Climate Change News: Roundup of Climate Blog Stories (#2)

Roundup of recent climate change stories bellow, many of these stories have been highlighted in the sidebar of Climate Change News/Action/Resources as 'Top Climate Blog Stories'.

This week the blogosphere has been dealing with questions of transport, future energy solutions, negawatts as a source of energy, carbon offsets, weird weather, china's development and environmental devastation, and continued business innovation.

In the case of transport, the main developments this week have been increasing concern over the rapid expansion of corn based ethanol in the US and more broadly about the global blueprint for biofuels. Advancements in ultra-capacitors have been seen, and these promise to increase the durability and performance of electric cars which both utilise energy more efficiently and promise a low emissions route to mobility if renewables can be used to source this power.


The electricity sector as always has shown some of the more positive trends. Solar power is expanding dramatically, Sharp's largest plant will soon have a production capacity of 800MW per year--a large fraction of global manufacturing capacity just a couple of years ago. The rapid rise of both solar and wind power is being supported by record, and rapidly increasing CleanTech investment. Wind power contracts have grown to 1400MW for Siemens in the US, a figure that would have seemed enormous just a couple of years ago; today several wind farms either already built or in the planning will individually approach this size. In a significant partnership, India and Europe are starting to undertake serious discussions of how to scale up wind power across the sub-continent. All of this development is starting to be integrated, visions of a 'Green Unifying Theory' are being developed. Many discussions are taking place about the contents of such a theory, one component that isn't to likely to be included is coal. That's a shame because in a reversal of the famous dash-to-gas, the UK seems to be undergoing a somewhat smaller but rather disconcerting career-to-coal.

Meanwhile, in efficiency, negawatts have been in the news again, a report just release in Texas has found that they don't actually need new coal, or wind, they need efficiency and this option is remarkably affordable. Technological developments that may help with such improvements in the future include frequency regulation using flywheels that produce a tiny fraction of the GHG emissions associated with typical regulation facilities.

After 'Carbon Neutral' made it as word of the year by the Oxford English Dictionary it was perhaps predictable that there would be more scrutiny of this nascent market. This has proved to be the case. In the UK the Environmental Audit Comitte has started an investigation and the UK government is planning offset standards. I recently also made my views on the topic clear and supported my preferred company, MyClimate.

All of which has become even more relevant, and discussed due to the extremely weird 'winter' weather occurring throughout the northern hemisphere. Weather that is having many unforceen impacts.

In Asian news, ASEAN has come to an agreement on encouraging energy efficiency, cheap energy and biofules (ahem..). The tensions between economic development, energy security and climate change are really showing themselves. China's continuing rapid expansion to the detriment of its environment has been written about over at china dialogue in a two piece article. Meanwhile, more on Bejing's efforts to clean up prior to the 2012 Olympics can be found here.

Finishing off with some good news, Marks and Spencer's (M&S) has join the growing ranks of businesses prepared to take on (to some degree) the issues of climate change. This general willingness can also be seen the in the continued growth of the Climate Group which has just acquired three new members.

Accountability: the other climate change

The Stern Review’s report on the economics of climate change published on 30 October 2006 is an impressive document that calls for action to meet a global challenge on a civilisational scale. It is also unlikely – on present evidence – to have the effect required, for one simple reason.

Today’s vested political and economic interests are likely to prevent us from effectively addressing climate change, and so securing a decent future on this planet. It’s ghastly, it sticks in the throat, and it’s awesome to think it even as I write it. But it’s probably true.

This prognosis is suggested by Jared Diamond’s best-selling analysis of why societies collapse. Societies are endangered, he argues, when their elites insulate themselves from the negative impact of their own actions in pursuit of power and privilege. His paradigmatic case is of Easter Island, where the overuse of wood products in the production of competing religious totems eventually destroyed its inhabitants’ survival prospects.


Jared Diamond argues that this self-destructive spiral might have been halted if those with the power to enforce the cutting down of wood had far earlier suffered the economic and political consequences of this process. As economists would have it, these leaders succeed for too long to “externalise” these costs onto the shoulders, and ultimately the lives of others.

But surely, some might argue, this could not happen to the rich countries of the world, with the knowledge they have, their many institutions for collective action and capacity to hold those with power to account?


Here, however, is exactly where the problem lies: a lack of accountability where it really matters. In the microcosmic areas of social life - fines for taking our children on holiday before the school break, or for allowing our dogs to do what is natural to them in the park – we are overwhelmed by accountability mechanisms. Yet on big, important, collective issues, accountability mechanisms are either non-existent or failing. After all, no rich-nation leader will pay the human and financial costs of the Iraq war, or compensate for the poverty resulting from the failure of the Doha trade round.

