Energy Efficiency Index from Merrill Lynch

Merrill's Efficiency Index
July 30, 2007 -- By Cassandra Vinograd, WSJ: Energy Roundup

Merrill Lynch announced a new Energy Efficiency Index, currently comprised of 40 companies, to identify industry sectors that it says should benefit from the growing drive to improve energy efficiency.

“While there has been a clear shift of resources and investor attention into renewable energy, energy efficiency remains an area that is relatively under-explored,” said Asari Efiong, Merrill Lynch SRI/ Renewable Energy equity analyst. “We believe that energy efficiency represents a significant market opportunity for investors, as policy changes look set to force a structural shift in demand.”

Merrill analysts say they think the global manufacturing industry could improve its energy efficiency by between 18% to 26% overall, while cutting the sector’s CO2 emissions by 19-32%. The four sectors most exposed to this theme, according to Merrill, are the automotive industry, capital goods, semi-conductors and building materials.

Among the companies in the index are those with technologies that boost automotive fuel efficiency; building-insulation companies; power-semiconductor makers and efficient-lighting companies.

Climate Change and Energy: 2008 Presidential Policy Directors

Campaign 2008
May 24, 2007 -- Environment & Energy TV

Click here for the video.

Panelists include, James Kvaal of John Edwards for America, Denis McDonough of Obama for America, John Raidt of McCain 2008 and Todd Stern of the Hillary Clinton for President Exploratory Committee. They discuss the candidates’ goals for climate and energy, whether nuclear and coal to liquids will play a part in future energy policy and whether or not the United States should wait for an international agreement on climate policy.

Global Fresh Water Supplies in Peril

Water Tables Falling and Rivers Running Dry
July 24, 2007 -- By Lester R. Brown, Earth Policy Institute

PLAN B 2.0 BOOK BYTE:
As the world’s demand for water has tripled over the last half-century and as the demand for hydroelectric power has grown even faster, dams and diversions of river water have drained many rivers dry. As water tables fall, the springs that feed rivers go dry, reducing river flows.

Scores of countries are overpumping aquifers as they struggle to satisfy their growing water needs, including each of the big three grain producers—China, India, and the United States. More than half the world’s people live in countries where water tables are falling.

There are two types of aquifers: replenishable and nonreplenishable (or fossil) aquifers. Most of the aquifers in India and the shallow aquifer under the North China Plain are replenishable. When these are depleted, the maximum rate of pumping is automatically reduced to the rate of recharge.

For fossil aquifers, such as the vast U.S. Ogallala aquifer, the deep aquifer under the North China Plain, or the Saudi aquifer, depletion brings pumping to an end. Farmers who lose their irrigation water have the option of returning to lower-yield dryland farming if rainfall permits. In more arid regions, however, such as in the southwestern United States or the Middle East, the loss of irrigation water means the end of agriculture.

The U.S. embassy in Beijing reports that Chinese wheat farmers in some areas are now pumping from a depth of 300 meters, or nearly 1,000 feet. Pumping water from this far down raises pumping costs so high that farmers are often forced to abandon irrigation and return to less productive dryland farming. A World Bank study indicates that China is overpumping three river basins in the north—the Hai, which flows through Beijing and Tianjin; the Yellow; and the Huai, the next river south of the Yellow. Since it takes 1,000 tons of water to produce one ton of grain, the shortfall in the Hai basin of nearly 40 billion tons of water per year (1 ton equals 1 cubic meter) means that when the aquifer is depleted, the grain harvest will drop by 40 million tons—enough to feed 120 million Chinese.

In India, water shortages are particularly serious simply because the margin between actual food consumption and survival is so precarious. In a survey of India’s water situation, Fred Pearce reported in New Scientist that the 21 million wells drilled are lowering water tables in most of the country. In North Gujarat, the water table is falling by 6 meters (20 feet) per year. In Tamil Nadu, a state with more than 62 million people in southern India, wells are going dry almost everywhere and falling water tables have dried up 95 percent of the wells owned by small farmers, reducing the irrigated area in the state by half over the last decade.

