New research does not question climate change is also melting ice in the Arctic, but finds wind patterns explain steep decline
David Adam, environment correspondent
guardian.co.uk, Monday 22 March 2010 07.00 GMT
Much of the record breaking loss of ice in the Arctic ocean in recent years is down to the region's swirling winds and is not a direct result of global warming, a new study reveals.
Ice blown out of the region by Arctic winds can explain around one-third of the steep downward trend in sea ice extent in the region since 1979, the scientists say.
The study does not question that global warming is also melting ice in the Arctic, but it could raise doubts about high-profile claims that the region has passed a climate "tipping point" that could see ice loss sharply accelerate in coming years.
The new findings also help to explain the massive loss of Arctic ice seen in the summers of 2007-08, which prompted suggestions that the summertime Arctic Ocean could be ice-free withing a decade. About half of the variation in maximum ice loss each September is down to changes in wind patterns, the study says.
Masayo Ogi, a scientist with the Japan Agency for Marine-Earth Science and Technology in Yokohama, and her colleagues, looked at records of how winds have behaved across the Arctic since satellite measurements of ice extent there began in 1979.
They found that changes in wind patterns, such as summertime winds that blow clockwise around the Beaufort Sea, seemed to coincide with years where sea ice loss was highest.
Writing in a paper to be published in the journal Geophysical Research Letters, the scientists suggest these winds have blown large amounts of Arctic ice south through the Fram Strait, which passes between Greenland and the Norwegian islands of Svalbard, and leads to the warmer waters of the north Atlantic. These winds have increased recently, which could help explain the apparent acceleration in ice loss.
"Wind-induced, year-to-year differences in the rate of flow of ice toward and through Fram Strait play an important role in modulating September sea ice extent on a year-to-year basis," the scientists say. "A trend toward an increased wind-induced rate of flow has contributed to the decline in the areal coverage of Arctic summer sea ice."
Ogi said this was the first time the Arctic winds have been analysed in such a way.
"Both winter and summer winds could blow ice out of the Arctic [through] the Fram Strait during 1979-2009," she said.
A number of other factors were also responsible for ice loss, including warming of the air and ocean, she added.
According to the National Snow and Ice Data Centre in Colorado, Arctic sea ice "is in a state of ongoing decline". Since 1979, the ice has shrunk by about 10% a decade, or 28,000 square miles each year. The ice reaches its minimum extent each September, when it begins to reform as the freezing Arctic winter takes hold.
Monday, 22 March 2010
Take on the City with a 'people's budget'
Alistair Darling has a chance to start tackling the deep structural problems of the economy
Larry Elliott
The Guardian, Monday 22 March 2010 01.34 GMT
Budget day has its own ritual. The battered old red box, the photo call in Downing Street, the tension in the Commons as MPs wait for the chancellor to pull a rabbit out of the hat – all are part of a peculiarly British occasion. It was never quite the same when the Conservatives moved it to autumn in the 1990s, and a relief when Gordon Brown moved it back to its proper place in the calendar.
Tradition and pageantry can deceive. The budget box may give the impression of enduring solidity but the economy is weak and the public finances are shot to pieces. More worrying, perhaps, is that plans for attacking the deep structural problems of the economy remain inchoate as the third anniversary of the financial crisis approaches.
Alistair Darling said yesterday that this week's speech would flesh out the government's plans for growth. There would be no giveaways, he told Andrew Marr, no pre-election sweeteners. He thinks voters would be more impressed by a budget that he promises will be "sensible and workmanlike".
But this is what chancellors always say. You would struggle to find a second lord of the Treasury who promised a flashy and opportunistic budget. To be truly "sensible and workmanlike", the budget needs to contain five elements.
Firstly, it should facilitate, rather than impede, economic recovery. Darling will rightly reject George Osborne's calls for immediate tax rises or cuts in public spending to reduce the budget deficit but he should consider filching the shadow chancellor's proposal for an Office of Budget Responsibility, only with a different mandate from that proposed by the Conservatives. The Opposition would like an independent OBR to produce forecasts for the public finances ahead of the budget, assess their long-term sustainability and suggest steps to hit the fiscal objectives.
But this, as a forthcoming paper from the Progressive Economics Panel rightly notes, is putting the cart before the horse. In the current circumstances, with a marked risk of a double-dip recession, the strength of the recovery should take precedence. "Certainly," the paper argues, "a credible strategy is needed to address the budget deficit but this strategy must be flexible and based on the strength of the recovery and not on rigid timelines and/or ideological opposition to budget deficits."
Secondly, the budget should lay the foundations for structural reform. As Britain has discovered to its cost all too often in the past 40 years, the nature of the recovery matters and pumping up consumer demand through a booming housing market is no long-term solution. The government's challenge is to create a supply-side environment that will rebalance the economy towards production and exports.
Baby steps
There is now all-party agreement that the City will have to pay more to the exchequer, either through a financial transaction tax or through an insurance levy. The Conservatives and the Liberal Democrats say this can be done unilaterally; Darling insists that a go-it-alone strategy would put the competitiveness of the UK financial sector in jeopardy.
But since the aim is to reduce the economy's dependency on the City as a source of growth, it makes sense to use the money raised from the City to fund the rebalancing through a national investment bank and a system of German-style job subsidies to protect skilled labour during downturns. Britain's competitors have better educated workforces, more predictable flows of capital to industry, and stronger supply chains.
Thirdly, the budget should recognise that Britain is falling behind in the race to develop the low-carbon industrial sectors of the future. Darling has hinted that he will announce a £2bn green infrastructure fund on Wednesday, but this is a baby step when giant leaps are needed. Recessions inevitably result in the environment slipping down the political agenda but the long-term challenges of climate change and more expensive fossil fuels remain.
Governments in other countries have recognised that backing environmental industries through a mixture of subsidy, taxation and procurement makes sense because there will be monopoly profits for companies that can secure first-mover advantage. Far more ambition is needed in the UK to make the Green New Deal more than a soundbite.
Fourthly, it has to be recognised that any economic rebalancing will prove stillborn unless there are important changes to the way the financial sector operates. Over the past few months it has become clear that the Bank of England and the Financial Services Authority are both ready to embrace radical reform; Mervyn King has openly raised the question of whether there should be a legally enforced split between "safe" utility banks and "risky" investment banks. The governor has warned, repeatedly and almost certainly correctly, that leaving the banks broadly unreformed will lead to a fresh and perhaps even more serious crisis.
Strong stuff
Adair Turner is not a fan of legislating for a Glass-Steagall approach to breaking up the banks, but the FSA chairman has been voicing previously unthinkable thoughts. Turner made three points in a lecture to the Cass Business School: that the authorities needed specific controls on credit for the housing market; that the benefits of complex financial instruments had been hugely overstated, and that it should not be assumed that ever-greater market liquidity was "axiomatically beneficial".
This is strong stuff. Keynes was always sceptical of what he called the fetish of liquidity, arguing that the point of capital markets was to channel savings into productive investment rather than create casinos. Turner agrees, calling for a "bias to conservatism in setting capital requirements against trading activity; it reinforces the case for limiting via capital requirements the extent to which commercial banks are involved in proprietary trading, and it may argue in favour of financial transaction taxes".
The problem is that the third leg of the tripartite system, the Treasury, is far less open to new thinking. Years of the City lobbying Whitehall has paid off; government machinery has been captured by financial interests and conservatism is entrenched. One way to break the logjam would be a Royal Commission – on no account to be chaired by a City grandee – with a mandate to propose reforms of the financial system by the end of 2011.
Finally, a far greater proportion of UK savings should go into productive investment rather than bricks and mortar. The reason Britain has destabilising bubbles in property is simple: this is a small island with a large and growing population, tough planning regulations limiting new housing developments and a tax system that encourages owner-occupation. Reform is fraught with political difficulties; concreting over swaths of the green belt is just as unpopular as slapping capital gains tax on a prime residence. Nobody has yet come up with a better solution than that of David Lloyd George in his "people's budget" of 1909: a land valuation tax.
These then would be the bare bones of a sensible and workmanlike budget. Darling needs to get the economy moving again; he needs to build-up its long-term productive capacity; he needs to invest in a long-term future, and he needs to tackle the two roadblocks to reform: the City and the housing market. All he has to contend with are a record peacetime deficit, powerful vested interests and deep-rooted cultural inertia. Easy peasy.
