Grassroot Environmentalism Shifting American Policy

Waking up and catching up
January 25, 2007 -- The Economist

Belatedly, and for many reasons, America is embracing environmentalism

WHEN Jim Webb, the new Democratic senator from Virginia, replied to George Bush's state-of-the-union message, he could bear to endorse only one of the president's proposals. This was the idea of cutting America's petrol (gasoline) consumption by 20% in ten years, by increasing ethanol production to 35 billion gallons a year and raising fuel-efficiency standards for cars.

Such a plan would reduce America's dependence on imported oil from dangerous places (as would Mr Bush's plan to double the country's petroleum reserves). But it would address global warming only tangentially. The Democrats in Congress are weighing much more dramatic measures, including across-the-board cuts to the greenhouse gases that are heating up the planet. At the state level, politicians of all stripes are already taking more radical steps. Even big business is coming round. Mr Bush may be dragging his feet, but America is greening fast.

The Democrats' victory in last year's elections means that Congress's stance on environmental issues has changed dramatically. In one race for the House of Representatives, a Democratic consultant on wind power defeated a Republican ally of the oil industry. Barbara Boxer, an ardent advocate of firm action on climate change, has taken over the chairmanship of the Senate Environment Committee from James Inhofe, who often described global warming as “the greatest hoax ever perpetrated on the American people”.

Since Congress convened earlier this month, the Democrats have got to work fast. The House has passed a bill that would eliminate a tax break for oil production in America, and would impose penalties on firms that refuse to renegotiate the absurdly generous leases the government accidentally granted them in the late 1990s. The proceeds—perhaps $15 billion over the next decade—would be used to fund renewable energy schemes.

Nancy Pelosi, the new speaker of the House, is now turning her attention to global warming. She is setting up a committee to address both that issue, and America's dependence on imported fuel. She wants to see legislation before July 4th, so that she can declare “energy independence” on the same day that the founding fathers severed political ties with Britain.

Meanwhile, some half-dozen bills on global warming are circulating in the Senate. Several propose cap-and-trade schemes, whereby the government would create a fixed number of permits to produce greenhouse gases and then auction them or allocate them to businesses. Firms without enough permits to cover their emissions would either have to pollute less, or buy up spare ones from firms that had managed to cut back.

John McCain, a leading Republican presidential candidate, and Joe Lieberman, a former Democratic one, are behind the most prominent cap-and-trade scheme. Barack Obama, one of the Democrats' current presidential aspirants, is a co-sponsor. It is the most ambitious of the bills with serious backing: it would cut carbon emissions to 2004 levels by 2012 and then mandate further reductions of 2% a year until 2020. Although these targets are less onerous than those of the Kyoto protocol, the United Nations' treaty on climate change, most analysts reckon they will prove too exacting for Congress.

An alternative cap-and-trade scheme, sponsored by Jeff Bingaman, chairman of the Senate Energy Committee, suffers from the opposite problem: excessive modesty. His plan would aim to slow the growth of emissions, and ultimately stabilise them at their 2013 level by 2020. It includes a safety valve, under which the government would automatically issue more permits to pollute if the price of those permits rose too far. The economic impact would be much smaller than under the McCain-Lieberman plan but so, too, would the reductions in emissions.

Dianne Feinstein, a Democratic senator from California, is proposing a third approach. She wants to create cap-and-trade mechanisms within industries rather than across the economy as a whole. She has, for instance, proposed legislation that would cut power companies' emissions by 25% of their projected levels by 2020.

All these initiatives face an uphill battle. The previous Senate rejected the McCain-Lieberman plan twice—by a bigger margin the second time around. Any bill that involves mandatory caps on greenhouse-gas emissions would need 60 of the chamber's 100 votes to succeed, since Mr Inhofe has pledged to filibuster all such measures. In the House the Energy Committee is chaired by John Dingell, a Democrat from the carmaking hub of Detroit who has long opposed mandatory caps. Mr Dingell, who says Ms Pelosi's new committee is “as useful as feathers on a fish”, will still have a big say in any legislation. And even if a bill overcomes all these obstacles, it would risk a presidential veto.

A matter of security
But whatever the fate of these proposals, the political climate is changing faster than the weather. Almost all the leading presidential candidates favour emissions caps. One of them, Hillary Clinton, has condemned the Bush administration's failure to act as “unAmerican”. That is a remarkable change since 2000, when Al Gore toned down his environmental rhetoric during his presidential campaign for fear of sounding pious and obsessive. Indeed, activists are so convinced that the next president will be greener than Mr Bush that they are debating whether to settle for immediate but modest measures on global warming, or wait for a new administration to take bolder steps.