As water tables fall, well drillers are using modified oil-drilling technology to reach water, going as deep as 1,000 meters in some locations. In communities where underground water sources have dried up entirely, all agriculture is rain-fed and drinking water is trucked in. Tushaar Shah, who heads the International Water Management Institute’s groundwater station in Gujarat, says of India’s water situation, “When the balloon bursts, untold anarchy will be the lot of rural India.”

In the United States, the U.S. Department of Agriculture reports that in parts of Texas, Oklahoma, and Kansas—three leading grain-producing states—the underground water table has dropped by more than 30 meters (100 feet). As a result, wells have gone dry on thousands of farms in the southern Great Plains. Although this mining of underground water is taking a toll on U.S. grain production, irrigated land accounts for only one fifth of the U.S. grain harvest, compared with close to three fifths of the harvest in India and four fifths in China.

Pakistan, a country with 158 million people that is growing by 3 million per year, is also mining its underground water. In the Pakistani part of the fertile Punjab plain, the drop in water tables appears to be similar to that in India. Observation wells near the twin cities of Islamabad and Rawalpindi show a fall in the water table between 1982 and 2000 that ranges from 1 to nearly 2 meters a year.

In the province of Baluchistan, water tables around the capital, Quetta, are falling by 3.5 meters per year. Richard Garstang, a water expert with the World Wildlife Fund and a participant in a study of Pakistan’s water situation, said in 2001 that “within 15 years Quetta will run out of water if the current consumption rate continues.”

Iran, a country of 70 million people, is overpumping its aquifers by an average of 5 billion tons of water per year, the water equivalent of one third of its annual grain harvest. Under the small but agriculturally rich Chenaran Plain in northeastern Iran, the water table was falling by 2.8 meters a year in the late 1990s. New wells being drilled both for irrigation and to supply the nearby city of Mashad are responsible. Villages in eastern Iran are being abandoned as wells go dry, generating a flow of “water refugees.”

Saudi Arabia, a country of 25 million people, is as water-poor as it is oil-rich. Relying heavily on subsidies, it developed an extensive irrigated agriculture based largely on its deep fossil aquifer. After several years of using oil money to support wheat prices at five times the world market level, the government was forced to face fiscal reality and cut the subsidies. Its wheat harvest dropped from a high of 4 million tons in 1992 to some 2 million tons in 2005. Some Saudi farmers are now pumping water from wells that are 1,200 meters deep (nearly four fifths of a mile).

In neighboring Yemen, a nation of 21 million, the water table under most of the country is falling by roughly 2 meters a year as water use outstrips the sustainable yield of aquifers. In western Yemen’s Sana’a Basin, the estimated annual water extraction of 224 million tons exceeds the annual recharge of 42 million tons by a factor of five, dropping the water table 6 meters per year. World Bank projections indicate the Sana’a Basin—site of the national capital, Sana’a, and home to 2 million people—will be pumped dry by 2010.

In the search for water, the Yemeni government has drilled test wells in the basin that are 2 kilometers (1.2 miles) deep—depths normally associated with the oil industry—but they have failed to find water. Yemen must soon decide whether to bring water to Sana’a, possibly by pipeline from coastal desalting plants, if it can afford it, or to relocate the capital. Either alternative will be costly and potentially traumatic.

Israel, even though it is a pioneer in raising irrigation water productivity, is depleting both of its principal aquifers—the coastal aquifer and the mountain aquifer that it shares with Palestinians. Israel’s population, whose growth is fueled by both natural increase and immigration, is outgrowing its water supply. Conflicts between Israelis and Palestinians over the allocation of water in the latter area are ongoing. Because of severe water shortages, Israel has banned the irrigation of wheat.

In Mexico—home to a population of 107 million that is projected to reach 140 million by 2050—the demand for water is outstripping supply. Mexico City’s water problems are well known. Rural areas are also suffering. For example, in the agricultural state of Guanajuato, the water table is falling by 2 meters or more a year. At the national level, 51 percent of all the water extracted from underground is from aquifers that are being overpumped.

Since the overpumping of aquifers is occurring in many countries more or less simultaneously, the depletion of aquifers and the resulting harvest cutbacks could come at roughly the same time. And the accelerating depletion of aquifers means this day may come soon, creating potentially unmanageable food scarcity.

