Ben Webster, Environment Editor
Twelve million low-energy light bulbs were posted to households over Christmas by an energy company as part of its legal obligation to cut carbon emissions, despite government advice that many would never be used.
Npower sent out the packages last month to escape a ban on issuing unsolicited bulbs, which came into force yesterday. The German-owned company saved millions of pounds by giving away the bulbs. Alternative ways of meeting its obligation, such as insulating homes, are much more effective but up to seven times more expensive.
It faced a fine of more than £40 million, or 10 per cent of its turnover, if it failed to meet its target for improving efficiency in homes under the carbon emissions reduction target scheme.
Households have received more than 180 million free or subsidised low-energy bulbs in the past 18 months. A survey in July by the Energy Saving Trust found that the average home had six unused ones lying in drawers and cupboards.
In 2008 the Government ordered the big energy companies to invest in measures for improving energy efficiency and cutting fuel poverty.
Companies can choose how to meet their obligations. Each measure they fund is given a score for the lifetime carbon savings that it achieves.
The scheme made assumptions about the usage of light bulbs that turned out to be wildly optimistic.
Companies were allowed to register immediate carbon savings from every bulb issued on the assumption that all recipients instantly installed them in some of their most intensively used light sockets. In reality, many people either stored the bulbs or threw them away, often because they were the wrong fitting or wattage.
The companies can also meet their obligations by paying for homes to be insulated. This guarantees energy savings but is much more expensive.
According to the latest government estimates, each low-energy bulb costs an energy company £2.97 and saves 0.04 tonnes of carbon over its lifetime. Insulating the external solid walls of a three-bedroom semi-detached house costs £8,760 and saves 18.08 tonnes. A company can achieve the same score of 18.08 tonnes by posting 452 bulbs, costing only £1,342.
In the first 18 months of the scheme, companies issued 182 million bulbs but insulated only 17,000 solid-wall homes. Britain has 6.6 million solid-wall homes requiring insulation.
Companies can pass on all the costs of the scheme to their customers. Over three years it is expected to add more than £100 to the average household’s energy bills.
The Department of Energy and Climate Change quietly admitted in June that the scheme was flawed and resulting in significant wastage.
In a paragraph buried in a 30-page “impact assessment”, the department said: “Government is increasingly concerned that the number of lamps already distributed has been so high that it may work out at more than the average number of highest-use light fittings in a house.
“As such, there is an increasing risk to carbon savings under the scheme where lamps are not used, are installed on low-use light fittings, or replace existing [low-energy bulbs].”
It said that direct mailouts of bulbs would be banned from January 1, 2010, allowing six months for companies to wind down their schemes.
Npower, which had a turnover of £427 million in 2008, initially focused on home insulation but was named a few months ago as the energy supplier that was farthest from achieving its green energy target. Companies that fail to meet their obligations by 2011 will be fined up to 10 per cent of their turnover.
It began posting 12 million bulbs on November 27, five months after the ban had been announced and just as the postal system was struggling to cope with the volume of Christmas mail.
A spokeswoman for the energy company said that the scheme was designed to be completed on New Year’s Eve, hours before the ban came into force at midnight.
She admitted that Npower did not know how many of the bulbs would be used. “There is nothing under [the carbon emissions reduction target scheme] that means we have to get evidence that bulbs are being used. It’s up to the customer,” she said.
Saturday, 2 January 2010
Green technology to be used by top firms to overhaul UK homes
• Sustainability scheme could create tens of thousands of jobs • 'Retrofitting' homes could make Britain a pioneer in field
Nick Mathiason
guardian.co.uk, Friday 1 January 2010 18.32 GMT
Some of Britain's leading firms are partnering top academic institutions to develop projects that will overhaul household energy, water, transport and waste provision to drastically cut carbon emissions.
The groundbreaking partnership, led by Arup's global planning chief, Peter Head, involves 25 international companies including GE (the world's biggest company, according to Forbes). HSBC, French energy firm EDF, Thames Water, Marks & Spencer and waste management firm Biffa are also behind the plan.
Politicians and regulators are calling for a "green new deal" to help lift the economy out of recession. "Green industries alone could support a further half a million jobs over the next decade," Alistair Darling wrote in the Guardian last week.
The companies involved hope that in five years their work could create tens of thousands of jobs and push Britain into the vanguard of environmental technology. They are working with Imperial College and University College London to "retrofit" hundreds of thousands of homes, using the latest clean technology to transform energy and water efficiency.
Head, who will become chairman of a new charity, the Thames Gateway Institute of Sustainability, said: "We want to connect new developments with retrofitting technology combining energy, water and waste, improvements to recycling and the introduction of electric cars and better cycling facilities… there are tremendous advantages and business opportunities."
The "retrofitting" of Britain is the focus of the new institute, which will open a research centre this year in Dagenham, east London, as part of a 24-hectare sustainable technology business park. The centre will focus on green technology breakthroughs that can be cheaply "scaled up" to industrial proportions. "We need to move to a new industrial model. And we genuinely need this institute to power demonstration projects," said Head.
Part of the plan is to develop new financing for green projects and the group is in advanced talks with pension funds. Financiers at international investment bank Sustainable Development Capital want to see part of household and business energy and water bills ringfenced in a special fund for green developments that will be matched by pension funds.
The plan aims to take advantage of savings for firms when consumers use less energy. It implies households utility bills will not come down in spite of the savings envisaged from the scheme. The model assumes that it will cost £1bn to convert 200,000 new homes, into which communities will be divided. They could then see their neighbourhoods converted street-by-street into sustainable communities complete with energy-from-waste facilities, electric car power points and advanced water capture technology.
The Institute of Sustainability has been building up for a year as a shadow operation but has now completed the formation of a 12-strong board. Other than Head, it includes Professor Malcolm Grant, president and provost of UCL, and Keith Riley, managing director of Veolia Environmental Services. Ian Short, deputy chief executive at the London Thames Gateway Development Corporation, will be the Institute's interim chief executive.
Focusing on close-to-market environmental technology projects that are now ready to be applied on housing developments, the institute will use the huge building programme on the Thames Gateway – a 40-mile ribbon of land either side of the Thames in east London, where tens of thousands of new homes are planned – to be its worldwide showcase. Two major housing developments in north Kent are likely to be pilots for the new plan.
It will also draw on lessons learned from the 2012 east London Olympics, where a number of facilities are using the latest environmental technology to reduce emissions as well as a "soil hospital" to clean and re-use contaminated soil.
Head was the principal planning adviser on the Chinese sustainable city project at Dongtan. Though the project has stalled for internal political reasons, it has inspired the launch of the new institute in Britain, which is forging links with the Chinese authorities in what Head hopes will provide huge business opportunities.
Nick Mathiason
guardian.co.uk, Friday 1 January 2010 18.32 GMT
Some of Britain's leading firms are partnering top academic institutions to develop projects that will overhaul household energy, water, transport and waste provision to drastically cut carbon emissions.
The groundbreaking partnership, led by Arup's global planning chief, Peter Head, involves 25 international companies including GE (the world's biggest company, according to Forbes). HSBC, French energy firm EDF, Thames Water, Marks & Spencer and waste management firm Biffa are also behind the plan.
Politicians and regulators are calling for a "green new deal" to help lift the economy out of recession. "Green industries alone could support a further half a million jobs over the next decade," Alistair Darling wrote in the Guardian last week.