The Democrats have always been the greener party, but environmentalism is budding among Republicans too. Take Saxby Chambliss, a moderate senator. He voted against the McCain-Lieberman bill in 2005, but changed his mind after visiting Greenland to view the melting ice cap. “There really is something to it,” he now says.

Many factors lie behind the party's shift. Most have to do not with sudden sentimentality in the face of Nature, but with national security (a motivation that lies, too, behind Ms Pelosi's new committee and Mrs Clinton's patriotic posturing). Fiscal hawks fret about the impact of growing oil imports on the dollar. Military types fear global conflict for dwindling resources in the event of catastrophic global warming. Neoconservatives worry about America's dependence on oil imports from unstable if not openly hostile countries in Latin America and the Middle East. Some think the solution is simply to pump more oil at home, but others argue that America needs to move away from oil altogether. One such figure, Jim Woolsey, a former director of the Central Intelligence Agency, pointedly drives a Toyota Prius, a famously fuel-efficient car.

At the same time, a growing number of evangelical Christians are beginning to see global warming as a moral issue. They argue that mankind, as steward of God's creation, has a duty to protect the environment. One outfit, the Evangelical Climate Initiative, encourages prominent pastors and theologians to sign a “Call to Action”. Another group, the Evangelical Environmental Network, runs a website called “What would Jesus drive?” Last year Pat Robertson, a prominent televangelist, told his flock, “We really need to address the burning of fossil fuels.”

The Republican Party has a strong, albeit fitful, tradition of environmentalism. Teddy Roosevelt expanded America's national parks. Richard Nixon created the Environmental Protection Agency (EPA). Mr Bush's father, when he was president, signed off on America's first nationwide cap-and-trade scheme to control emissions of the gases that cause acid rain.

But the strongest force propelling environmentalism among Republicans is self-preservation. Arnold Schwarzenegger, the decidedly green governor of California, was one of the few luminaries in the party unaffected by last year's electoral meltdown. Republicans in other western states, where a Democratic tide is rising and a pristine landscape is a major tourist attraction, are following Mr Schwarzenegger's moves with interest. They fear the party may lose ground with moderate middle-class types who dislike urban sprawl and unfettered oil-drilling.

The destruction wrought by Hurricane Katrina in 2005 had a big influence on voters, according to Jonathan Lash of the World Resources Institute. Americans seem to view the increasing incidence of freakish weather as proof that climate change is real. Many of them paid to see Mr Gore's film on the subject, making it the third-most-successful documentary of all time (and now a candidate for an Oscar). Polls show that Americans are gradually growing more exercised about global warming, although they are still less anxious than Europeans or Japanese.


The business view
Even big business, which stands to lose most from stricter environmental regulation, is beginning to accept that change is in the air. Exxon Mobil, led until recently by a fierce sceptic of global warming, now concedes that there is a problem, and that its products are contributing to it. Last year four-fifths of utility executives polled by Cambridge Energy Research Associates, a consultancy, expected mandatory emissions caps within a decade.

If regulation is indeed on its way, many firms would like Congress to fix the rules sooner rather than later, to help them plan investments in factories and power plants with long lifespans. Earlier this week ten companies, including Alcoa, Caterpillar and DuPont, called for Congress to set up a cap-and-trade system for greenhouse gases as quickly as possible. Since most of the firms involved produce clouds of emissions, they would obviously like to influence future legislation.

But the firms' bosses claim to see emissions caps as an opportunity, not a threat. GE, a member of the group, wants its executives to use their “ecomagination”. By the same token Rick Wagoner, the head of GM, the world's biggest carmaker, recently hoped aloud that oil prices would remain high, so that his firm would keep its incentive to develop fuel-efficient cars. Wal-Mart, America's biggest retailer, hopes to double its sales of low-watt lightbulbs.

Lots of firms are growing healthily on the back of America's sudden enthusiasm for alternative energy. Americans invested almost $30 billion in the sector in 2006, according to New Energy Finance, a research firm. American venture capitalists lavish seven times more on greenery than their counterparts in Europe. Ethanol production was expected to double in the next few years, even before the latest boost from Mr Bush. Wind and solar power are also booming. And the bigger green firms become the more influence they will have over politicians.


States to the fore
At the very least, businesses want to avoid a patchwork of conflicting local regulations on environmental matters in general, and greenhouse-gas emissions in particular. There is already a bit of a muddle, since several states have taken much bolder and more experimental steps than the federal government. California, the boldest of all, has taken on carmakers, electricity companies and the EPA, to name a few. Its politicians vie to out-green one another. Some 40 of its legislators drive hybrid cars. Mr Schwarzenegger, not to be bested, has converted one of his fuel-swigging Hummers to run on hydrogen.