While falling water tables are largely hidden, rivers that are drained dry before they reach the sea are highly visible. Two rivers where this phenomenon can be seen are the Colorado, the major river in the southwestern United States, and the Yellow, the largest river in northern China. Other large rivers that either run dry or are reduced to a mere trickle during the dry season are the Nile, the lifeline of Egypt; the Indus, which supplies most of Pakistan’s irrigation water; and the Ganges in India’s densely populated Gangetic basin. Many smaller rivers have disappeared entirely.

Since 1950, the number of large dams, those over 15 meters high, has increased from 5,000 to 45,000. Each dam deprives a river of some of its flow. Engineers like to say that dams built to generate electricity do not take water from the river, only its energy, but this is not entirely true since reservoirs increase evaporation. The annual loss of water from a reservoir in arid or semiarid regions, where evaporation rates are high, is typically equal to 10 percent of its storage capacity.

The Colorado River now rarely makes it to the sea. With the states of Colorado, Utah, Arizona, Nevada, and, most important, California depending heavily on the Colorado’s water, the river is simply drained dry before it reaches the Gulf of California. This excessive demand for water is destroying the river’s ecosystem, including its fisheries.

A similar situation exists in Central Asia. The Amu Darya—which, along with the Syr Darya, feeds the Aral Sea—is diverted to irrigate the cotton fields of Central Asia. In the late 1980s, water levels dropped so low that the sea split in two. While recent efforts to revitalize the North Aral Sea have raised the water level somewhat, the South Aral Sea will likely never recover.

China’s 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. Since 1985 it has often failed to reach the sea, although better management and greater reservoir capacity have facilitated year-round flow in recent years.

The Nile, site of another ancient civilization, now barely makes it to the sea. Water analyst Sandra Postel, in Pillar of Sand, notes that before the Aswan Dam was built, some 32 billion cubic meters of water reached the Mediterranean each year. After the dam was completed, however, increasing irrigation, evaporation, and other demands reduced its discharge to less than 2 billion cubic meters.

Pakistan, like Egypt, is essentially a river-based civilization, heavily dependent on the Indus. This river, originating in the Himalayas and flowing westward to the Indian Ocean, not only provides surface water, it also recharges aquifers that supply the irrigation wells dotting the Pakistani countryside. In the face of growing water demand, it too is starting to run dry in its lower reaches. Pakistan, with a population projected to reach 305 million by 2050, is in trouble.

In Southeast Asia, the flow of the Mekong is being reduced by the dams being built on its upper reaches by the Chinese. The downstream countries, including Cambodia, Laos, Thailand, and Viet Nam—countries with 168 million people—complain about the reduced flow of the Mekong, but this has done little to curb China’s efforts to exploit the power and the water in the river.

The same problem exists with the Tigris and Euphrates Rivers, which originate in Turkey and flow through Syria and Iraq en route to the Persian Gulf. This river system, the site of Sumer and other early civilizations, is being overused. Large dams erected in Turkey and Iraq have reduced water flow to the once “fertile crescent,” helping to destroy more than 90 percent of the formerly vast wetlands that enriched the delta region.

In the river systems just mentioned, virtually all the water in the basin is being used. Inevitably, if people upstream use more water, those downstream will get less. As demands continue to grow, balancing water demand and supply is imperative. Failure to do so means that water tables will continue to fall, more rivers will run dry, and more lakes and wetlands will disappear.

A Brief Look at Corn Ethanol

May 9, 2007 -- By Brad Ewing

From the moment we entered this world, many of us have lived in societies powered almost entirely by fossil fuels. We are at the cusp of changing this, but the tradeoffs we face provide no perfect solution. The world supply of fossil fuels such as petroleum cannot sustain projected consumption levels for the rest of this century. The U.S. Government Accountability Office recently observed that world oil production will peak sometime between now and 2040, and that U.S. production peaked in 1970. Weaning Americans from petroleum will require diversification of supply and conservation to reduce demand.