Testing times: Addressing the Deficit Without Risking the Recovery, www.progecon.org.uk
larry.elliott@guardian.co.uk
Larry Elliott
The Guardian, Monday 22 March 2010 01.34 GMT
Budget day has its own ritual. The battered old red box, the photo call in Downing Street, the tension in the Commons as MPs wait for the chancellor to pull a rabbit out of the hat – all are part of a peculiarly British occasion. It was never quite the same when the Conservatives moved it to autumn in the 1990s, and a relief when Gordon Brown moved it back to its proper place in the calendar.
Tradition and pageantry can deceive. The budget box may give the impression of enduring solidity but the economy is weak and the public finances are shot to pieces. More worrying, perhaps, is that plans for attacking the deep structural problems of the economy remain inchoate as the third anniversary of the financial crisis approaches.
Alistair Darling said yesterday that this week's speech would flesh out the government's plans for growth. There would be no giveaways, he told Andrew Marr, no pre-election sweeteners. He thinks voters would be more impressed by a budget that he promises will be "sensible and workmanlike".
But this is what chancellors always say. You would struggle to find a second lord of the Treasury who promised a flashy and opportunistic budget. To be truly "sensible and workmanlike", the budget needs to contain five elements.
Firstly, it should facilitate, rather than impede, economic recovery. Darling will rightly reject George Osborne's calls for immediate tax rises or cuts in public spending to reduce the budget deficit but he should consider filching the shadow chancellor's proposal for an Office of Budget Responsibility, only with a different mandate from that proposed by the Conservatives. The Opposition would like an independent OBR to produce forecasts for the public finances ahead of the budget, assess their long-term sustainability and suggest steps to hit the fiscal objectives.
But this, as a forthcoming paper from the Progressive Economics Panel rightly notes, is putting the cart before the horse. In the current circumstances, with a marked risk of a double-dip recession, the strength of the recovery should take precedence. "Certainly," the paper argues, "a credible strategy is needed to address the budget deficit but this strategy must be flexible and based on the strength of the recovery and not on rigid timelines and/or ideological opposition to budget deficits."
Secondly, the budget should lay the foundations for structural reform. As Britain has discovered to its cost all too often in the past 40 years, the nature of the recovery matters and pumping up consumer demand through a booming housing market is no long-term solution. The government's challenge is to create a supply-side environment that will rebalance the economy towards production and exports.
Baby steps
There is now all-party agreement that the City will have to pay more to the exchequer, either through a financial transaction tax or through an insurance levy. The Conservatives and the Liberal Democrats say this can be done unilaterally; Darling insists that a go-it-alone strategy would put the competitiveness of the UK financial sector in jeopardy.
But since the aim is to reduce the economy's dependency on the City as a source of growth, it makes sense to use the money raised from the City to fund the rebalancing through a national investment bank and a system of German-style job subsidies to protect skilled labour during downturns. Britain's competitors have better educated workforces, more predictable flows of capital to industry, and stronger supply chains.
Thirdly, the budget should recognise that Britain is falling behind in the race to develop the low-carbon industrial sectors of the future. Darling has hinted that he will announce a £2bn green infrastructure fund on Wednesday, but this is a baby step when giant leaps are needed. Recessions inevitably result in the environment slipping down the political agenda but the long-term challenges of climate change and more expensive fossil fuels remain.
Governments in other countries have recognised that backing environmental industries through a mixture of subsidy, taxation and procurement makes sense because there will be monopoly profits for companies that can secure first-mover advantage. Far more ambition is needed in the UK to make the Green New Deal more than a soundbite.
Fourthly, it has to be recognised that any economic rebalancing will prove stillborn unless there are important changes to the way the financial sector operates. Over the past few months it has become clear that the Bank of England and the Financial Services Authority are both ready to embrace radical reform; Mervyn King has openly raised the question of whether there should be a legally enforced split between "safe" utility banks and "risky" investment banks. The governor has warned, repeatedly and almost certainly correctly, that leaving the banks broadly unreformed will lead to a fresh and perhaps even more serious crisis.
Strong stuff
Adair Turner is not a fan of legislating for a Glass-Steagall approach to breaking up the banks, but the FSA chairman has been voicing previously unthinkable thoughts. Turner made three points in a lecture to the Cass Business School: that the authorities needed specific controls on credit for the housing market; that the benefits of complex financial instruments had been hugely overstated, and that it should not be assumed that ever-greater market liquidity was "axiomatically beneficial".
This is strong stuff. Keynes was always sceptical of what he called the fetish of liquidity, arguing that the point of capital markets was to channel savings into productive investment rather than create casinos. Turner agrees, calling for a "bias to conservatism in setting capital requirements against trading activity; it reinforces the case for limiting via capital requirements the extent to which commercial banks are involved in proprietary trading, and it may argue in favour of financial transaction taxes".
The problem is that the third leg of the tripartite system, the Treasury, is far less open to new thinking. Years of the City lobbying Whitehall has paid off; government machinery has been captured by financial interests and conservatism is entrenched. One way to break the logjam would be a Royal Commission – on no account to be chaired by a City grandee – with a mandate to propose reforms of the financial system by the end of 2011.
Finally, a far greater proportion of UK savings should go into productive investment rather than bricks and mortar. The reason Britain has destabilising bubbles in property is simple: this is a small island with a large and growing population, tough planning regulations limiting new housing developments and a tax system that encourages owner-occupation. Reform is fraught with political difficulties; concreting over swaths of the green belt is just as unpopular as slapping capital gains tax on a prime residence. Nobody has yet come up with a better solution than that of David Lloyd George in his "people's budget" of 1909: a land valuation tax.
These then would be the bare bones of a sensible and workmanlike budget. Darling needs to get the economy moving again; he needs to build-up its long-term productive capacity; he needs to invest in a long-term future, and he needs to tackle the two roadblocks to reform: the City and the housing market. All he has to contend with are a record peacetime deficit, powerful vested interests and deep-rooted cultural inertia. Easy peasy.
Testing times: Addressing the Deficit Without Risking the Recovery, www.progecon.org.uk
larry.elliott@guardian.co.uk
Sunday, 21 March 2010
SG Biofuels Launches First Elite Jatropha Cultivar
San Diego, United States [RenewableEnergyWorld.com]
SG Biofuels said that it has launched its first JMax 100 cultivar, a proprietary cultivar of Jatropha optimized for growing conditions in Guatemala with yields 100 percent greater than existing varieties.
SG Biofuels said that JMax 100 increases the profitability of Jatropha to greater than US $400 per acre, which equals more than 350 gallons per acre at $1.39 per gallon.
JMax 100 is the first elite cultivar developed through the company's JMax Jatropha Optimization Platform. The platform provides growers and plantation developers with access to the sequenced genome of jatropha, as well as advanced biotech and synthetic biology tools to develop cultivars specifically optimized for their unique growing conditions.
"The yields and profitability of JMax100 and the JMax platform far exceed what is currently available through existing varieties of Jatropha," said Kirk Haney, president and CEO of SG Biofuels. "In Guatemala, we have utilized the world's largest library of Jatropha genetic material and our advanced genetic program to enable exponential increases in productivity and profitability, and establish Jatropha as a large-scale sustainable energy crop."
SG Biofuels said that JMax 100 increases the profitability of Jatropha to greater than US $400 per acre, which equals more than 350 gallons per acre at $1.39 per gallon.
SG Biofuels will work with a select group of partners and collaborators to optimize JMax for region-specific planting through the establishment of in-region technology centers. In addition to its work in Guatemala, the company is collaborating with the Hawaii Agriculture Research Center (HARC) to develop a customized Jatropha cultivar that can be used to meet the high demand for locally-grown renewable fuel.
Jatropha curcas is a non-edible shrub that is native to Central America. Its seeds contain high amounts of oil that can be refined using existing technology to produce diesel fuel, jet fuel, and specialty chemicals. It can be effectively grown on marginal lands that are considered undesirable for other crops.
SG Biofuels said that it has launched its first JMax 100 cultivar, a proprietary cultivar of Jatropha optimized for growing conditions in Guatemala with yields 100 percent greater than existing varieties.
SG Biofuels said that JMax 100 increases the profitability of Jatropha to greater than US $400 per acre, which equals more than 350 gallons per acre at $1.39 per gallon.
