verify.
AgCert was forced into examinership (the Irish equivalent of administration) in April after running short of cash and EcoSecurities and Camco, which have seen their shares tumble (see graph), both delivered disappointing updates to the market last week.
The major concern for these carbon credit firms, as for any early-stage company, is that they run out of cash before they can start turning a regular profit.
"The reason that everyone is in trouble and blaming the UN is that there's a growing fear that they're running out of money," claimed one industry source. "Once the market thinks they need a refinancing, the shares tank in expectation."
But while the carbon credit producers have been struggling, Climate Exchange, which owns the European and Chicago carbon exchanges, has seen its share price surge by more than 500pc over the past two years.
The dramatic rise of Climate Exchange, which has become one of the 10 biggest companies on Aim, has prompted some sceptical investors to question its fundamentals.
Although Climate Exchange views itself more as commodity exchange than any sort of green business, it still faces the same challenges as other developmental companies.
The intense hype surrounding the global carbon market - which was worth £30bn in the first half of this year alone and is forecast to grow to trillions of pounds over the next 10 years - has benefited Climate Exchange, which operates the leading markets for carbon trading in Europe and the US.
However, the company, which generates its revenue from trading and membership fees, is yet to produce a profit.
Climate Exchange, which has a market capitalisation of more than £800m, made a pre-tax loss of £8.3m on revenues of just £13.8m in 2007. It trades on a staggering 2009 price/earnings ratio of 116, according to forecasts from Morgan Stanley that are based on a move into profitability next year.
That's in stark contrast to an average 2007 P/E ratio of 26 for global exchange stocks and an average 2009 forecast P/E of 18.
One of the reasons that Climate Exchange is trading on such a high multiple is the hope that it will be taken over by one of the large US commodities exchanges, such as the IntercontinentalExchange or NYMEX.
However, any predators are unlikely to move at this kind of valuation, especially in this troubled market.
Government 'failing on carbon emissions targets'
Last Updated: 12:01am BST 13/07/2008
The Government is lagging far behind its own targets to cut carbon emissions, a Parliamentary environment watchdog announced.
Government departments and agencies have pledged to reduce their carbon emissions by 12.5 per cent in 2010-11, compared with levels in 1999-00, and to go carbon neutral in 2012.
But the Government had only reduced its emissions by 4 per cent by 2006-07, which was "very poor progress", according to the Environmental Audit Committee (EAC).
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The Committee was "extremely disappointed" with progress on generating electricity through renewable energy on Government property. Only 0.0004 per cent of all electricity consumed by the Government was generated by on-site renewables, such as wind, solar or biomass power plants, according to the National Audit Office.
The Government was also relying "too heavily" on buying offsets to make its estate carbon neutral rather than reducing its own emissions.
The select committee report - Making Government Operations More Sustainable: A Progress Report - draws on the annual review of Government performance by the Sustainable Development Commission.
The EAC said there was a "degree of confusion" within Government about how the targets would be met and these "essential issues" should be worked out urgently. Each year, central Government offices produce approximately 2.3 million tonnes of carbon emissions - around 0.4 per cent of the UK's total - and 309,000 tonnes of waste.
Committee chairman, Conservative MP Tim Yeo, said: "The degree of confusion within Government as to how to make its offices carbon neutral by 2012, how much this will cost, and even how it will be defined and what it will measure, is wholly unsatisfactory.
"The Government is to be congratulated for announcing a big shake-up to the way departments respond to their environmental targets. But now they've got to demonstrate significant year-on-year improvements.
"Until the Government shows that it is living up to its commitments it will find it hard to maintain the moral authority to influence the rest of us."
The EAC concluded that personal responsibility for sustainability issues must be increased at all levels. This would require "more training and incentives" beyond the senior civil service, the report said.
The Committee also expressed concern over the reliability of emission figures. Members criticised the Ministry of Defence for claiming a big cut in emissions after it sold the defence agency QinetiQ.
In reality, the EAC said, the Government was simply moving these emissions "off balance sheet" to the private sector.
An EAC spokesman said: "The Government has now stopped claiming this as a cut in emissions, but the Committee warns it not to make similar claims in the future."
Ministers should also put a cap on the use of offsets so that the use of on-site renewable energy was encouraged. The Office of Government Commerce (OGC) should annually publish details of the amount the Government expected to spend on offsetting emissions, the Committee said.
The Government is lagging far behind its own targets to cut carbon emissions, a Parliamentary environment watchdog announced.