One potential solution to diversify supply of passenger vehicle fuel is ethanol made from cornstarch. Investment in fuel ethanol has risen rapidly since the 2005 oil price hikes, the passage of the Energy Policy Act and replacing the fuel additive MTBE with ethanol. Most studies show that corn ethanol greenhouse gas emissions are slightly lower in comparison to gasoline. In addition, corn ethanol is not a total loss to the food economy because 30 percent of the corn is recovered in a protein rich livestock feed called distillers dried grains. Farmers will also benefit from increased value of their land and crops. The corn ethanol industry stands the best chance to prosper throughout the Corn Belt.

The benefits of corn ethanol are accompanied by difficult problems for both Midwestern and coastal Americans. The use of corn makes ethanol a Midwest issue as the U.S. lacks the infrastructure to efficiently transport the fuel through current pipelines. Complicating the issue further, smog-causing pollutants are higher when consuming corn ethanol rather than gasoline. In fact, the largest producer of corn ethanol in the U.S., Archers Daniel Midland, was ranked the tenth worst corporate air polluter on the University of Massachusetts Toxic 100 list. What is more, some researchers question whether corn ethanol can even provide a net energy gain.

Beyond logistical concerns, corn ethanol is ethically worrisome. Converting the entire U.S. corn harvest to ethanol would satisfy approximately 12.3 percent of the U.S. household vehicle needs or feed 100 million people. In smaller terms, the corn required to produce 25-gallons of ethanol is enough to feed one person for an entire year. In a world of 6.59 billion people with 18,000 children dying every day from hunger and malnutrition, food used as fuel seems unethical--especially when there are other options.

Corn ethanol production will come at a very high price in comparison to energy conservation. The Congressional Budget Office estimates that reducing gasoline consumption 10 percent through fuel economy standards would cost nearly $3.6 billion a year. Achieving the same result by expanding ethanol production would cost taxpayers at least $10 billion a year. As we transition towards a diversified energy portfolio, all forms of energy should face market prices that reflect the costs they impose on society. And with these real costs, we must also recognize the inherent struggles that exist when food and energy markets intertwine.

Who Cares About Climate Change?

Losing sleep over climate change
July 16, 2007 -- The Economist (Subscription)

Poor countries may be more worried than rich ones

The biggest problem in the fight against climate change is the issue of how to involve poor countries. Developing-country governments are reluctant to bear the costs of averting climate change. Two reasons are generally given: first, that rich countries are largely responsible for global warming, and second, that people in developing countries have more immediate problems to worry about.

The first point is indisputable. Industrialisation in the rich world started long before that in the poor world; carbon dioxide stays in the atmosphere for around 200 years, so developed countries have contributed far more of the carbon dioxide in the atmosphere than developing ones have.

The second point sounds likely also to be correct. People in developing countries have immediate personal needs—such as health, education, clean water, decent food—which are largely satisfied in developed countries. Surely they would want governments to invest in those areas, rather than in averting the distant risk of climate change?

But if a report by HSBC published on July 12th is right, that assumption seems to be wrong. HSBC asked people in both rich and poor countries not just about their level of concern about climate change, but also what should be done about it and whether the world was likely to avert it.

The highest levels of concern were not in the developed countries, but in the developing ones. Only 22% of Britons thought climate change was one of the biggest issues the world faces, whereas 60% of Indians and 47% of Chinese did. And the countries with the largest proportions of people ranking climate change as the world’s most worrying issue were Mexico, Brazil and China.

Attitudes in Europe in particular were marked by pessimism. In Britain, 5% of respondents thought people and organisations (and according to most, that means governments) were doing what was needed to combat climate change. The figures were similar in France and Germany. In China, an extraordinary 41% did—which may say more about the Chinese people’s faith in government than about effective action against climate change.

Some 41% of Germans thought it was not even worth trying to do anything about climate change, mostly on the grounds that nothing can be done. Such fatalism was far less prevalent in poorer countries. Almost nobody in Mexico and Brazil took that view. Confidence that climate change can be stopped was much higher in developing countries than in developed ones.

Perhaps it is not surprising that people in the developing world are worried. Rich countries are in the temperate parts of the globe; it is the world’s hotter, drier nations that will feel the effect of climate change first. Indeed, they may already be affected: rainfall patterns are going awry in China, and the earlier melting of Himalayan snow is damaging agricultural productivity in bits of the Indian subcontinent. Concern about climate change may also be bound up with broader environmental worries, which are mounting in China in particular.

