California becomes the first state in America to mandate carbon-based decreases in transportation fuels
McClatchy newspapers
guardian.co.uk, Friday 24 April 2009 16.02 BST
California became the first state in America yesterday to mandate carbon-based reductions in transportation fuels in an attempt to cut the state's overall greenhouse gas emissions.
The California air resources board approved a phased-in reduction starting in 2011, with a goal of shrinking carbon impacts 10% by 2020. Fuel producers can comply in different ways, such as providing a cleaner fuel portfolio, blending low-carbon ethanol with gasoline or purchasing credits from other clean-energy producers.
California's low-carbon fuel standard could lead to a national measure under Barack Obama, as well as shape how the transportation sector evolves. But businesses and oil industry critics warned that more research is necessary and that its action would lead to higher costs for consumers in a recessionary economy.
Board chairwoman Mary Nichols hailed the low-carbon fuel standard as a major step in moving the country away from oil dependence and toward alternative fuels that generate lower greenhouse gas emissions.
"By changing the way we think about fuels and requiring them all to be lower carbon, I think we are now finally creating an opportunity for other types of advanced transportation to compete on a level playing field," Nichols said.
Arnold Schwarzenegger, California's governor, asked the air board in 2007 to consider a low-carbon fuel standard as way to meet the state's overall goal of cutting greenhouse gases 25% by 2020, as mandated by a 2006 law.
The air board looked at the entire carbon "intensity" of fuels, rather than the impact of emissions from use alone. That meant considering the emissions from the start of production to lasting impacts not directly related to fuel supply.
That led to some controversy over the air board's regulations dealing with corn-based ethanol producers.
A staff analysis assigned additional greenhouse-gas consequences to their fuels alone based on the potential impacts that ethanol production has on forests and green space. The theory is that increased ethanol production reduces the existing amount of farmland for food crops, which in turn leads to cultivation of untouched land that previously captured carbon.
Ethanol advocates challenged the report's findings, disputing that their corn-based production had a significant impact on greenhouse-gas increases elsewhere. But they also suggested that petroleum and other fuels were not given the same treatment.
The air board promised to work with ethanol producers to update formulas related to the indirect effects of fuels as warranted by future research. But it stood by its findings that other fuels did not have significant indirect impacts.
"The preliminary analysis is there is no other fossil fuel option that has any direct land use effect that comes anywhere near any of the biofuels," said Daniel Sperling, an air board member and a University of California-Davis transportation studies expert. "We will be looking carefully to make sure that initial assessment is correct. But I do want to make it clear there was no effort just to focus on the biofuels."
Saturday, 25 April 2009
Threat to European biodiversity 'as serious as climate change'
Most of Europe's species and habitats are in poor condition and the risk of extinction continues to rise, environment chiefs are to warn at a major biodiversity conference in Athens this week
Juliette Jowit
guardian.co.uk, Friday 24 April 2009 16.53 BST
The natural world across Europe is suffering a crisis as serious as the threat of climate change, Europe's environment chiefs are to warn this week.
A report from the European Environment Agency (EEA) to be published next month sounds the alarm that most species and habitats across the continent are in poor condition and the risk of extinction continues to rise.
New figures for the UK also show that even the most important and rare plants and animals are suffering: eight out of 10 habitats and half of species given the highest level of European protection are in an "unfavourable" condition.
Species at risk in the UK range from insects like the honeybee and swallowtail butterfly, to mammals and birds at the top of the food chain such as the otter and the golden eagle, said the Centre for Ecology & Hydrology (CEH).
The losses threaten to undermine vital ecosystem services like clean water and fertile soils, which underpin both quality of life and the economy, said Jacqueline McGlade, the EEA's executive director.
"Much of our economy in Europe relies on the fact we have natural resources underpinning everything," McGlade told the Guardian. The losses of wildlife and habitat are a threat to being able to live sustainably within the enviroment in the future, she said. "Some of the losses are irreversible."
McGlade will present findings from the agency report at a major conference next week called by the European environment commissioner Stavros Dimas. He is worried that the European commission has failed to meet a pledge to halt biodiversity loss by 2010, and recently warned "the loss of biodiversity is a global threat that is every bit as serious as climate change".
"The reasons that we are losing biodiversity are well known: destruction of habitats, pollution, over-exploitation, invasive species and, most recently, climate change," Dimas will tell the conference in Athens. "The compound effect of these forces is terrifying."
At another high-level conference in London on Wednesday, organised by the CEH, leaders from business, government, academics and NGOs will warn that ecosystems underpin human lifestyles from air, water and food to resources for industry.
Professor Lord May of Oxford, a former government chief scientific adviser and president of the Royal Society, said: "Our massive and unintended experiment on the planet's reaction to unsustainable levels of human impacts is approaching crisis point. The future is not yet beyond rescue, provided we take appropriate action with due urgency."
The EEA report says although there have been some conservation successes, including halting the decline of common songbirds, the "overall status and trends of most species and habitats give rise to concern".
Figures for the habitats and species awarded special protection under the EU habitats directive reveal that across 40 countries of Europe and the former Soviet Union, 50-85% of habitats and 40-70% of species were in an "unfavourable" condition, and many more could not be assessed because of a lack of information.
Across Europe, the biggest declines from 1990 to 2000 had been for bogs and fenland, heathland and coastal habitats. Woodland, forests and lakes had grown, but these increases were dwarfed by the biggest habitat expansion, which was "constructed, industrial, artificial habitats".
Populations of some European common birds stopped falling in the 1990s, but all groups of birds had fallen in numbers since 1980, and other species groups like butterflies, amphibians and pollinating insects had declined dramatically, said the report.
The report notes that habitats and species in the habitats directive were chosen because they were under threat, and so were harder to conserve.
"Ecosystems generally show a fair amount of resilience," it adds. "Beyond certain thresholds, however, ecosystems may collapse and transform into distinctly different states, potentially with considerable impacts on humans."
Reforms to be put to the conference in Athens include better management of protected areas, which now make up more than 17% of the European Union territory; targets for economic sectors, such as transport, to ensure they do not have a negative impact on the environment; and more work on putting a "value" on ecosystem services so conservationists can argue their case against developers, said McGlade.
"This is not about putting a price on everything, it's a value. This will transform the discussion because somebody can say 'you're eating away at our capital - grassland', or whatever the landscape or species is."
In a statement, Defra, the UK environment department, said the government fully supported strong international targets, but said many conservation schemes were working.
"For example, England's Sites of Special Scientific Interest are in better condition than ever at 88.4% in favourable or recovering condition compared with 57% in 2003," it added.
Globally, last year's annual "red ist" of endangered species from the IUCN conservation organisation warned that the world's mammals face an extinction crisis, with almost one in four of 5,487 known species at risk of disappearing forever.
Some UK species at risk
Mammals - Dormouse, otter
Birds - Golden eagle, cuckoo
Insects - Swallowtail butterfly, garden tiger moth, stag beetle
Amphibians - Great crested newt
Pollinators - Honeybee, several kinds of bumblebee
Source: Centre for Ecology & Hydrology
Juliette Jowit
guardian.co.uk, Friday 24 April 2009 16.53 BST
The natural world across Europe is suffering a crisis as serious as the threat of climate change, Europe's environment chiefs are to warn this week.
A report from the European Environment Agency (EEA) to be published next month sounds the alarm that most species and habitats across the continent are in poor condition and the risk of extinction continues to rise.
New figures for the UK also show that even the most important and rare plants and animals are suffering: eight out of 10 habitats and half of species given the highest level of European protection are in an "unfavourable" condition.
Species at risk in the UK range from insects like the honeybee and swallowtail butterfly, to mammals and birds at the top of the food chain such as the otter and the golden eagle, said the Centre for Ecology & Hydrology (CEH).
The losses threaten to undermine vital ecosystem services like clean water and fertile soils, which underpin both quality of life and the economy, said Jacqueline McGlade, the EEA's executive director.
"Much of our economy in Europe relies on the fact we have natural resources underpinning everything," McGlade told the Guardian. The losses of wildlife and habitat are a threat to being able to live sustainably within the enviroment in the future, she said. "Some of the losses are irreversible."