The companies involved hope that in five years their work could create tens of thousands of jobs and push Britain into the vanguard of environmental technology. They are working with Imperial College and University College London to "retrofit" hundreds of thousands of homes, using the latest clean technology to transform energy and water efficiency.
Head, who will become chairman of a new charity, the Thames Gateway Institute of Sustainability, said: "We want to connect new developments with retrofitting technology combining energy, water and waste, improvements to recycling and the introduction of electric cars and better cycling facilities… there are tremendous advantages and business opportunities."
The "retrofitting" of Britain is the focus of the new institute, which will open a research centre this year in Dagenham, east London, as part of a 24-hectare sustainable technology business park. The centre will focus on green technology breakthroughs that can be cheaply "scaled up" to industrial proportions. "We need to move to a new industrial model. And we genuinely need this institute to power demonstration projects," said Head.
Part of the plan is to develop new financing for green projects and the group is in advanced talks with pension funds. Financiers at international investment bank Sustainable Development Capital want to see part of household and business energy and water bills ringfenced in a special fund for green developments that will be matched by pension funds.
The plan aims to take advantage of savings for firms when consumers use less energy. It implies households utility bills will not come down in spite of the savings envisaged from the scheme. The model assumes that it will cost £1bn to convert 200,000 new homes, into which communities will be divided. They could then see their neighbourhoods converted street-by-street into sustainable communities complete with energy-from-waste facilities, electric car power points and advanced water capture technology.
The Institute of Sustainability has been building up for a year as a shadow operation but has now completed the formation of a 12-strong board. Other than Head, it includes Professor Malcolm Grant, president and provost of UCL, and Keith Riley, managing director of Veolia Environmental Services. Ian Short, deputy chief executive at the London Thames Gateway Development Corporation, will be the Institute's interim chief executive.
Focusing on close-to-market environmental technology projects that are now ready to be applied on housing developments, the institute will use the huge building programme on the Thames Gateway – a 40-mile ribbon of land either side of the Thames in east London, where tens of thousands of new homes are planned – to be its worldwide showcase. Two major housing developments in north Kent are likely to be pilots for the new plan.
It will also draw on lessons learned from the 2012 east London Olympics, where a number of facilities are using the latest environmental technology to reduce emissions as well as a "soil hospital" to clean and re-use contaminated soil.
Head was the principal planning adviser on the Chinese sustainable city project at Dongtan. Though the project has stalled for internal political reasons, it has inspired the launch of the new institute in Britain, which is forging links with the Chinese authorities in what Head hopes will provide huge business opportunities.
Government must 'green economy and create jobs' FSA chief says
• Lord Turner champions environmental taxes• Investment in renewable energy would boost employment
Ashley Seager
guardian.co.uk, Friday 1 January 2010
Adair Turner, the outspoken head of the City regulator, believes that, whichever party wins the next election, the government should embark on a tax and spend programme to green the economy and create jobs.
Lord Turner, head of the Financial Services Authority, created a stir last year when he said that much of the City's activities were "socially useless". He could find himself on a collision course with the Conservatives, who have pledged to take an axe to public spending immediately after the election, if they win it.
"If we have to raise taxes – and we will to some extent – we can deliberately design those to tax bad environmental things, like overuse of fossil fuels, rather than good welfare-enhancing things, like employment for people," says Turner, who also heads the government's committee on climate change, in an interview with BBC Radio 4 to be broadcast tonight.
"There is therefore a very strong argument whenever one is in the environment of tax rises for trying to make them skewed as much as possible to things that make sense in the long-term."
He goes on to say that spending should be carefully targeted, rather than cut sharply. "In the expenditure side, obviously it is the case that some expenditures are particularly valuable at this time in the cycle, in particular ones where the leakage into imports is least.
"So, things like insulating peoples' homes [thereby] employing people from the construction industry, which has been hit particularly hard by the recession."
Turner's comments echo those of the chancellor, Alistair Darling, who wrote in the Guardian that green industries as a whole could add half a million jobs to the economy. He added that the Conservatives' plans to reduce the budget deficit "further and faster" than Labour could wreck the economic recovery.
On the World Tonight programme, Turner will also tell Andrew Simms, of the New Economics Foundation, that when it comes to investing in the low-carbon and energy-saving technologies of tomorrow, the government may have to take a direct role because the market cannot be relied upon to deliver what is needed.
"I don't think we should exclude the possibility ... that we may need to think about whether we need more direct, public supported or investments in low-carbon electricity generation if we find that the market isn't directly delivering that," Turner says.
"So concepts like investment banks or elements of guarantee, or particular categories of bond finance, I think are within the set of things that we should think about."
Turner's ideas chime with those of the NEF, which, with other campaigners, has been calling for a "Green New Deal", to push huge investments into renewables and energy-saving technologies, which it says would create thousands of jobs and boost tax receipts, as well as saving billions of pounds in imports of carbon energy sources, such as coal and gas.
In a report last month, the group argued that the fledgling economic recovery in Britain was supported only by low interest rates and a fiscal easing, and would tip back into recession this year (2010) if public spending is slashed in response to the government's ballooning budget deficit.
If £10bn of the Bank of England's £200bn of quantitative easing were invested in offshore wind energy, it could easily create over 100,000 new jobs, the group says.
Turner says he is concerned that the swing during the 1970s and 1980s towards the idea the private sector would always deliver outcomes better and cheaper than the public sector, which he used to agree with, had gone too far.
Turner adds that the government should avoid pursuing economic growth. "If you spend your time thinking that the most important objective of public policy is to get growth up from 1.9% to 2% and even better 2.1% we're pursuing a sort of false god.
"We're pursuing it, first of all, because if we accept that we will do things to the climate that will be harmful, but also because all the evidence shows that beyond the sort of standard of living which Britain has now achieved, extra growth does not automatically translate into human welfare and happiness."
Ashley Seager
guardian.co.uk, Friday 1 January 2010
Adair Turner, the outspoken head of the City regulator, believes that, whichever party wins the next election, the government should embark on a tax and spend programme to green the economy and create jobs.
Lord Turner, head of the Financial Services Authority, created a stir last year when he said that much of the City's activities were "socially useless". He could find himself on a collision course with the Conservatives, who have pledged to take an axe to public spending immediately after the election, if they win it.
"If we have to raise taxes – and we will to some extent – we can deliberately design those to tax bad environmental things, like overuse of fossil fuels, rather than good welfare-enhancing things, like employment for people," says Turner, who also heads the government's committee on climate change, in an interview with BBC Radio 4 to be broadcast tonight.
"There is therefore a very strong argument whenever one is in the environment of tax rises for trying to make them skewed as much as possible to things that make sense in the long-term."
He goes on to say that spending should be carefully targeted, rather than cut sharply. "In the expenditure side, obviously it is the case that some expenditures are particularly valuable at this time in the cycle, in particular ones where the leakage into imports is least.
"So, things like insulating peoples' homes [thereby] employing people from the construction industry, which has been hit particularly hard by the recession."
Turner's comments echo those of the chancellor, Alistair Darling, who wrote in the Guardian that green industries as a whole could add half a million jobs to the economy. He added that the Conservatives' plans to reduce the budget deficit "further and faster" than Labour could wreck the economic recovery.
On the World Tonight programme, Turner will also tell Andrew Simms, of the New Economics Foundation, that when it comes to investing in the low-carbon and energy-saving technologies of tomorrow, the government may have to take a direct role because the market cannot be relied upon to deliver what is needed.
