Avoiding Collapse in Modern Civilization

THE NATURE OF THE NEW WORLD
October 2, 2007 -- By Lester R. Brown, Earth Policy Institute

Plan B 2.0 Book Byte:

We recently entered a new century, but we are also entering a new world, one where the collisions between our demands and the earth’s capacity to satisfy them are becoming daily events. It may be another crop-withering heat wave, another village abandoned because of invading sand dunes, or another aquifer pumped dry. If we do not act quickly to reverse the trends, these seemingly isolated events will occur more and more frequently, accumulating and combining to determine our future.

Resources that accumulated over eons of geological time are being consumed in a single human lifespan. We are crossing natural thresholds that we cannot see and violating deadlines that we do not recognize. These deadlines, determined by nature, are not politically negotiable.

Nature has many thresholds that we discover only when it is too late. In our fast-forward world, we learn that we have crossed them only after the fact, leaving little time to adjust. For example, when we exceed the sustainable catch of a fishery, the stocks begin to shrink. Once this threshold is crossed, we have a limited time in which to back off and lighten the catch. If we fail to meet this deadline, breeding populations shrink to where the fishery is no longer viable, and it collapses.

We know from earlier civilizations that the lead indicators of economic decline were environmental, not economic. The trees went first, then the soil, and finally the civilization itself. To archeologists, the sequence is all too familiar.

Our situation today is far more challenging because in addition to shrinking forests and eroding soils, we must deal with falling water tables, more frequent crop-withering heat waves, collapsing fisheries, expanding deserts, deteriorating rangelands, dying coral reefs, melting glaciers, rising seas, more-powerful storms, disappearing species, and, soon, shrinking oil supplies. Although these ecologically destructive trends have been evident for some time, and some have been reversed at the national level, not one has been reversed at the global level.

The bottom line is that the world is in what ecologists call an “overshoot-and-collapse” mode. Demand has exceeded the sustainable yield of natural systems at the local level countless times in the past. Now, for the first time, it is doing so at the global level. Forests are shrinking for the world as a whole. Fishery collapses are widespread. Grasslands are deteriorating on every continent. Water tables are falling in many countries. Carbon dioxide (CO2) emissions exceed CO2 sequestration.

In 2002, a team of scientists led by Mathis Wackernagel, who now heads the Global Footprint Network, concluded that humanity’s collective demands first surpassed the earth’s regenerative capacity around 1980. Their study, published by the U.S. National Academy of Sciences, estimated that global demands in 1999 exceeded that capacity by 20 percent. The gap, growing by 1 percent or so a year, is now much wider. We are meeting current demands by consuming the earth’s natural assets, setting the stage for decline and collapse.

In a rather ingenious approach to calculating the human physical presence on the planet, Paul MacCready, the founder and Chairman of AeroVironment and designer of the first solar-powered aircraft, has calculated the weight of all vertebrates on the land and in the air. He notes that when agriculture began, humans, their livestock, and pets together accounted for less than 0.1 percent of the total. Today, he estimates, this group accounts for 98 percent of the earth’s total vertebrate biomass, leaving only 2 percent for the wild portion, the latter including all the deer, wildebeests, elephants, great cats, birds, small mammals, and so forth.

Ecologists are intimately familiar with the overshoot-and-collapse phenomenon. One of their favorite examples began in 1944, when the Coast Guard introduced 29 reindeer on remote St. Matthew Island in the Bering Sea to serve as the backup food source for the 19 men operating a station there. After World War II ended a year later, the base was closed and the men left the island. When U.S. Fish and Wildlife Service biologist David Kline visited St. Matthew in 1957, he discovered a thriving population of 1,350 reindeer feeding on the thick mat of lichen that covered the 332-square-kilometer (128-square-mile) island. In the absence of any predators, the population was exploding. By 1963, it had reached 6,000. He returned to St. Matthew in 1966 and discovered an island strewn with reindeer skeletons and not much lichen. Only 42 of the reindeer survived: 41 females and 1 not entirely healthy male. There were no fawns. By 1980 or so, the remaining reindeer had died off.

Like the deer on St. Matthew Island, we too are overconsuming our natural resources. Overshoot leads sometimes to decline and sometimes to a complete collapse. It is not always clear which it will be. In the former, a remnant of the population or economic activity survives in a resource-depleted environment. For example, as the environmental resource base of Easter Island in the South Pacific deteriorated, its population declined from a peak of 20,000 several centuries ago to today’s population of fewer than 4,000. In contrast, the 500-year-old Norse settlement in Greenland collapsed during the 1400s, disappearing entirely in the face of environmental adversity.

Even as the global population is climbing and the economy’s environmental support systems are deteriorating, the world is pumping oil with reckless abandon. Leading geologists now think oil production may soon peak and turn downward. Although no one knows exactly when oil production will peak, supply is already lagging behind demand, driving prices upward.

Faced with a seemingly insatiable demand for automotive fuel, farmers will want to clear more and more of the remaining tropical forests to produce sugarcane, oil palms, and other high-yielding biofuel crops. Already, billions of dollars of private capital are moving into this effort. In effect, the rising price of oil is generating a massive new threat to the earth’s biological diversity.

As the demand for farm commodities climbs, it is shifting the focus of international trade concerns from the traditional goal of assured access to markets to one of assured access to supplies. Countries heavily dependent on imported grain for food are beginning to worry that buyers for fuel distilleries may outbid them for supplies. As oil security deteriorates, so, too, will food security.

As the role of oil recedes, the process of globalization will be reversed in fundamental ways. As the world turned to oil during the last century, the energy economy became increasingly globalized, with the world depending heavily on a handful of countries in the Middle East for energy supplies. Now as the world turns to wind, solar cells, and geothermal energy in this century, we are witnessing the localization of the world energy economy.

The world is facing the emergence of a geopolitics of scarcity, which is already highly visible in the efforts by China, India, and other developing countries to ensure their access to oil supplies. In the future, the issue will be who gets access to not only Middle Eastern oil but also Brazilian ethanol and North American grain. Pressures on land and water resources, already excessive in most of the world, will intensify further as the demand for biofuels climbs. This geopolitics of scarcity is an early manifestation of civilization in an overshoot-and-collapse mode, much like the one that emerged among the Mayan cities competing for food in that civilization’s waning years.

You do not need to be an ecologist to see that if recent environmental trends continue, the global economy eventually will come crashing down. It is not knowledge that we lack. At issue is whether national governments can stabilize population and restructure the economy before time runs out.

In addition, here is a synopsis of Jared Diamond's book entitled Collapse:

Diamond lists eight factors which have historically contributed to the collapse of past societies:

1. Deforestation and habitat destruction
2. Soil problems (erosion, salinization, and soil fertility losses)
3. Water management problems
4. Overhunting
5. Overfishing
6. Effects of introduced species on native species
7. Human population growth
8. Increased per-capita impact of people

Further he says four new factors may contribute to the weakening and collapse of present and future societies:

1. Human-caused climate change
2. Buildup of toxic chemicals in the environment
3. Energy shortages
4. Full human utilization of the Earth’s photosynthetic capacity

Biofuels May Raise GHG Emissions, says Nobel Laureate Paul Crutzen

Biofuels could boost global warming, finds study
September 21, 2007 -- By Zoe Corbyn, Chemistry World

Growing and burning many biofuels may actually raise rather than lower greenhouse gas emissions, a new study led by Nobel prize-winning chemist Paul Crutzen has shown. The findings come in the wake of a recent OECD report, which warned nations not to rush headlong into growing energy crops because they cause food shortages and damage biodiversity.