McGlade will present findings from the agency report at a major conference next week called by the European environment commissioner Stavros Dimas. He is worried that the European commission has failed to meet a pledge to halt biodiversity loss by 2010, and recently warned "the loss of biodiversity is a global threat that is every bit as serious as climate change".
"The reasons that we are losing biodiversity are well known: destruction of habitats, pollution, over-exploitation, invasive species and, most recently, climate change," Dimas will tell the conference in Athens. "The compound effect of these forces is terrifying."
At another high-level conference in London on Wednesday, organised by the CEH, leaders from business, government, academics and NGOs will warn that ecosystems underpin human lifestyles from air, water and food to resources for industry.
Professor Lord May of Oxford, a former government chief scientific adviser and president of the Royal Society, said: "Our massive and unintended experiment on the planet's reaction to unsustainable levels of human impacts is approaching crisis point. The future is not yet beyond rescue, provided we take appropriate action with due urgency."
The EEA report says although there have been some conservation successes, including halting the decline of common songbirds, the "overall status and trends of most species and habitats give rise to concern".
Figures for the habitats and species awarded special protection under the EU habitats directive reveal that across 40 countries of Europe and the former Soviet Union, 50-85% of habitats and 40-70% of species were in an "unfavourable" condition, and many more could not be assessed because of a lack of information.
Across Europe, the biggest declines from 1990 to 2000 had been for bogs and fenland, heathland and coastal habitats. Woodland, forests and lakes had grown, but these increases were dwarfed by the biggest habitat expansion, which was "constructed, industrial, artificial habitats".
Populations of some European common birds stopped falling in the 1990s, but all groups of birds had fallen in numbers since 1980, and other species groups like butterflies, amphibians and pollinating insects had declined dramatically, said the report.
The report notes that habitats and species in the habitats directive were chosen because they were under threat, and so were harder to conserve.
"Ecosystems generally show a fair amount of resilience," it adds. "Beyond certain thresholds, however, ecosystems may collapse and transform into distinctly different states, potentially with considerable impacts on humans."
Reforms to be put to the conference in Athens include better management of protected areas, which now make up more than 17% of the European Union territory; targets for economic sectors, such as transport, to ensure they do not have a negative impact on the environment; and more work on putting a "value" on ecosystem services so conservationists can argue their case against developers, said McGlade.
"This is not about putting a price on everything, it's a value. This will transform the discussion because somebody can say 'you're eating away at our capital - grassland', or whatever the landscape or species is."
In a statement, Defra, the UK environment department, said the government fully supported strong international targets, but said many conservation schemes were working.
"For example, England's Sites of Special Scientific Interest are in better condition than ever at 88.4% in favourable or recovering condition compared with 57% in 2003," it added.
Globally, last year's annual "red ist" of endangered species from the IUCN conservation organisation warned that the world's mammals face an extinction crisis, with almost one in four of 5,487 known species at risk of disappearing forever.
Some UK species at risk
Mammals - Dormouse, otter
Birds - Golden eagle, cuckoo
Insects - Swallowtail butterfly, garden tiger moth, stag beetle
Amphibians - Great crested newt
Pollinators - Honeybee, several kinds of bumblebee
Source: Centre for Ecology & Hydrology
Stormy weather for economic climate has no silver lining for climate change
Greenhouse gases tend to track GDP, so a 3% drop in emissions won't help the government meet its own target of 34%
Adam Vaughan
guardian.co.uk, Friday 24 April 2009 11.23 BST
In his budget this week, Alastair Darling laid bare the rocky ride ahead for the British economy. He forecast that GDP would drop by 3.5% in 2009. There has been worse economic news from the rest of the world. In the last three months of 2008, the US economy contracted at an annualised rate of 6.2% - the fastest since 1982.
But does this vast economic cloud have a silver (or perhaps green-tinged) lining? As economist Alex Bowen and the New Economic Foundation's Andrew Simms have pointed out, greenhouse gas emissions tend to track GDP. So a 3.5% fall in the UK's GDP leads roughly to a 3.15% fall in CO2 emissions. That would help the UK government reach its commitment to cut carbon emissions by 34% by 2020.
The notion of GDP matching emissions was supported by new research this week from analysts Cambridge Econometrics, which said the recession will cause CO2 emissions to fall by 3% in both 2009 and 2010.
But such dips in GDP may not seriously affect emissions in the long term. On Tuesday, the US National Oceanic and Atmospheric Administration (NOAA) reminded us that atmospheric concentrations of greenhouse gases CO2 and methane were both up in 2008, despite the economic slump.
The NOAA data is hardly surprising. CO2 emissions have grown over 2% a year since the beginning of the industrial age, and around 2.5% for each of the past five years.
Judging from Cambridge Econometrics' numbers, it appears history will view the recession as a blip in rising CO2 levels. Its figures say that even if the UK economy suffers a very deep recession - based on a 4% decline in GDP this year, and 0.9% next year - the UK will still emit 131 million tonnes of carbon in 2015. That's still a considerable global warming contribution, even compared with the 148 million tonnes of carbon the UK emitted in 2007.
And, as the Cambridge Econometrics team notes, any drop in CO2 from the UK isn't just because factories are using less energy. Recent emissions falls are mainly due to the switch from coal to gas-powered power plants, which are less carbon intensive. So if gas falls out of favour - Russia switches off the pipes or gas prices rise again, for example - it'll be imperative the government sticks to its promise to only approve future coal power plants with carbon capture and storage technology. If it reneges on the promise, that 2015 figure of 131 million tonnes of carbon is likely to go up.
Some experts, however, argue that the recession could have a serious effect on CO2 - if the slump goes on long enough.
Terry Barker, the director at the Cambridge Centre for Climate Change Mitigation Research , says emissions in the Great Depression fell by 35% between 1929 and 1932, and he predicts greater falls for what he calls the 21st Century Greater Depression. He believes this downturn is more severe than economists realise and late last year told me we'll "see 40-50% CO2 emission falls globally between now and 2012".
Barker's is a fringe position, but NOAA reminds us that, historically, the "carbon dioxide record isn't immune to temporary dips lasting several years or more. A slowdown occurred in 1930–36 after the Great Depression and again during the 1940s, possibly because of World War II."
But saving ourselves from runaway climate change by decreasing economic activity that results in people losing their jobs and homes is neither desirable, or likely.
Even the finanical analysts predicting dramatic 4% falls in UK GDP this year reckon the UK economy will see only a 0.3% contraction in 2010. Cambridge Econometrics forecasts that UK GDP will then grow by 1.8% in 2011, and 2.5% in 2012. Which means, based on our GDP and emissions rule of thumb, we'll be back up to emissions growth of around 2.25%. In other words, business as usual.
Adam Vaughan
guardian.co.uk, Friday 24 April 2009 11.23 BST
In his budget this week, Alastair Darling laid bare the rocky ride ahead for the British economy. He forecast that GDP would drop by 3.5% in 2009. There has been worse economic news from the rest of the world. In the last three months of 2008, the US economy contracted at an annualised rate of 6.2% - the fastest since 1982.
But does this vast economic cloud have a silver (or perhaps green-tinged) lining? As economist Alex Bowen and the New Economic Foundation's Andrew Simms have pointed out, greenhouse gas emissions tend to track GDP. So a 3.5% fall in the UK's GDP leads roughly to a 3.15% fall in CO2 emissions. That would help the UK government reach its commitment to cut carbon emissions by 34% by 2020.
The notion of GDP matching emissions was supported by new research this week from analysts Cambridge Econometrics, which said the recession will cause CO2 emissions to fall by 3% in both 2009 and 2010.
But such dips in GDP may not seriously affect emissions in the long term. On Tuesday, the US National Oceanic and Atmospheric Administration (NOAA) reminded us that atmospheric concentrations of greenhouse gases CO2 and methane were both up in 2008, despite the economic slump.
The NOAA data is hardly surprising. CO2 emissions have grown over 2% a year since the beginning of the industrial age, and around 2.5% for each of the past five years.
Judging from Cambridge Econometrics' numbers, it appears history will view the recession as a blip in rising CO2 levels. Its figures say that even if the UK economy suffers a very deep recession - based on a 4% decline in GDP this year, and 0.9% next year - the UK will still emit 131 million tonnes of carbon in 2015. That's still a considerable global warming contribution, even compared with the 148 million tonnes of carbon the UK emitted in 2007.