"I don't think we should exclude the possibility ... that we may need to think about whether we need more direct, public supported or investments in low-carbon electricity generation if we find that the market isn't directly delivering that," Turner says.
"So concepts like investment banks or elements of guarantee, or particular categories of bond finance, I think are within the set of things that we should think about."
Turner's ideas chime with those of the NEF, which, with other campaigners, has been calling for a "Green New Deal", to push huge investments into renewables and energy-saving technologies, which it says would create thousands of jobs and boost tax receipts, as well as saving billions of pounds in imports of carbon energy sources, such as coal and gas.
In a report last month, the group argued that the fledgling economic recovery in Britain was supported only by low interest rates and a fiscal easing, and would tip back into recession this year (2010) if public spending is slashed in response to the government's ballooning budget deficit.
If £10bn of the Bank of England's £200bn of quantitative easing were invested in offshore wind energy, it could easily create over 100,000 new jobs, the group says.
Turner says he is concerned that the swing during the 1970s and 1980s towards the idea the private sector would always deliver outcomes better and cheaper than the public sector, which he used to agree with, had gone too far.
Turner adds that the government should avoid pursuing economic growth. "If you spend your time thinking that the most important objective of public policy is to get growth up from 1.9% to 2% and even better 2.1% we're pursuing a sort of false god.
"We're pursuing it, first of all, because if we accept that we will do things to the climate that will be harmful, but also because all the evidence shows that beyond the sort of standard of living which Britain has now achieved, extra growth does not automatically translate into human welfare and happiness."
Five economic reasons why 2010 will be greener
Economics, rather than politics, will be the main driver of the fight against global warming in 2010.
By Pierre Briancon, Reuters Breakingviews Published: 12:01AM GMT 01 Jan 2010
In 2009, the global recession had a greater impact than all the diplomatic efforts that ended in the Copenhagen flop: energy production hadn't declined on such a scale since 1981, according to the International Energy Agency (IEA). Here are five economic reasons for the world to become slightly greener in the coming year (just a few of them could be wishful thinking...)
First, high oil prices. Pricier crude encourages investments in alternative energy sources. Crude oil has been trading in a fairly narrow - and reassuringly expensive - range of $64 to $80 a barrel since June. It is not likely to fall below that level.
True, inventories are abundant, and in the longer term the Iraqi industry is emerging from the rubble. But there are several reasons to think oil prices will hold up through 2010 and beyond. Demand growth in big emerging nations like China and India is a solid support. Downward pressure on the dollar would probably help sustain prices. And OPEC probably still has enough power to keep prices from plummeting. So while the oil price is not likely to shoot up to recession-inducing highs, it is likely to stay high enough to keep alternative energy resources profitable.
Second, the low price of natural gas. Cheap gas encourages utilities to build more gas-fired power plants, which are cleaner than coal-powered ones. The current gas supply glut is not likely to go away soon. Even the always-possible Russia-Ukraine row, or a colder than usual winter, probably would not be enough to boost world prices. Unconventional gas production is expected to rise in the United States. That will force Qatar and other exporters of liquefied natural gas (LNG) to divert exports from North America to Asia and Europe. The alternative supply should strengthen the hand of European buyers in dealing with their big supplier - Russia.
Third, more research on, and subsidies for, clean energy. The wishful thinking, or reasoned optimism, may be starting here, but Western governments may at last realize that that the United Nations-style approach to global warming is doomed to failure. A focus on domestic priorities would lead to more determined public efforts to encourage research in lower-carbon sources of energy, lowering their costs and making them more competitive.
Fourth, deterrence could achieve what diplomacy could not. The mere prospect of a carbon tax on imports, which the European Union is currently debating, might help concentrate Chinese minds. The World Trade Organization has hinted such a levy would not necessarily run counter to its rules. To forestall this sort of virtuous tariff, China might come forward with serious proposals to curb its own carbon emissions.
Finally, carbon prices should rise again. True, they took a hit after the failure of the Copenhagen conference to achieve much in the way of international cooperation. But steps being taken in several major countries will ultimately help make carbon more expensive on the exchanges where emission rights are traded: for example the U.S. cap-and-trade bill, coupled with the Obama administration's intention to consider carbon emissions as health hazard, the British government's energy efficiency scheme or France's domestic carbon tax.
While these trends could make for a greener year ahead, worrying signals are accumulating for the longer term. If the IEA is to be believed, without major policy changes the world is on path for a temperature rise of up to 6 degrees Celsius, far above the stated international goal of limiting the rise to 2 degrees Celsius. Growth will resume, pushing energy demand 40 percent higher in 2030 than in 2007, with non-industrialised counties accounting for 90 percent of that increase. Demand for coal - driven by emerging countries' growing needs - will rise faster than for other energy sources.
At the same time the financial crisis has depressed energy investment, whether in oil and gas upstream production, or power plants. In other words, by 2030 the world could face the absurd situation of having to cope both with global warming and energy shortages. Green will only prevail if the world's major powers take the Copenhagen dud as a call to arms.
By Pierre Briancon, Reuters Breakingviews Published: 12:01AM GMT 01 Jan 2010
In 2009, the global recession had a greater impact than all the diplomatic efforts that ended in the Copenhagen flop: energy production hadn't declined on such a scale since 1981, according to the International Energy Agency (IEA). Here are five economic reasons for the world to become slightly greener in the coming year (just a few of them could be wishful thinking...)
First, high oil prices. Pricier crude encourages investments in alternative energy sources. Crude oil has been trading in a fairly narrow - and reassuringly expensive - range of $64 to $80 a barrel since June. It is not likely to fall below that level.
True, inventories are abundant, and in the longer term the Iraqi industry is emerging from the rubble. But there are several reasons to think oil prices will hold up through 2010 and beyond. Demand growth in big emerging nations like China and India is a solid support. Downward pressure on the dollar would probably help sustain prices. And OPEC probably still has enough power to keep prices from plummeting. So while the oil price is not likely to shoot up to recession-inducing highs, it is likely to stay high enough to keep alternative energy resources profitable.
Second, the low price of natural gas. Cheap gas encourages utilities to build more gas-fired power plants, which are cleaner than coal-powered ones. The current gas supply glut is not likely to go away soon. Even the always-possible Russia-Ukraine row, or a colder than usual winter, probably would not be enough to boost world prices. Unconventional gas production is expected to rise in the United States. That will force Qatar and other exporters of liquefied natural gas (LNG) to divert exports from North America to Asia and Europe. The alternative supply should strengthen the hand of European buyers in dealing with their big supplier - Russia.
Third, more research on, and subsidies for, clean energy. The wishful thinking, or reasoned optimism, may be starting here, but Western governments may at last realize that that the United Nations-style approach to global warming is doomed to failure. A focus on domestic priorities would lead to more determined public efforts to encourage research in lower-carbon sources of energy, lowering their costs and making them more competitive.
Fourth, deterrence could achieve what diplomacy could not. The mere prospect of a carbon tax on imports, which the European Union is currently debating, might help concentrate Chinese minds. The World Trade Organization has hinted such a levy would not necessarily run counter to its rules. To forestall this sort of virtuous tariff, China might come forward with serious proposals to curb its own carbon emissions.
Finally, carbon prices should rise again. True, they took a hit after the failure of the Copenhagen conference to achieve much in the way of international cooperation. But steps being taken in several major countries will ultimately help make carbon more expensive on the exchanges where emission rights are traded: for example the U.S. cap-and-trade bill, coupled with the Obama administration's intention to consider carbon emissions as health hazard, the British government's energy efficiency scheme or France's domestic carbon tax.