JMax 100 is the first elite cultivar developed through the company's JMax Jatropha Optimization Platform. The platform provides growers and plantation developers with access to the sequenced genome of jatropha, as well as advanced biotech and synthetic biology tools to develop cultivars specifically optimized for their unique growing conditions.
"The yields and profitability of JMax100 and the JMax platform far exceed what is currently available through existing varieties of Jatropha," said Kirk Haney, president and CEO of SG Biofuels. "In Guatemala, we have utilized the world's largest library of Jatropha genetic material and our advanced genetic program to enable exponential increases in productivity and profitability, and establish Jatropha as a large-scale sustainable energy crop."
SG Biofuels said that JMax 100 increases the profitability of Jatropha to greater than US $400 per acre, which equals more than 350 gallons per acre at $1.39 per gallon.
SG Biofuels will work with a select group of partners and collaborators to optimize JMax for region-specific planting through the establishment of in-region technology centers. In addition to its work in Guatemala, the company is collaborating with the Hawaii Agriculture Research Center (HARC) to develop a customized Jatropha cultivar that can be used to meet the high demand for locally-grown renewable fuel.
Jatropha curcas is a non-edible shrub that is native to Central America. Its seeds contain high amounts of oil that can be refined using existing technology to produce diesel fuel, jet fuel, and specialty chemicals. It can be effectively grown on marginal lands that are considered undesirable for other crops.
Budget 2010: Darling to launch £1bn green infrastructure fund
Alistair Darling will announce plans to back low-carbon transport and energy projects in 'budget for growth'
Heather Stewart
The Observer, Sunday 21 March 2010
Alistair Darling will this week announce a £1bn fund to kick-start investment in green transport and energy projects as part of a "budget for growth".
With Wednesday's budget coming weeks before an expected general election, the chancellor will use his plans for the new low-carbon infrastructure scheme to contrast Labour's support for industry with the Conservatives' more hands-off philosophy.
Business secretary Lord Mandelson, who has spearheaded the government's new, more interventionist approach, told the Observer that the Conservatives "wouldn't lift a single finger" to help manufacturing.
With the public finances tight, the new green fund will be relatively small in scale, but the government hopes to use the cash to tempt private investors to back innovative new ideas. "It's about saying there are ways in which the government can play a role, which are not necessarily multibillion-pound projects," said a Treasury source. He cited the model of the Sheffield Forgemasters plant, where Mandelson last week used an £80m loan from taxpayers to secure a £170m financing package that included support from the European Investment Bank and nuclear supplier Westinghouse.
The Sheffield Forgemasters deal – which will create 180 jobs initially and provide 1,000 apprenticeships – was one of several new industrial investments announced in recent weeks that have been secured with the help of public subsidy.
Mandelson said: "People say: why am I securing Vauxhall, why am I securing the Nissan electric car to be produced in Sunderland, why am I securing the development and production of Ford's green technologies, why did I go to Sheffield Forgemasters to deliver funding for a 15,000-tonne press? It's because if the government doesn't act here, some other government will. If we hadn't bridged the final mile in the way that we did, because the market couldn't or wouldn't provide, then the investment would have gone elsewhere."
With the government committed to reduce UK carbon emissions by 80% by 2050, radical changes in infrastructure and power generation will be needed over the coming decades. Labour hopes that by boosting low-carbon energy such as wind, wave and solar power, and helping to upgrade the transport system to use cleaner fuels, it can help to meet those targets while creating thousands of new "green-collar jobs".
But environmental campaigners warned that £1bn would not go very far. Andrew Simms, director of the New Economics Foundation, said: "If what they're talking about is less than one five-hundredth of the amount that was thrown at the banking system, at a point where investment banks have bonus pots bigger than £1bn, then while the idea is right, the size of the ambition smacks of skewed priorities."
Comparing the task of preparing for a new low-carbon era to the long drive from London to Edinburgh, he said: "You won't get very far on a teacupful of petrol." The Stern review on the economics of climate change suggested it would cost more than £10bn a year to prepare the economy for cuts in emissions on the scale needed.
Mandelson stressed that as well as underpinning growth, the budget would also reaffirm Labour's determination to tackle the public deficit. The latest official figures showed that the public finances are in a healthier state than the chancellor feared at the time of December's pre-budget report, and he could reduce his £178bn estimate of this year's deficit by as much as £10bn.
But Mandelson said that would not alter the government's plans for tax rises and public spending cuts in the years ahead. "We will maintain a tough deficit reduction programme: there's no question about it. It's necessary for the health of the economy, for the confidence of the markets. We will make it absolutely clear that what we have committed to, we will follow through."
However, Darling will also stress that – unlike the Conservatives, who would start cutbacks immediately – Labour will "lock in recovery" by maintaining its financial support for the fragile economy for another year.
The UK emerged from recession in the final quarter of 2009, growing by 0.3%, but Bank of England policymakers have left low interest rates in place, making clear they remain nervous about the sustainability of the upturn.
Separately, Mandelson is also likely to be given the task of overseeing a new state-backed investment bank, which will help to support businesses struggling to secure funding from banks.
Heather Stewart
The Observer, Sunday 21 March 2010
Alistair Darling will this week announce a £1bn fund to kick-start investment in green transport and energy projects as part of a "budget for growth".
With Wednesday's budget coming weeks before an expected general election, the chancellor will use his plans for the new low-carbon infrastructure scheme to contrast Labour's support for industry with the Conservatives' more hands-off philosophy.
Business secretary Lord Mandelson, who has spearheaded the government's new, more interventionist approach, told the Observer that the Conservatives "wouldn't lift a single finger" to help manufacturing.
With the public finances tight, the new green fund will be relatively small in scale, but the government hopes to use the cash to tempt private investors to back innovative new ideas. "It's about saying there are ways in which the government can play a role, which are not necessarily multibillion-pound projects," said a Treasury source. He cited the model of the Sheffield Forgemasters plant, where Mandelson last week used an £80m loan from taxpayers to secure a £170m financing package that included support from the European Investment Bank and nuclear supplier Westinghouse.
The Sheffield Forgemasters deal – which will create 180 jobs initially and provide 1,000 apprenticeships – was one of several new industrial investments announced in recent weeks that have been secured with the help of public subsidy.
Mandelson said: "People say: why am I securing Vauxhall, why am I securing the Nissan electric car to be produced in Sunderland, why am I securing the development and production of Ford's green technologies, why did I go to Sheffield Forgemasters to deliver funding for a 15,000-tonne press? It's because if the government doesn't act here, some other government will. If we hadn't bridged the final mile in the way that we did, because the market couldn't or wouldn't provide, then the investment would have gone elsewhere."
With the government committed to reduce UK carbon emissions by 80% by 2050, radical changes in infrastructure and power generation will be needed over the coming decades. Labour hopes that by boosting low-carbon energy such as wind, wave and solar power, and helping to upgrade the transport system to use cleaner fuels, it can help to meet those targets while creating thousands of new "green-collar jobs".
But environmental campaigners warned that £1bn would not go very far. Andrew Simms, director of the New Economics Foundation, said: "If what they're talking about is less than one five-hundredth of the amount that was thrown at the banking system, at a point where investment banks have bonus pots bigger than £1bn, then while the idea is right, the size of the ambition smacks of skewed priorities."
Comparing the task of preparing for a new low-carbon era to the long drive from London to Edinburgh, he said: "You won't get very far on a teacupful of petrol." The Stern review on the economics of climate change suggested it would cost more than £10bn a year to prepare the economy for cuts in emissions on the scale needed.
Mandelson stressed that as well as underpinning growth, the budget would also reaffirm Labour's determination to tackle the public deficit. The latest official figures showed that the public finances are in a healthier state than the chancellor feared at the time of December's pre-budget report, and he could reduce his £178bn estimate of this year's deficit by as much as £10bn.
But Mandelson said that would not alter the government's plans for tax rises and public spending cuts in the years ahead. "We will maintain a tough deficit reduction programme: there's no question about it. It's necessary for the health of the economy, for the confidence of the markets. We will make it absolutely clear that what we have committed to, we will follow through."
However, Darling will also stress that – unlike the Conservatives, who would start cutbacks immediately – Labour will "lock in recovery" by maintaining its financial support for the fragile economy for another year.