Jared Diamond’s story shines a sad and disturbing light on our current situation. Our elite do not feel enough pain to allow, let alone lead in making the changes we need.

So what is to be done? Pragmatism and a hard-headed reading of history suggest that “the people” are unlikely to resolve our current crisis. Far from it, we are more likely to degenerate into a toxic blend of hedonism and divided fundamentalisms. Faced with an apparently insoluble problem, the citizens of the world will unite in partying until the curtain comes down.



The terms of debate

Yet there is an alternative – unpalatable but essential. If we cannot make those with power feel the pain, can we help them to profit from taking us along the right path?

This would involve rewarding political leaders who take a stand on climate change, who are willing to tell citizens the tough story, make enemies of those who would deny, and dedicate themselves to creating coalitions of the unwilling. Such political leaders must be empowered, whether by the ballot-box or the amplifying effects of global civil society and the media. And those leaders who choose to pipe an old tune, whoever and wherever they are, along with their advisors and sponsors, must be exposed in their naked splendour for all to see.

And that brings us to business leaders. Business will not solve climate change by what it does not do; compliance will only ever be a marginal part of any serious solution. Business will make a difference by what it does and does best: inventing, making and selling new products and services. (That is why our Accountability Rating of the world’s largest hundred companies measures how smart rather than how moral they are in embedding social and environmental dynamics into their business models and practices).

Co-opting those who can make, or prevent, change requires that “corporate responsibility” grows up and becomes a driver in shaping a global, responsible competitiveness between nations and regions. We need global markets where money is to be made by doing the right thing, creating value and profit by “internalising externalities” that will otherwise destroy us.

Business cannot, and will not do this on its own. Reshaping markets requires unlikely alliances between business, governments and civil society. We have proven we can do this across such diverse challenges as labour standards, access to life-saving drugs, corruption and animal rights. We can and must do it for climate change, reshaping the terms on which business is done to our collective good.

Who will take the lead?

On Easter Island, no leader emerged from any of the dozen clans to reshape timber markets. It is instructive to consider which countries or regions - today’s global “clans” - will provide leadership in driving forward responsible competitiveness tomorrow.

Europe has enormous potential, with its leadership on Kyoto and its history of linking social inclusion and markets. But a region characterized (by Nick Robins) as having a “responsibility surplus and an innovation deficit” has to date failed to turn this “social good” to its competitive advantage.

The United States too is an unlikely candidate, essentially the mirror-image of Europe's strengths and weaknesses, over-innovating without focus on the things that count. Directing its business community towards long-term issues is, with some notable exceptions, a contradiction in terms. It would require a seismic shift in the time-horizons and interests of the American electorate and its investment community, unlikely although not impossible on both counts.

Perhaps then we need to bet on China for leadership. We might point today to its dirty economy in more senses than one. But China's culture and practice of decision-making is like no other, rooted in a history of long-termism. Could it be that tackling climate change will be China's equivalent of the moai in the era of their creation: a powerful symbol of emerging leadership?

Trading in a carbon limited world

Reducing carbon emissions requires all of us to change our behaviour. But how? Matt Prescott explores the potential for a market mechanism that will transform our personal economies and could help save the planet.

The idea of trading carbon as commodity began with Kyoto. Now the carbon market appears to be here to stay. There is a strong interest at all levels – individual, business and government, in engaging with this newcomer in the financial world.

Carbon is an unusual commodity. It evokes a great deal of emotion and is tied to areas of social and environmental thinking that have never previously been aligned with conventional capitalist thinking. But through the carbon market we are beginning to see the ecological future of our planet priced and traded as a commodity.

Whilst this may sound like an unfeeling solution to the climate change crisis, environmental groups in the west are warming to the carbon market’s potential. Why? Because we need to reduce emissions dramatically in the next ten years, according to the world’s leading climate scientists. With time so short, we have to go with the biggest tool we’ve got – the market.

Carbon trading is one of the mechanisms approved by the Kyoto Protocol for nations to reduce their emissions of greenhouse gases. The Kyoto Protocol created the Clean Development Mechanism (CDM) to enable emissions being saved in one part of the world to be sold in another. The result is a vast number of projects, mostly in developing nations, being certified for emissions reductions. Renewable energy projects such as wind power are common. These are checked to avoid ‘double counting’ and sold into one of a number of carbon markets from where the credits can be purchased.