Still, these findings certainly overturn previous assumptions about attitudes around the world. Does that matter? For those who think that governments should be taking stronger measures to avert climate change, it probably does. The interesting implications are not so much for Europe and America. People in those regions don’t think climate change is the most important problem in the world; but nor are their governments behaving as though it is.

What these data change is the debate about involving poorer countries. When developing-country governments resist pressure from Europe and America for action, they can still use the argument that climate change is mostly the rich world’s fault. But the argument that their people have other priorities for government action looks harder to sustain. Whether they choose to listen to their people’s concerns is, of course, another matter.

Banning Incandescent Light Bulbs: Economic Rationality

BAN THE BULB
May 9, 2007 -- By Lester R. Brown, Earth Policy Institute

ECO-ECONOMY UPDATE:
BAN THE BULB: Worldwide Shift from Incandescents to Compact Fluorescents Could Close 270 Coal-Fired Power Plants

On February 20, 2007, Australia announced it would phase out the sale of inefficient incandescent light bulbs by 2010, replacing them with highly efficient compact fluorescent bulbs that use one fourth as much electricity. If the rest of the world joins Australia in this simple step to sharply cut carbon emissions, the worldwide drop in electricity use would permit the closing of more than 270 coal-fired (500 megawatt) power plants. For the United States, this bulb switch would facilitate shutting down 80 coal-fired plants.

The good news is that the world may be approaching a social tipping point in this shift to efficient light bulbs. On April 25, 2007, just two months after Australia’s announcement, the Canadian government announced it would phase out sales of incandescents by 2012. Mounting concerns about climate change are driving the bulb replacement movement.

In mid-March, a U.S. coalition of environmental groups—including the Natural Resources Defense Council, the Alliance to Save Energy, the American Coalition for an Energy-Efficient Economy, and the Earth Day Network—along with Philips Lighting launched an initiative to shift to the more-efficient bulbs in all of the country’s estimated 4 billion sockets by 2016.

In California, the most populous state, Assemblyman Lloyd Levine is proposing that his state phase out the sale of incandescent light bulbs by 2012, four years ahead of the coalition’s deadline. Levine calls his proposed law the “How Many Legislators Does It Take to Change a Light Bulb Act.” On the East Coast, the New Jersey legislature is on the verge of requiring state government buildings to replace all incandescent bulbs with compact fluorescents by 2010 as part of a broader statewide effort to promote the shift to more-efficient lighting. (See additional initiatives.)

The European Union, now numbering 27 countries, announced in March 2007 that it plans to cut carbon emissions by 20 percent by 2020. Part of this cut will be achieved by replacing incandescent bulbs with compact fluorescents. In the United Kingdom, a nongovernmental group called Ban the Bulb has been vigorously pushing for a ban on incandescents since early 2006. Further east, Moscow is urging residents to switch to compact fluorescents. In New Zealand, Climate Change Minister, David Parker, has announced that his country may take similar measures to those adopted by Australia.

In April, Greenpeace urged the government of India to ban incandescents in order to cut carbon emissions. Since roughly 640 million of the 650 million bulbs sold each year in this fast-growing economy are incandescents, the potential for cutting carbon emissions, reducing air pollution, and saving consumers money is huge.

At the industry level, Philips, the world’s largest lighting manufacturer, has announced plans to discontinue marketing incandescents in Europe and the United States by 2016. More broadly, the European Lamp Companies Federation (the bulb manufacturers’ trade association) is supporting a rise in EU lighting efficiency standards that would lead to a phase-out of incandescent bulbs.

At the commercial level, Wal-Mart, the world’s largest retailer, announced a marketing campaign in November 2006 to boost its sales of compact fluorescents to 100 million by the end of 2007, more than doubling its annual sales. In the U.K., Currys, Britain’s largest electrical retail chain, has announced that it will discontinue selling incandescent light bulbs.