The UK emerged from recession in the final quarter of 2009, growing by 0.3%, but Bank of England policymakers have left low interest rates in place, making clear they remain nervous about the sustainability of the upturn.
Separately, Mandelson is also likely to be given the task of overseeing a new state-backed investment bank, which will help to support businesses struggling to secure funding from banks.
Aiming for a no-carbon economy
Taking the 'low-carbon' path means we are designing an economy not fit for purpose
Mike Mason
guardian.co.uk, Friday 19 March 2010 10.51 GMT
Who would get on a flight across the Atlantic if most of the aeronautical engineers in the world were saying that the plane had a 50% chance of crashing before it got to the destination? No one. So why then are we prepared to take our chances on a planet which the vast majority of serious scientists say has a high chance of catastrophic system failure? I don't care whether the odds are 50% or 10% or even 1% - this is the only planet going and we're all on it.
In that case, when governments talk of aiming for a "low-carbon economy" by 2050, shouldn't we all rejoice? Perhaps not. If you're going to design an aeroplane you have to know how far it is expected to fly. Designing a transatlantic airliner that "nearly" gets across the ocean is not only a disaster for the passengers but it is also a waste of money. The same is true of the move towards a "low-carbon economy", which I believe is the wrong path to take. Here's why.
There are greenhouse gas emissions from industry, transport and the domestic sector, and there are emissions from agriculture and land use change. Take those emissions from agriculture, which are difficult to reduce substantially, and combine them with a world population that is expected to grow by 50% by 2050 and incomes that are growing at rates of up to 6% in the developing world, and you have a situation in 2050 where roughly 10 billion people are living at a standard close to ours in the UK. All those extra and relatively rich people will drastically increase those agricultural emissions.
Bearing that in mind, how much wiggle room do we have to generate future emissions before we set ourselves on the route to catastrophic climate change? Some notable scientists are saying we should emit no more. Some, more pragmatic voices, are arguing that the risks are acceptable if we stabilise at 450 parts per million CO2 in the atmosphere by 2050. The Stern review suggests the emissions level we would need to do this is around 13bn tonnes per year. After we've factored in the emissions from agriculture, which we need to feed ourselves, what's left for industry, transport and homes? Zero.
Not only is it zero, but we've got to get there by 2050. This is a massive engineering project – the biggest the planet has ever seen. We could do it, with the technology we already know about, provided we abandon our squeamishness about nuclear power, windfarms in our backyards and carbon capture and storage. However the timescale is short. It is shorter than the life of a power station, or a gas grid, or even a new jumbo jet.
Now, here's the danger. There is a big difference between a "low-carbon economy" and a "no carbon economy". Both will need massive investments in new infrastructure and the deployment of huge swaths of new technology which will take decades to build. However, getting the last bit of carbon out of the economy is going to be terribly difficult, and many key choices needed to get there must be made more or less today. Look at a few examples.
The EU and individual governments are pumping billions of Euros into a form of carbon capture and storage that will only save 85% of emissions. Let's allow 10-15 years to get the technology sorted, and then 10-15 years to build the power stations. That takes us to 2040. If the life of a power station is 40 years, what are they all going to do in 2050? If we are serious about saving the planet we have to shut them down prematurely – what a waste of money and time.
Here's another. The UK has 20m homes with a gas supply. The government is currently providing incentives to install really efficient gas-fired combined heat and power in those homes. This will lock in 20 million sources of CO2 that can't be captured – instead of starting now to phase gas out of our homes and shift everyone to heat pumps.
Another example is the plan for Heathrow's third runway, which will allow more planes to come in. New planes have a 30-40 year lifespan. The runway won't be built for 10 years. The planes and runway will be obsolete before they are worn out – unless of course we spend a vast amount of new money on the research and development of biofuels. I don't see that in the coming budget.
In short, by going "low carbon" we're designing an economy not fit for purpose. We will waste a lot of time, and spend a vast amount of money, installing long-life assets and infrastructure that future politicians will have to scrap. You couldn't think of a more expensive and wasteful way to approach such a major and costly project. We will have designed that transatlantic airliner that doesn't quite reach the runway at the other end – but sadly you and I will have to fly on it.
• Mike Mason is the founder of Climate Care and Biojoule. He is looking for feedback on his "no-carbon economy" idea - please post your thoughts below.
Mike Mason
guardian.co.uk, Friday 19 March 2010 10.51 GMT
Who would get on a flight across the Atlantic if most of the aeronautical engineers in the world were saying that the plane had a 50% chance of crashing before it got to the destination? No one. So why then are we prepared to take our chances on a planet which the vast majority of serious scientists say has a high chance of catastrophic system failure? I don't care whether the odds are 50% or 10% or even 1% - this is the only planet going and we're all on it.
In that case, when governments talk of aiming for a "low-carbon economy" by 2050, shouldn't we all rejoice? Perhaps not. If you're going to design an aeroplane you have to know how far it is expected to fly. Designing a transatlantic airliner that "nearly" gets across the ocean is not only a disaster for the passengers but it is also a waste of money. The same is true of the move towards a "low-carbon economy", which I believe is the wrong path to take. Here's why.
There are greenhouse gas emissions from industry, transport and the domestic sector, and there are emissions from agriculture and land use change. Take those emissions from agriculture, which are difficult to reduce substantially, and combine them with a world population that is expected to grow by 50% by 2050 and incomes that are growing at rates of up to 6% in the developing world, and you have a situation in 2050 where roughly 10 billion people are living at a standard close to ours in the UK. All those extra and relatively rich people will drastically increase those agricultural emissions.
Bearing that in mind, how much wiggle room do we have to generate future emissions before we set ourselves on the route to catastrophic climate change? Some notable scientists are saying we should emit no more. Some, more pragmatic voices, are arguing that the risks are acceptable if we stabilise at 450 parts per million CO2 in the atmosphere by 2050. The Stern review suggests the emissions level we would need to do this is around 13bn tonnes per year. After we've factored in the emissions from agriculture, which we need to feed ourselves, what's left for industry, transport and homes? Zero.
Not only is it zero, but we've got to get there by 2050. This is a massive engineering project – the biggest the planet has ever seen. We could do it, with the technology we already know about, provided we abandon our squeamishness about nuclear power, windfarms in our backyards and carbon capture and storage. However the timescale is short. It is shorter than the life of a power station, or a gas grid, or even a new jumbo jet.
Now, here's the danger. There is a big difference between a "low-carbon economy" and a "no carbon economy". Both will need massive investments in new infrastructure and the deployment of huge swaths of new technology which will take decades to build. However, getting the last bit of carbon out of the economy is going to be terribly difficult, and many key choices needed to get there must be made more or less today. Look at a few examples.
The EU and individual governments are pumping billions of Euros into a form of carbon capture and storage that will only save 85% of emissions. Let's allow 10-15 years to get the technology sorted, and then 10-15 years to build the power stations. That takes us to 2040. If the life of a power station is 40 years, what are they all going to do in 2050? If we are serious about saving the planet we have to shut them down prematurely – what a waste of money and time.
Here's another. The UK has 20m homes with a gas supply. The government is currently providing incentives to install really efficient gas-fired combined heat and power in those homes. This will lock in 20 million sources of CO2 that can't be captured – instead of starting now to phase gas out of our homes and shift everyone to heat pumps.
Another example is the plan for Heathrow's third runway, which will allow more planes to come in. New planes have a 30-40 year lifespan. The runway won't be built for 10 years. The planes and runway will be obsolete before they are worn out – unless of course we spend a vast amount of new money on the research and development of biofuels. I don't see that in the coming budget.
In short, by going "low carbon" we're designing an economy not fit for purpose. We will waste a lot of time, and spend a vast amount of money, installing long-life assets and infrastructure that future politicians will have to scrap. You couldn't think of a more expensive and wasteful way to approach such a major and costly project. We will have designed that transatlantic airliner that doesn't quite reach the runway at the other end – but sadly you and I will have to fly on it.
• Mike Mason is the founder of Climate Care and Biojoule. He is looking for feedback on his "no-carbon economy" idea - please post your thoughts below.