The outcomes, in terms of environmental and social impact have been mixed so far, and the Kyoto Protocol is under fire for failing to deliver anything near the emission reductions the world needs. Indeed global emissions are continuing to rise and few countries can claim to have bucked the trend. But much has been learned since Kyoto and the learning curve is getting steeper.

Learning from the EU

The European Union has been operating an Emissions Trading Scheme (EU ETS) since January 2005, with the first phase due to end in December 2007. beyond which the second phase will coincide with the first Kyoto commitment period which operates from 2008 to 2012 and requires signed-up developed nations to have reduced their greenhouse gas emissions by around 5% below their 1990 levels. At its peak, the price for a tonne of carbon (CO2 equivalent) was above €30. Currently it is hovering around €12.

This is a "cap and trade" scheme. In such a scheme, those that emit carbon are each given credits -- an allowance that entitles them to emit a specific amount of carbon. The total amount of credits cannot exceed the cap – which is the overall limit of total agreed emissions. The EU ETS covers around 40% of total greenhouse gas emissions from EU nations in several industry sectors such as paper, mineral and energy. The basic logic of any cap and trade scheme is that the market will find the cheapest savings. Any organisation covered by the scheme has two options if it exceeds its permitted allowance. It can purchase the more emissions rights in the market or it can reduce its own emissions through greater energy efficiency. According to the theory of the market, each installation will tend to make the most economically rational decision within its capped "carbon budget".

Global impacts

Many project-based carbon reductions take place in China and India – two fast growing economies which offer many opportunities to deliver verifiable reductions because the pace of development of their energy infrastructure is so fast. Investment in clean renewable energy technologies aided by the finance made available through the carbon market makes low carbon developments more attractive to them. As the market for carbon expands, there is an ever greater opportunity to further reduce emissions.

On many fronts, carbon trading has so far proved to be a successful mechanism, though some criticise it for its traditional capitalist approach. However, criticism is muted, given the current lack of alternatives. Given the urgent need to reduce emissions, a strong carbon market offers a way to unlock the creative potential of many of the world’s great financial and cultural centres to try to solve the greenhouse gas emissions problem.

You, the new actor

At the present time, 44% of emissions in the UK are attributable directly to individuals, but the individual is not currently a player in the carbon market. In a globalised carbon market, the initiative to reduce emissions may not stay with governments. Companies and communities who recognise the scale of the threat of climate change to their own futures and the future of their families could themselves become the drivers.

As a concerned citizen, one could buy verified carbon reductions and not sell them – hence removing carbon from the market and therefore forcing the price up, but the RSA does not believe this is enough. We are looking at an entirely new approach to individual carbon trading which we hope could hold the key to balancing the development of the economy with the need to control carbon emissions in a fast, effective and equitable manner. It is the new show in town.

At present, there are few actors in the EU ETS – 12,000 installations, representing approximately 45% of EU CO2 emissions. The RSA conceives of every individual in the UK becoming an actor and, if the scheme succeeds, every individual in the EU – nearly 500 million people.

It would work like this: The government of the UK would allocate to each adult in the UK an equal per capita share of the 44% of the country’s emissions that are attributable directly to individuals (through fuel and electricity purchases). The remaining 56% of the UK’s carbon emissions would be auctioned to government and business.

That 56% operates in much the same way as the EU ETS. However individuals are now actors in the same market. If they emit less than their personal allocation, they can sell their emissions rights to those emitting more than their share.

Decoupling emissions from growth

So what would happen if each person was financially responsible for his or her own emissions? Firstly we would find out where our allowance was going: do we drive a big car? Do we leave the lights on? Do we have the heating turned up too high? Do we take many flights? If there was a strong financial incentive and individual access to the market, we think we would see a rapid move away from wasteful to low-carbon lifestyles. People would look for low-carbon products and services to save on their emissions allocations. If there was demand for low-carbon products, entrepreneurs, in turn, would develop and produce them for the market.

Each year, to fight climate change, the carbon budget will have to shrink. As the budget is shrunk, the goods and services required to meet the lowered targets will become available and affordable and a new low-carbon culture will continue to propel this change.

It would be good in other ways, too. It would enhance public health and energy security and, indeed, the Contraction and Convergence model could also be delivered through this mechanism. So what starts out looking like an idea with a strong core of market economics, on closer inspection turns into something which speaks to the heart of a strong and just society.


Matt Prescott is the director of CarbonLimited. The Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA) is at the heart of work to further the debate on personal carbon trading through the CarbonLimited project. CarbonLimited runs until December 2008 and is delivering a programme of research, public debate and piloting. www.rsacarbonlimited.org