And, as the Cambridge Econometrics team notes, any drop in CO2 from the UK isn't just because factories are using less energy. Recent emissions falls are mainly due to the switch from coal to gas-powered power plants, which are less carbon intensive. So if gas falls out of favour - Russia switches off the pipes or gas prices rise again, for example - it'll be imperative the government sticks to its promise to only approve future coal power plants with carbon capture and storage technology. If it reneges on the promise, that 2015 figure of 131 million tonnes of carbon is likely to go up.
Some experts, however, argue that the recession could have a serious effect on CO2 - if the slump goes on long enough.
Terry Barker, the director at the Cambridge Centre for Climate Change Mitigation Research , says emissions in the Great Depression fell by 35% between 1929 and 1932, and he predicts greater falls for what he calls the 21st Century Greater Depression. He believes this downturn is more severe than economists realise and late last year told me we'll "see 40-50% CO2 emission falls globally between now and 2012".
Barker's is a fringe position, but NOAA reminds us that, historically, the "carbon dioxide record isn't immune to temporary dips lasting several years or more. A slowdown occurred in 1930–36 after the Great Depression and again during the 1940s, possibly because of World War II."
But saving ourselves from runaway climate change by decreasing economic activity that results in people losing their jobs and homes is neither desirable, or likely.
Even the finanical analysts predicting dramatic 4% falls in UK GDP this year reckon the UK economy will see only a 0.3% contraction in 2010. Cambridge Econometrics forecasts that UK GDP will then grow by 1.8% in 2011, and 2.5% in 2012. Which means, based on our GDP and emissions rule of thumb, we'll be back up to emissions growth of around 2.25%. In other words, business as usual.
Jetion’s pre-tax profits quadruple
By David Blackwell
Published: April 25 2009 04:51
Jetion Holdings, the solar cell manufacturer based in China’s Jiangsu province, quadrupled pre-tax profits last year after doubling its production lines to four. Profits rose to $20.1m on sales up from $104m to $250m.
Gabriel Kow, chairman, said the first nine months of the year had proved strong, but described the fourth quarter as “turbulent”. Because of the credit crunch customers had cancelled orders, and there had been some destocking. At the same time the company had to write-off more than $1m on silicon stocks after a fall in prices.
But Jetion had improved its product and reduced its scrap rate, and also ended the year with $4m cash. It was expecting to come out of the downturn stronger than its competitors.
Most of its sales are made in Europe, particularly Germany. However last month its products were certified for the US and Canadian markets, and it is expecting 10 per cent of sales this year to go to North America.
The shares, priced at 151p when it joined Aim in July 2007, have recovered from a low of 25p at the turn of the year. They closed Friday up 22 per cent at 68p.
Copyright The Financial Times Limited 2009
Published: April 25 2009 04:51
Jetion Holdings, the solar cell manufacturer based in China’s Jiangsu province, quadrupled pre-tax profits last year after doubling its production lines to four. Profits rose to $20.1m on sales up from $104m to $250m.
Gabriel Kow, chairman, said the first nine months of the year had proved strong, but described the fourth quarter as “turbulent”. Because of the credit crunch customers had cancelled orders, and there had been some destocking. At the same time the company had to write-off more than $1m on silicon stocks after a fall in prices.
But Jetion had improved its product and reduced its scrap rate, and also ended the year with $4m cash. It was expecting to come out of the downturn stronger than its competitors.
Most of its sales are made in Europe, particularly Germany. However last month its products were certified for the US and Canadian markets, and it is expecting 10 per cent of sales this year to go to North America.
The shares, priced at 151p when it joined Aim in July 2007, have recovered from a low of 25p at the turn of the year. They closed Friday up 22 per cent at 68p.
Copyright The Financial Times Limited 2009
Green funds set to enjoy increased investment
By Alice Ross
Published: April 24 2009 19:22
Investors in green investment funds are set to receive a boost from what Alistair Darling called the world’s “first-ever carbon Budget”.
The Budget committed the government to cutting carbon emissions by 34 per cent by 2020. Previous promises to cut emissions have been targets, rather than legally binding.
Fund managers said this would give businesses clear targets for cutting emissions and make growth in renew-able technologies more likely.
Ben Yearsley at Hargreaves Lansdown said the extra investment might mean there were opportunities for investors to make money.
Funds that invest in renewable energy struggled in 2008, with many losing a third of their value as companies in the sector found it difficult to attract funding.
But, with governments around the world channelling money into developing clean technologies, fund managers are hopeful that green investing could flourish again – though they stress it should be seen as a long-term investment.
Simon Webber, manager of the Schroder Climate Change fund, said the measures announced in the Budget were “definitely a step in the right direction”.
Offshore wind will be a particular beneficiary of the extra funding, with £525m channelled towards the expensive technology.
A further £405m will go towards low carbon energy, while £435m will provide extra investment in energy efficiency measures.
Webber has been more positive on wind energy holdings in recent months, adding to his portfolio from the end of December.
“The credit crunch and lack of project financing has really slowed growth in the wind area – we’ve needed a response from governments and that will start to oil the cogs of investment again,” he said.
Charlie Thomas, manager of Jupiter’s £270m Ecology fund, said the wind investment should open up opportunities for wind power holdings such as Vestas.
Industrial gas companies are also set to benefit from the focus on carbon storage.
Webber said the extra funding could be a “great opportunity” for gas handlers such as Linde, the German company.
The Schroder Climate Change fund launched in the UK in September 2007. It has lost 21.5 per cent since then, compared with a 27.6 fall in its benchmark, the MSCI World Index.
Jupiter Ecology has lost 6.5 per cent so far this year and last year lost nearly a quarter of its value.
Thomas said companies in his portfolio including Eaga and Kingspan should benefit from the new energy efficiency funding.
He said governments were showing “unprecedented support” for green investors, making it “an exciting long- term opportunity”.
But an initial note of caution on the Budget proposals was also sounded. Emma Howard Boyd, head of socially responsible investing (SRI) at Jupiter, said: “We need more details on how the carbon budgets will work to fully assess the opportunities they will present for green investment.”
Other specialist investors are set to get a boost from changes to venture capital schemes announced in this week’s Budget.
People who put money into an enterprise investment scheme (EIS) – a direct investment into an unquoted company – will be allowed to “carry back” more of their tax relief to the previous tax year.
They will now be able to claim the tax relief of 20 per cent allowed for an EIS investment – on investments up to £500,000 – for the previous tax year the investment is made.
The changes could benefit people earning nothing in the current tax year – for example those who have retired or are not taking an income from their business, according to Paula Higgleton at Deloitte.
Copyright The Financial Times Limited 2009
Published: April 24 2009 19:22
Investors in green investment funds are set to receive a boost from what Alistair Darling called the world’s “first-ever carbon Budget”.
The Budget committed the government to cutting carbon emissions by 34 per cent by 2020. Previous promises to cut emissions have been targets, rather than legally binding.
Fund managers said this would give businesses clear targets for cutting emissions and make growth in renew-able technologies more likely.
Ben Yearsley at Hargreaves Lansdown said the extra investment might mean there were opportunities for investors to make money.
Funds that invest in renewable energy struggled in 2008, with many losing a third of their value as companies in the sector found it difficult to attract funding.
But, with governments around the world channelling money into developing clean technologies, fund managers are hopeful that green investing could flourish again – though they stress it should be seen as a long-term investment.
Simon Webber, manager of the Schroder Climate Change fund, said the measures announced in the Budget were “definitely a step in the right direction”.
Offshore wind will be a particular beneficiary of the extra funding, with £525m channelled towards the expensive technology.
A further £405m will go towards low carbon energy, while £435m will provide extra investment in energy efficiency measures.
Webber has been more positive on wind energy holdings in recent months, adding to his portfolio from the end of December.
“The credit crunch and lack of project financing has really slowed growth in the wind area – we’ve needed a response from governments and that will start to oil the cogs of investment again,” he said.
Charlie Thomas, manager of Jupiter’s £270m Ecology fund, said the wind investment should open up opportunities for wind power holdings such as Vestas.
Industrial gas companies are also set to benefit from the focus on carbon storage.