Vigorous tree plantation needed to combat global warming
By: Jamaluddin Jamali Published: March 21, 2010
LAHORE - Massive tree plantation is the only hope for combating the monster of global warming and environmental degradation, which is endangering the life on earth in the wake of haphazard industrialisation and emission of lethal gases.Only the trees have the natural potential to consume the toxic gases and the clouds of smoke produced as a result of ever-expanding industries and mounting flood of vehicles in the urban centres. Forests make a substantial contribution for mitigating the climate change through carbon sequestration, substitution and conservation.This is the message of the International Forestry Day, which will be celebrated today (Sunday) around the world to increase human knowledge and awareness about the global warming and the role of trees in the modern times. The day is being celebrated for the last 32 years to remind the people of the importance of forests and the benefits which we gain from them.The experts say trees and forests being the nature’s gifts can reduce the high levels of carbon dioxide pumped into the earth’s atmosphere due to the burning of fossil fuels and emissions of dangerous gases.As per international guidelines, about 25 per cent of the total land mass should be covered with forests to balance the cycles of gases in the environment for making it healthy for human living. But the Punjab Forest Department has been able to increase the tree-covered area on farmlands from 3 trees/acre in 1947 to over 17 trees per care only by the year 2001. And still, there is a potential to increase this density up to 28 trees/acre.Forests give us shade and shelter, refuge and refreshment, clean air and water. Today, with a growing population and subsequent demand for timber products, the forests are at risk from widespread deforestation and degradation.
LAHORE - Massive tree plantation is the only hope for combating the monster of global warming and environmental degradation, which is endangering the life on earth in the wake of haphazard industrialisation and emission of lethal gases.Only the trees have the natural potential to consume the toxic gases and the clouds of smoke produced as a result of ever-expanding industries and mounting flood of vehicles in the urban centres. Forests make a substantial contribution for mitigating the climate change through carbon sequestration, substitution and conservation.This is the message of the International Forestry Day, which will be celebrated today (Sunday) around the world to increase human knowledge and awareness about the global warming and the role of trees in the modern times. The day is being celebrated for the last 32 years to remind the people of the importance of forests and the benefits which we gain from them.The experts say trees and forests being the nature’s gifts can reduce the high levels of carbon dioxide pumped into the earth’s atmosphere due to the burning of fossil fuels and emissions of dangerous gases.As per international guidelines, about 25 per cent of the total land mass should be covered with forests to balance the cycles of gases in the environment for making it healthy for human living. But the Punjab Forest Department has been able to increase the tree-covered area on farmlands from 3 trees/acre in 1947 to over 17 trees per care only by the year 2001. And still, there is a potential to increase this density up to 28 trees/acre.Forests give us shade and shelter, refuge and refreshment, clean air and water. Today, with a growing population and subsequent demand for timber products, the forests are at risk from widespread deforestation and degradation.
McElroy: Impending global warming a welcome relief
By Jack McElroy
Posted March 21, 2010 at midnight
Now is the winter of our discontent made glorious summer by THE SUN!
It's spring today, and a long time coming it was.
If ever there was an argument against global warming it was made this past winter, right?
The "Climategate" scandal broke. It snowed what seemed like every week in Knoxville, and the idea of Al Gore getting an honorary degree from the University of Tennessee sent chilly blasts across the state.
Brrr.
But watch out. Those sneaky academicians and earth-huggers may be down, but they ain't out.
If the health-care issue really does get resolved, we can expect the national debate to swing toward energy policy and climate-change legislation.
Honestly, I have a lot of faith in science, and if the greenhouse effect remains the consensus of the expert researchers, I suspect they're right.
Regardless, does anyone really think pollution is a good thing? Of course not. What we're arguing about is the cost of controlling it.
That's why I'm intrigued by cap and trade.
It's a wonderfully elegant concept.
Pollution emitters spend "credits" allowing them to pollute. If they cut pollution, they can sell their unused credits to heavier polluters.
The idea is that market forces will drive emitters toward efficient ways to be cleaner. In time, as the "cap" on credits goes down, so will emissions.
But how do the smokestack companies get credits to start the system in the first place?
One way is for the government to assign them, but that's likely to be a boondoggle.
A more efficient way would be for the government to auction credits so they're distributed according to real need.
That would mean that utilities and other big polluters would be out a lot of money, though, and they would raise prices to cover their costs. In the end, consumers would be the ones to hand over more money to the government - pretty much like taxes.
Of course, the government could refund all the money right back to the citizens, and everything would be square. That's the approach Tennessee Sen. Bob Corker has advocated.
But when the government has a big pot of money, refunding doesn't seem to spring to mind. People come up with all sorts of ideas about what to do with the dough besides give it back.
Done right, cap-and-trade could help us efficiently become a greener nation. Done wrong, it would create the biggest public trough in history, and the "green" people would be chasing would have little to do with the environment.
Anyway, I'm predicting a period of sharp temperature increases across the Northern Hemisphere over the next several months - and thank goodness.
On an unrelated hot topic, we are introducing a new comic Monday.
"Dustin" is about a 23-year-old "boomerang kid," a college graduate who is unable to find a job and has returned home to live with his industrious parents and younger sister.
The theme may hit uncomfortably close to home for some readers around here, but it also will bring plenty of smiles.
Let me know your opinion at editor@knoxnews.com.
Jack McElroy is editor of the News Sentinel. He may be reached at 865-342-6300, at editor@knews.com or through his blog, The Upfront Page at http://blogs.knoxnews.com.
© 2010, Knoxville News Sentinel Co.
Report says China is squeezing U.S. firms out of its massive wind-power market
12:00 AM CDT on Thursday, March 18, 2010
By JIM LANDERS / The Dallas Morning News jlanders@dallasnews.com
WASHINGTON – U.S. companies are getting squeezed out of the big Chinese wind-power market even as Dallas investors are bringing Chinese firms here via a big wind farm in Texas, according to a new industry report.
"They've used every measure you could possibly think of to enhance production of renewable energy equipment in China," said report author Alan Wolff of the trade law firm Dewey & LeBoeuf LLP.
U.S. Trade Representative Ron Kirk won a pledge from the Chinese last fall to drop rules giving preference to Chinese makers of wind-power equipment. But Kirk's office hasn't seen any evidence that the pledge has been carried out, said spokeswoman Carol Guthrie.
Meanwhile, Chinese manufacturers are entering the U.S. wind market under a joint venture led by Dallas investor Cappy McGarr.
McGarr's U.S. Renewable Energy Group, with Cielo Wind Power LP of Austin and China's Shenyang Power Group, is planning a $1.5 billion, 600-megawatt wind farm on 36,000 acres in West Texas.
Several U.S. senators have complained that the West Texas project would use hundreds of millions of dollars in U.S. economic stimulus funds for wind turbines built in China. They introduced a bill this month that would halt federal funding of renewable energy projects until "buy American" requirements are written into law.
McGarr's Chinese partners announced plans last week to build a wind turbine factory in Nevada, and McGarr says most of the jobs for the West Texas project will be American.
"A minimum of 70 percent of each wind turbine in the ... project, including the massive towers and blades, will be wholly manufactured in the United States and made entirely of American steel," McGarr said.
Dewey & LeBoeuf's report on China's renewable energy equipment market was done for a U.S. industry group, the National Foreign Trade Council, where concern about China's market restrictions and treatment of foreign firms is growing.
"If you're not operating under a rule-of-law country, if you have no place to adjudicate, and there are places where the country has stacked the deck against you, you may look for somewhere else" to do business, said trade council president Bill Reinsch.
Some wind power advocates are urging everyone to calm down and are particularly concerned about the Senate "Buy American" bill.
"This proposal would torpedo one of the most successful job creation efforts of the Recovery Act [the economic stimulus program], which has already preserved half of the 85,000 American jobs in the U.S. wind industry," said Denise Bode, president of the American Wind Energy Association.
"Rather than adopt policies that will kill American jobs, Congress should enact policies that will create jobs by encouraging manufacturers to invest in U.S. plants," she said.
Six years ago, foreign wind turbine manufacturers held 82 percent of the Chinese market, but they now have a 10 percent share, according to the Dewey & LeBoeuf study.
Because of off-and-on incentives for wind power in the United States, foreign manufacturers have dominated here as well, says the American Wind Energy Association. Even so, the United States is the largest wind-power producer, with Texas leading the states in wind-generated electricity.