Congress may be thinking about tackling greenhouse-gas emissions, but California has already done it. Its Global Warming Solutions Act, which was passed last year, aims to cut them to 1990 levels by 2020—an ambitious target for a state that has grown rapidly in the past 15 years and will probably continue to do so. The details have yet to be fleshed out, but the reductions will come from both a cap-and-trade scheme for industry and regulations of various sorts.

Mr Schwarzenegger issued the first such regulation earlier this month, obliging producers of petrol and other fuels to cut the emissions of carbon dioxide from their products by 10% by 2020—presumably by mixing in more ethanol and other biofuels. It is not California's first attempt to reduce emissions from transport: its legislature voted for stringent cuts in 2002. That move has become snarled in a court battle over whether states have the right to set fuel-economy standards. Meanwhile, the politicians keep trucking. In September, the state showily sued six car manufacturers, alleging they had damaged its climate. It is also suing the EPA, for failing to regulate greenhouse-gas emissions.

California's politicians are keen on renewables too. State law requires utilities to generate 20% of the power they sell from sources such as windmills and biomass plants by 2010, and 33% by 2020. Solar power has won even greater favour: under the “million solar roofs” scheme, the state plans to spend more than $3 billion over the next decade subsidising the installation of solar-power panels.

California has also pioneered the practice of “decoupling”, which deprives power firms of their incentive to sell as much electricity as possible. Instead, the local regulator has devised a formula to reward firms whose sales are lower than expected, and to allow the recovery of the costs of energy-efficiency schemes.

Such measures (along with high power prices to pay for them) have helped California rein in its electricity consumption—although lovely weather and a relative lack of heavy industry have also played a part. Power use per person has remained roughly stable in the state since the 1970s, even as it has doubled in the rest of the country. As a result, California's greenhouse-gas emissions per person are on a par with those of Denmark. Relative to the size of its economy, they are lower.

But California is not America's only green enclave. Nine states in the north-east have combined to reduce emissions from power generation through a cap-and-trade scheme. Two of them plan to auction all the permits, unlike the countries in the European Union's Emissions Trading Scheme, which handed them out for nothing. Ten states have signed up to follow California's standards on car exhaust, including its requirements on greenhouse gases. Many more promote ethanol, or renewables, or energy-efficient buildings.

On the whole, left-leaning states are keener on greenery than right-wing ones, which tend to be more energy-intensive. But politicians of all stripes in the Midwest are keen to promote ethanol for the sake of local farmers, who grow the corn from which it is made. And Texas recently overtook California as the country's biggest generator of wind power.

Greenery is also popular at the local level. Almost 400 cities have devised plans to curb or reduce their greenhouse gas emissions. Many buy only fuel-efficient cars for their municipal fleets. Laura Miller, the mayor of Dallas, has spoken out against the plans of local utilities to build 17 new coal-fired power plants. What is the point of her city buying police cars fuelled by natural gas, she asks, when they will soon be overshadowed by clouds of soot?

Despite all this grassroots environmentalism, America remains the biggest contributor to global warming, accounting for roughly a fifth of all the world's emissions. The federal government's recalcitrance on the subject remains the biggest obstacle to an effective global scheme to tackle the problem. But whereas in Europe or Asia new ideas often flow from the centre to the regions, in America the states are the incubators of big shifts in policy. This means that change is coming—fast.

California May Ban Conventional Lightbulbs by 2012

California May Ban Conventional Lightbulbs by 2012
January 31, 2007 — By Bernie Woodall, Reuters, via ENN

LOS ANGELES -- A California lawmaker wants to make his state the first to ban incandescent lightbulbs as part of California's groundbreaking initiatives to reduce energy use and greenhouse gases blamed for global warming.

The "How Many Legislators Does it Take to Change a Lightbulb Act" would ban incandescent lightbulbs by 2012 in favor of energy-saving compact fluorescent lightbulbs.

"Incandescent lightbulbs were first developed almost 125 years ago, and since that time they have undergone no major modifications," California Assemblyman Lloyd Levine said Tuesday.

"Meanwhile, they remain incredibly inefficient, converting only about 5 percent of the energy they receive into light."
Levine is expected to introduce the legislation this week, his office said.

If passed, it would be another pioneering environmental effort in California, the most populous U.S. state. It became the first state to mandate cuts in greenhouse gas emissions, targeting a 25 percent reduction in emissions by 2020.

Compact fluorescent lightbulbs (CFLs) use about 25 percent of the energy of conventional lightbulbs.

Many CFLs have a spiral shape, which was introduced in 1980. By 2005, about 100 million CFLs were sold in the United States, or about 5 percent of the 2-billion-lightbulb market, according to the U.S. Environmental Protection Agency.

That number could more than double this year. Wal-Mart Stores Inc. alone wants to sell 100 million CFLs at its stores by the end of 2007, the world's biggest retailer said in November.

While it will not give opinion on the possible California law, the EPA recommends CFLs.