While these trends could make for a greener year ahead, worrying signals are accumulating for the longer term. If the IEA is to be believed, without major policy changes the world is on path for a temperature rise of up to 6 degrees Celsius, far above the stated international goal of limiting the rise to 2 degrees Celsius. Growth will resume, pushing energy demand 40 percent higher in 2030 than in 2007, with non-industrialised counties accounting for 90 percent of that increase. Demand for coal - driven by emerging countries' growing needs - will rise faster than for other energy sources.
At the same time the financial crisis has depressed energy investment, whether in oil and gas upstream production, or power plants. In other words, by 2030 the world could face the absurd situation of having to cope both with global warming and energy shortages. Green will only prevail if the world's major powers take the Copenhagen dud as a call to arms.
Wheels come off an American romance
Is America beginning to fall out of love with the automobile, asks Geoffrey Lean.
By Geoffrey LeanPublished: 5:54PM GMT 01 Jan 2010
Is America beginning to fall out of love with the automobile? It is, as Zhou Enlai famously said about the consequences of the French Revolution, far too early to tell. But next week a new study will report that the number of US cars actually dropped last year, after a century of apparently unstoppable growth.
The Washington-based Earth Policy Institute – a small think tank with a knack of spotting new trends – will announce that the US passenger-vehicle fleet fell from 250 million to 246 million in 2009. Nothing on this scale has happened before; it stagnated in 1998 and fell slightly during the 1991 recession, but otherwise has been growing by an average of 3.69 million annually since 1960.
Is this just a blip, caused by deeper recession? Maybe. But Lester Brown, president of the institute, thinks something fundamental is happening, and that numbers will continue to fall throughout this decade.
One reason, he says, is "market saturation"; there are now five cars in the country for every four registered drivers. But he also cites rising fuel prices, increasing congestion, "mounting concerns about climate change" and "the declining interest in cars among young people who have grown up in cities".
Of course, any decline will be more than offset by increases elsewhere, especially in China and India. But a cultural shift in the country that is home to nearly a third of the world's vehicles would still prove a landmark
By Geoffrey LeanPublished: 5:54PM GMT 01 Jan 2010
Is America beginning to fall out of love with the automobile? It is, as Zhou Enlai famously said about the consequences of the French Revolution, far too early to tell. But next week a new study will report that the number of US cars actually dropped last year, after a century of apparently unstoppable growth.
The Washington-based Earth Policy Institute – a small think tank with a knack of spotting new trends – will announce that the US passenger-vehicle fleet fell from 250 million to 246 million in 2009. Nothing on this scale has happened before; it stagnated in 1998 and fell slightly during the 1991 recession, but otherwise has been growing by an average of 3.69 million annually since 1960.
Is this just a blip, caused by deeper recession? Maybe. But Lester Brown, president of the institute, thinks something fundamental is happening, and that numbers will continue to fall throughout this decade.
One reason, he says, is "market saturation"; there are now five cars in the country for every four registered drivers. But he also cites rising fuel prices, increasing congestion, "mounting concerns about climate change" and "the declining interest in cars among young people who have grown up in cities".
Of course, any decline will be more than offset by increases elsewhere, especially in China and India. But a cultural shift in the country that is home to nearly a third of the world's vehicles would still prove a landmark
Thursday, 31 December 2009
Humiliation for green convert Sarkozy as carbon tax ruled unconstitutional
French court judges tax would punish households while letting off big industrial polluters
Lizzy Davies in Paris
guardian.co.uk, Wednesday 30 December 2009 16.13 GMT
Nicolas Sarkozy's dreams of putting France on the frontline of the fight against global warming were in disarray today, after his flagship carbon tax was ruled unconstitutional two days before it was due to come into effect.
In an unexpected and embarrassing blow, the court responsible for ensuring the validity of French legislation rejected the reform as ineffective and unfair.
It ruled that rather than being the revolutionary measure Sarkozy promised, the tax would have let off many industrial polluters, while placing a disproportionately heavy burden on ordinary households.
"The large number of exemptions from the carbon tax runs counter to the goal of fighting climate change and violates the equality enjoyed by all in terms of public charges," said the constitutional council in its eleventh hour ruling last night.
Scrambling to salvage a project which the President had vigorously defended against criticism from opposition politicians, green groups and members of his own party, the government insisted today the carbon tax had not been put off for good. "It is a tough fight, but a worthwhile one," said spokesman Luc Chatel. Ministers promised a revised text within weeks.
However, there was little the government could do to distract from the humiliation of having a much-trailed reform batted back by the sages of the august constitutional council.
Nor will the hopes of a new and improved plan do much to calm heightening worries over revenue. Even if a revised proposal is made, the tax – which was expected to raise €1.5bn (£1.34bn) during 2010 – will take weeks to reach parliament again and even longer to start boosting state coffers.
The opposition Socialist party made no secret of their glee at seeing the right-wing president fall at the final hurdle of his marathon battle to introduce a tax which was opposed by two-thirds of the public.
"This is a good decision and shows once again that Sarkozy's way of doing things does not work," the Socialist party's parliamentary leader, Jean-Marc Ayrault, told French radio. "They announce a reform, listen to no one and produce a poor job. It's a real mess."
Sarkozy, who has championed the environmental cause with increasing vigour since the strong performance of the French Greens in June's European elections, set out his vision for the carbon tax in September with the zeal of the ecological convert he claims to be. "It's a question of survival of the human race," he said. A tax of €17 (£17.22) per tonne of carbon emissions would have been levied on oil, coal and gas consumption.
But, while green campaigners warned the tax was not high enough to be effective, the Socialists and consumer groups claimed it would lead to an unfair situation in which certain people, such as car-dependant households in isolated areas, would be hit harder than the real culprits.
The ruling of the constitutional council appeared to support those criticisms. It said that more than 1,000 of France's biggest polluters could have been exempted from the charges, and that 93% of industrial emissions would not have been taxed.
However, many big polluters are required to participate in the EU emissions trading scheme, in which they must buy carbon permits if they exceed pollution targets.
Speaking on French radio this yesterday morning, the junior minister for trade and consumption admitted mistakes had been made. "It was perhaps shocking that the sectors given exemptions were those that polluted the most," said Hervé Novelli. "So we will have to put that right."
Sarkozy, who is returning tonight from a Christmas break in Morocco with his wife Carla Bruni, has made no public comment on the setback. But Chantal Jouanno, the junior minister for ecology, said he remained "very determined" to get a carbon tax into law before the summer.
Lizzy Davies in Paris
guardian.co.uk, Wednesday 30 December 2009 16.13 GMT
Nicolas Sarkozy's dreams of putting France on the frontline of the fight against global warming were in disarray today, after his flagship carbon tax was ruled unconstitutional two days before it was due to come into effect.
In an unexpected and embarrassing blow, the court responsible for ensuring the validity of French legislation rejected the reform as ineffective and unfair.
It ruled that rather than being the revolutionary measure Sarkozy promised, the tax would have let off many industrial polluters, while placing a disproportionately heavy burden on ordinary households.
"The large number of exemptions from the carbon tax runs counter to the goal of fighting climate change and violates the equality enjoyed by all in terms of public charges," said the constitutional council in its eleventh hour ruling last night.