Switching light bulbs is an easy way of realizing large immediate gains in energy efficiency. A study for the U.S. government calculated that the gasoline equivalent of the energy saved over the lifetime of one 24 watt compact fluorescent bulb is sufficient to drive a Prius from New York to San Francisco. While a worldwide phase out of the inefficient incandescents would reduce world electricity use by more than 3 percent, shifting to more-efficient street lighting and replacing older fluorescent tubes with newer, more-efficient ones might double this reduction in power use.

Although highly efficient compact fluorescent bulbs have been around for a generation, they have until recently been on the fringe, used only by environmentally-minded consumers and typically sold in hardware stores, but not in supermarkets. One reason consumers lacked interest was that the new bulbs can cost five times as much as incandescents. Only the more knowledgeable consumers knew that a compact fluorescent bulb uses only one fourth as much electricity as an incandescent bulb, lasts 10 times as long, and easily saves $50 during its lifetime.

One disadvantage of compact fluorescents is that each bulb contains a small amount of mercury, roughly one fifth the amount in a watch battery. This mercury is only a small fraction of that released into the atmosphere by the additional coal burned to power an incandescent.

Mercury released by coal-fired power plants is the principal reason why 44 of the 50 states in the United States have issued mercury intake advisories limiting the consumption of fish from freshwater streams and lakes. Nonetheless, worn-out compact fluorescents, watch batteries, and other items that contain mercury still need to be recycled properly. Fortunately, this is possible, whereas the mercury spewing from coal smokestacks blankets the countryside, ending up in the water and food supply.

Shifting to the highly efficient bulbs sharply reduces monthly electricity bills and cuts carbon emissions, since each standard (13 watt) compact fluorescent over its lifetime reduces coal use by more than 210 pounds. Such a shift also substantially reduces air pollution, making it obviously attractive for fast-growing economies plagued with bad air like China and India.

In the United States, an ingenious website called 18seconds.org (the name derives from the time it takes to change a light bulb), provides a running tally of compact fluorescents sold nationwide since January 1, 2007. As of early May, it totaled nearly 37 million bulbs, yielding a reduction in carbon emissions comparable to taking 260,000 cars off the road. Sponsored by Yahoo! and Nielson, the site also provides data on how many dollars are being saved and how much less coal is burned. Data are available on the website for each state, providing a convenient way of monitoring local progress in replacing incandescents.

The challenge for each of us, of course, is to shift to compact fluorescents in our own homes if we have not already. But far more important, we need to contact our elected representatives at the city, provincial, or state level and at the national level to introduce legislation to raise lighting efficiency standards, in effect phasing out inefficient incandescent light bulbs. Few things can cut carbon emissions faster than this simple step.

In a world facing almost daily new evidence of global warming and its consequences, there is a need for a quick decisive victory in the effort to cut carbon emissions and stabilize climate. If we can engineer a rapid phase-out of incandescent light bulbs it would provide just such a victory, generating momentum for even greater advances in climate stabilization.

Related post: Economic Irrationality

Economic Irrationality

Irrational Incandescence
May 31, 2007 -- By The Economist via Energy Bulletin

Some ways of cutting carbon are cheaper than others. So, at different carbon prices, different sorts of methods of abatement become worthwhile. Vattenfall, a Swedish power utility, has tried to quantify which ones would be worth undertaking at what price (see chart 3).

The result is a testament to economic irrationality. The measures below the horizontal line have a negative abatement cost—in other words, by carrying them out, people and companies could both cut emissions and save money. At a macroeconomic level they would boost, rather than reduce, economic growth.Lighting, for instance, accounts for some 19% of the world's electricity use. A standard incandescent light bulb costs around €1, says Theo van Deursen, chief executive of Philips Lighting, and uses €15-worth of electricity a year. A low-energy one costs €5-6 and uses €3-worth. The payback on investing in a compact fluorescent bulb, therefore, is less than a year. Yet low-energy lighting makes up only 30% of Philips's sales. Mr van Deursen admits to being disappointed. Sales are rising faster in the developing world: there, people pay more attention to electricity bills than they do in the rich world.

Economists trying to explain this apparent irrationality suggest that the savings are too small and the effort involved in change too large. People find their electricity bills too boring to think about; within companies, those responsible for keeping bills down may not have the authority to spend the necessary capital. Another explanation is the agency problem: that the developer who would have to pay higher capital costs up front will not be forking out for the electricity bills. Besides, people buy houses not because they have good insulation but because they have pretty views.