Crutzen and colleagues have calculated that growing some of the most commonly used biofuel crops releases around twice the amount of the potent greenhouse gas nitrous oxide (N2O) than previously thought - wiping out any benefits from not using fossil fuels and, worse, probably contributing to global warming. The work appears in Atmospheric Chemistry and Physics and is currently subject to open review.

'The significance of it is that the supposed benefits of biofuel are even more disputable than had been thought hitherto,' Keith Smith, a co-author on the paper from the University of Edinburgh, told Chemistry World. 'What we are saying is that [growing many biofuels] is probably of no benefit and in fact is actually making the climate issue worse.'

Crutzen, famous for his work on nitrogen oxides and the ozone layer, declined to comment before the paper is officially published. But the paper suggests that microbes convert much more of the nitrogen in fertiliser to N2O than previously thought - 3 to 5 per cent or twice the widely accepted figure of 2 per cent used by the International Panel on Climate Change (IPCC).

For rapeseed biodiesel, which accounts for about 80 per cent of the biofuel production in Europe, the relative warming due to N2O emissions is estimated at 1 to 1.7 times larger than the quasi-cooling effect due to saved fossil CO2 emissions. For corn bioethanol, dominant in the US, the figure is 0.9 to 1.5. Only cane sugar bioethanol - with a relative warming of 0.5 to 0.9 - looks like a viable alternative to conventional fuels.

Some previous estimates had suggested that biofuels could cut greenhouse gas emissions by up to 40 per cent.

Global picture

The IPCC's N2O conversion factor is derived using data from plant experiments. But Crutzen takes a different approach, using atmospheric measurements and ice core data to calculate the total amount of N2O in the atmosphere. He then subtracts the level of N2O in pre-industrial times - before fertilizers were available - to take account of N2O from natural processes such as leguminous plants growing in forests, lightning, and burn offs.

Assuming the rest of the N2O is attributable to newly-fixed nitrogen from fertilizer use, and knowing the amount of fertilizer applied globally, he can calculate thecontribution of fertilizers to N2O levels.

The results may well trigger a rethink by the IPCC, says Smith. 'Should we go along the road of adding up the experimental evidence for each of the processes or are we better off using the global numbers?'

Critical reception

But other experts are critical of Crutzen's approach. Simon Donner, a nitrogen researcher based at Princeton University, US, says the method is elegant but there is little evidence to show the N2O yield from fertilized plants is really as high as 3-5 per cent. Crutzen's basic assumption, that pre-industrial N2O emissions are the same as natural N2O emissions, is 'probably wrong', says Donner.

One reason he gives is that farmers plant crops in places that have nitrogen rich soils anyway. 'It is possible we are indirectly increasing the "natural" source of N2O by drawing down the soil nitrogen in the world's agricultural regions,' he explains.

Others dispute the values chosen by Crutzen to calculate his budget. Stefan Rauh, an agricultural scientist at the Instituteof Agricultural Economics and Farm Management in Munich, Germany, says some of the rates for converting crops into biofuel should be higher. 'If you use the other factors you get a little net climate cooling,' he said.

Meanwhile, a report prepared by the OECD for a recent Round Table on Sustainable Development questions the benefits of first generation biofuels and concludes that governments should scrap mandatory targets.

Richard Doornbosch, the report's author, says both the report and Crutzen's work highlights the importance of establishing correct full life-cycle assessments for biofuels. 'Without them, government policies can't distinguish between one biofuel and another - risking making problems worse,' said Doornbosch.

The Road To Clean Energy Starts Here, by Jeffrey D. Sachs

The Road to Clean Energy Starts Here
May 2007 Issue -- By Jeffrey D. Sachs, Scientific American

Realizing crucial energy technologies will take more than just research and development

The key to solving the climate change crisis is technology. To accommodate the economic aspirations of the more than five billion people in the developing countries, the size of the world economy should increase by a factor of four to six by 2050; at the same time, global emissions of greenhouse gases will have to remain steady or decline to prevent dangerous changes to the climate. After 2050, emissions will have to drop further, nearly to zero, for greenhouse gas concentrations to stabilize.

The overarching challenge is to make that transition at minimum cost and without economic disruption. Energy-saving technologies will play a pivotal role. Buildings can save energy at low capital cost, and often net overall savings, through improved insulation, efficient illumination and the use of heat pumps rather than home furnaces. Automobiles could, over time, reach 100 miles per gallon by a shift to plug-in hybrids, better batteries, lighter frames and other strategies. Of course, technologies such as heat pumps and plug-in hybrids partly reduce direct emissions by shifting from on-site combustion to electricity, so that low-emission power plants become paramount.

Low-emission electricity generation will be achieved in part through niche sources such as wind and biofuels. Larger-scale solutions will come from nuclear and solar power. Yet clean coal will be essential. New combustion techniques, combined with carbon capture and sequestration (CCS), offer the prospect of low- or zero-emission coal-fired thermal plants. The incremental costs of ccs may well be as low as one to three cents per kilowatt-hour.

All these technologies are achievable. Some will impose real added costs; others will pay for themselves as lower energy bills offset higher capital outlays. Some estimates suggest that, as of 2050, the world will have to negate around 30 billion tons of carbon dioxide emissions a year at a cost of roughly $25 per ton, or $750 billion annually. But with a world economy by then of perhaps $200 trillion, the cost would be well under 1 percent of world income and perhaps under 0.5 percent, a true bargain compared with the costs of inaction.

Achieving these technological solutions on a large scale, however, will require an aggressive global technology policy. First, there will have to be market incentives to avoid emissions, in the form of either tradable permits or levies. A reasonable levy might be $25 per ton of emitted carbon dioxide, introduced gradually over the next 10 to 20 years. Second, there will have to be ample government support for rapid technological change. Patents can help spur private market research and development (R&D), but public funding is required for basic science as well as for the public demonstration and the global diffusion of new technologies. In sum, we need a strategy sometimes described as RDD&D.

In the past two years, the Earth Institute at Columbia University has hosted a Global Roundtable on Climate Change, involving leading corporations from around the world. These companies, including many of the largest power producers, are ready to reduce carbon emissions. They know that CCS must be a high priority. A new Global Roundtable Task Force on CCS seeks to promote the required RDD&D. Fortunately, the European Union has already pledged to build at least a dozen CCS demonstration projects in Europe by 2015. But we will also need such centers in the U.S., China, India, Australia, Indonesia and other highly significant coal-power producers. In the low-income countries, this will require a few billion dollars; that is where the RDD&D investments of the high-income countries will be essential. The CCS Task Force aims to break ground on one or more demonstration plants by 2010 in every major coal region. By 2015 this crucial technology can be proved and added to the bid to avert climate disaster. This model of RDD&D won't stop there. Harnessing technology to achieve sustainable energy will involve much of the global economy for decades.

Carbon Footprint Labels Are Expensive

Not on the label
May 17, 2007 -- The Economist (Subscription)

Why adding “carbon footprint” labels to foods and other products is tricky

Would you like a footprint on your food? Labels already show fat, salt and sugar content, among other things. But now several British food companies and retailers plan to add “carbon footprint” labels showing the quantity (in grams) of carbon-dioxide emissions associated with making and transporting foods and other goods. The first such labels appeared on packets of Walkers crisps in April. Boots, a British pharmacy chain, will add carbon labels to some of its own-brand shampoos in July. These labels were produced in conjunction with the Carbon Trust, an environmental consultancy funded by the British government, as part of a trial scheme. Tesco, Britain's biggest retailer, has also announced plans to apply carbon labels across its product range and many other firms plan to do the same.