Scrambling to salvage a project which the President had vigorously defended against criticism from opposition politicians, green groups and members of his own party, the government insisted today the carbon tax had not been put off for good. "It is a tough fight, but a worthwhile one," said spokesman Luc Chatel. Ministers promised a revised text within weeks.
However, there was little the government could do to distract from the humiliation of having a much-trailed reform batted back by the sages of the august constitutional council.
Nor will the hopes of a new and improved plan do much to calm heightening worries over revenue. Even if a revised proposal is made, the tax – which was expected to raise €1.5bn (£1.34bn) during 2010 – will take weeks to reach parliament again and even longer to start boosting state coffers.
The opposition Socialist party made no secret of their glee at seeing the right-wing president fall at the final hurdle of his marathon battle to introduce a tax which was opposed by two-thirds of the public.
"This is a good decision and shows once again that Sarkozy's way of doing things does not work," the Socialist party's parliamentary leader, Jean-Marc Ayrault, told French radio. "They announce a reform, listen to no one and produce a poor job. It's a real mess."
Sarkozy, who has championed the environmental cause with increasing vigour since the strong performance of the French Greens in June's European elections, set out his vision for the carbon tax in September with the zeal of the ecological convert he claims to be. "It's a question of survival of the human race," he said. A tax of €17 (£17.22) per tonne of carbon emissions would have been levied on oil, coal and gas consumption.
But, while green campaigners warned the tax was not high enough to be effective, the Socialists and consumer groups claimed it would lead to an unfair situation in which certain people, such as car-dependant households in isolated areas, would be hit harder than the real culprits.
The ruling of the constitutional council appeared to support those criticisms. It said that more than 1,000 of France's biggest polluters could have been exempted from the charges, and that 93% of industrial emissions would not have been taxed.
However, many big polluters are required to participate in the EU emissions trading scheme, in which they must buy carbon permits if they exceed pollution targets.
Speaking on French radio this yesterday morning, the junior minister for trade and consumption admitted mistakes had been made. "It was perhaps shocking that the sectors given exemptions were those that polluted the most," said Hervé Novelli. "So we will have to put that right."
Sarkozy, who is returning tonight from a Christmas break in Morocco with his wife Carla Bruni, has made no public comment on the setback. But Chantal Jouanno, the junior minister for ecology, said he remained "very determined" to get a carbon tax into law before the summer.
John Gummer to quit as MP to focus on international climate change campaign
Former Tory cabinet minister announces he is to step down at the election in order to play a leading role in a pan-European campaign to tackle global warming
Will Woodward and agencies
guardian.co.uk, Wednesday 30 December 2009 10.31 GMT
John Gummer, a former Conservative cabinet minister and one of the party's most staunch environmentalists, has announced he is to quit the Commons to join a new international campaign to combat climate change.
He said the collapse of the Copenhagen talks had forced him to rethink his longstanding plans to contest his Suffolk Coastal seat, which he has represented, with boundary changes, since the 1979 election which brought Margaret Thatcher into power. He was also MP for Lewisham West from 1970-74.
Gummer is to play a leading role in as-yet-unrevealed pan-European campaign on climate change, which will be launched next month.
"I had every intention of staying on," he told the Guardian today, but said he had his mind changed by "the collapse of the Copenhagen talks and then the pressures from other people that we have got to do something about it".
The departure of Gummer, who co-chaired the party's "quality of life" policy group with Tory candidate Zac Goldsmith, weakens the "green" presence on the Tory benches. He said he had discussed his departure with David Cameron before Christmas. "I am quite sure the future of these [green issues] are in safe hands with him. He is totally committed, but not everybody internationally is."
Gummer's departure will make Kenneth Clarke, assuming he retains his safe Tory seat at the next election, the sole surviving Commons representative of the "Cambridge mafia", a group of high-octane Conservative brains from that university which made it to the cabinet. Michael Howard is standing down and Lords Brittan, Lamont and Fowler have already left.
Gummer was party chairman under Thatcher, agriculture secretary under her and John Major, and then environment secretary for four years from 1993. He is possibly most famous, or infamous, for trying to feed his daughter Cordelia a beefburger to convince the public it was safe from mad cow disease.
His son Benedict Gummer is now Conservative candidate for neighbouring Ipswich, held by Labour's Chris Mole with a 5,332 majority but a swing seat vulnerable to a Tory challenge.
In a statement Gummer said: "Since the very disappointing results of the Copenhagen negotiations, I have been forced to rethink my plans for the future. In discussion with colleagues in the rest of Europe and the United States, as well as with international NGOs, I have realised that I cannot commit myself to the work that they believe has to be done and continue to serve my constituents as I would want.
"The things that I am urged to take on will demand a good deal of absence from home, which is simply incompatible either with the inevitably heavy legislative programme of a new parliament or with attendance at the many constituency functions upon which I have always laid great stress.
"During the 35 years that I have had the privilege of being a member of parliament, I have always put my constituency work first and I am not prepared to skimp on it now. It is therefore with very great sadness that I have decided it is simply not possible to contest the next election and still promise the kind of service that my constituents have rightly grown to expect."
More than 120 MPs have said they will step down at the next general election and many more are expected to go before the general election campaign starts. Many departures are directly or indirectly due to the outcry over MPs' expenses. Gummer attracted some criticism for claiming £9,000 in gardening expenses, including £100 a year to remove moles from his country estate.
Gummer said: "Climate change is not only a crisis without historic parallel, it is an urgent political threat. We will never win this battle if we diminish people's lives or preach at them. The threat must not be used as an excuse for unnecessary state direction and control.
"Instead, it is all of us, as citizens, entrepreneurs, and consumers, who will make change happen. Politicians and campaigners have to enable that change: they must unleash the power of the free market; they must harness the skills and innovation that drive it; and they must create the opportunities for competition to deliver new answers to this entirely new challenge.
"Those of us who have any chance to influence the course of events, even in a small way, have simply to make that our first priority, however difficult the choice."
Will Woodward and agencies
guardian.co.uk, Wednesday 30 December 2009 10.31 GMT
John Gummer, a former Conservative cabinet minister and one of the party's most staunch environmentalists, has announced he is to quit the Commons to join a new international campaign to combat climate change.
He said the collapse of the Copenhagen talks had forced him to rethink his longstanding plans to contest his Suffolk Coastal seat, which he has represented, with boundary changes, since the 1979 election which brought Margaret Thatcher into power. He was also MP for Lewisham West from 1970-74.
Gummer is to play a leading role in as-yet-unrevealed pan-European campaign on climate change, which will be launched next month.
"I had every intention of staying on," he told the Guardian today, but said he had his mind changed by "the collapse of the Copenhagen talks and then the pressures from other people that we have got to do something about it".
The departure of Gummer, who co-chaired the party's "quality of life" policy group with Tory candidate Zac Goldsmith, weakens the "green" presence on the Tory benches. He said he had discussed his departure with David Cameron before Christmas. "I am quite sure the future of these [green issues] are in safe hands with him. He is totally committed, but not everybody internationally is."
Gummer's departure will make Kenneth Clarke, assuming he retains his safe Tory seat at the next election, the sole surviving Commons representative of the "Cambridge mafia", a group of high-octane Conservative brains from that university which made it to the cabinet. Michael Howard is standing down and Lords Brittan, Lamont and Fowler have already left.
Gummer was party chairman under Thatcher, agriculture secretary under her and John Major, and then environment secretary for four years from 1993. He is possibly most famous, or infamous, for trying to feed his daughter Cordelia a beefburger to convince the public it was safe from mad cow disease.