Webber said the extra funding could be a “great opportunity” for gas handlers such as Linde, the German company.
The Schroder Climate Change fund launched in the UK in September 2007. It has lost 21.5 per cent since then, compared with a 27.6 fall in its benchmark, the MSCI World Index.
Jupiter Ecology has lost 6.5 per cent so far this year and last year lost nearly a quarter of its value.
Thomas said companies in his portfolio including Eaga and Kingspan should benefit from the new energy efficiency funding.
He said governments were showing “unprecedented support” for green investors, making it “an exciting long- term opportunity”.
But an initial note of caution on the Budget proposals was also sounded. Emma Howard Boyd, head of socially responsible investing (SRI) at Jupiter, said: “We need more details on how the carbon budgets will work to fully assess the opportunities they will present for green investment.”
Other specialist investors are set to get a boost from changes to venture capital schemes announced in this week’s Budget.
People who put money into an enterprise investment scheme (EIS) – a direct investment into an unquoted company – will be allowed to “carry back” more of their tax relief to the previous tax year.
They will now be able to claim the tax relief of 20 per cent allowed for an EIS investment – on investments up to £500,000 – for the previous tax year the investment is made.
The changes could benefit people earning nothing in the current tax year – for example those who have retired or are not taking an income from their business, according to Paula Higgleton at Deloitte.
Copyright The Financial Times Limited 2009
Friday, 24 April 2009
Greenwash: The dream of the first eco-city was built on a fiction
Dongtan in Shanghai was to be a model for the world by 2010, but after lots of grand promises, the old entrenched ways mean little has happened
Fred Pearce
guardian.co.uk, Thursday 23 April 2009 14.59 BST
Three years ago, I crossed the world to see it: the site for the world's first eco-city. Shanghai, one of the fastest growing megacities on the planet, was setting aside a giant island in the Yangtze river to create an eco-city for half a million people.
British eco-engineers and green-minded architects and town planners were designing the renewably powered, car-free, water-recycling city of Dongtan as a model for the world. And its first 25,000 citizens would be living the good life there in time for the Shanghai World Expo in 2010, at which it would be by far the largest exhibit, reached by a new tunnel and bridge.
Well, it is now exactly a year until the start of the Expo. The tunnel and bridge are about to open. But of the eco-city there is nothing except half a dozen wind turbines and an organic farm. No houses, no water taxis, no sewage-recycling plant, no energy park. Nothing. And all mentioned of it has disappeared from the Expo website (slogan: "Better city; better life").
This week, Peter Head, the man behind the project at the London-based consulting engineers Arup, who drew up the master plan, told me his clients at the city's Shanghai Industrial Investment Company had "gone quiet. We just don't know if anything will happen or when. The project office is shut."
There is a persistent rumour that the project has been a casualty of the political fallout from the conviction of the city boss Chen Liangyu, jailed last year for corruption. Not so, says Head. The problems are more fundamental.
"China does everything by the rules handed down from the top. There is a rule for everything. The width of roads, everything. That is how they have developed so fast, by being totally prescriptive. We wanted to change the rules in Dongtan, to do everything different. But when it comes to it, China cannot deliver that."
It's a bit like greening the planet. Lots of grand promises, but in the end the old entrenched ways mean little happens. Greenwash, in other words.
Shanghai milked the media well during the heyday of the planning. Searching for Dongtan on Google, there are around 177,000 hits. Almost all of them are built on a fiction: that the city fathers in Shanghai actually intended to do things differently on Chongming Island. That they really saw Arup's expensively produced Dongtan masterplan as a blueprint for a more sustainable future. They didn't. Not when it came to it.
Tony Blair signed the deal to design and build Dongtan with Chinese president Hu Jin-tao. His deputy, John Prescott, went there twice. So did Britain's top urban planner, Peter Hall, and the London mayor Ken Livingstone, who wanted ideas for greening his urban landscape.
British academics carried out energy audits aimed at giving Dongtan's future citizens an ecological footprint a quarter that of other Shanghai citizens.
But they and Arup were hoodwinked as much as anyone. People like Head, whose commitment to the project was total, could have been planning other things that might have got off the drawing board. Their time was wasted.
The SIIC director, Ma Cheng Liang, the man in charge of the project, told me in early 2006: "We need to reduce our ecological footprint. Dongtan is very significant for Shanghai and the nation." He explained how, the Dongtan blueprint would prevent urban sprawling taking over the 100-kilometre long Chongming Island after the bridge was finished. "We want to skip traditional industrialisation in favour of ecological modernism. Dongtan is a chance to develop new ways of living."
Did he ever mean it? I don't know. Is it all over? Probably. With the new bridge providing easy access to Shanghai's Pudong business district, the island's western end, where Dongtan was planned, will soon be taken over by high-rise, high-footprint apartments. The first are already under construction.
We all wasted our time; burned carbon flying to Shanghai to relay a false prospectus to the world. If I sound bitter, I am. This time, I was a personal victim of greenwash.
• Do you know of any green claims that deserve closer examination? Email your examples to greenwash@guardian.co.uk or add your comments below
Fred Pearce
guardian.co.uk, Thursday 23 April 2009 14.59 BST
Three years ago, I crossed the world to see it: the site for the world's first eco-city. Shanghai, one of the fastest growing megacities on the planet, was setting aside a giant island in the Yangtze river to create an eco-city for half a million people.
British eco-engineers and green-minded architects and town planners were designing the renewably powered, car-free, water-recycling city of Dongtan as a model for the world. And its first 25,000 citizens would be living the good life there in time for the Shanghai World Expo in 2010, at which it would be by far the largest exhibit, reached by a new tunnel and bridge.
Well, it is now exactly a year until the start of the Expo. The tunnel and bridge are about to open. But of the eco-city there is nothing except half a dozen wind turbines and an organic farm. No houses, no water taxis, no sewage-recycling plant, no energy park. Nothing. And all mentioned of it has disappeared from the Expo website (slogan: "Better city; better life").
This week, Peter Head, the man behind the project at the London-based consulting engineers Arup, who drew up the master plan, told me his clients at the city's Shanghai Industrial Investment Company had "gone quiet. We just don't know if anything will happen or when. The project office is shut."
There is a persistent rumour that the project has been a casualty of the political fallout from the conviction of the city boss Chen Liangyu, jailed last year for corruption. Not so, says Head. The problems are more fundamental.
"China does everything by the rules handed down from the top. There is a rule for everything. The width of roads, everything. That is how they have developed so fast, by being totally prescriptive. We wanted to change the rules in Dongtan, to do everything different. But when it comes to it, China cannot deliver that."
It's a bit like greening the planet. Lots of grand promises, but in the end the old entrenched ways mean little happens. Greenwash, in other words.
Shanghai milked the media well during the heyday of the planning. Searching for Dongtan on Google, there are around 177,000 hits. Almost all of them are built on a fiction: that the city fathers in Shanghai actually intended to do things differently on Chongming Island. That they really saw Arup's expensively produced Dongtan masterplan as a blueprint for a more sustainable future. They didn't. Not when it came to it.
Tony Blair signed the deal to design and build Dongtan with Chinese president Hu Jin-tao. His deputy, John Prescott, went there twice. So did Britain's top urban planner, Peter Hall, and the London mayor Ken Livingstone, who wanted ideas for greening his urban landscape.
British academics carried out energy audits aimed at giving Dongtan's future citizens an ecological footprint a quarter that of other Shanghai citizens.
But they and Arup were hoodwinked as much as anyone. People like Head, whose commitment to the project was total, could have been planning other things that might have got off the drawing board. Their time was wasted.
The SIIC director, Ma Cheng Liang, the man in charge of the project, told me in early 2006: "We need to reduce our ecological footprint. Dongtan is very significant for Shanghai and the nation." He explained how, the Dongtan blueprint would prevent urban sprawling taking over the 100-kilometre long Chongming Island after the bridge was finished. "We want to skip traditional industrialisation in favour of ecological modernism. Dongtan is a chance to develop new ways of living."
Did he ever mean it? I don't know. Is it all over? Probably. With the new bridge providing easy access to Shanghai's Pudong business district, the island's western end, where Dongtan was planned, will soon be taken over by high-rise, high-footprint apartments. The first are already under construction.