If the idea can be made to work, carbon labels will allow shoppers to choose the products with the smallest carbon footprints and make it possible for them to compare locally produced and imported foods, as well as conventionally farmed and organic products. Claims that some kinds of food are more energy-efficient than others and worries about “food miles” would give way to “a much more rounded, inclusive picture,” says Euan Murray of the Carbon Trust.

But calculating the carbon footprint of a product is far from easy. Unlike the fat or sugar content, it cannot be measured directly. For a start, how far back up the supply chain do you go? Academic “life-cycle analyses” go into painstaking detail, factoring in the emissions associated with building factories in which food is produced, for example. But doing this for thousands of products would be a mammoth undertaking. The trick, says Mr Murray, is to find the right trade-off between rigour and a methodology that works across thousands of items. The Carbon Trust's approach is to include carbon dioxide produced in the manufacturing but not, say, that from employees commuting to work.

How far down the supply chain do you go? The Carbon Trust's labels aim to show the carbon emissions associated with making something, packaging it, getting it to the store and disposing of it. Because bags of crisps delivered to far-flung shops will have travelled farther from the factory, the auditors use an average figure for transport emissions. Similarly, national averages feed into calculations of whether a product or its packaging are recycled, incinerated or put into landfill.

The labels do not count the energy needed for refrigeration, lighting and heating in shops. Nor do they include the emissions that come from using a product. The carbon footprint of boiled potatoes, for example, is dominated by the emissions associated with cooking them. Whether you put a lid on the pan can make more of a difference than how they were farmed, or whether they were produced locally or not. Similarly, the emissions of shampoo depend on how long you spend in the shower, how hot the water is and the quality of your boiler. Such things cannot be captured in a carbon label, so they are not included, says Mr Murray.

A particularly difficult area is agricultural modelling. Some sources of farm emissions, such as the electricity consumption of a milking shed, can be measured directly. Others, such as nitrous-oxide emissions from soils and methane emissions from animals, cannot. For the latter, mathematical models are used instead, says Adrian Williams, an agri-environmental scientist at Cranfield University in England. Such models contain assumptions that not everyone may agree with, however. A recent report funded by DEFRA, Britain's environment agency, found that some organic foods had larger carbon footprints than conventional ones. It was criticised by the Soil Association, Britain's main organic lobby, which took issue with the models used for the calculations.

To complicate matters further, nitrous-oxide and methane emissions from farms far outweigh carbon-dioxide emissions in global-warming potential. Methane and nitrous oxide are taken into account by converting them into “carbon-dioxide equivalent” emissions using conversion factors provided by the Intergovernmental Panel on Climate Change. But the quantification of nitrous-oxide emissions is still not well understood, says Dr Williams, so it is not clear which model to use.

Getting agreement on how best to calculate carbon footprints depends on debate between scientists, retailers, farmers, lobbyists and others. The Carbon Trust has begun a year-long consultation and this month a meeting took place at the Environmental Change Institute at Oxford University, which is looking into carbon labelling for Tesco. Agreement is vital because the labels will be useful only if there is a common standard. Otherwise consumers will not be able to compare apples with apples, as it were.

Tackling Climate Change: A bargain

Tackling Climate Change: A bargain
May 4, 2007 -- The Economist (Subscription)

About 0.1% of world GDP would do it

The Intergovernmental Panel on Climate Change (IPCC), set up under the auspices of the United Nations to establish a consensus on global warming and what to do about it, has now completed its fourth assessment report. The first two parts, published earlier this year, about the science and the impacts of climate change, were designed to spread gloom. Change was happening, they said; it was mankind’s fault; and it was going to be damaging. The third part, released on Friday May 4th in Bangkok, is about mitigating climate change, and is designed to spread hope. Just as mankind caused the problem, it says, so mankind can stop it—and at a reasonable cost.

In some areas of economic activity, emissions could be cut with no cost to consumers or taxpayers. The heating and lighting systems of many buildings, for instance, are startlingly inefficient. Improving this would cut both emissions and bills. Economists are troubled by this, for it implies that people and businesses are not maximising their economic self-interest; yet the low take-up of energy-efficient lightbulbs suggests this is indeed the case. Governments are therefore beginning to tighten regulations on the energy efficiency of buildings, and to talk about, for instance, banning incandescent lightbulbs. The IPCC reckons that such measures could cut 30% of projected emissions from this sector at no extra cost.

Transport is trickier, because car ownership is rocketing and the demand for fuel is fairly inelastic. If people want to drive they are going to drive, unless governments jack up petrol prices to levels that are politically unacceptable. So for emissions to fall in the transport sector, new technologies, such as more efficient biofuels or electric cars, are needed. Given a big R&D effort in this sector, there is a good chance that those will be forthcoming.

Similarly, in power generation, there is scope for cutting emissions. The cost of renewable energy, such as wind and solar, has been falling. Nuclear generating technology has improved. Carbon capture and storage, which involves taking the carbon dioxide (or C02) out of power station flue gases and injecting it back into the earth, is also a possibility, though that technology is at an early stage.

Technological solutions to climate change, then, are available. But most of those on offer in the power and transport sectors cost more than fossil-fuel generated energy. Fortunately, economics comes to the rescue. Burning fossil fuels imposes a cost to society that is not reflected in their price. Economics says that it should be; and if it were, the price of using fossil fuels would rise in relation to the price of using renewable energy.

Unfortunately, the social cost of carbon is hard to calculate. Plenty of economists have tried, with unconvincing results. It requires estimating the impact of climate change on economic growth, which involves too many unknowns. So the IPCC report starts from the other end. Rather than trying to work out the social cost of carbon, and letting it feed through to reduce greenhouse-gas concentrations in the atmosphere, it starts from a manageable greenhouse-gas concentration and works backwards to a carbon price. Conveniently, it says the “social cost of carbon is at least comparable to, and possibly higher than carbon prices for even the most stringent scenarios assessed by the IPCC”.

And what is the right price? The report says that to stabilise greenhouse-gas concentrations at 550 parts per million (a level most scientists think safeish) would require a price of $20-50 per tonne of carbon by 2020-30. That is along the lines of the carbon price established the European Emissions-Trading Scheme, which varied between $6 and $40 in 2005-06. It has not bankrupted the European economy so far. The IPCC’s economic models reckon, on average, that if the world adopted such a price the global economy would be 1.3% smaller than it otherwise would have been by 2050; or, put another way, global economic growth would be 0.1% a year lower than it otherwise would have been.

The world would barely notice such figures; so one might think that climate change can be easily sorted. The problem, of course, is that the numbers work only if they are applied globally. If a few countries—even a few big countries—adopt a carbon price, it will make little difference. All the world’s big emitters need to do it. Which brings the world straight back to the problem that sank Kyoto. No country alone can make a difference, and it is in every country’s interest to ensure that everybody else bears the burden. As the IPCC report convincingly argues, the technology and the economics of this problem are easily soluble. It is the politics that is so difficult.