"They save money and energy," EPA spokeswoman Enesta Jones said. "They are more convenient than other alternatives and come in different sizes and shapes to fit almost any fixture."

Also, CFLs generate 70 percent less heat than incandescent lights, Jones said.

About a fifth of the average U.S. home's electricity costs pays for lighting, which means even if CFLs initially cost more than conventional lightbulbs, consumers will save, Jones said.

A 20-watt CFL gives as much light as a 75-watt conventional bulb, and lasts 13 times longer, according to the Rocky Mountain Institute, a nonprofit group studying energy issues.

Southern California Edison, an Edison International subsidiary and one of the state's biggest utilities, runs a program that cuts the cost of a CFL by $1 to $2.50. In the past year, SCE has helped consumers buy 6 million CFLs, it said.

California Energy Commission member Arthur Rosenfeld said an average home in California will save $40 to $50 per year if CFLs replace all incandescent bulbs.

While not commenting specifically on Levine's likely legislation, Rosenfeld, winner of the Enrico Fermi Presidential Award in 2006, said the switch from incandescent bulbs became feasible about five years ago when CFL performance improved.

"This is clearly an idea whose time has come," he said.

Levine, a Democrat from Van Nuys in Los Angeles, last year introduced a bill that will become law in July that requires most grocery stores to have plastic bag recycling.

Queensland, Australia: Recycled Sewage Made Drinkable

Australian State Leader Says Drinking Water Must Be Recycled
January 29, 2007 -- By Rod McGuirk, Associated Press, via ENN

CANBERRA, Australia -- An Australian state plans to introduce recycled sewage to its drinking water as a record drought threatens water supplies around the nation, a state leader said Monday.

Queensland state Premier Peter Beattie said falling dam levels have left his government with no choice but to introduce recycled water next year in the state's southeast -- one of Australia's fastest growing urban areas.

"We're not getting rain; we've got no choice," Beattie, who said his government had scrapped a referendum planned for March on the issue, told Australian Broadcasting Corp. radio.

Australian farms and most cities are in the grip of the nation's worst drought in a century, with some areas receiving below average rainfall for a decade.

"I think in the end, because of the drought, all of Australia are going to end up drinking recycled, purified water," he added.

However, Morris Iemma, Premier of New South Wales, the most populous of Australia's six states, said drinking recycled water was not inevitable for Australia's major cities including his state capital, Sydney.

South Australia state Premier Mike Rann said his state -- Australia's driest -- already used recycled water to irrigate crops but would not introduce it to the drinking water supply.

Victoria, the second most populous state, did not need to recycle drinking water, the state's acting Water Minister Justin Madden. He said using recycled water for industry was a better option since that would free up more drinking water.

Prime Minister John Howard, a Sydney resident, congratulated Beattie and predicted recycled water would be introduced to Sydney in the near future.

"I am very strongly in favor of recycling, and Mr. Beattie is right and I agree with him completely," Howard told Southern Cross Broadcasting radio in Sydney.

Davos Day 3: Sustainable Development in Asia -- The Answer's in the Water

Sustainable Development in Asia
January 26, 2007 -- By Lester R. Brown, The Huffington Post

Last night I was privileged to attend a dinner at the World Economic Forum that was sponsored by the Japan Water Forum. The dinner had an important focus: Sustainable Growth in Asia.

While sustainable growth in our world's most populous continent carries many environmental implications there is one area that emerges as the most critical, namely water shortages.

In recent decades, water has become a dominant issue in many countries around the world. In Plan B 2.0, which can be downloaded free of charge from the Earth Policy Institute's web site, I spend a great deal of time focused on this issue, especially as it relates to Asia.

In the last half century water demand has tripled, exceeding the sustainable yield of aquifers in scores of countries, and ultimately leading to falling water tables. In fact, water tables are now falling in countries that contain more than half the world's people

In Asia, this problem is particularly acute. The Amu Darya river, formerly a major source of water for the Aral Sea, is now drained dry by Uzbek and Turkmen cotton farmers upstream. In China, the Yellow River, which flows some 4,000 kilometers through five provinces before it reaches the Yellow Sea, has been under mounting pressure for several decades. It first ran dry in 1972, and since 1985 it has often failed to reach the sea.

A similar situation is taking place in Southeast Asia where the flow of the Mekong - which provides water to Cambodia, Laos, Thailand, and Viet Nam - is being reduced by the dams being built on its upper reaches by the Chinese.

What does this mean for Asia? It means not only water scarcity, but eventually a dramatic drop in crop yields.

Countries that are pressing against the limits of their water supply typically satisfy the growing need of cities and industry by diverting irrigation water from agriculture, and then importing grain to offset the loss of productive capacity. Since it takes 1,000 tons of water to produce 1 ton of grain, importing grain is the most efficient way to import water.