We all wasted our time; burned carbon flying to Shanghai to relay a false prospectus to the world. If I sound bitter, I am. This time, I was a personal victim of greenwash.
• Do you know of any green claims that deserve closer examination? Email your examples to greenwash@guardian.co.uk or add your comments below
A Look Into Future Oceans for Shellfish Reasons
Carbon Dioxide, Absorbed by the Seas, Changes the Chemistry of Water and the Growth of Marine Life
By ROBERT LEE HOTZ
In the living laboratory of a submerged volcano, marine biologist Verena Tunnicliffe glimpsed sea creatures trying to survive in acidic oceans.
Carbon dioxide that bubbles up in the sulfur chimneys of the undersea Eifuku volcano near the Pacific's Mariana Islands has turned the water into an acidic broth, with striking effects on sea life. Scientists say the corrosive conditions there offer clues to how rising levels of man-made CO2 in the air could unbalance oceans world-wide.
To her surprise, Dr. Tunnicliffe found that mussel shells she collected at Eifuku were so thin that she and her colleagues could see right through them. The water chemistry made it impossible for the mussels to extract enough calcium carbonate to form a proper covering. Compared with shells of the same species collected in more normal waters, "they were half the thickness and half the weight," she said.
Known as the rain forests of the sea, coral reefs teem with life. Now, scientists say these important habitats are under threat. WSJ's Science Journal columnist Robert Lee Hotz reports.
Recommended Reading
Exploration of life on the undersea volcano Eifuku was reported in "Survival of mussels in extremely acidic waters on a submarine volcano," published in Nature Geoscience.
A team of Australian researchers documented the effects of ocean acidity on plankton shells in "Reduced calcification in modern Southern Ocean planktonic foraminifera."
University of Chicago researchers measured increasing coastal ocean acidity in the Pacific Northwest in The Proceedings of The National Academy of Sciences.
In January, researchers at the Australian Institute of Marine Science measured the impact of ocean acidity on the Great Barrier Reef in "Declining Coral Calcification on the Great Barrier Reef," published in Science.
An international research team calculated the effects on coral reefs of rising CO2 emissions in "Coral reefs may start dissolving when atmospheric CO2 doubles," in Geophysical Research Letters.
An international research effort assessed the impact of CO2 on oceans in "Anthropogenic ocean acidification over the twenty-first century and its impact on calcifying organisms," in Nature.
Researchers systematically calculated the amount of man-made CO2 absorbed by oceans since 1800 in "The Oceanic Sink for Anthropogenic CO2," published in Science.
To live in these inhospitable conditions, the mollusks cannibalized their own shells, leaching from them the carbonate needed to maintain their internal muscle chemistry. "They are dissolving whatever shell they do have," says Dr. Tunnicliffe at the University of Victoria in British Columbia. They manage to survive despite their weakened shells, the scientists speculated, because the water's harsh chemistry is too much for the hard-shell crabs that prey on these mussels elsewhere.
When the mussels die, their wafer-thin shells disintegrate even faster than their soft tissues can decay.
To be sure, the sea chemistry of Eifuku is unusual by any measure. Located on the volcanic rim of the Mariana Trench near the island of Guam, the mollusks live in water pressure 44 times that at the surface, at one of only two spots in the world where CO2 rises from the seabed as a liquid. Dr. Tunnicliffe and her colleagues explored the beds of exotic vent mussels during a 2006 expedition via the sensors of a sturdy deep-sea robotic explorer called Jason-II. They reported their findings last week in the journal Nature Geoscience.
Conditions on the volcanic slopes of Eifuku have been this acidic for millennia, giving these creatures more than enough time to acclimate. But many oceanographers worry that increased CO2 -- likely created by burning fossil fuel -- is changing sea chemistry world-wide more quickly than most marine life can adapt. A host of experiments are underway to assess just how the increased CO2 levels are changing ocean life.
From the rocky inlets of Tatoosh Island in the Pacific Northwest to Australia's Great Barrier Reef, seawater is turning acidic. Mounting evidence suggests plankton, sea urchins, squid, coral and other marine life already find it harder to grow, reproduce and survive. If acidification intensifies, it could ultimately threaten the marine food chain, including commercial fisheries.
Pfister, University of Chicago
Dead mussels along Tatoosh Island in the Pacific Northwest, where seawater acidity has risen faster than expected.
All told, the oceans have absorbed 118 billion tons of carbon in the 200 years since the beginning of the industrial revolution, an international research team led by oceanographer Christopher Sabine at the Pacific Marine Environmental Laboratory in Seattle has calculated. Every second of the day, the oceans absorb an additional 300 tons of CO2 emissions.
In seawater, CO2 forms carbonic acid, steadily lowering the ocean's pH value on a scale used to gauge a liquid's acidity or alkalinity. The number gets lower as a liquid gets more acidic. Fresh milk has a pH of about 6.7; lemon juice has a pH of 2.4 or so. The concern is that quickly falling pH levels could overwhelm a species' chemical stability.
"If CO2 levels in the atmosphere rise, then the oceans become more acidic," says marine ecologist Jon Havenhand of Sweden's University of Gothenburg. "The chemistry is unavoidable."
For at least 600,000 years, the oceans maintained a steady pH of about 8.2, according to levels measured in ancient ice cores that preserve an annual chemical record of times past in the same way that tree rings do. Since 1800, however, the pH of seawater has dropped to 8.1. "The number is small but the change is substantial," says marine biologist Donald Potts at the University of California, Santa Cruz. By the end of this century, the pH of seawater is expected to drop to 7.8 or so.
The change in sea chemistry affects how easily marine creatures can form the calcium carbonate materials for shells and skeletons. "As it gets more acid, they lay down skeletons more slowly and they make a softer skeleton, with less strength," he says.
Last month, President Barack Obama signed a new wilderness law that calls for federal agencies to assess the impact of rising ocean acidity. The measure also authorizes an ocean acidification research program led by the National Oceanic and Atmospheric Administration. Last week, the U.S. Environmental Protection Agency for the first time began weighing the possibility of revising pH standards under the federal Clean Water Act to prevent ocean acidification.
ROV RoPOS, NOAA Exploration Program
High acidity surrounding the undersea Eifuku volcano offers a model of how carbon dioxide might affect marine life elsewhere.
Jacqueline Savitz, a senior scientist at the conservation group Oceana, says regulators should move quickly. Already, coral growth across the Great Barrier Reef has slowed, researchers at the Australian Institute of Marine Science reported in Science earlier this year. The rate at which the corals at 69 reefs across the formation absorb calcium from seawater has declined precipitously in the last 20 years.
In a computer study made public last month, researchers at the Carnegie Institution for Science and the Hebrew University of Jerusalem analyzed conditions at 9,733 reefs around the world and then calculated the impact of CO2 emissions. The scientists found that rising CO2 levels in the atmosphere threaten the reefs' ability to replenish themselves. "If you double the CO2, it's twice as hard for them to build their skeletons," says Carnegie oceanographer Ken Caldeira.
The changing carbon chemistry already is affecting some marine organisms, several new scientific studies show.
Off the coast of Washington state, for example, mussels and barnacles were edged out of traditional beds by more acid-tolerant algae as pH levels plummeted over the past eight years, University of Chicago researchers found. "The acidity was dropping to levels that haven't been expected at all," says Chicago ecologist Timothy Wooten. "We are scrambling to understand what is going on there."
At Gothenburg University, researchers found that more acidic seawater cut fertilization rates among sea urchins by 25%. Some species of shellfish, though, were indifferent to lower pH changes, their tests showed. One mollusk species thrived. So far, there are no other known benefits from the changes.
"It's unpredictable," Dr. Havenhand says.
Australian researchers recently analyzed shells of modern plankton, called foraminifera, which teem by the billions in the Southern Ocean surrounding Antarctica. The scientists compared shells today with those from cores of sea-floor sediments dating back 50,000 years. The modern plankton made shells 30% to 35% lighter than their ancestors, suggesting today's plankton can't get enough calcium carbonate.
Indeed, the plankton now can't build shells as large as those of even a century ago. The change, scientists say, is not part of any natural ocean cycle but due to CO2 from burning fossil fuels over the last 100 years.