Green shoots of growth

Green shoots of growth (Subscription)
December 7, 2006 -- Editorial, Nature

Energy from biomass is an idea whose time has returned.

Until the twentieth century, biomass was humanity's principal source of energy, heating our stoves and feeding our draught animals. Even today, roughly 10% of all our energy comes from biomass — far more than from any other renewable energy source or, for that matter, from nuclear fission.

But this use of biomass for energy supply is accompanied by many challenges. For one thing, it is often not all that renewable — the biomass sources that provide firewood to the world's poor, for example, are not being replanted. For another, it is very inefficient: gathering firewood takes a long time. The history of the past couple of centuries has been in large part one of people moving away from biomass as soon as they can afford to do so.

Three recent developments have spurred renewed interest in biomass, however. One is the need to reduce greenhouse-gas emissions. The requirement for other external energy inputs during biomass processing means that it often involves some net carbon emissions — but the amount of carbon dioxide given off by burning biomass is the same as that taken from the atmosphere by photosynthesis in the first place. If biomass projects could sequester carbon, either by enriching the soil beneath plantations or by storing any carbon dioxide produced in combustion, they could even be carbon negative — a unique selling point for this energy source.

The other two developments are the upward movement in the prices of oil and natural gas, and the related revival of concerns about the security of their supply. Most nations are seeking home-based energy sources that do not rely on political stability in the Middle East or Russia.

It seems unlikely that these factors will provide sufficient impetus to propel biomass energy to the very front rank of possible alternatives to fossil fuels. But biomass clearly has a potential role as part of a portfolio of energy sources for the twenty-first century.

If that role is to be fulfilled, two things need to happen. Nations have to build regulatory mechanisms that recognize the carbon benefits of technologies such as biomass — through emissions pricing, a carbon tax or a combination of the two. And intensive research needs to be conducted into both the efficient production of biomass and its conversion into useable energy.

One focal point for such research should be finding ways to grow biomass quickly and in an easily processed form while minimizing external inputs, such as fertilizer and pesticides. Another is the systems engineering of farms and ecosystems, finding ways to fit biomass projects into and around present land use and possible changes in farming practice.

A major attraction of biomass is that it is likely to benefit poorer countries, which tend to be in tropical regions where plants grow quickly. There is plenty of scope for more collaboration between developing countries on biomass research and development, both to meet local needs and for export.

But this requires consideration of the local and global ecological impact of biomass expansion. Vast tropical monocultures eating away at primary forests — as exemplified by the production of palm oil in Indonesia — will benefit no one, except those who profit from selling the fuel. In effect, such approaches take green subsidies from richer countries, and use them to despoil the tropics.

Similar problems afflict existing biomass programmes in the United States, where ethanol refineries often burn fossil fuel and are reliant on subsidized corn monoculture. More innovative approaches would include firing the refineries with agricultural waste, and feeding them with plants of many different species. Biomass energy should be developed energetically, but within the context of appropriate environmental policies, and using approaches that are both sustainable and cost-effective.

Do We Tax Energy Enough?

Here is the link with audio and video of this great discussion as well as related papers by Hassett and Parry. I would recommend signing up for a free subscription to Resources by Resources for the Future as well as reading Greg Mankiw's blog. Below is an introduction to the discussion.

Do We Tax Energy Enough?
March 29, 2007 -- American Enterprise Institute For Public Policy Research

What are the advantages and disadvantages of carbon and gasoline taxes? Ian W. H. Parry of Resources for the Future and AEI’s Kenneth P. Green, Kevin A. Hassett, and N. Gregory Mankiw will examine the pros and cons of carbon and gasoline taxes, discuss possible levels at which they could be set, and compare taxation to regulation as an alternative way to address environmental concerns.

Compact Fluorescents Release Poisonous Mercury

Mercury in Energy-Saving Bulbs Worries Scientists
March 28, 2007 -- By Lisa Von Ahn, Reuters via ENN

There's an old joke about the number of people it takes to change a light bulb. But because the newer energy-efficient kinds contain tiny amounts of mercury, the hard part is getting rid of them when they burn out.

Mercury is poisonous, but it's also a necessary part of most compact fluorescent bulbs, the kind that environmentalists and some governments are pushing as a way to cut energy use.

With an estimated 150 million CFLs sold in the United States in 2006 and with Wal-Mart alone hoping to sell 100 million this year, some scientists and environmentalists are worried that most are ending up in garbage dumps.

Mercury is probably best-known for its effects on the nervous system. The Mad Hatter in the classic children's book "Alice in Wonderland" was based on 19th-century hat makers who were continually exposed to the toxin.

Mercury can also damage the kidneys and liver, and in sufficient quantities can cause death.

U.S. regulators, manufacturers and environmentalists note that, because CFLs require less electricity than traditional incandescent bulbs, they reduce overall mercury in the atmosphere by cutting emissions from coal-fired power plants.

But some of the mercury emitted from landfills is in the form of vaprous methyl-mercury, which can get into the food chain more readily than inorganic elemental mercury released directly from a broken bulb or even coal-fired power plants, according to government scientist Steve Lindberg.

"Disposal of any mercury-contaminated material in landfills is absolutely alarming to me," said Lindberg, emeritus fellow of the U.S. Department of Energy's Oak Ridge National Laboratory.

The mercury content in the average CFL -- now about 5 milligrams -- would fit on the tip of a ballpoint pen, according to the U.S. Environmental Protection Agency, and manufacturers have committed to cap the amount in most CFLs to 5 milligrams or 6 milligrams per bulb.

The majority of Philips Lighting's bulbs contain less than 3 milligrams, and some have as little as 1.23 milligrams, said spokesman Steve Goldmacher.

To prevent mercury from getting into landfills, the EPA, CFL makers and various organizations advocate recycling.
Besides commercial recyclers and some municipal waste collection services, some retailers accept used CFLs.

IKEA, the Swedish home furnishings chain, has free drop-off programs at all of its 234 stores, 29 of which are in the United States. Spokeswoman Mona Astra Liss said response was slow at first, but has since picked up.

Now advocacy groups are calling on Wal-Mart Stores Inc. and other big chains to get involved.

Andy Ruben, vice president for corporate sustainability at Wal-Mart, said the company was working with the EPA's Office of Solid Waste and others to find mercury and recycling solutions.

RECYCLING HURDLES

One problem with recycling is that it isn't cheap.

Larry Chalfan, executive director of the Zero Waste Alliance environmental group, said the value of the metal, glass and mercury reclaimed from recycling fails to offset the cost of the process. "Someone has to pay," he said.

Costs can range from 20 cents to 50 cents per bulb -- not a paltry sum when some CFLs sell for less than $2 at Wal-Mart.

But, compared with the overall lifecycle cost of buying and using a bulb, recycling would be less than 1 percent, said Paul Abernathy, executive director of the Association of Lighting & Mercury Recyclers, "a small price to keep the mercury out of the environment."

Another obstacle lies in the fragility of the bulbs and their mercury content.

"People who are going to accumulate these things from the public are going to have to address the fact that breakage will happen," Abernathy said. "There's the potential for contamination, and I think right now people are a little hesitant to volunteer to take on this liability."

The U.S. government has no single recycling plan in mind, said Matt Hale, director of the EPA's Office of Solid Waste.

Among the alternatives are special curbside collections by municipalities, mail-back programs by manufacturers and drop-off programs at various places, including retail stores that sell CFLs, he said.