His son Benedict Gummer is now Conservative candidate for neighbouring Ipswich, held by Labour's Chris Mole with a 5,332 majority but a swing seat vulnerable to a Tory challenge.
In a statement Gummer said: "Since the very disappointing results of the Copenhagen negotiations, I have been forced to rethink my plans for the future. In discussion with colleagues in the rest of Europe and the United States, as well as with international NGOs, I have realised that I cannot commit myself to the work that they believe has to be done and continue to serve my constituents as I would want.
"The things that I am urged to take on will demand a good deal of absence from home, which is simply incompatible either with the inevitably heavy legislative programme of a new parliament or with attendance at the many constituency functions upon which I have always laid great stress.
"During the 35 years that I have had the privilege of being a member of parliament, I have always put my constituency work first and I am not prepared to skimp on it now. It is therefore with very great sadness that I have decided it is simply not possible to contest the next election and still promise the kind of service that my constituents have rightly grown to expect."
More than 120 MPs have said they will step down at the next general election and many more are expected to go before the general election campaign starts. Many departures are directly or indirectly due to the outcry over MPs' expenses. Gummer attracted some criticism for claiming £9,000 in gardening expenses, including £100 a year to remove moles from his country estate.
Gummer said: "Climate change is not only a crisis without historic parallel, it is an urgent political threat. We will never win this battle if we diminish people's lives or preach at them. The threat must not be used as an excuse for unnecessary state direction and control.
"Instead, it is all of us, as citizens, entrepreneurs, and consumers, who will make change happen. Politicians and campaigners have to enable that change: they must unleash the power of the free market; they must harness the skills and innovation that drive it; and they must create the opportunities for competition to deliver new answers to this entirely new challenge.
"Those of us who have any chance to influence the course of events, even in a small way, have simply to make that our first priority, however difficult the choice."
'Carousel' frauds plague European carbon trading markets
Why are mysterious UK businesses registering to trade carbon in Europe?
By Rowena Mason, City ReporterPublished: 6:07PM GMT 30 Dec 2009
It is a building site, formerly a derelict car park, in a deprived part of West London, where the neon glow of curry houses and late-night grocery stores could not be further from the wealth and glamour of London's financial markets.
Described as a "consulting" business, this is the address of a UK company that has signed up to trade carbon permits under the European Emissions Trading Scheme in Copenhagen. But there is no trace of its existence on the Companies House database.
At the newsagent next door, nobody has ever even heard of emissions trading – the system where companies buy and sell the right to emit carbon dioxide – and there has not been a building there for many years.
It is not the only oddity to emerge from the Danish Carbon Registry. All the expected big players are on the list – utilities, oil and heavy industry – the only sectors obliged by law to own permits to cover emissions.
Quite a few investment banks are also signed up, on behalf of industry or trading to make a profit.
But outnumbering these familiar names, hundreds of UK companies selling anything from hair loss treatments to electronics have mysteriously registered to buy and sell carbon permits in the Scandinavian nation – mostly in the last 18 months.
Many give addresses in the regions such as Yorkshire, Lancashire, Essex and other places not known for their links to the world of finance.
The appearance of these obscure British companies – among them businesses with unreachable addresses and Hotmail, Gmail or Yahoo email accounts for company representatives – has recently come to the attention of the Danish authorities.
While many are bound to be genuine individual private traders playing the carbon markets, investigators are examining the possibility that some of these unknown UK-based companies have used the system to commit "carousel" fraud linked to VAT.
As the Copenhagen summit on global warming began this month, Denmark, the host nation, was bringing in an emergency ban to halt VAT on carbon. This followed similar suspensions in Britain, France, Spain and Holland.
According to sources, the Danish registry may be at the heart of Europe's problems with carbon trading fraud. Local media has repeatedly raised the fact that few, if any, checks are done on new traders and approval can be much quicker than in other countries.
Criminals profit by importing goods VAT-free, selling them through a series of companies, each liable to VAT, before exporting them again. Then, the first link in the chain often goes missing without accounting for the VAT and the final link reclaims the VAT it has paid from the state before disappearing.
It might sound like the tinpot scheme of local small-time crooks, but fleecing the tax man can bring in big money.
Just a few weeks ago, Europol, the cross-border police force, said that carbon trading fraudsters may have accounted for up to 90pc of all market activity in some European countries, with criminals mainly from Britain, France, Spain, Denmark and Holland pocketing an estimated €5bn (£4.5bn).
"It is estimated that in some countries, up to 90pc of the whole market volume was caused by fraudulent activities," Europol said.
Figures from New Energy Finance show the value of the global market falling from $38bn (£23bn) in the second quarter to $30bn in the three months to the end of September after several countries cracked down.
The London platform, the European Climate Exchange, where banks and energy companies tend to trade, is not affected by the fraud because it does not offer the spot contracts on which VAT was payable. But British traders can still defraud authorities by buying and selling permits on other European exchanges.
This organised criminal activity has even "endangered the credibility" of the current carbon trading system, according to Rob Wainwright, the director of Europol.
So why have fraudsters particularly targeted carbon trading? And what is being done to iron out problems in Europe before other areas – such as the US – start to trade carbon in the next few years?
Carousel fraud has been a known scam for years among mobile commodities, such as phones, computer chips and cigarettes.
But the attraction of carbon permits is their intangible nature, so there is no need physically to ship goods across borders. All is done at the click of a mouse.
It now looks like Europe will start a so-called "reverse charge" mechanism, which would remove the need for VAT to change hands between carbon traders every time permits are sold.
But will this remove all problems from the system? It should certainly eradicate VAT fraud, but the very nature of carbon credits makes them "an incredibly lucrative target for criminals", Rafael Rondelez, who was involved with the Europol investigation, has warned.
His message is clear: other types of carbon fraud could soon spring up because there are "no strong regulations or checking principles as there is in banking to prevent such activities as money laundering."
By Rowena Mason, City ReporterPublished: 6:07PM GMT 30 Dec 2009
It is a building site, formerly a derelict car park, in a deprived part of West London, where the neon glow of curry houses and late-night grocery stores could not be further from the wealth and glamour of London's financial markets.
Described as a "consulting" business, this is the address of a UK company that has signed up to trade carbon permits under the European Emissions Trading Scheme in Copenhagen. But there is no trace of its existence on the Companies House database.
At the newsagent next door, nobody has ever even heard of emissions trading – the system where companies buy and sell the right to emit carbon dioxide – and there has not been a building there for many years.
It is not the only oddity to emerge from the Danish Carbon Registry. All the expected big players are on the list – utilities, oil and heavy industry – the only sectors obliged by law to own permits to cover emissions.
Quite a few investment banks are also signed up, on behalf of industry or trading to make a profit.
But outnumbering these familiar names, hundreds of UK companies selling anything from hair loss treatments to electronics have mysteriously registered to buy and sell carbon permits in the Scandinavian nation – mostly in the last 18 months.
Many give addresses in the regions such as Yorkshire, Lancashire, Essex and other places not known for their links to the world of finance.
The appearance of these obscure British companies – among them businesses with unreachable addresses and Hotmail, Gmail or Yahoo email accounts for company representatives – has recently come to the attention of the Danish authorities.
While many are bound to be genuine individual private traders playing the carbon markets, investigators are examining the possibility that some of these unknown UK-based companies have used the system to commit "carousel" fraud linked to VAT.