The link between water and food is strong. We each drink on average nearly 4 liters of water per day in one form or another, while the water required to produce our daily food totals at least 2,000 liters--500 times as much. This helps explain why 70 percent of all water use is for one purpose--irrigation. Another 20 percent is used by industry, and 10 percent goes for residential purposes. With the demand for water growing in all three categories, competition among sectors is intensifying, with farmers almost always losing.

In China, a combination of aquifer depletion, and the diversion of irrigation water to cities are making it difficult to expand the grain harvest. After peaking at 392 million tons in 1998, the harvest dropped to 346 million tons in 2002 before gradually recovering during the four harvests since then. China's food bubble may be about to burst, as more and more irrigation wells go dry. In recent years, China has covered its grain shortfall by drawing down its stocks, but it will soon have to turn to the world market to fill this deficit. When it does, it could destabilize world grain markets.

Asia can lead the charge to solve the world's ballooning water problems. I see two important steps to this end. First, Asia - as well as developing countries around the world where water scarcity is already a real problem - can reduce demand by stabilizing population and raising water productivity. This is an extraordinary challenge considering that nearly all of the 3 billion people to be added by 2050 will be born in developing countries

The second step in stabilizing the water situation is to raise water productivity, not unlike the way we have raised land productivity. After World War II, with population projected to double by 2000 and with little new land to bring under the plow, the world launched a major effort to raise cropland productivity. As a result, land productivity has nearly tripled since1950. We now need to make a similar effort when it comes to water.

For more Davos coverage -- including news, videos, and blog posts -- visit the Davos Conversation site.

Davos Day 2: The Future Depends on Increasing Energy Efficiency

The Future Depends on Increasing Our Energy Efficiency
January 25, 2007 -- By Lester R. Brown, The Huffington Post

Two panels that I will participate in today focus on the future of energy.

One of the primary motivations for writing my most recent book Plan B 2.0 - which can be downloaded for free at the Earth Policy Institute's web site -- was confronting the dangers of our current, fossil-fuel based energy economy and its role in catastrophic climate change.

A major chunk of the book, along with much of the work we do at the Earth Policy Institute, focuses on describing a viable alternative-energy economy.

The good news is that solutions do exist.

We see the 21st century, alternative-energy economy already emerging in the growing reliance on wind-energy in Europe, where 40 million people get their residential electricity from wind, the use of geothermal energy to heat 87 percent of homes in Iceland, the expansion of solar energy in Japan, and the growing fleet of hybrid cars here in the United States.

Another major solution is seen in the development of biofuels. I recently posted this piece regarding the dangers of the over-reliance of ethanol from corn. While that danger is very real, a rational and thoughtful approach to biofuels, which includes a greater reliance on cellulosic ethanol, should be an important part of our 21st century energy economy.

One crucial area of focus, a step we can take essentially immediately, is raising energy efficiency -- especially in the United States.

When the Bush administration released a new energy plan in April 2001 that called for construction of 1,300 new power plants by 2020, Bill Prindle of the Washington-based Alliance to Save Energy responded by pointing out how the country could eliminate the need for those plants and save money in the process. He ticked off several steps that would reduce the demand for electricity:

* Improving efficiency standards for household appliances would eliminate the need for 127 power plants;
* More stringent residential air conditioner efficiency standards would eliminate 43 power plants;
* Raising commercial air conditioner standards would eliminate the need for 50 plants;
* Using tax credits and energy codes to improve the efficiency of new buildings would save another 170 plants;
* Similar steps to raise the energy efficiency of existing buildings would save 210 plants.

These five measures from the longer list suggested by Prindle would not only eliminate the need for 600 power plants, they would also save money. Although these calculations were made in 2001, they are still valid simply because there has been so little progress in raising U.S. energy efficiency since then.

One simple energy-saving step is to replace all remaining incandescent light bulbs with compact fluorescent lamps (CFLs), which use only one third as much electricity and last 10 times as long. In the United States, where 20 percent of all electricity is used for lighting, if each household replaced the still widely used incandescents with compact fluorescents, electricity for lighting would be easily cut in half. The combination of greater longevity and lower electricity use greatly outweighs the higher costs of the CFLs, yielding a risk-free investment return of some 25-40 percent a year. Worldwide, replacing incandescent light bulbs with CFLs in, say, the next three years would facilitate the closing of hundreds of climate-disrupting coal-fired power plants.

A second obvious area for raising energy efficiency is automobiles. If over the next decade the United States, for example, were to shift from the current fleet of cars powered with gasoline engines to gas-electric hybrids with the fuel efficiency of the Toyota Prius, gasoline use could easily be cut in half. Higher gasoline prices and mounting climate change worries are driving sales upward.

This is but one area of focus, but in theory its application is among the simplest in the short term.