Some methods lend themselves to certain geographic areas more than others, Hale said, because of differences in population density, transportation infrastructure and proximity to recycling sites.

State laws are also a factor.

Federal regulations mandate recycling of fluorescent lighting, while exempting households and other small users. Some states, however, are strict. For example, California no longer allows anyone to throw CFLs in the trash, while Massachusetts requires manufacturers to implement recycling programs and meet certain targets.

As technology advances, however, mercury could become less of an issue, at least as far as light bulbs are concerned.

Last month General Electric Co. said it was working on doubling the energy efficiency of incandescent lights and eventually developing versions comparable with CFLs. These bulbs, which the company hopes to begin marketing in 2010, will cost less than fluorescents but they won't last as long.

Meanwhile, some environmentally minded consumers are embracing CFLs and doing their best to dispose of them responsibly.

"I have CFLs throughout my house," said Lindberg, who lives in California. "None of them have burned out yet. I can't tell you what I'll do with them when they've burned out, but I won't throw them in the garbage."

Absent-minded killers

Absent-minded killers
March 22, 2007 -- By Jeffrey Sachs, Project Syndicate

We kill other species not because we must but because we are too negligent to do otherwise.

As a species, human beings have a major self-control problem. We humans are now so aggressively fishing, hunting, logging, and growing crops in all parts of the world that we are literally chasing other species off the planet. Our intense desire to take all that we can from nature leaves precious little for other forms of life.

In 1992, when the world's governments first promised to address man-made global warming, they also vowed to head off the human-induced extinction of other species. The Convention on Biological Diversity, agreed at the Rio Earth Summit, established that "biological diversity is a common concern of humanity." The signatories agreed to conserve biological diversity, by saving species and their habitats, and to use biological resources (e.g. forests) in a sustainable manner. In 2002, the treaty's signatories went further, committing to "a significant reduction in the current rate of biodiversity loss" by 2010.

Unfortunately, like so many other international agreements, the Convention on Biological Diversity remains essentially unknown, un-championed, and unfulfilled. That neglect is a human tragedy. For a very low cash outlay - and perhaps none at all on balance - we could conserve nature and thus protect the basis of our own lives and livelihoods. We kill other species not because we must, but because we are too negligent to do otherwise.

Consider a couple of notorious examples. Some rich countries, such as Spain, Portugal, Australia, and New Zealand, have fishing fleets that engage in so-called "bottom trawling". Bottom trawlers drag heavy nets over the ocean bottom, destroying magnificent, unexplored, and endangered marine species in the process. Complex and unique ecologies, most notably underground volcanoes known as seamounts, are ripped to shreds, because bottom trawling is the "low cost" way to catch a few deep sea fish species. One of these species, orange roughy, has been caught commercially for only around a quarter-century, but already is being fished to the point of collapse.

Likewise, in many parts of the world, tropical rainforest is being cleared for pastureland and food crops. The result is massive loss of habitat and destruction of species, yielding a tiny economic benefit at a huge social cost. After cutting down a swath of rainforest, soils are often quickly leached of their nutrients so that they cannot sustain crops or nutritious grasses for livestock. As a result, the new pastureland or farmland is soon abandoned, with no prospect for regeneration of the original forest and its unique ecosystems.

Because these activities' costs are so high and their benefits so low, stopping them would be easy. Bottom trawling should simply be outlawed; it would be simple and inexpensive to compensate the fishing industry during a transition to other activities. Forest clearing, on the other hand, is probably best stopped by economic incentives, perhaps combined with regulatory limits. Simply restricting the practice of land clearing probably would not work, since farm families and communities would face a strong temptation to evade legal limits. On the other hand, financial incentives would probably succeed, because cutting down forest to create pastureland is not profitable enough to induce farmers to forego payments for protecting the land.

Many rainforest countries have united in recent years to suggest the establishment of a rainforest conservation fund by the rich countries, to pay impoverished small farmers a small amount of money to preserve the forest. A well-designed fund would slow or stop deforestation, preserve biodiversity, and reduce emissions of carbon dioxide the burning of cleared forests. At the same time, small farmers would receive a steady flow of income, which they could use for micro-investments to improve their household's wealth, education, and health.

Aside from banning bottom trawling and establishing a global fund for avoided deforestation, we should designate a global network of protected marine areas, in which fishing, boating, polluting, dredging, drilling, and other damaging activities would be prohibited. Such areas not only permit the regeneration of species, but also provide ecological benefits that spill over to neighbouring unprotected areas.

We also need a regular scientific process to present the world with the evidence on species abundance and extinction, just as we now have such a process for climate change. Politicians don't listen very well to individual scientists, but they are forced to listen when hundreds of scientists speak with a united voice.

Finally, the world should negotiate a new framework no later than 2010 to slow human-induced climate change. There can be little doubt that climate change poses one of the greatest risks to species' viability. As the planet warms, and rain and storm patterns change dramatically, many species will find themselves in climate zones that no longer support their survival. Some can migrate, but others (such as polar bears) are likely to be driven to extinction unless we take decisive action to head off climate change.

These measures are achievable by 2010. They are affordable, and in each case would ultimately deliver large net benefits. Most importantly, they would allow us to follow through on a global promise. It is too painful to believe that humanity would destroy millions of other species - and jeopardise our own future - in a fit of absent-mindedness.

Corn Can't Solve Our Problem

Corn Can't Solve Our Problem
March 25, 2007 -- By David Tilman and Jason Hill, The Washington Post

The world has come full circle. A century ago our first transportation biofuels -- the hay and oats fed to our horses -- were replaced by gasoline. Today, ethanol from corn and biodiesel from soybeans have begun edging out gasoline and diesel.

This has been hailed as an overwhelmingly positive development that will help us reduce the threat of climate change and ease our dependence on foreign oil. In political circles, ethanol is the flavor of the day, and presidential candidates have been cycling through Iowa extolling its benefits. Lost in the ethanol-induced euphoria, however, is the fact that three of our most fundamental needs -- food, energy, and a livable and sustainable environment -- are now in direct conflict. Moreover, our recent analyses of the full costs and benefits of various biofuels, performed at the University of Minnesota, present a markedly different and more nuanced picture than has been heard on the campaign trail.

Some biofuels, if properly produced, do have the potential to provide climate-friendly energy, but where and how can we grow them? Our most fertile lands are already dedicated to food production. As demand for both food and energy increases, competition for fertile lands could raise food prices enough to drive the poorer third of the globe into malnourishment. The destruction of rainforests and other ecosystems to make new farmland would threaten the continued existence of countless animal and plant species and would increase the amount of climate-changing carbon dioxide in the atmosphere.

Finding and implementing solutions to the food, fuel and environment conflict is one of the greatest challenges facing humanity. But solutions will be neither adopted nor sought until we understand the interlinked problems we face.

Fossil fuel use has pushed atmospheric carbon dioxide higher than at any time during the past half-million years. The global population has increased threefold in the past century and will increase by half again, to 9 billion people, by 2050. Global food and fossil energy consumption are on trajectories to double by 2050.

Biofuels, such as ethanol made from corn, have the potential to provide us with cleaner energy. But because of how corn ethanol currently is made, only about 20 percent of each gallon is "new" energy. That is because it takes a lot of "old" fossil energy to make it: diesel to run tractors, natural gas to make fertilizer and, of course, fuel to run the refineries that convert corn to ethanol.