As the Copenhagen summit on global warming began this month, Denmark, the host nation, was bringing in an emergency ban to halt VAT on carbon. This followed similar suspensions in Britain, France, Spain and Holland.
According to sources, the Danish registry may be at the heart of Europe's problems with carbon trading fraud. Local media has repeatedly raised the fact that few, if any, checks are done on new traders and approval can be much quicker than in other countries.
Criminals profit by importing goods VAT-free, selling them through a series of companies, each liable to VAT, before exporting them again. Then, the first link in the chain often goes missing without accounting for the VAT and the final link reclaims the VAT it has paid from the state before disappearing.
It might sound like the tinpot scheme of local small-time crooks, but fleecing the tax man can bring in big money.
Just a few weeks ago, Europol, the cross-border police force, said that carbon trading fraudsters may have accounted for up to 90pc of all market activity in some European countries, with criminals mainly from Britain, France, Spain, Denmark and Holland pocketing an estimated €5bn (£4.5bn).
"It is estimated that in some countries, up to 90pc of the whole market volume was caused by fraudulent activities," Europol said.
Figures from New Energy Finance show the value of the global market falling from $38bn (£23bn) in the second quarter to $30bn in the three months to the end of September after several countries cracked down.
The London platform, the European Climate Exchange, where banks and energy companies tend to trade, is not affected by the fraud because it does not offer the spot contracts on which VAT was payable. But British traders can still defraud authorities by buying and selling permits on other European exchanges.
This organised criminal activity has even "endangered the credibility" of the current carbon trading system, according to Rob Wainwright, the director of Europol.
So why have fraudsters particularly targeted carbon trading? And what is being done to iron out problems in Europe before other areas – such as the US – start to trade carbon in the next few years?
Carousel fraud has been a known scam for years among mobile commodities, such as phones, computer chips and cigarettes.
But the attraction of carbon permits is their intangible nature, so there is no need physically to ship goods across borders. All is done at the click of a mouse.
It now looks like Europe will start a so-called "reverse charge" mechanism, which would remove the need for VAT to change hands between carbon traders every time permits are sold.
But will this remove all problems from the system? It should certainly eradicate VAT fraud, but the very nature of carbon credits makes them "an incredibly lucrative target for criminals", Rafael Rondelez, who was involved with the Europol investigation, has warned.
His message is clear: other types of carbon fraud could soon spring up because there are "no strong regulations or checking principles as there is in banking to prevent such activities as money laundering."
Corn Cobs Have Energy Use
By IAN BERRY
The corn cob could go from farmer trash to treasure if an effort by the world's largest ethanol maker takes root.
Poet, Sioux Falls, S.D., is readying production of a new cellulosic ethanol plant that uses the corn waste product, rather than corn itself, to make the biofuel. The plant, located in Emmitsburg, Iowa, where Poet already has a traditional corn-based ethanol refinery, is expected to produce 25 million gallons per year once it starts commercial production in 2011. Poet already has a pilot project in Scotland, S.D., that produced about 20,000 gallons of cellulosic ethanol since it opened in November 2008.
The plant, called Project Liberty, could be a new revenue source for farmers, proponents say, although the future for the technology remains uncertain.
"We're looking at $30 to $60 per ton is what we'd be paying for the corn cobs," said Scott Weishaar, vice president of Commercial Development for Poet. "You take a look at a farmer who maybe has 1,000 or 2,000 acres of corn, that's pretty significant incremental income to his operation."
Currently, farmers have little use for the stripped-down corn cobs. The industry is moving toward cellulosic, as spelled out in the Environmental Protection Agency's renewable-fuel mandate. The mandate calls for cellulosic ethanol to account for 16 billion gallons of the total 36 billion gallons of production by 2022. Other sources for the cellulosic ethanol include wood waste, switchgrass and other corn "residue" besides the cob, such as the stalks. Corn cobs are currently the sole focus of Poet's cellulosic effort.
Unlike some of the other corn residue, the cobs are seen as having little if any value to the land and can be removed without depleting the soil. And the cob, unlike the grain, doesn't ignite the "food versus fuel" debate. Poet said that it is quickly finding ways to make cellulosic ethanol profitable. Since the pilot project started, it has cut costs almost in half, to $2.35 per gallon from $4.13, by reducing energy usage and enzyme costs, among other expenses. It costs roughly 50 to 80 cents more per gallon to make ethanol from corn cobs than from the grain, Poet said.
It hopes to have the costs per gallon below $2 by the start of commercial operation. Ethanol futures are trading around $1.90 at the Chicago Board of Trade.
Chief Executive Jeff Broin said that two years ago he would have considered cellulosic ethanol "a long shot" but that it is now a reality.
For farmers, harvesting the cobs requires additional equipment, and Poet is working with farm machine manufacturers to "accelerate their development" of equipment that will harvest cobs, Mr. Weishaar said.
The company hosted 16 different equipment makers in Emmitsburg for a field day in November, in which industry leaders showed off prototype machines to area farmers.
One of those companies, Agco Corp., has rarely before, if ever, taken a prototype machine to such a public event, said Agco spokesman Reid Hamre. The Duluth, Ga., company is probably at least several months away from deciding whether to mass-produce the equipment.
"It's a prototype machine, we've got some more testing and exhibiting and gathering of feedback for farmers and dealers we want to do," Mr. Hamre said.
The corn cob could go from farmer trash to treasure if an effort by the world's largest ethanol maker takes root.
Poet, Sioux Falls, S.D., is readying production of a new cellulosic ethanol plant that uses the corn waste product, rather than corn itself, to make the biofuel. The plant, located in Emmitsburg, Iowa, where Poet already has a traditional corn-based ethanol refinery, is expected to produce 25 million gallons per year once it starts commercial production in 2011. Poet already has a pilot project in Scotland, S.D., that produced about 20,000 gallons of cellulosic ethanol since it opened in November 2008.
The plant, called Project Liberty, could be a new revenue source for farmers, proponents say, although the future for the technology remains uncertain.
"We're looking at $30 to $60 per ton is what we'd be paying for the corn cobs," said Scott Weishaar, vice president of Commercial Development for Poet. "You take a look at a farmer who maybe has 1,000 or 2,000 acres of corn, that's pretty significant incremental income to his operation."
Currently, farmers have little use for the stripped-down corn cobs. The industry is moving toward cellulosic, as spelled out in the Environmental Protection Agency's renewable-fuel mandate. The mandate calls for cellulosic ethanol to account for 16 billion gallons of the total 36 billion gallons of production by 2022. Other sources for the cellulosic ethanol include wood waste, switchgrass and other corn "residue" besides the cob, such as the stalks. Corn cobs are currently the sole focus of Poet's cellulosic effort.
Unlike some of the other corn residue, the cobs are seen as having little if any value to the land and can be removed without depleting the soil. And the cob, unlike the grain, doesn't ignite the "food versus fuel" debate. Poet said that it is quickly finding ways to make cellulosic ethanol profitable. Since the pilot project started, it has cut costs almost in half, to $2.35 per gallon from $4.13, by reducing energy usage and enzyme costs, among other expenses. It costs roughly 50 to 80 cents more per gallon to make ethanol from corn cobs than from the grain, Poet said.
It hopes to have the costs per gallon below $2 by the start of commercial operation. Ethanol futures are trading around $1.90 at the Chicago Board of Trade.