There is no silver bullet when it comes to replacing our climate-altering, fossil fuel-based economy. But, using technologies readily available today, we can take a massive step towards the diversified, Plan B, alternative-energy economy of tomorrow.

For more Davos coverage -- including news, videos, and blog posts -- visit the Davos Conversation site.

Davos Notes: Considering the Real Costs of Our Energy Economy

Davos Notes: Considering the Real Costs of Our Energy Economy
January 24, 2007 -- By Lester R. Brown, The Huffington Post

Davos 2007 has officially begun. For me, the highlight of the first day consisted of a series of debates, part of CNBC's Make Green Pay panel.

As is true with most events at the World Economic Forum, the topics of each of the event's three panels were controversial, and the speakers on both sides were thoughtful and impressive.

I participated as a featured speaker discussing, among other things, the viability of nuclear energy as a solution to our world's current fossil-fuel-based energy economy.

As concerns over climate change have mounted in recent years, nuclear energy has been touted as a viable alternative to our current dependency on carbon-intensive energy sources.

The truth however, is that when the real costs of nuclear power are considered, the energy source is quickly taken out of the running.

In fact, on a level playing field with no taxpayer subsidies, nuclear power is dead. If utilities pay the full costs of nuclear waste disposal, of insurance against an accident, and of decommissioning plants that are worn out, the cost of nuclear power will far exceed that of other promising alternatives.

This notion of real costs is something that our fossil-fuel-based throwaway economy does not take into account.

In my recent book, Plan B 2.0 - which is downloadable, free of charge from the Earth Policy Institute's website - I urge considering the real costs of all products as we develop the necessary 21st century, Plan B, economy.

What does "real costs" mean? It means including the total ecological and health costs of products on their prices.

Throughout most of recorded history, the indirect costs of economic activity were so small that they were rarely an issue and, even then, only at the local level. But with the sevenfold global economic expansion since 1950, the failure to address these market shortcomings and the irrational economic distortions they create could be fatal.

Our modern economic prosperity is achieved in part by running up ecological deficits, costs that do not show up on the books, but costs that someone will eventually pay.

The burning of coal, for example, results in increased costs for society as citizens are affected by breathing polluted air, as well as for governments that will be forced to deal with the effects of climate change.

Instead of pushing these costs - which will have to be paid at some point - off until the future, it makes more sense to incorporate them at the front end. The method for this, increasing taxes on environmentally damaging goods while decreasing income taxes, is a model I discuss at length in Plan B 2.0.

It is also something that has been proposed by ecologists and economists alike, and, when real costs are included in the pricing of goods, it is the greener, alternative energy sources - like wind, solar, and geothermal - that emerge as the cheapest, most viable solutions to our current model.

The notion of taxing products to include their entire cost to society is something that is being put into practice here in the United States in the form of tobacco taxes.

A study by the Centers for Disease Control and Prevention (CDC) in the United States calculated the social costs of smoking cigarettes at $7.18 per pack. As a result, prices for cigarettes in many states across the country are rising toward this number - a result of increased taxes intended to offset the social costs.

When it comes to energy, the International Center for Technology Assessment has done a detailed analysis, entitled "The Real Price of Gasoline." The group calculates several indirect costs, including oil industry tax breaks, oil supply protection costs, oil industry subsidies, and health care costs of treating auto exhaust-related respiratory illnesses. The total of these indirect costs centers around $9 per gallon, somewhat higher than the social cost of smoking a pack of cigarettes. Add this external or social cost to the roughly $2 per gallon average price of gasoline in the United States in early 2005, and gas would cost $11 a gallon (this does not include projected costs of climate change). These costs are real; someone bears them.

Now that these costs have been calculated, they can be used to restructure taxes--lowering income taxes and offsetting this with a rise in gasoline taxes.

This practice is a necessary component to any energy economy we consider as a solution to our current fossil-fuel-based energy economy.

That being said, nuclear energy with the real costs of insurance, construction, security and waste disposal becomes among the most expensive form of energy in the world.

Conversely, green, clean, renewable energy becomes the most viable; the costs we see today are very close to the real costs we would endure as most of these energy sources have few if any hidden effects on society.

It's time we start being honest about what various energy options actually cost in the long run. It was the failure to do so in the first place that brought us to this juncture in human history, where we must decide on our future. If we are willing to acknowledge the full effects of our actions - including total societal costs of our energy choices - then we may yet avert some of the impending consequences of global climate change.

For more Davos coverage -- including news, videos, and blog posts -- visit the Davos Conversation site.

Ethanol From Corn Is Not The Solution!

Ethanol From Corn Is Not The Solution
January 16, 2007 -- By Lester R. Brown, The Huffington Post

In the announcement of their "100 Hour" agenda, Democrats targeted expanding research and investment in alternative energy as a key priority. This development is long overdue, and should be celebrated as a major step towards embracing a diversified 21st century energy economy.