If every one of the 70 million acres on which corn was grown in 2006 was used for ethanol, the amount produced would displace only 12 percent of the U.S. gasoline market. Moreover, the "new" (non-fossil) energy gained would be very small -- just 2.4 percent of the market. Car tune-ups and proper tire air pressure would save more energy.

There is another problem with relying on a food-based biofuel, such as corn ethanol, as the poor of Mexico can attest. In recent months, soaring corn prices, sparked by demand from ethanol plants, have doubled the price of tortillas, a staple food. Tens of thousands of Mexico City's poor recently protested this "ethanol tax" in the streets.

In the United States, the protests have also begun -- in Congress. Representatives of the dairy, poultry and livestock industries, which rely on corn as a principal animal feed, are seeking an end to subsidies for corn ethanol in the hope of stabilizing corn prices. (It takes about three pounds of corn to produce a pound of chicken, and seven or eight pounds to grow a pound of beef.) Profit margins are being squeezed, and meat prices are rising.

U.S. soybeans, which are used to make biodiesel, may be about to follow corn's trajectory, escalating the food vs. fuel conflict. The National Biodiesel Board recently reported that 77 biodiesel production plants are under construction and that eight established plants are expanding capacity.

In terms of environmental impact, all biofuels are not created equal. Ethanol is the same chemical product no matter what its source. But ethanol made from prairie grasses, from corn grown in Illinois and from sugar cane grown on newly cleared land in Brazil have radically different impacts on greenhouse gases.

Corn, like all plants, is a natural part of the global carbon cycle. The growing crop absorbs carbon dioxide from the atmosphere, so burning corn ethanol does not directly create any additional carbon. But that is only part of the story. All of the fossil fuels used to grow corn and change it into ethanol release new carbon dioxide and other greenhouse gases. The net effect is that ethanol from corn grown in the Corn Belt does increase atmospheric greenhouse gases, and this increase is only about 15 percent less than the increase caused by an equivalent amount of gasoline. Soybean biodiesel does better, causing a greenhouse gas increase that is about 40 percent less than that from petroleum diesel.

In Brazil, ethanol made from sugar cane produces about twice as much ethanol per acre as corn. Brazilian ethanol refineries get much of their power from burning cane residue, in effect recycling carbon from the atmosphere. The environmental benefit is large. Sugar-cane ethanol grown on established soils releases 80 percent less greenhouse gases than gasoline.

But that isn't the case for sugar-cane ethanol or soybean biodiesel from Brazil's newly cleared lands, including tropical forests and savannas. Clearing land releases immense amounts of greenhouse gases into the air, because much of the material in the plants and soil is broken down into carbon dioxide.

Plants and soil contain three times more carbon than the atmosphere. The trees and soil of an acre of rainforest -- which, once cleared, is suitable for growing soybeans -- contain about 120 tons of organic carbon. An acre of tropical woodland or savanna, suitable for sugar cane, contains about half this amount. About a fourth of the carbon in an ecosystem is released to the atmosphere as carbon dioxide when trees are clear-cut, brush and branches are burned or rot, and roots decay. Even more is lost during the first 20 to 50 years of farming, as soil carbon decomposes into carbon dioxide and as wood products are burned or decay.

This means that when tropical woodland is cleared to produce sugar cane for ethanol, the greenhouse gas released is about 50 percent greater than what occurs from the production and use of the same amount of gasoline. And that statistic holds for at least two decades.

Simply being "renewable" does not automatically make a fuel better for the atmosphere than the fossil fuel it replaces, nor guarantee that society gains any new energy by its production. The European Union was recently shocked to learn that some of its imported biodiesel, derived from palm trees planted on rain-forest lands, was more than twice as bad for climate warming as petroleum diesel. So much for the "benefits" of that form of biodiesel.

Although current Brazilian ethanol is environmentally friendly, the long-term environmental implications of buying more ethanol and biodiesel from Brazil, a possibility raised recently during President Bush's trip to that country, are cloudy. It could be harmful to both the climate and the preservation of tropical plant and animal species if it involved, directly or indirectly, additional clearing of native ecosystems.

Concerns about the environmental effects of ethanol production are starting to be felt in the United States as well. It appears that American farmers may add 10 million acres of corn this year to meet booming demand for ethanol. Some of this land could come from millions of acres now set aside nationwide for conservation under a government-subsidized program. Those uncultivated acres absorb atmospheric carbon, so farming them and converting the corn into ethanol could release more carbon dioxide into the air than would burning gasoline.

There are biofuel crops that can be grown with much less energy and chemicals than the food crops we currently use for biofuels. And they can be grown on our less fertile land, especially land that has been degraded by farming. This would decrease competition between food and biofuel. The United States has about 60 million acres of such land -- in the Conservation Reserve Program, road edge rights-of-way and abandoned farmlands.

In a 10-year experiment reported in Science magazine in December, we explored how much bioenergy could be produced by 18 different native prairie plant species grown on highly degraded and infertile soil. We planted 172 plots in central Minnesota with various combinations of these species, randomly chosen. We found, on this highly degraded land, that the plots planted with mixtures of many native prairie perennial species yielded 238 percent more bioenergy than those planted with single species. High plant diversity led to high productivity, and little fertilizer or chemical weed or pest killers was required.

The prairie "hay" harvested from these plots can be used to create high-value energy sources. For instance, it can be mixed with coal and burned for electricity generation. It can be "gasified," then chemically combined to make ethanol or synthetic gasoline. Or it can be burned in a turbine engine to make electricity. A technique that is undergoing rapid development involves bioengineering enzymes that digest parts of plants (the cellulose) into sugars that are then fermented into ethanol.

Whether converted into electricity, ethanol or synthetic gasoline, the high-diversity hay from infertile land produced as much or more new usable energy per acre as corn for ethanol on fertile land. And it could be harvested year after year.

Even more surprising were the greenhouse gas benefits. When high-diversity mixtures of native plants are grown on degraded soils, they remove carbon dioxide from the air. Much of this carbon ends up stored in the soil. In essence, mixtures of native plants gradually restore the carbon levels that degraded soils had before being cleared and farmed. This benefit lasts for about a century.

Across the full process of growing high-diversity prairie hay, converting it into an energy source and using that energy, we found a net removal and storage of about a ton and a half of atmospheric carbon dioxide per acre. The net effect is that ethanol or synthetic gasoline produced from this grass on degraded land can provide energy that actually reduces atmospheric levels of carbon dioxide.

When one of these carbon-negative biofuels is mixed with gasoline, the resulting blend releases less carbon dioxide than traditional gasoline.

Biofuels, if used properly, can help us balance our need for food, energy and a habitable and sustainable environment. To help this happen, though, we need a national biofuels policy that favors our best options. We must determine the carbon impacts of each method of making these fuels, then mandate fuel blending that achieves a prescribed greenhouse gas reduction. We have the knowledge and technology to start solving these problems.

Food to Fuel Increases World Food Prices

Massive Diversion of U.S. Grain To Fuel Cars Is Raising World Food Prices
March 21, 2007 -- By Lester R. Brown, Earth Policy Institute

ECO-ECONOMY UPDATE:
Massive Diversion of U.S. Grain To Fuel Cars Is Raising World Food Prices

If you think you are spending more each week at the supermarket, you may be right. The escalating share of the U.S. grain harvest going to ethanol distilleries is driving up food prices worldwide.