Once a national market evolves, equipment suppliers tend to build manufacturing plants closer to wind farms to avoid shipping expenses for the large machines, said Lutz Weischer, a research analyst with the Washington-based World Resources Institute.
"Putting a moratorium on wind projects could have the unintended consequence of making your market less stable and slowing the growth in employment," he said.
Citing Chinese press reports, Weischer also argued that China is living up to its pledge to drop local content rules for wind energy equipment. GE, the largest U.S.-based wind turbine company, reached a deal in January to sell 88 turbines to three smaller Chinese wind farms.
Wolff said he and his colleagues found no evidence that China is reopening its market. In August, the Chinese announced they would build a series of enormous wind farms, each designed to generate 20 times as much electricity as McGarr's West Texas project, with preferences for local equipment manufacturers.
"Some of those projects will reportedly have [wind turbine] towers 30 stories high. They're building them in valleys, in deserts; they're really taking advantage of their resource," said Dewey & LeBoeuf attorney Tom Howell.
Foreign manufacturers haven't won any of the equipment contracts for those jobs or any others developed by the Chinese central government since 2005, Howell said.
Sen. Sherrod Brown, D-Ohio, is one of the sponsors of legislation that would add "Buy American" requirements for wind projects built with government stimulus funding.
"We cannot sit idly by while China races to the forefront of clean energy production at the expense of U.S. manufacturing, U.S. jobs and U.S. energy independence," he said.
By choosing to build a turbine factory in Nevada, the Chinese at the very least may have slowed Brown's bill. The turbine plant provides an economic boost to Nevada, where Senate Majority Leader Harry Reid is facing a tough re-election challenge later this year.
By JIM LANDERS / The Dallas Morning News jlanders@dallasnews.com
WASHINGTON – U.S. companies are getting squeezed out of the big Chinese wind-power market even as Dallas investors are bringing Chinese firms here via a big wind farm in Texas, according to a new industry report.
"They've used every measure you could possibly think of to enhance production of renewable energy equipment in China," said report author Alan Wolff of the trade law firm Dewey & LeBoeuf LLP.
U.S. Trade Representative Ron Kirk won a pledge from the Chinese last fall to drop rules giving preference to Chinese makers of wind-power equipment. But Kirk's office hasn't seen any evidence that the pledge has been carried out, said spokeswoman Carol Guthrie.
Meanwhile, Chinese manufacturers are entering the U.S. wind market under a joint venture led by Dallas investor Cappy McGarr.
McGarr's U.S. Renewable Energy Group, with Cielo Wind Power LP of Austin and China's Shenyang Power Group, is planning a $1.5 billion, 600-megawatt wind farm on 36,000 acres in West Texas.
Several U.S. senators have complained that the West Texas project would use hundreds of millions of dollars in U.S. economic stimulus funds for wind turbines built in China. They introduced a bill this month that would halt federal funding of renewable energy projects until "buy American" requirements are written into law.
McGarr's Chinese partners announced plans last week to build a wind turbine factory in Nevada, and McGarr says most of the jobs for the West Texas project will be American.
"A minimum of 70 percent of each wind turbine in the ... project, including the massive towers and blades, will be wholly manufactured in the United States and made entirely of American steel," McGarr said.
Dewey & LeBoeuf's report on China's renewable energy equipment market was done for a U.S. industry group, the National Foreign Trade Council, where concern about China's market restrictions and treatment of foreign firms is growing.
"If you're not operating under a rule-of-law country, if you have no place to adjudicate, and there are places where the country has stacked the deck against you, you may look for somewhere else" to do business, said trade council president Bill Reinsch.
Some wind power advocates are urging everyone to calm down and are particularly concerned about the Senate "Buy American" bill.
"This proposal would torpedo one of the most successful job creation efforts of the Recovery Act [the economic stimulus program], which has already preserved half of the 85,000 American jobs in the U.S. wind industry," said Denise Bode, president of the American Wind Energy Association.
"Rather than adopt policies that will kill American jobs, Congress should enact policies that will create jobs by encouraging manufacturers to invest in U.S. plants," she said.
Six years ago, foreign wind turbine manufacturers held 82 percent of the Chinese market, but they now have a 10 percent share, according to the Dewey & LeBoeuf study.
Because of off-and-on incentives for wind power in the United States, foreign manufacturers have dominated here as well, says the American Wind Energy Association. Even so, the United States is the largest wind-power producer, with Texas leading the states in wind-generated electricity.
Once a national market evolves, equipment suppliers tend to build manufacturing plants closer to wind farms to avoid shipping expenses for the large machines, said Lutz Weischer, a research analyst with the Washington-based World Resources Institute.
"Putting a moratorium on wind projects could have the unintended consequence of making your market less stable and slowing the growth in employment," he said.
Citing Chinese press reports, Weischer also argued that China is living up to its pledge to drop local content rules for wind energy equipment. GE, the largest U.S.-based wind turbine company, reached a deal in January to sell 88 turbines to three smaller Chinese wind farms.
Wolff said he and his colleagues found no evidence that China is reopening its market. In August, the Chinese announced they would build a series of enormous wind farms, each designed to generate 20 times as much electricity as McGarr's West Texas project, with preferences for local equipment manufacturers.
"Some of those projects will reportedly have [wind turbine] towers 30 stories high. They're building them in valleys, in deserts; they're really taking advantage of their resource," said Dewey & LeBoeuf attorney Tom Howell.
Foreign manufacturers haven't won any of the equipment contracts for those jobs or any others developed by the Chinese central government since 2005, Howell said.
Sen. Sherrod Brown, D-Ohio, is one of the sponsors of legislation that would add "Buy American" requirements for wind projects built with government stimulus funding.
"We cannot sit idly by while China races to the forefront of clean energy production at the expense of U.S. manufacturing, U.S. jobs and U.S. energy independence," he said.
By choosing to build a turbine factory in Nevada, the Chinese at the very least may have slowed Brown's bill. The turbine plant provides an economic boost to Nevada, where Senate Majority Leader Harry Reid is facing a tough re-election challenge later this year.
Vestas Sells Bonds for First Time as Growth Slows
By Christian Wienberg
March 15 (Bloomberg) -- Vestas Wind Systems A/S, the biggest maker of wind turbines, is selling bonds for the first time to diversify funding as growth in the market slows.
The company successfully placed a 600 million-euro five- year bond offering paying a coupon of 4.625 percent, it said in a statement today. The offer, which goes on issue on March 23, corresponds to a yield of 225 basis points more than the benchmark mid-swap rate, the company said.
Revenue growth at Vestas slowed after the credit crisis prompted banks to restrict lending to wind park developers, causing project cancellations and delays. Last month, Vestas cut its sales and profit margin forecasts for 2010 and said it would investigate the possibility of a bond sale.
“There have been some investors fearing Vestas would raise capital by selling shares again and that risk is now reduced,” Jacob Pedersen, an analyst with Aabenraa, Denmark-based Sydbank A/S with an “overweight” rating on the stock, said by phone.
Vestas turned to the bond market after increasing cash at a faster pace than financial debt because it raised 5.98 billion kroner ($1.1 billion) in an April share sale, according to data compiled by Bloomberg.
The company more than tripled its liquidity to 488 million euros by the end of 2009 compared with a less-than-threefold gain in financial debt to 351 million euros from 123 million a year earlier, according to the annual report.
Sales Outlook
The market has “persistent” oversupply that will depress turbine prices to an average 1.08 million euros per megawatt in the first half of 2011 from 1.24 million euros in the second half of 2008, according to Bloomberg New Energy Finance.
China, the world’s third-biggest wind-power market by generating capacity, is idling as much as 40 percent of its turbine factories, Lu Yachen, vice president of Shanghai Electric Group Corp, said March 11. That followed a surge in the number of Chinese turbine makers to 78 from six in 2004.
After growing by 30 percent to 40 percent a year from 2004 to 2008, the global market for the turbines probably grew a little more than 8 percent last year and may expand about 10 percent in 2010, according to Danish researcher BTM Consult APS.
Deutsche Bank AG cut its rating today on Vestas to “sell” from “hold,” saying Vestas faces profit margin “pressure” and earnings forecasts downgrades.
Vestas fell 7.8 kroner, or 2.9 percent, to 263.6 kroner in Copenhagen trading. The shares have lost 17 percent this year compared with an 11 percent drop in the WilderHill New Energy Global Innovation Index and a 1.3 percent gain in the Bloomberg European 500 Index.