"We can actually detect the isotopic signature of CO2 from fossil fuels in the ocean and in the shells of these organisms," says marine geologist William Howard at the Antarctic Climate and Ecosystems Cooperative Research Centre in Hobart, Tasmania, who led the study. "For good or ill, this is where the CO2 is coming from."
Robert Lee Hotz also shares recommended reading on this topic and responds to reader comments at WSJ.com/Currents. Email him at sciencejournal@wsj.com.
Democrats Weigh Break for Utilities in Climate-Change Bill
By GREG HITT and STEPHEN POWER
WASHINGTON -- House Democrats are weighing a plan to give some of the nation's biggest polluters a 10-year cushion from the impact of greenhouse-gas regulations to get a cap-and-trade system in place now.
Under the proposal, electric utilities would get free permits to emit carbon dioxide and other greenhouse gases for as long as ten years, after which they would gradually begin paying. In exchange, utilities would be required to shield consumers and businesses from higher electricity rates during that time. They would also make investments in conservation and renewable energy to lessen the industry's reliance on coal.
"We're going to have some of the money allocated to ratepayers," said House Energy and Commerce Committee Chairman Henry Waxman (D., Calif.) "How much and what percentage, I don't know."
Under the proposal, which is still being negotiated, electric utilities would receive about 40% of the permits allotted under a cap-and-trade program designed to gradually cut carbon-dioxide emissions. That is roughly equivalent to the utility industry's share of such emissions.
Negotiations over free emissions permits reflect the pivotal role centrist business-minded Democrats are playing in the evolving legislation to combat climate change.
Republicans are attacking the House climate bill as a job-killing tax. In response, the bill's main sponsors, Mr. Waxman and Rep. Edward Markey (D., Mass.), are working to shore up support among committee Democrats from the South and industrial Midwest who are worried about hurting their states' economies.
To court the centrists, Mr. Waxman has already added a provision to commit $10 billion over ten years for development of technologies that would allow coal to be burned cleanly. That's important to Virginia Rep. Rick Boucher, a Democrat who represents a coal-producing region and now a key figure in the debate.
Mr. Waxman also agreed to protect such trade-sensitive industries as cement and steel by granting them some permits without cost, the better to compete with rivals in other countries with less stringent rules. The measure is a priority of Rep. Mike Doyle, a Pennsylvania Democrat.
By showing flexibility with House moderates, Mr. Waxman could make his bill more palatable in the Senate, where strong concerns also exist among Democratic centrists. Still, he has by no means locked down the votes of House moderates.
Some economists say giving away permits to electric utilities will artificially suppress price increases in electric bills and undercut incentives for consumers to reduce electricity.
The Waxman-Markey bill aims to cut U.S. greenhouse-gas emissions 20% below 2005 levels by 2020 and 80% by 2050. The proposal would put a cap on the total amount of greenhouse gases emitted by businesses across the economy and allow individual companies to buy and sell permits giving them the right to pollute.
Crucial questions remain, such as which industries will have to pay for pollution permits and how the revenue they generate will be distributed. The bill Mr. Waxman made public a few weeks ago is largely silent on these issues.
Top House Democrats are also considering a proposal to create a second consumer rebate to help lower- and middle-income families offset the higher energy costs of the cap-and-trade program.
"There should be no cost to the consumer," House Speaker Nancy Pelosi (D., Calif.) said Wednesday. She vowed the legislation would "make good on that" pledge.—Ian Talley contributed to this article.
Write to Greg Hitt at greg.hitt@wsj.com and Stephen Power at stephen.power@wsj.com
WASHINGTON -- House Democrats are weighing a plan to give some of the nation's biggest polluters a 10-year cushion from the impact of greenhouse-gas regulations to get a cap-and-trade system in place now.
Under the proposal, electric utilities would get free permits to emit carbon dioxide and other greenhouse gases for as long as ten years, after which they would gradually begin paying. In exchange, utilities would be required to shield consumers and businesses from higher electricity rates during that time. They would also make investments in conservation and renewable energy to lessen the industry's reliance on coal.
"We're going to have some of the money allocated to ratepayers," said House Energy and Commerce Committee Chairman Henry Waxman (D., Calif.) "How much and what percentage, I don't know."
Under the proposal, which is still being negotiated, electric utilities would receive about 40% of the permits allotted under a cap-and-trade program designed to gradually cut carbon-dioxide emissions. That is roughly equivalent to the utility industry's share of such emissions.
Negotiations over free emissions permits reflect the pivotal role centrist business-minded Democrats are playing in the evolving legislation to combat climate change.
Republicans are attacking the House climate bill as a job-killing tax. In response, the bill's main sponsors, Mr. Waxman and Rep. Edward Markey (D., Mass.), are working to shore up support among committee Democrats from the South and industrial Midwest who are worried about hurting their states' economies.
To court the centrists, Mr. Waxman has already added a provision to commit $10 billion over ten years for development of technologies that would allow coal to be burned cleanly. That's important to Virginia Rep. Rick Boucher, a Democrat who represents a coal-producing region and now a key figure in the debate.
Mr. Waxman also agreed to protect such trade-sensitive industries as cement and steel by granting them some permits without cost, the better to compete with rivals in other countries with less stringent rules. The measure is a priority of Rep. Mike Doyle, a Pennsylvania Democrat.
By showing flexibility with House moderates, Mr. Waxman could make his bill more palatable in the Senate, where strong concerns also exist among Democratic centrists. Still, he has by no means locked down the votes of House moderates.
Some economists say giving away permits to electric utilities will artificially suppress price increases in electric bills and undercut incentives for consumers to reduce electricity.
The Waxman-Markey bill aims to cut U.S. greenhouse-gas emissions 20% below 2005 levels by 2020 and 80% by 2050. The proposal would put a cap on the total amount of greenhouse gases emitted by businesses across the economy and allow individual companies to buy and sell permits giving them the right to pollute.
Crucial questions remain, such as which industries will have to pay for pollution permits and how the revenue they generate will be distributed. The bill Mr. Waxman made public a few weeks ago is largely silent on these issues.
Top House Democrats are also considering a proposal to create a second consumer rebate to help lower- and middle-income families offset the higher energy costs of the cap-and-trade program.
"There should be no cost to the consumer," House Speaker Nancy Pelosi (D., Calif.) said Wednesday. She vowed the legislation would "make good on that" pledge.—Ian Talley contributed to this article.
Write to Greg Hitt at greg.hitt@wsj.com and Stephen Power at stephen.power@wsj.com
Reckless 'Endangerment'
The Obama EPA plays 'Dirty Harry' on cap and trade.
President Obama's global warming agenda has been losing support in Congress, but why let an irritant like democratic consent interfere with saving the world? So last Friday the Environmental Protection Agency decided to put a gun to the head of Congress and play cap-and-trade roulette with the U.S. economy.
The pistol comes in the form of a ruling that carbon dioxide is a dangerous pollutant that threatens the public and therefore must be regulated under the 1970 Clean Air Act. This so-called "endangerment finding" sets the clock ticking on a vast array of taxes and regulation that EPA will have the power to impose across the economy, and all with little or no political debate.
This is a momentous decision that has the potential to affect the daily life of every American, yet most of the media barely noticed, and those that did largely applauded. When America's Founders revolted against "taxation without representation," this is precisely the kind of kingly diktat they had in mind.
Michigan Democrat John Dingell helped to write the Clean Air Act, as well as its 1990 revision, and he says neither was meant to apply to carbon. But in 2007 five members of the Supreme Court followed the environmental polls and ordered the EPA to determine if CO2 qualified as a "pollutant." The Bush Administration prudently slow-walked the decision. As Peter Glaser, an environmental lawyer at Troutman Sanders, told Congress in 2008, "The country will experience years, if not decades, of regulatory agony, as EPA will be required to undertake numerous, controversial, time-consuming, expensive and difficult regulatory proceedings, all of which ultimately will be litigated."
The Obama EPA has now opened this Pandora's box. The centerpiece of the Clean Air Act is something called the National Ambient Air Quality Standards, or NAAQS, under which the EPA decides the appropriate atmospheric concentration of a given air pollutant. Under this law the states must adopt measures to meet a NAAQS goal, and the costs cannot be considered. For global warming, this is going to be a hugely expensive futility parade.