The plan, however, has a major pitfall: an over-reliance on corn based ethanol.

We need to make sure that in trying to solve one problem--our dependence on imported oil--we do not create a far more serious one: soaring grain prices and potential chaos in the world food economy.

Ethanol from corn has long been hailed as a solution to our nation's reliance on oil. As a result of soaring oil prices, investors have rushed to expand ethanol production - most clearly seen in the explosion of ethanol distilleries in the last year. Unfortunately this rush to invest in crop-based ethanol is pitting the world's poorest against the world's wealthy motorists.

Furthermore, a report released by me and my colleagues at the Earth Policy Institute (EPI) earlier this month revealed that this surge in ethanol plant construction has been vastly underestimated by both industry papers and ultimately the USDA, which has understated the amount of corn that will be required for ethanol in 2008 by more than half.

The USDA projects that distilleries will require only 60 million tons of corn from the 2008 harvest. But here at the Earth Policy Institute, we estimate that distilleries will need 139 million ton. If the EPI estimate is at all close to the mark, the emerging competition between cars and people for grain will likely drive world grain prices to levels never seen before. The key questions are: How high will grain prices rise? When will the crunch come? And what will be the worldwide effect of rising food prices?

This unprecedented diversion of the world's leading grain crop to the production of fuel will affect food prices everywhere. As the world corn price rises, so too do those of wheat and rice, both because of consumer substitution among grains and because the crops compete for land. Both corn and wheat futures were already trading at 10-year highs in late 2006.

With corn supplies tightening fast, rising prices will affect not only products made directly from corn, such as breakfast cereals, but also those produced using corn, including milk, eggs, cheese, butter, poultry, pork, beef, yogurt, and ice cream. The risk is that soaring food prices could generate a consumer backlash against the fuel ethanol industry.

Fuel ethanol proponents point out, and rightly so, that the use of corn to produce ethanol is not a total loss to the food economy because 30 percent of the corn is recovered in distillers dried grains that can be fed to beef and dairy cattle, pigs, and chickens, though only in limited amounts. They also argue that the U.S. distillery demand for corn can be met by expanding land in corn, mostly at the expense of soybeans, and by raising yields. While it is true that the corn crop can be expanded, there is no precedent for growth on the scale needed. And this soaring demand for corn comes when world grain production has fallen below consumption in six of the last seven years, dropping grain stocks to their lowest level in 34 years.

From an agricultural vantage point, the automotive demand for fuel is insatiable. The grain it takes to fill a 25-gallon tank with ethanol just once will feed one person for a whole year. Converting the entire U.S. grain harvest to ethanol would satisfy only 16 percent of U.S. auto fuel needs.

The competition for grain between the world's 800 million motorists who want to maintain their mobility and its 2 billion poorest people who are simply trying to survive is emerging as an epic issue. Soaring food prices could lead to urban food riots in scores of lower-income countries that rely on grain imports, such as Indonesia, Egypt, Algeria, Nigeria, and Mexico. The resulting political instability could in turn disrupt global economic progress, directly affecting all countries. It is not only food prices that are at stake, but trends in the Nikkei Index and the Dow Jones Industrials as well.

There are alternatives to creating a crop-based automotive fuel economy. The equivalent of the 2 percent of U.S. automotive fuel supplies now coming from ethanol could be achieved several times over, and at a fraction of the cost, by raising auto fuel efficiency standards by 20 percent.

If we shift to gas-electric hybrid plug-in cars over the next decade, we could be doing short-distance driving, such as the daily commute or grocery shopping, with electricity. If we then invested in thousands of wind farms to feed cheap electricity into the grid, U.S. cars could run primarily on wind energy--and at the gasoline equivalent of less than $1 a gallon. The stage is set for a crash program to help Detroit switch to gas-electric hybrid plug-in cars.

It is time for a moratorium on the licensing of new distilleries, a time-out, while we catch our breath and decide how much corn can be used for ethanol without dramatically raising food prices. The policy goal should be to use just enough fuel ethanol to support corn prices and farm incomes but not so much that it disrupts the world food economy. Meanwhile, a much greater effort is needed to produce ethanol from cellulosic sources such as switchgrass, a feedstock that is not used for food.

The world desperately needs a strategy to deal with the emerging food-fuel battle. As the leading grain producer, grain exporter, and ethanol producer, the United States is in the driver's seat.

America's Moral Leadership & Pollution

The Greening of America
January 25, 2007 -- The Economist

How America is likely to take over leadership of the fight against climate change; and how it can get it right.