Chief Executive Jeff Broin said that two years ago he would have considered cellulosic ethanol "a long shot" but that it is now a reality.
For farmers, harvesting the cobs requires additional equipment, and Poet is working with farm machine manufacturers to "accelerate their development" of equipment that will harvest cobs, Mr. Weishaar said.
The company hosted 16 different equipment makers in Emmitsburg for a field day in November, in which industry leaders showed off prototype machines to area farmers.
One of those companies, Agco Corp., has rarely before, if ever, taken a prototype machine to such a public event, said Agco spokesman Reid Hamre. The Duluth, Ga., company is probably at least several months away from deciding whether to mass-produce the equipment.
"It's a prototype machine, we've got some more testing and exhibiting and gathering of feedback for farmers and dealers we want to do," Mr. Hamre said.
Investing in coal is dysfunctional
Power companies, investment bankers and pension fund managers are fuelling an unlivable future – with our money
Jeremy Leggett
guardian.co.uk, Wednesday 30 December 2009 14.23 GMT
The acid test of the Copenhagen climate change summit was always going to be coal. Had governments managed to come up with a meaningful agreement, those who seek to continue burning coal would have faced significant risk that they would be spending their money on what investors call "strandable" assets – assets that become obsolete and therefore worthless. And for their part, financial institutions would have had to think twice whether they should keep pouring billions of dollars into new coal-fired electricity generation, seeking short-term returns while knowingly fuelling future climate ruin that is not costed in today's books.
But there was no meaningful agreement. And so we see the first in the queue to foist coal horrors upon us already knocking at the door. Since Copenhagen, E.ON has announced that any further emissions cuts by the company will depend on governments making progress in 2010 in the climate negotiations. E.ON and Centrica have both said they are less likely to build coal plants attempting carbon capture and storage. We can expect to see similar sentiments from most of the other big energy companies. Enlightened business leadership ahead of legislation is not their bag. More plans for unsequestered coal, without trapping and burying the carbon dioxide, will be the best we can expect.
To be fair to the power companies, the fault is wider. Most investors expect this behaviour of them. Most banks, insurance companies and pension funds are happy, as things stand, to continue investing in coal.
When it comes to the London Stock Exchange, they will have their first major chance soon. The largest Russian steam coal producer is eyeing an initial public offering in London during the first half of 2010. Suek, owned by two oligarchs, is worth $8-9bn (£5-6bn), and will be floating as many as a quarter of its shares. As one anonymous banker put it to Reuters: "There haven't been any good opportunities in this sector for a long time, and the sector is on its way up, so therefore this will be a positive story."
Of course, at the same time, those buying shares will be fuelling long-term wealth destruction – let me not be so base as to mention killing people to boot, let's stick to the money – by stoking climate change. This is the bottom line with the dysfunctional form of capitalism we have allowed to evolve. And the most galling thing is this: the bonus cultists are doing it, in large part, with our money.
A pension fund manager invests billions built up from tiny parcels of the peoples' pension contributions. He is rewarded, like everyone else in the temples of finance, on the basis of short-term returns. That the pension holder might retire into a world that is increasingly unliveable because of the actions of his fund manager features nowhere in any bonus calculation.
Hugo Chávez gloatingly told the Copenhagen summit that capitalism is to blame for climate change. He has more than half a point. After this failure of a summit many leaders had cast as a last-chance saloon, surely now we have to think hard about capitalism in the form we have allowed it to evolve.
The fact is that as things stand – to use the parlance of the investment bankers who will scrabble to win the Russian coal business and the pension fund managers who will line up to invest in the listing – there is no place on the global balance sheet for the assets most relevant to the survival of economies: ecosystems and civilisation. There is plenty of space for spectres they label as assets while shovelling the attendant megarisks off the books. That is the real bottom line.
Unless, that is, we can mobilise enough people-power, on enough fronts, for the citizenry to turn around the course of a war in which our leaders are currently displaying toothless impotence. The listing by Suek, and the role of our money it, might be a good place to start.
Any company investing in that IPO is a company that I will no longer bank or insure with. And any pension fund investing in it is one that I will encourage all my friends to switch their pension out of.
Jeremy Leggett, jeremyleggett.net, set up his company, Solarcentury, to fight climate change.
Jeremy Leggett
guardian.co.uk, Wednesday 30 December 2009 14.23 GMT
The acid test of the Copenhagen climate change summit was always going to be coal. Had governments managed to come up with a meaningful agreement, those who seek to continue burning coal would have faced significant risk that they would be spending their money on what investors call "strandable" assets – assets that become obsolete and therefore worthless. And for their part, financial institutions would have had to think twice whether they should keep pouring billions of dollars into new coal-fired electricity generation, seeking short-term returns while knowingly fuelling future climate ruin that is not costed in today's books.
But there was no meaningful agreement. And so we see the first in the queue to foist coal horrors upon us already knocking at the door. Since Copenhagen, E.ON has announced that any further emissions cuts by the company will depend on governments making progress in 2010 in the climate negotiations. E.ON and Centrica have both said they are less likely to build coal plants attempting carbon capture and storage. We can expect to see similar sentiments from most of the other big energy companies. Enlightened business leadership ahead of legislation is not their bag. More plans for unsequestered coal, without trapping and burying the carbon dioxide, will be the best we can expect.
To be fair to the power companies, the fault is wider. Most investors expect this behaviour of them. Most banks, insurance companies and pension funds are happy, as things stand, to continue investing in coal.
When it comes to the London Stock Exchange, they will have their first major chance soon. The largest Russian steam coal producer is eyeing an initial public offering in London during the first half of 2010. Suek, owned by two oligarchs, is worth $8-9bn (£5-6bn), and will be floating as many as a quarter of its shares. As one anonymous banker put it to Reuters: "There haven't been any good opportunities in this sector for a long time, and the sector is on its way up, so therefore this will be a positive story."
Of course, at the same time, those buying shares will be fuelling long-term wealth destruction – let me not be so base as to mention killing people to boot, let's stick to the money – by stoking climate change. This is the bottom line with the dysfunctional form of capitalism we have allowed to evolve. And the most galling thing is this: the bonus cultists are doing it, in large part, with our money.
A pension fund manager invests billions built up from tiny parcels of the peoples' pension contributions. He is rewarded, like everyone else in the temples of finance, on the basis of short-term returns. That the pension holder might retire into a world that is increasingly unliveable because of the actions of his fund manager features nowhere in any bonus calculation.
Hugo Chávez gloatingly told the Copenhagen summit that capitalism is to blame for climate change. He has more than half a point. After this failure of a summit many leaders had cast as a last-chance saloon, surely now we have to think hard about capitalism in the form we have allowed it to evolve.
The fact is that as things stand – to use the parlance of the investment bankers who will scrabble to win the Russian coal business and the pension fund managers who will line up to invest in the listing – there is no place on the global balance sheet for the assets most relevant to the survival of economies: ecosystems and civilisation. There is plenty of space for spectres they label as assets while shovelling the attendant megarisks off the books. That is the real bottom line.
Unless, that is, we can mobilise enough people-power, on enough fronts, for the citizenry to turn around the course of a war in which our leaders are currently displaying toothless impotence. The listing by Suek, and the role of our money it, might be a good place to start.
Any company investing in that IPO is a company that I will no longer bank or insure with. And any pension fund investing in it is one that I will encourage all my friends to switch their pension out of.
Jeremy Leggett, jeremyleggett.net, set up his company, Solarcentury, to fight climate change.
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