Compared with pursuing greater energy efficiency, the abatement measures into which so much money is now being poured look rather expensive. Carbon capture and storage and wind and solar power, for instance, all have positive, and relatively high, abatement costs.

But the cheapest sources of abatement are difficult for policymakers to get at. Billions of different actors are involved. They cannot be targeted in the way that a few hundred factories can. What is more, a moderate carbon price is not likely to be effective, since people clearly do not care enough about cost.

One policy option is to decouple the utilities' revenues from the amount of electricity they sell. That gives them an incentive to increase the efficiency of power usage rather than to produce and sell extra power. California is already doing this, which is presumably why electricity prices there are among the highest in America, while consumption is relatively low.

Energy-efficiency standards, such as building regulations, are another option. Economists generally prefer to avoid rules that specify what companies can produce and how, because they require governments, rather than markets, to allocate resources, and markets tend to do a better job. But if, as in this case, a public as well as a private good is involved, and the market does not seem to be doing its job properly, there is an argument for governments giving it a nudge.

There are lots of energy-efficiency regulations in place already, and they are being tightened. Incandescent light bulbs are the top target at the moment. Both the European Union and Australia said earlier this year that they are planning to ban them. But the man in the vanguard of this green revolution is Fidel Castro, who started phasing them out two years ago.

~~~~~~~~~~~~~~~ Editorial Notes (Energy Bulletin) ~~~~~~~~~~~~~~~~~~~

Nice piece by The Economist (UK). Another good one from the Economist: The truth about recycling. Conservatives and libertarians in search of an intelligent way to approach environmentalism might have a good role model in the (conservative) Economist...

The Vattenfall website has a big section on climate change.

The chief executive of Vattenfall, Lars Josefsson, was recently profiled: Hero or villain? A carbon critic relies on coal (International Herald Tribune).

Europe seems to be further along than the USA in its sense of urgency about conservation. Der Spiegel had a long series about it: Why Conservation Is the World's Best Energy Source.

UPDATE (June 13)
Two posters at The Oil Drum found source documents for the striking graphic in the article. The graphics in those documents are more readable and more complete than the graphic in the above article.

Marco located a bigger and better version of the figure on page 7 or 8 of Vattenfall’s Global Climate Impact Abatement Map (25-page PDF).

Peaknik located another version of the graphic on page 10 or 11 of Global Mapping of Greenhouse Gas Abatement Opportunities (54-page PDF).

David Jeffery's response to Irrational Incandescence:
Cheap ways to reduce greenhouse emissions
June 28, 2007 -- By David Jeffery, Oikos

An interesting article in The Economist last month took a look at the cost of various options for reducing greenhouse emissions (summarised in the graph above).

Two things are particularly notable:

* There are a number of options that have a negative cost. In other words, not only would they reduce emissions, they’d also save us money. The biggest one is insulation and low-energy lighting is also up there.

* The solutions we hear a lot about – such as wind, solar and carbon capture – are among the most expensive options.

So why are we not voluntarily making decisions that would not only reduce emissions but also save us money?

The Economist identifies a couple of possible reasons, the most compelling to my mind is that the people who make the choices are not the people who pay the costs of those decisions. For example, property developers have to pay for insulation but they won’t get the benefits of lower electricity bills, so their incentive is to go cheap on insulation. If the property is to be rented out, it’s not even the buyer who pay those bills – it’s a tenant.

How to solve this? In theory, awareness of the issue should be enough: if tenants and buyers of new houses (or other buildings) are aware that good insulation can save them substantial amounts of money, they should demand it and be prepared to pay more for it – in the same way they’d be prepared to pay more for a good bathroom or kitchen.

So why isn't this happening? And seeing as it doesn’t seem to be happening, is there a role for government in mandating it in building standards or requiring developers and sellers to at least provide understandable information (eg, energy efficiency ratings)?

Genotypes, Phenotypes, Beavers, Birds and Fungi

Wild Neighbors: Requiem for the Hat Creek Beavers