‘Attractive Pricing’
“We see the eurobond market as an attractive source of financing as it offers long-term visibility and attractive pricing,” Chief Financial Officer Henrik Noerremark said in a separate filing.
Nordea Bank AB, Rabobank Nederland NV, Societe Generale SA and UniCredit SpA are the joint lead managers and book-runners, Vestas said. SEB AB will also be joint lead manager, though not a book-runner for the bond sale.
To contact the reporter on this story: Christian Wienberg in Copenhagen at cwienberg@bloomberg.net
March 15 (Bloomberg) -- Vestas Wind Systems A/S, the biggest maker of wind turbines, is selling bonds for the first time to diversify funding as growth in the market slows.
The company successfully placed a 600 million-euro five- year bond offering paying a coupon of 4.625 percent, it said in a statement today. The offer, which goes on issue on March 23, corresponds to a yield of 225 basis points more than the benchmark mid-swap rate, the company said.
Revenue growth at Vestas slowed after the credit crisis prompted banks to restrict lending to wind park developers, causing project cancellations and delays. Last month, Vestas cut its sales and profit margin forecasts for 2010 and said it would investigate the possibility of a bond sale.
“There have been some investors fearing Vestas would raise capital by selling shares again and that risk is now reduced,” Jacob Pedersen, an analyst with Aabenraa, Denmark-based Sydbank A/S with an “overweight” rating on the stock, said by phone.
Vestas turned to the bond market after increasing cash at a faster pace than financial debt because it raised 5.98 billion kroner ($1.1 billion) in an April share sale, according to data compiled by Bloomberg.
The company more than tripled its liquidity to 488 million euros by the end of 2009 compared with a less-than-threefold gain in financial debt to 351 million euros from 123 million a year earlier, according to the annual report.
Sales Outlook
The market has “persistent” oversupply that will depress turbine prices to an average 1.08 million euros per megawatt in the first half of 2011 from 1.24 million euros in the second half of 2008, according to Bloomberg New Energy Finance.
China, the world’s third-biggest wind-power market by generating capacity, is idling as much as 40 percent of its turbine factories, Lu Yachen, vice president of Shanghai Electric Group Corp, said March 11. That followed a surge in the number of Chinese turbine makers to 78 from six in 2004.
After growing by 30 percent to 40 percent a year from 2004 to 2008, the global market for the turbines probably grew a little more than 8 percent last year and may expand about 10 percent in 2010, according to Danish researcher BTM Consult APS.
Deutsche Bank AG cut its rating today on Vestas to “sell” from “hold,” saying Vestas faces profit margin “pressure” and earnings forecasts downgrades.
Vestas fell 7.8 kroner, or 2.9 percent, to 263.6 kroner in Copenhagen trading. The shares have lost 17 percent this year compared with an 11 percent drop in the WilderHill New Energy Global Innovation Index and a 1.3 percent gain in the Bloomberg European 500 Index.
‘Attractive Pricing’
“We see the eurobond market as an attractive source of financing as it offers long-term visibility and attractive pricing,” Chief Financial Officer Henrik Noerremark said in a separate filing.
Nordea Bank AB, Rabobank Nederland NV, Societe Generale SA and UniCredit SpA are the joint lead managers and book-runners, Vestas said. SEB AB will also be joint lead manager, though not a book-runner for the bond sale.
To contact the reporter on this story: Christian Wienberg in Copenhagen at cwienberg@bloomberg.net
WWF hopes to find $60 billion growing on trees
The carbon credits scheme would make WWF and its partners much richer, but with no lowering of overall CO2 emissions, writes Christopher Booker .
By Christopher BookerPublished: 4:53PM GMT 20 Mar 2010
If the world’s largest, richest environmental campaigning group, the WWF – formerly the World Wildlife Fund – announced that it was playing a leading role in a scheme to preserve an area of the Amazon rainforest twice the size of Switzerland, many people might applaud, thinking this was just the kind of cause the WWF was set up to promote. Amazonia has long been near the top of the list of the world’s environmental cconcerns, not just because it includes easily the largest and most bio-diverse area of rainforest on the planet, but because its billions of trees contain the world’s largest land-based store of CO2 – so any serious threat to the forest can be portrayed as a major contributor to global warming.
If it then emerged, however, that a hidden agenda of the scheme to preserve this chunk of the forest was to allow the WWF and its partners to share the selling of carbon credits worth $60 billion, to enable firms in the industrial world to carry on emitting CO2 just as before, more than a few eyebrows might be raised. The idea is that credits representing the CO2 locked into this particular area of jungle – so remote that it is not under any threat – should be sold on the international market, allowing thousands of companies in the developed world to buy their way out of having to restrict their carbon emissions. The net effect would simply be to make the WWF and its partners much richer while making no contribution to lowering overall CO2 emissions.
WWF, which already earns £400 million yearly, much of it contributed by governments and taxpayers, has long been at the centre of efforts to talk up the threat to the Amazon rainforest – as shown recently by the furore over a much-publicised passage in the 2007 report of the UN’s Intergovernmental Panel on Climate Change. The IPCC’s claim that 40 per cent of the forest is threatened by global warming, it turned out, was not based on any scientific evidence, but simply on WWF propaganda, which had wholly distorted the findings of an earlier study on the threat posed to the forest, not by climate change but by logging.
This curious saga goes back to 1997, when the UN’s Kyoto treaty set up what is known as the Clean Development Mechanism (CDM). This allowed businesses in the developing world that could claim to have reduced their greenhouse gas emissions to make billions of pounds by selling their resulting carbon credits to those firms in the developed world which, under the treaty, would be obliged to cut their emissions. In 2001 the parties to Kyoto agreed in principle that trees in the southern hemisphere could be counted as “carbon sinks” for the benefit of CO2 emitting firms in the northern hemisphere. In 2002, after lengthy negotiations with WWF and other NGOs, the Brazilian government set up its Amazon Region Protected Areas (Arpa) project, supported by nearly $80 million of funding. Of this, $18 million was given to the WWF by the US’s Gordon & Betty Moore Foundation, $18 million to its Brazilian NGO partner by the Brazilian government, plus $30 million from the World Bank.
The aim was that the NGOs, led by the WWF, should administer chunks of the Brazilian rainforest to ensure either that they were left alone or managed “sustainably”. Added to them, as the largest area of all, was 31,000 square miles on Brazil’s all but inaccessible northern frontier; half designated as the Tumucumaque National Park, the world’s largest nature reserve, the other half to be left largely untouched but allowing for sustainable development. This is remote from any part of the Amazonian forest likely to be damaged by loggers, mining or agriculture.
So far all this might have seemed admirably idealistic. Despite the international agreement that forests could be counted as carbon sinks, there was as yet no system in place whereby the CO2 thus “saved” could be turned into a saleable commodity. In 2007, however, the WWF and its allies in the World Bank launched the Global Forest Alliance, with start-up funding of $250 million from the Bank, to work for what they called “avoided deforestation”. A conference in Bali, under the auspices of the UN Framework Convention on Climate Change (UNFCCC), which administers the CDM, agreed to a scheme called REDD (reducing emissions for deforestation in developing countries). Hailed as “the big new idea to save the planet from runaway climate change”, this set up a global fund to save vast areas of rainforest from the deforestation which accounts for nearly a fifth of all man-made CO2 emissions.
But still there was no mechanism for turning all this “saved” CO2 into a money-making commodity. The WWF now, however, found a key ally in the Woods Hole Research Center, based in Massachusetts. Not to be confused with the nearby Woods Hole Oceanographic Institute, a bona fide scientific body, this is in fact a global warming advocacy group, headed by a board which includes fund managers responsible for billions of dollars of private investments.
In 2008, funded by $7 million from the Moore Foundation and working in partnership with the WWF on the Tumucumaque project, Woods Hole came up with the formula required: a way of valuing all that carbon stored in Brazil’s protected rainforests, so that it could be traded under the CDM. The CO2 to be “saved” by the Arpa programme, it calculated, amounted to 5.1 billion tons. Based on the UNFCCC’s valuation of CO2 at $12.50 per ton, this valued the trees in Brazil’s protected areas at over $60 billion. Endorsed by the World Bank, this projection was presented to the UNFCCC.