A country with a presidential system tends to get identified with its leader. So, for the rest of the world, America is George Bush's America right now. It is the country that has mismanaged the Iraq war; holds prisoners without trial at Guantánamo Bay; restricts funding for stem-cell research because of fundamentalist religious beliefs; and destroyed the chance of a global climate-change deal based on the Kyoto protocol.

But to simplify thus is to misunderstand—especially in the case of huge, federal America. One of its great strengths is the diversity of its political, economic and cultural life. While the White House dug its heels in on global warming, much of the rest of the country was moving. That's what forced the president's concession to greens in the state-of-the-union address on January 23rd. His poll ratings sinking under the weight of Iraq, Mr Bush is grasping for popular issues to keep him afloat; and global warming has evidently become such an issue. Albeit in the context of energy security, a now familiar concern of his, Mr Bush spoke for the first time to Congress of “the serious challenge of global climate change” and proposed measures designed, in part, to combat it.


Hot for the time of year
It's the weather, appropriately, that has turned public opinion—starting with Hurricane Katrina. Scientists had been warning Americans for years that the risk of “extreme weather events” would probably increase as a result of climate change. But scientific papers do not drive messages home as convincingly as the destruction of a city. And the heatwave that torched America's west coast last year, accompanied by a constant drip of new research on melting glaciers and dying polar bears, has only strengthened the belief that something must be done.


Business is changing its mind too. Five years ago corporate America was solidly against carbon controls. But the threat of a patchwork of state regulations, combined with the opportunity to profit from new technologies, began to shift business attitudes. And that movement has gained momentum, because companies that saw their competitors espouse carbon controls began to fear that, once the government got down to designing regulations, they would be left out of the discussion if they did not jump on the bandwagon. So now the loudest voices are not resisting change but arguing for it.

Support for carbon controls has also grown among some unlikely groups: security hawks (who want to reduce America's dependence on Middle Eastern oil); farmers (who like subsidies for growing the raw material for ethanol); and evangelicals (who worry that man should be looking after the Earth God gave him a little better). This alliance has helped persuade politicians to move. Arnold Schwarzenegger, California's Republican governor, has led the advance, with muscular measures legislating Kyoto-style curbs in his state. His popularity has rebounded as a result. And now there is movement too at the federal level, which is where it really matters. Since the Democrats took control of Congress after the November mid-term elections, bills to tackle climate change have proliferated. And three of the serious candidates for the presidency in 2008—John McCain, Hillary Clinton and Barack Obama—are all pushing for federal measures.


Europe's good, and bad, example
Unfortunately, Mr Bush's new-found interest in climate change is coupled with, and distorted by, his focus on energy security. Reducing America's petrol consumption by 20% by 2017, a target he announced in the state-of-the-union address, would certainly diminish the country's dependence on Middle Eastern oil, but the way he plans to go about it may not be either efficient or clean. Increasing fuel-economy standards for cars and trucks will go part of the way, but for most of the switch America will have to rely on a greater use of alternative fuels. That means ethanol (inefficient because of heavy subsidies and high tariffs on imports of foreign ethanol) or liquefied coal (filthy because of high carbon emissions).

The measure of Mr Bush's failure to tackle this issue seriously is his continued rejection of the only two clean and efficient solutions to climate change. One is a carbon tax, which this paper has long advocated. The second is a cap-and-trade system of the sort Europe introduced to meet the Kyoto targets. It would limit companies' emissions while allowing them to buy and sell permits to pollute. Either system should, by setting a price on carbon, discourage its emission; and, in doing so, encourage the development and use of cleaner-energy technologies. Just as America's adoption of catalytic converters led eventually to the world's conversion to lead-free petrol, so its drive to clean-energy technologies will ensure that these too spread.

A tax is unlikely because of America's aversion to that three-letter word. Given that, it should go for a tough cap-and-trade system. In doing so, it can usefully learn from Europe's experience. First, get good data. Europe failed to do so: companies were given too many permits, and emissions have therefore not fallen. Second, auction permits (which are, in effect, money) rather than giving them away free. Europe gave them away, which allowed polluters to make windfall profits. This will be a huge fight; for, if the federal government did what the Europeans did, it would hand out $40 billion-50 billion in permits. Third, set a long time-horizon. Europeans do not know whether carbon emissions will still be constrained after 2012, when Kyoto runs out. Since most clean-energy projects have a payback period of more than five years, the system thus fails to encourage green investment.

One of America's most admirable characteristics is its belief that it has a duty of moral leadership. At present, however, it's not doing too well on that score. Global warming could change that. By tackling the issue now it could regain the high moral ground (at the same time as forging ahead in the clean-energy business, which Europe might otherwise dominate). And it looks as though it will; for even if the Toxic Texan continues to evade the issue, his successor will grasp it.

Frilled Shark (Chlamydoselachus anguineus)

This video shows rare footage of a frilled shark in shallow water after it was captured.