Corn prices have doubled over the last year, wheat futures are trading at their highest level in 10 years, and rice prices are rising too. In addition, soybean futures have risen by half. A Bloomberg analysis notes that the soaring use of corn as the feedstock for fuel ethanol “is creating unintended consequences throughout the global food chain.”

The countries initially hit by rising food prices are those where corn is the staple food. In Mexico, one of more than 20 countries with a corn-based diet, the price of tortillas is up by 60 percent. Angry Mexicans in crowds of up to 75,000 have taken to the streets in protest, forcing the government to institute price controls on tortillas.

Food prices are also rising in China, India, and the United States, countries that contain 40 percent of the world’s people. While relatively little corn is eaten directly in these countries, vast quantities are consumed indirectly in meat, milk, and eggs in both China and the United States.

Rising grain and soybean prices are driving up meat and egg prices in China. January pork prices were up 20 percent above a year earlier, eggs were up 16 percent, while beef, which is less dependent on grain, was up 6 percent.

In India, the overall food price index in January 2007 was 10 percent higher than a year earlier. The price of wheat, the staple food in northern India, has jumped 11 percent, moving above the world market price.

In the United States, the U.S. Department of Agriculture projects that the wholesale price of chicken in 2007 will be 10 percent higher on average than in 2006, the price of a dozen eggs will be up a whopping 21 percent, and milk will be 14 percent higher. And this is only the beginning.

In the past, food price rises have usually been weather related and always temporary. This situation is different. As more and more fuel ethanol distilleries are built, world grain prices are starting to move up toward their oil-equivalent value in what appears to be the beginning of a long-term rise.

The food and energy economies, historically separate, are now merging. In this new economy, if the fuel value of grain exceeds its food value, the market will move it into the energy economy. As the price of oil climbs so will the price of food.

Some 16 percent of the 2006 U.S. grain harvest was used to produce ethanol. With 80 or so ethanol distilleries now under construction, enough to more than double existing ethanol production capacity, nearly a third of the 2008 grain harvest will be going to ethanol.

Since the United States is the leading exporter of grain, shipping more than Canada, Australia, and Argentina combined, what happens to the U.S. grain crop affects the entire world. With the massive diversion of grain to produce fuel for cars, exports will drop. The world’s breadbasket is fast becoming the U.S. fuel tank.

The number of hungry people in the world has been declining for several decades, but in the late 1990s the trend reversed and the number began to rise. The United Nations currently lists 34 countries as needing emergency food assistance. Many of these are considered failed and failing states, including Chad, Iraq, Liberia, Haiti, and Zimbabwe. Since food aid programs typically have fixed budgets, if the price of grain doubles, food aid will be reduced by half.

Urban food protests in response to rising food prices in low and middle income countries, such as Mexico, could lead to political instability that would add to the growing list of failed and failing states. At some point, spreading political instability could disrupt global economic progress.

Against this backdrop, Washington is consumed with “ethanol euphoria.” President Bush in his State of the Union address set a production goal for 2017 of 35 billion gallons of alternative fuels, including grain-based and cellulosic ethanol, and liquefied coal. Given the current difficulties in producing cellulosic ethanol at a competitive cost and given the mounting public opposition to liquefied coal, which is far more carbon-intensive than gasoline, most of the fuel to meet this goal might well have to come from grain. This could take most of the U.S. grain harvest, leaving little grain to meet U.S. needs, much less those of the hundred or so countries that import grain.

The stage is now set for direct competition for grain between the 800 million people who own automobiles, and the world’s 2 billion poorest people. The risk is that millions of those on the lower rungs of the global economic ladder will start falling off as higher food prices drop their consumption below the survival level.

In February 2007 the World Food Programme Director James T. Morris reported that 18,000 children are now dying every day from hunger and malnutrition. This daily loss of life is six times the number of U.S. combat fatalities in Iraq over the last four years.

There are alternatives to this grim scenario. A rise in auto fuel efficiency standards of 20 percent, phased in over the next decade would save as much oil as converting the entire U.S. grain harvest into ethanol.

One option that is gaining momentum is a shift to plug-in hybrids. Adding a second storage battery to a gas-electric hybrid car along with a plug-in capacity so that the batteries can be recharged at night allows most short-distance driving—daily commuting and grocery shopping, for example—to be done with electricity. If this shift were accompanied by investment in thousands of wind farms that could feed cheap electricity into the grid, then cars could run largely on electricity for the equivalent cost of $1 per gallon gasoline.

Encouragingly, three auto manufacturers—Toyota, Nissan, and GM—have announced plans to bring plug-in hybrid cars to market. Plug-In Partners, which is spearheading a national campaign to shift to plug-in hybrid cars, already has 508 partners, including electrical utilities, corporations, state and city governments, and farm and environmental groups. Among its fast-growing list of partners are the American Public Power Association, Electric Power Research Institute, American Wind Energy Association, American Corn Growers Association, and the cities of Los Angeles, Dallas, Chicago, and Boston. Already a number of Partners have collectively pledged to purchase for their own fleets more than 8,000 plug-in hybrids as soon as they reach the market.

Ethanol euphoria is not an acceptable substitute for a carefully thought through policy. For Washington, it is time to decide whether to continue with the current policy of subsidizing more and more grain-based fuel distilleries or to encourage a shift to more fuel-efficient cars and a new automotive fuel economy centered on plug-in hybrid cars and wind energy. The choice is between a future of rising world food prices, spreading hunger, and growing political instability, or one of stable food prices, sharply reduced dependence on oil, and much lower carbon emissions.

Water Prices Rising Worldwide

Water Prices Rising Worldwide
March 7, 2007 -- By Edwin H. Clark, II, Earth Policy Institute

ECO-ECONOMY UPDATE:
Water Prices Rising Worldwide

The price of water is increasing—sometimes dramatically—throughout the world. Over the past five years, municipal water rates have increased by an average of 27 percent in the United States, 32 percent in the United Kingdom, 45 percent in Australia, 50 percent in South Africa, and 58 percent in Canada. In Tunisia, the price of irrigation water increased fourfold over a decade.

A recent survey of 14 countries indicates that average municipal water prices range from 66¢ per cubic meter in the United States up to $2.25 in Denmark and Germany. Yet consumers rarely pay the actual cost of water. In fact, many governments practically (and sometimes literally) give water away for nothing.

The average American household consumes about 480 cubic meters (127,400 gallons) of water during a year. Homeowners in Washington, DC, pay about $350 (72¢ per cubic meter) for that amount. Buying that same amount of water from a vendor in the slums of Guatemala City would cost more than $1,700.

The price people pay for water is largely determined by three factors: the cost of transport from its source to the user, total demand for the water, and price subsidies. Treatment to remove contaminants also can add to the cost.

The cost of transporting water is determined largely by how far it has to be carried and how high it has to be lifted. Growing cities and towns may have to go hundreds of kilometers to find the water needed to satisfy their increasing thirst. California cities have long imported water from hundreds of kilometers away. And China is constructing three canals that are 1,156 kilometers, 1,267 kilometers, and 260 kilometers long to transfer water from the Yangtze River to Beijing and other rapidly growing areas in the northern provinces.

Pumping water out of the ground or over land to higher elevations is energy-intensive. Pumping 480 cubic meters of water a height of 100 meters requires some 200 kilowatt-hours of electricity. At a price of 10¢ per kilowatt-hour, the cost is $20—not including the cost of the pump, the well, and the piping. One hundred meters is not an unusual lift for wells tapping falling supplies of groundwater. In Beijing and other areas in northern China, for instance, lifts of 1,000 meters are sometimes required.