July 17, 2007 -- By Joe Eaton, Berkeley Daily Planet

The week before the Fourth of July we were up at Lassen Volcanic National Park watching the traffic at Hat Lake. The place was jumping.

A male western tanager, resplendent in red and yellow, came down to the lake’s edge to drink. Audubon’s and Wilson’s warblers flashed in and out of the young lodgepole pines. A dipper made repeated shuttle flights from its nest below the highway bridge, alternately ducking underwater to forage or swimming like a little duck as it retrieved insects—mayflies?—from the lake’s surface. Another hard-working parent, a male white-headed woodpecker, commuted between its tree-cavity nest and some beetle-rich dead snag nearby. Tree swallows skimmed low over the lake, and noisy young spotted sandpipers chased each other around the beaver lodge.

No beavers, though. The last time we were there, we watched them late into the buggy twilight as they cruised the lake they had made, or at least augmented. This time the dam was in poor repair, and the lodge was surrounded by mud. We blamed that on the dry winter, but were still worried about the beavers. Later a ranger-naturalist told us they were gone. One had been found dead on the highway last year; another on a hiking trail—disease, old age, who knows.

Maybe another pair will wander up from the Warner Valley and take over the franchise. If not, the lake will inexorably change, and the results of all that dedicated beavering will be gone. And everything in and around it—the tanagers, the woodpeckers, the mayflies, the pines—will be affected, one way or another.

Some years back, before he took on organized religion, Richard Dawkins wrote a book called The Extended Phenotype. A phenotype is the physical manifestation of a genotype—the ensemble of physical traits that the genome codes for. Dawkins’ point was that you have to think of behavior as part of that ensemble, which is fair enough with beavers. Their dam-building drive is so hard-wired that if you play the sound of running water for captives, they’ll pile up sticks and brush in front of the speaker.

Beyond that, Dawkins’ notion of the phenotype also includes the built environment that results from an organism’s behavior—the dam, the pond, the lodge.

We tend to think of our species as the only one that leaves a significant mark on the world, for better or worse. Far from it: beyond the engineering of beavers, consider the cities of the termites or the coral polyps, the soil moved by pocket gophers. All of us, man to microorganism, shape our various environments.

And our environments shape us back. Another book from the ’80s, Richard Levins and Richard Lewontin’s The Dialectical Biologist, tried to make that point, albeit with too much Marxist jargon for most tastes. (With us, there’s another layer when culture feeds back into the genome, as when Northern European and East African cattle herders independently—by separate genetic pathways—evolved adult lactose tolerance.)

Woodpeckers—to pick just one of the cast of characters at Hat Lake—are builders and shapers in their own right. Their nesting cavities provide housing for a whole community of hole-nesting birds: chickadees, nuthatches, flycatchers, swallows, wrens. A woodpecker neighborhood tends to have high avian diversity. Small mammals like flying squirrels also adopt old woodpecker nests.

But it doesn’t stop there. Working in Lassen National Forest, not far from where we were, Kerry Farris and Steve Zack of the Wildlife Conservation Society and Martin Huss of Arkansas State University made an interesting discovery about woodpeckers. They mist-netted white-headed, hairy, and black-backed woodpeckers, swabbed their beaks, and cultured the contents of the swab in a petri dish. Half a dozen species of filamentous fungi, some known wood-decayers, were identified in the culture.

The woodpeckers seem to be carrying around little fungus colonies, inoculating the ponderosa pine snags where they feed with organisms that hasten the decay of the dead wood, making the birds’ foraging routines a little easier. Other cavity nesters like red-breasted nuthatches and mountain chickadees had their own fungus cultures; a control group of non-cavity-nesters—warblers, kinglets, tanagers, finches—did not.

The jury is still out on whether what’s going on with the woodpeckers and the fungi is dedicated mutualism or opportunistic hitchhiking, and who is part of whose extended phenotype. The more you look at the interface of ecology and evolution, the more complicated it seems to get.

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Update (July 19)
The study by Kerry Farris, Martin Huss and Steve Zack entitled "The Role of Foraging Woodpeckers in the Decomposition of Ponderosa Pine Snags" can be found here. The entire article requires access from a library or someone with BioOne Journal online access.