Greenhouse gases mix in the atmosphere, and it doesn't matter where they come from. A ton of emissions from Ohio has the same effect on global CO2 as a ton emitted in China; and even if Ohio figured out a way to reduce its emissions to zero, it would still have no control over the carbon content in its ambient air. But under the law, EPA would be required to severely punish Ohio -- and every state -- for not complying with NAAQS.
Under the Clean Air Act, the EPA also must regulate all "major" sources of emissions that emit more than 250 tons of an air pollutant in a year. That includes "any building, structure, facility or installation." This might be a reasonable threshold for conventional pollutants such as SOX or NOX, but it's extremely low for carbon. Hundreds of thousands of currently unregulated sources will suddenly be subject to the EPA's preconstruction permitting and review, including schools, hospitals, malls, restaurants, farms and colleges. According to EPA, the average permit today takes 866 hours for a source to prepare, and 301 hours for EPA to process. So this regulatory burden will increase by several orders of magnitude.
The EPA took the highly unusual step of not accompanying its endangerment finding with actual proposed regulations. For now, EPA Administrator Lisa Jackson claims her agency will only target cars and trucks. That is bad enough. It probably means, for example, that California's mileage fleet burdens will seep out to every other state. So even as taxpayers are now paying tens of billions of dollars to prop up GM and Chrysler, Ms. Jackson will be able to tell the entire auto industry it must make even more small cars that consumers don't want to buy.
Still, why confine the rule only to cars and trucks? By the EPA's own logic, it shouldn't matter where carbon emissions come from. Carbon from a car's tailpipe is the same as carbon from a coal-fired power plant. And transportation is responsible for only 28% of U.S. emissions, versus 34% for electricity generation. Ms. Jackson is clearly trying to limit the immediate economic impact of her ruling, so as not to ignite too great a business or consumer backlash.
But her half-measure is also too clever by half. By finding carbon a public danger, she is inviting lawsuits from environmental lobbies demanding that EPA regulate all carbon sources. Massachusetts and two other states have already sued in federal court to force the EPA to create a NAAQS for CO2.
Which brings us back to the Obama Administration's political roulette. Democrats know that their cap-and-tax agenda is losing ground, notably among Midwestern Senators. The EPA "endangerment" is intended to threaten businesses and state and local governments until they surrender and support the Obama agenda. The car industry is merely the first target, meant to be the object lesson.
Massachusetts Democrat Ed Markey put it this way at MIT recently: "Do you want the EPA to make the decision or would you like your Congressman or Senator to be in the room and drafting legislation? . . . Industries across the country will just have to gauge for themselves how lucky they feel if they kill legislation in terms of how the EPA process will include them."
This "Dirty Harry" theory of governance -- Do you feel lucky? -- is as cynical as it is destructive. And contra Mr. Markey, if cap and tax is killed this year, it will be done in by Democrats, many of whom are starting to realize the economic harm it would inflict. In March, the Senate voted 89 to 8 on a resolution vowing to pass a climate bill only if "such legislation does not increase electricity or gasoline prices."
That's called democracy, but for the Obama Administration such debate is an inconvenient truth. If they can't get Congress to pass their agenda, they'll use EPA and the courts to impose it. How lucky do you feel?
President Obama's global warming agenda has been losing support in Congress, but why let an irritant like democratic consent interfere with saving the world? So last Friday the Environmental Protection Agency decided to put a gun to the head of Congress and play cap-and-trade roulette with the U.S. economy.
The pistol comes in the form of a ruling that carbon dioxide is a dangerous pollutant that threatens the public and therefore must be regulated under the 1970 Clean Air Act. This so-called "endangerment finding" sets the clock ticking on a vast array of taxes and regulation that EPA will have the power to impose across the economy, and all with little or no political debate.
This is a momentous decision that has the potential to affect the daily life of every American, yet most of the media barely noticed, and those that did largely applauded. When America's Founders revolted against "taxation without representation," this is precisely the kind of kingly diktat they had in mind.
Michigan Democrat John Dingell helped to write the Clean Air Act, as well as its 1990 revision, and he says neither was meant to apply to carbon. But in 2007 five members of the Supreme Court followed the environmental polls and ordered the EPA to determine if CO2 qualified as a "pollutant." The Bush Administration prudently slow-walked the decision. As Peter Glaser, an environmental lawyer at Troutman Sanders, told Congress in 2008, "The country will experience years, if not decades, of regulatory agony, as EPA will be required to undertake numerous, controversial, time-consuming, expensive and difficult regulatory proceedings, all of which ultimately will be litigated."
The Obama EPA has now opened this Pandora's box. The centerpiece of the Clean Air Act is something called the National Ambient Air Quality Standards, or NAAQS, under which the EPA decides the appropriate atmospheric concentration of a given air pollutant. Under this law the states must adopt measures to meet a NAAQS goal, and the costs cannot be considered. For global warming, this is going to be a hugely expensive futility parade.
Greenhouse gases mix in the atmosphere, and it doesn't matter where they come from. A ton of emissions from Ohio has the same effect on global CO2 as a ton emitted in China; and even if Ohio figured out a way to reduce its emissions to zero, it would still have no control over the carbon content in its ambient air. But under the law, EPA would be required to severely punish Ohio -- and every state -- for not complying with NAAQS.
Under the Clean Air Act, the EPA also must regulate all "major" sources of emissions that emit more than 250 tons of an air pollutant in a year. That includes "any building, structure, facility or installation." This might be a reasonable threshold for conventional pollutants such as SOX or NOX, but it's extremely low for carbon. Hundreds of thousands of currently unregulated sources will suddenly be subject to the EPA's preconstruction permitting and review, including schools, hospitals, malls, restaurants, farms and colleges. According to EPA, the average permit today takes 866 hours for a source to prepare, and 301 hours for EPA to process. So this regulatory burden will increase by several orders of magnitude.
The EPA took the highly unusual step of not accompanying its endangerment finding with actual proposed regulations. For now, EPA Administrator Lisa Jackson claims her agency will only target cars and trucks. That is bad enough. It probably means, for example, that California's mileage fleet burdens will seep out to every other state. So even as taxpayers are now paying tens of billions of dollars to prop up GM and Chrysler, Ms. Jackson will be able to tell the entire auto industry it must make even more small cars that consumers don't want to buy.
Still, why confine the rule only to cars and trucks? By the EPA's own logic, it shouldn't matter where carbon emissions come from. Carbon from a car's tailpipe is the same as carbon from a coal-fired power plant. And transportation is responsible for only 28% of U.S. emissions, versus 34% for electricity generation. Ms. Jackson is clearly trying to limit the immediate economic impact of her ruling, so as not to ignite too great a business or consumer backlash.
But her half-measure is also too clever by half. By finding carbon a public danger, she is inviting lawsuits from environmental lobbies demanding that EPA regulate all carbon sources. Massachusetts and two other states have already sued in federal court to force the EPA to create a NAAQS for CO2.
Which brings us back to the Obama Administration's political roulette. Democrats know that their cap-and-tax agenda is losing ground, notably among Midwestern Senators. The EPA "endangerment" is intended to threaten businesses and state and local governments until they surrender and support the Obama agenda. The car industry is merely the first target, meant to be the object lesson.
Massachusetts Democrat Ed Markey put it this way at MIT recently: "Do you want the EPA to make the decision or would you like your Congressman or Senator to be in the room and drafting legislation? . . . Industries across the country will just have to gauge for themselves how lucky they feel if they kill legislation in terms of how the EPA process will include them."
This "Dirty Harry" theory of governance -- Do you feel lucky? -- is as cynical as it is destructive. And contra Mr. Markey, if cap and tax is killed this year, it will be done in by Democrats, many of whom are starting to realize the economic harm it would inflict. In March, the Senate voted 89 to 8 on a resolution vowing to pass a climate bill only if "such legislation does not increase electricity or gasoline prices."
That's called democracy, but for the Obama Administration such debate is an inconvenient truth. If they can't get Congress to pass their agenda, they'll use EPA and the courts to impose it. How lucky do you feel?
Global Warming Overreach
By KIMBERLEY A. STRASSEL
Congressman Henry Waxman played to the crowds this week with high-profile hearings designed to boost his climate legislation. To listen to the Energy and Commerce committee chair, a House global warming bill is all but in the recyclable bag.