Government departments and agencies have pledged to reduce their carbon emissions by 12.5 per cent in 2010-11, compared with levels in 1999-00, and to go carbon neutral in 2012.
But the Government had only reduced its emissions by 4 per cent by 2006-07, which was "very poor progress", according to the Environmental Audit Committee (EAC).
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The Committee was "extremely disappointed" with progress on generating electricity through renewable energy on Government property. Only 0.0004 per cent of all electricity consumed by the Government was generated by on-site renewables, such as wind, solar or biomass power plants, according to the National Audit Office.
The Government was also relying "too heavily" on buying offsets to make its estate carbon neutral rather than reducing its own emissions.
The select committee report - Making Government Operations More Sustainable: A Progress Report - draws on the annual review of Government performance by the Sustainable Development Commission.
The EAC said there was a "degree of confusion" within Government about how the targets would be met and these "essential issues" should be worked out urgently. Each year, central Government offices produce approximately 2.3 million tonnes of carbon emissions - around 0.4 per cent of the UK's total - and 309,000 tonnes of waste.
Committee chairman, Conservative MP Tim Yeo, said: "The degree of confusion within Government as to how to make its offices carbon neutral by 2012, how much this will cost, and even how it will be defined and what it will measure, is wholly unsatisfactory.
"The Government is to be congratulated for announcing a big shake-up to the way departments respond to their environmental targets. But now they've got to demonstrate significant year-on-year improvements.
"Until the Government shows that it is living up to its commitments it will find it hard to maintain the moral authority to influence the rest of us."
The EAC concluded that personal responsibility for sustainability issues must be increased at all levels. This would require "more training and incentives" beyond the senior civil service, the report said.
The Committee also expressed concern over the reliability of emission figures. Members criticised the Ministry of Defence for claiming a big cut in emissions after it sold the defence agency QinetiQ.
In reality, the EAC said, the Government was simply moving these emissions "off balance sheet" to the private sector.
An EAC spokesman said: "The Government has now stopped claiming this as a cut in emissions, but the Committee warns it not to make similar claims in the future."
Ministers should also put a cap on the use of offsets so that the use of on-site renewable energy was encouraged. The Office of Government Commerce (OGC) should annually publish details of the amount the Government expected to spend on offsetting emissions, the Committee said.
Government lagging on CO2 curbs, say MPs
James Randerson, science correspondent
The Guardian,
Monday July 14, 2008
The government is "lagging far behind" in its efforts to curb carbon emissions from its buildings and activities, according to a report from a committee of MPs.
The report from the environmental audit committee (EAC) said that emissions from government departments had dropped by just 0.7% over the period 1999-2000 to 2006-07, much less than the 8% necessary to hit its target of a 12.5% reduction by 2010/11.
This modest performance was highly dependent on a large cut in emissions by the MoD, but the report criticised the MoD for trying to move some emissions "off balance sheet" in order to make its performance look better.
The report also criticised the tiny amount of renewable energy generated on-site at government property - just 0.0004% of the total.
The report, which draws on the annual review of government performance by the Sustainable Development Commission, as well as a review carried out by the National Audit Office, said that the government's record was "very disappointing".
"Until the government shows that it is living up to its commitments it will find it hard to maintain the moral authority to influence the rest of us," said the committee's chair, Tim Yeo.
Central government offices produce around 2.3m tonnes of CO2 emissions and 309,000 tonnes of waste. The government is committed to being carbon neutral by 2012.
The Guardian,
Monday July 14, 2008
The government is "lagging far behind" in its efforts to curb carbon emissions from its buildings and activities, according to a report from a committee of MPs.
The report from the environmental audit committee (EAC) said that emissions from government departments had dropped by just 0.7% over the period 1999-2000 to 2006-07, much less than the 8% necessary to hit its target of a 12.5% reduction by 2010/11.
This modest performance was highly dependent on a large cut in emissions by the MoD, but the report criticised the MoD for trying to move some emissions "off balance sheet" in order to make its performance look better.
The report also criticised the tiny amount of renewable energy generated on-site at government property - just 0.0004% of the total.
The report, which draws on the annual review of government performance by the Sustainable Development Commission, as well as a review carried out by the National Audit Office, said that the government's record was "very disappointing".
"Until the government shows that it is living up to its commitments it will find it hard to maintain the moral authority to influence the rest of us," said the committee's chair, Tim Yeo.
Central government offices produce around 2.3m tonnes of CO2 emissions and 309,000 tonnes of waste. The government is committed to being carbon neutral by 2012.
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