But two more obstacles had still to be overcome. The first was that the scheme needed to be adopted as part of REDD by the UNFCCC’s 2009 Copenhagen conference, which was supposed to agree a new global treaty to follow Kyoto. This would allow all that “saved” Brazilian CO2 to be turned into hard cash under the CDM scheme.
The other was that the US should adopt a “cap and trade” scheme, imposing severe curbs on the CO2 emitted by US industry. This would boost the international carbon market, sending the price soaring as US firms flocked to buy the credits that would allow them to continue emitting the CO2 they needed to survive.
As we know, the story hasn’t turned out as planned. Amid the shambles at Copenhagen in December, all that could be saved of the REDD proposals was an agreement in principle, with the hope of reaching detailed agreement in Mexico later this year. Also lost in the scramble to save something from the wreckage was the small print that guaranteed the rights of indigenous peoples in rainforests, whose way of life – to the concern of groups such as Survival International and the Forest Peoples Programme – has already been severely damaged by REDD-inspired schemes elsewhere, such as in Kenya and Papua New Guinea.
Just as alarming to the WWF and its allies, who were hoping to make billions from Brazilian forests, has been the failure of the US Senate to approve the cap and trade bill championed by President Obama. Since the EU has excluded the rainforests from its own cap and trade scheme, bringing the US into the net is vital for the WWF’s hopes of finding “money growing on trees”. The price of carbon on the Chicago Climate Exchange has just plummeted to its lowest-ever level, 10 cents a ton.
The WWF’s dream has been thwarted – but the revelation that it could even be party to such a scheme may have considerable influence on the way this richest of all environmental campaigning groups is viewed by the world at large.
Further details and sources can be found at www.eureferendum.blogspot.com.
'The Real Global Warming Disaster’ by Christopher Booker and Richard North is published by Continuum (£16.99)
By Christopher BookerPublished: 4:53PM GMT 20 Mar 2010
If the world’s largest, richest environmental campaigning group, the WWF – formerly the World Wildlife Fund – announced that it was playing a leading role in a scheme to preserve an area of the Amazon rainforest twice the size of Switzerland, many people might applaud, thinking this was just the kind of cause the WWF was set up to promote. Amazonia has long been near the top of the list of the world’s environmental cconcerns, not just because it includes easily the largest and most bio-diverse area of rainforest on the planet, but because its billions of trees contain the world’s largest land-based store of CO2 – so any serious threat to the forest can be portrayed as a major contributor to global warming.
If it then emerged, however, that a hidden agenda of the scheme to preserve this chunk of the forest was to allow the WWF and its partners to share the selling of carbon credits worth $60 billion, to enable firms in the industrial world to carry on emitting CO2 just as before, more than a few eyebrows might be raised. The idea is that credits representing the CO2 locked into this particular area of jungle – so remote that it is not under any threat – should be sold on the international market, allowing thousands of companies in the developed world to buy their way out of having to restrict their carbon emissions. The net effect would simply be to make the WWF and its partners much richer while making no contribution to lowering overall CO2 emissions.
WWF, which already earns £400 million yearly, much of it contributed by governments and taxpayers, has long been at the centre of efforts to talk up the threat to the Amazon rainforest – as shown recently by the furore over a much-publicised passage in the 2007 report of the UN’s Intergovernmental Panel on Climate Change. The IPCC’s claim that 40 per cent of the forest is threatened by global warming, it turned out, was not based on any scientific evidence, but simply on WWF propaganda, which had wholly distorted the findings of an earlier study on the threat posed to the forest, not by climate change but by logging.
This curious saga goes back to 1997, when the UN’s Kyoto treaty set up what is known as the Clean Development Mechanism (CDM). This allowed businesses in the developing world that could claim to have reduced their greenhouse gas emissions to make billions of pounds by selling their resulting carbon credits to those firms in the developed world which, under the treaty, would be obliged to cut their emissions. In 2001 the parties to Kyoto agreed in principle that trees in the southern hemisphere could be counted as “carbon sinks” for the benefit of CO2 emitting firms in the northern hemisphere. In 2002, after lengthy negotiations with WWF and other NGOs, the Brazilian government set up its Amazon Region Protected Areas (Arpa) project, supported by nearly $80 million of funding. Of this, $18 million was given to the WWF by the US’s Gordon & Betty Moore Foundation, $18 million to its Brazilian NGO partner by the Brazilian government, plus $30 million from the World Bank.
The aim was that the NGOs, led by the WWF, should administer chunks of the Brazilian rainforest to ensure either that they were left alone or managed “sustainably”. Added to them, as the largest area of all, was 31,000 square miles on Brazil’s all but inaccessible northern frontier; half designated as the Tumucumaque National Park, the world’s largest nature reserve, the other half to be left largely untouched but allowing for sustainable development. This is remote from any part of the Amazonian forest likely to be damaged by loggers, mining or agriculture.
So far all this might have seemed admirably idealistic. Despite the international agreement that forests could be counted as carbon sinks, there was as yet no system in place whereby the CO2 thus “saved” could be turned into a saleable commodity. In 2007, however, the WWF and its allies in the World Bank launched the Global Forest Alliance, with start-up funding of $250 million from the Bank, to work for what they called “avoided deforestation”. A conference in Bali, under the auspices of the UN Framework Convention on Climate Change (UNFCCC), which administers the CDM, agreed to a scheme called REDD (reducing emissions for deforestation in developing countries). Hailed as “the big new idea to save the planet from runaway climate change”, this set up a global fund to save vast areas of rainforest from the deforestation which accounts for nearly a fifth of all man-made CO2 emissions.
But still there was no mechanism for turning all this “saved” CO2 into a money-making commodity. The WWF now, however, found a key ally in the Woods Hole Research Center, based in Massachusetts. Not to be confused with the nearby Woods Hole Oceanographic Institute, a bona fide scientific body, this is in fact a global warming advocacy group, headed by a board which includes fund managers responsible for billions of dollars of private investments.
In 2008, funded by $7 million from the Moore Foundation and working in partnership with the WWF on the Tumucumaque project, Woods Hole came up with the formula required: a way of valuing all that carbon stored in Brazil’s protected rainforests, so that it could be traded under the CDM. The CO2 to be “saved” by the Arpa programme, it calculated, amounted to 5.1 billion tons. Based on the UNFCCC’s valuation of CO2 at $12.50 per ton, this valued the trees in Brazil’s protected areas at over $60 billion. Endorsed by the World Bank, this projection was presented to the UNFCCC.
But two more obstacles had still to be overcome. The first was that the scheme needed to be adopted as part of REDD by the UNFCCC’s 2009 Copenhagen conference, which was supposed to agree a new global treaty to follow Kyoto. This would allow all that “saved” Brazilian CO2 to be turned into hard cash under the CDM scheme.
The other was that the US should adopt a “cap and trade” scheme, imposing severe curbs on the CO2 emitted by US industry. This would boost the international carbon market, sending the price soaring as US firms flocked to buy the credits that would allow them to continue emitting the CO2 they needed to survive.
As we know, the story hasn’t turned out as planned. Amid the shambles at Copenhagen in December, all that could be saved of the REDD proposals was an agreement in principle, with the hope of reaching detailed agreement in Mexico later this year. Also lost in the scramble to save something from the wreckage was the small print that guaranteed the rights of indigenous peoples in rainforests, whose way of life – to the concern of groups such as Survival International and the Forest Peoples Programme – has already been severely damaged by REDD-inspired schemes elsewhere, such as in Kenya and Papua New Guinea.
Just as alarming to the WWF and its allies, who were hoping to make billions from Brazilian forests, has been the failure of the US Senate to approve the cap and trade bill championed by President Obama. Since the EU has excluded the rainforests from its own cap and trade scheme, bringing the US into the net is vital for the WWF’s hopes of finding “money growing on trees”. The price of carbon on the Chicago Climate Exchange has just plummeted to its lowest-ever level, 10 cents a ton.
The WWF’s dream has been thwarted – but the revelation that it could even be party to such a scheme may have considerable influence on the way this richest of all environmental campaigning groups is viewed by the world at large.
Further details and sources can be found at www.eureferendum.blogspot.com.
'The Real Global Warming Disaster’ by Christopher Booker and Richard North is published by Continuum (£16.99)
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