To listen to Congressman Jim Matheson is something else. During opening statements, the Utah Democrat detailed 14 big problems he had with the bill, and told me later that if he hadn't been limited to five minutes, "I might have had more." Mr. Matheson is one of about 10 moderate committee Democrats who are less than thrilled with the Waxman climate extravaganza, and who may yet stymie one of Barack Obama's signature issues. If so, the president can thank Democratic liberals, who are engaging in one of their first big cases of overreach.
Not that you couldn't see this coming even last year, when Speaker Nancy Pelosi engineered her coup against former Energy chairman John Dingell. House greens had been boiling over the Michigan veteran's cautious approach to climate-legislation. Mr. Dingell's mistake was understanding that when it comes to energy legislation, the divides aren't among parties, but among regions. Design a bill that socks it to all those manufacturing, oil-producing, coal-producing, coal-using states, and say goodbye to the very Democrats necessary to pass that bill.
Such sense didn't deter Mrs. Pelosi, who first tried an end-run around Mr. Dingell in 2007 by putting Massachusetts Rep. Edward Markey in charge of a new global-warming committee. When that didn't get her a bill, she helped her fellow Californian, Mr. Waxman, unseat Mr. Dingell. Environmentalists threw a party, and the Waxman-Markey duo got busy on legislation to please their coastal crowds.
Cap and trade was already going to be a brawl, but the two upped the ante by including tougher targets and restrictions. If that weren't enough, they rolled in every other item on the green wish list: a renewable electricity standard; a low-carbon fuel standard; a broader renewable fuels policy; new efficiency standards. Any one of these is a monumental fight on its own. Put together they risk an intra-party committee mutiny.
There's Mr. Matheson, chair of the Blue Dog energy task force, who has made a political career championing energy diversity and his state's fossil fuels, and who understands Utah is mostly reliant on coal for its electricity needs. He says he sees several ways this bill could result in a huge "income transfer" from his state to those less fossil-fuel dependent. Indiana Democrat Baron Hill has a similar problem; not only does his district rely on coal, it is home to coal miners. Rick Boucher, who represents the coal-fields of South Virginia, knows the feeling.
Or consider Texas's Gene Green and Charles Gonzalez, or Louisiana's Charlie Melancon, oil-patch Dems all, whose home-district refineries would be taxed from every which way by the bill. Mr. Dingell remains protective of his district's struggling auto workers, which would be further incapacitated by the bill. Pennsylvania's Mike Doyle won't easily throw his home-state steel industry over a cliff.
Add in the fact that a number of these Democrats hail from districts that could just as easily be in Republicans' hands. They aren't eager to explain to their blue-collar constituents the costs of indulging Mrs. Pelosi's San Francisco environmentalists. Remember 1993, when President Bill Clinton proposed an energy tax on BTUs? The House swallowed hard and passed the legislation, only to have Senate Democrats kill it; a year later, Newt Gingrich was in charge. With Senate Democrats already backing away from the Obama cap-and-trade plans, at least a few House Dems are reluctant to walk the plank.
Rumors were in fact flying earlier this week that Mr. Markey might have to postpone next week's subcommittee markup. For now, he and Mr. Waxman are busy trying to buy or arm-twist votes. They have some potent tools, in particular the enticement of giving some carbon-emission permits away for free, or allocating them to specific industries. Yet having set expectations so high, the duo risk losing liberal members if they give away too much.
The Obama team is aware it has trouble, which explains last week's well-timed Environmental Protection Agency "finding" that carbon is a danger. The administration is now using this as a stick to beat Congress to act, arguing that if it doesn't the EPA will. (Reality: Any EPA actions will be tied up in court for years.) It also helps explain EPA's Monday analysis claiming the legislation won't cost all that much. (Reality: The agency could only make this claim by assuming an endless recession.)
The real risk to the president is that his bill goes down at the hands of his own party -- with nary a Republican to blame. Whether Mrs. Pelosi and Mr. Waxman considered this as they crafted their gem is unclear. But the overreach has made it a possibility now.
Write to kim@wsj.com
Congressman Henry Waxman played to the crowds this week with high-profile hearings designed to boost his climate legislation. To listen to the Energy and Commerce committee chair, a House global warming bill is all but in the recyclable bag.
To listen to Congressman Jim Matheson is something else. During opening statements, the Utah Democrat detailed 14 big problems he had with the bill, and told me later that if he hadn't been limited to five minutes, "I might have had more." Mr. Matheson is one of about 10 moderate committee Democrats who are less than thrilled with the Waxman climate extravaganza, and who may yet stymie one of Barack Obama's signature issues. If so, the president can thank Democratic liberals, who are engaging in one of their first big cases of overreach.
Not that you couldn't see this coming even last year, when Speaker Nancy Pelosi engineered her coup against former Energy chairman John Dingell. House greens had been boiling over the Michigan veteran's cautious approach to climate-legislation. Mr. Dingell's mistake was understanding that when it comes to energy legislation, the divides aren't among parties, but among regions. Design a bill that socks it to all those manufacturing, oil-producing, coal-producing, coal-using states, and say goodbye to the very Democrats necessary to pass that bill.
Such sense didn't deter Mrs. Pelosi, who first tried an end-run around Mr. Dingell in 2007 by putting Massachusetts Rep. Edward Markey in charge of a new global-warming committee. When that didn't get her a bill, she helped her fellow Californian, Mr. Waxman, unseat Mr. Dingell. Environmentalists threw a party, and the Waxman-Markey duo got busy on legislation to please their coastal crowds.
Cap and trade was already going to be a brawl, but the two upped the ante by including tougher targets and restrictions. If that weren't enough, they rolled in every other item on the green wish list: a renewable electricity standard; a low-carbon fuel standard; a broader renewable fuels policy; new efficiency standards. Any one of these is a monumental fight on its own. Put together they risk an intra-party committee mutiny.
There's Mr. Matheson, chair of the Blue Dog energy task force, who has made a political career championing energy diversity and his state's fossil fuels, and who understands Utah is mostly reliant on coal for its electricity needs. He says he sees several ways this bill could result in a huge "income transfer" from his state to those less fossil-fuel dependent. Indiana Democrat Baron Hill has a similar problem; not only does his district rely on coal, it is home to coal miners. Rick Boucher, who represents the coal-fields of South Virginia, knows the feeling.
Or consider Texas's Gene Green and Charles Gonzalez, or Louisiana's Charlie Melancon, oil-patch Dems all, whose home-district refineries would be taxed from every which way by the bill. Mr. Dingell remains protective of his district's struggling auto workers, which would be further incapacitated by the bill. Pennsylvania's Mike Doyle won't easily throw his home-state steel industry over a cliff.
Add in the fact that a number of these Democrats hail from districts that could just as easily be in Republicans' hands. They aren't eager to explain to their blue-collar constituents the costs of indulging Mrs. Pelosi's San Francisco environmentalists. Remember 1993, when President Bill Clinton proposed an energy tax on BTUs? The House swallowed hard and passed the legislation, only to have Senate Democrats kill it; a year later, Newt Gingrich was in charge. With Senate Democrats already backing away from the Obama cap-and-trade plans, at least a few House Dems are reluctant to walk the plank.
Rumors were in fact flying earlier this week that Mr. Markey might have to postpone next week's subcommittee markup. For now, he and Mr. Waxman are busy trying to buy or arm-twist votes. They have some potent tools, in particular the enticement of giving some carbon-emission permits away for free, or allocating them to specific industries. Yet having set expectations so high, the duo risk losing liberal members if they give away too much.
The Obama team is aware it has trouble, which explains last week's well-timed Environmental Protection Agency "finding" that carbon is a danger. The administration is now using this as a stick to beat Congress to act, arguing that if it doesn't the EPA will. (Reality: Any EPA actions will be tied up in court for years.) It also helps explain EPA's Monday analysis claiming the legislation won't cost all that much. (Reality: The agency could only make this claim by assuming an endless recession.)
The real risk to the president is that his bill goes down at the hands of his own party -- with nary a Republican to blame. Whether Mrs. Pelosi and Mr. Waxman considered this as they crafted their gem is unclear. But the overreach has made it a possibility now.
Write to kim@wsj.com
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