Mexico City, at an elevation of 2,239 meters, has to pump some of its water supply over 1,000 meters up a mountain. The operating costs alone amount to $128.5 million annually. Pumping this water requires more energy than is consumed overall in the nearby city of Puebla, home to 8.3 million people. Amman, Jordan, faces a similar problem related to delivering water to higher elevations.

In most places water is not purchased or exchanged in a market. But formal water markets are developing in the western United States, Australia, and Chile. Where these water markets do exist, they provide examples of how high the scarcity value of the water—that is, the amount that other potential users would be willing to pay for it—can be. Water prices in Australia’s markets peaked at near 75¢ per cubic meter in December 2006, climbing 20-fold in a year in part due to prolonged drought. In the U.S. West, water prices typically range between 3¢ and 10¢ per cubic meter. This is just the cost of the water itself and does not include the expense of treating or transporting it. In some western U.S. cities, water is so scarce that cities are selling sewage effluent for as much as $1 a cubic meter to be used for irrigating gardens.

In India, water scarcity has prompted some farmers to profit by selling their water instead of farming. The water they formerly used to irrigate their crops is instead pumped from their wells and trucked to nearby cities. The farmers are harvesting water rather than food and at the same time promoting a rapid drop in underground water tables.

The final factor affecting how much people pay for water is the amount it is subsidized. Water subsidies can be very large. For instance, water revenues in the city of Delhi are less than 20 percent of what it spends each year to provide water. On average worldwide, nearly 40 percent of municipal suppliers do not charge enough for water to meet their basic operation and maintenance costs.

Subsidies often benefit only higher-income families. Frequently, urban slum residents in developing countries have no access to municipal water supplies and instead purchase water from private purveyors who bring it in by truck. In part because unscrupulous vendors often control this distribution, the prices are very high, typically exceeding $1 per cubic meter. In several Asian cities, for instance, households forced to purchase water from a private vendor pay more than 10 times as much as middle-income families who are connected to the municipality’s distribution system. The poorest households in Uganda spend 22 percent of their income on water, while those in El Salvador and Jamaica use more than 10 percent of their income to satisfy water needs.

Water subsidies are not limited to the developing world. Farmers in California’s Central Valley, for example, use roughly one fifth of the state’s water and pay on average slightly over 1¢ per cubic meter, just 2 percent of what Los Angeles pays for its drinking water and only 10 percent of its replacement value. One analysis of a new U.S. project in central Utah found that the water it will provide will cost close to 40 times more than irrigators pay for it.

Water is currently managed as if it were worthless instead of the life-sustaining, valuable, and increasingly scarce resource that it is. A key step in moving toward more rational water management is to place a price on water that reflects its value and scarcity. This can, of course, result in substantial price increases that particularly hurt low-income families. The best way to avoid this problem is to use a block rate pricing system where a low level of consumption—that required to satisfy basic needs—is very cheap, while prices increase at higher levels of consumption. In Osaka, Japan, for instance, users pay a set monthly fee that includes 10 cubic meters of water; beyond that prices increase in steps from 82¢ per cubic meter up to $3 or more for high-volume users. In addition, ensuring that the poorest households are connected to a secure water supply can protect them from price gouging by private vendors.

Although pricing water at a reasonable cost can generate political problems in the short run, it can lead to substantial efficiencies in the longer run and eliminate a perverse drain on government budgets. Higher prices will lead farmers and industries to use water more efficiently and encourage households to buy more water-efficient appliances and reduce the amount of water they waste. Many efficiency improvements are relatively inexpensive, and most pay for themselves. Any improvement that reduces hot water use, for instance, can pay for itself over time because it saves energy as well as water.

Indeed, there are many links between energy and water. Not only are substantial amounts of energy required to extract, transport, and treat water, but just as the oil price shocks of the 1970s stimulated energy conservation, so too could pricing water to better reflect its real cost stimulate similar conservation efforts by industries, farmers, and households.

Distillery Demand For Grain To Fuel Cars Vastly Understated

Distillery Demand For Grain To Fuel Cars Vastly Understated: World May Be Facing Highest Grain Prices in History
January 4, 2007 -- By Lester R. Brown, Earth Policy Institute

ECO-ECONOMY UPDATE:
World May Be Facing Highest Grain Prices in History

Investment in fuel ethanol distilleries has soared since the late-2005 oil price hikes, but data collection in this fast-changing sector has fallen behind. Because of inadequate data collection on the number of new plants under construction, the quantity of grain that will be needed for fuel ethanol distilleries has been vastly understated. Farmers, feeders, food processors, ethanol investors, and grain-importing countries are basing decisions on incomplete data.

The U.S. Department of Agriculture (USDA) projects that distilleries will require only 60 million tons of corn from the 2008 harvest. But here at the Earth Policy Institute (EPI), we estimate that distilleries will need 139 million tons—more than twice as much. 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?

One reason for the low USDA projection is that it was released in February 2006, well before the effect of surging oil prices on investment in fuel ethanol distilleries was fully apparent. Beyond this, USDA relies heavily on the Renewable Fuels Association (RFA), a trade group, for data on ethanol distilleries under construction, but the RFA data have lagged behind movement in the industry.

We drew on four firms that collect and publish data on U.S. ethanol distilleries under construction. RFA is the one most frequently cited. The other three firms are Europe-based F.O. Licht, the publisher of World Ethanol and Biofuels Report; BBI International, which publishes Ethanol Producer Magazine; and the American Coalition for Ethanol (ACE), publisher of Ethanol Today.

Unfortunately, the lists of plants under construction maintained by RFA, BBI, and ACE are not complete. Each contains some plants that are not on the other lists. Drawing on these three lists and on biweekly reports from F.O. Licht, EPI has compiled a more complete master list. For example, while we show 79 plants under construction, RFA lists 62 plants. (We welcome any information that will improve this list, which can be viewed at www.earthpolicy.org/Updates/2007/Update63_data.htm).

According to the EPI compilation, the 116 plants in production on December 31, 2006, were using 53 million tons of grain per year, while the 79 plants under construction—mostly larger facilities—will use 51 million tons of grain when they come online. Expansions of 11 existing plants will use another 8 million tons of grain (1 ton of corn = 39.4 bushels = 110 gallons of ethanol).

In addition, easily 200 ethanol plants were in the planning stage at the end of 2006. If these translate into construction starts between January 1 and June 30, 2007, at the same rate that plants did during the final six months of 2006, then an additional 3 billion gallons of capacity requiring 27 million more tons of grain will likely come online by September 1, 2008, the start of the 2008 harvest year. This raises the corn needed for distilleries to 139 million tons, half the 2008 harvest projected by USDA. This would yield nearly 15 billion gallons of ethanol, satisfying 6 percent of U.S. auto fuel needs. (And this estimate does not include any plants started after June 30, 2007, that would be finished in time to draw on the 2008 harvest).

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.

The U.S. corn crop, accounting for 40 percent of the global harvest and supplying 70 percent of the world’s corn exports, looms large in the world food economy. Annual U.S. corn exports of some 55 million tons account for nearly one fourth of world grain exports. The corn harvest of Iowa alone, which edges out Illinois as the leading producer, exceeds the entire grain harvest of Canada. Substantially reducing this export flow would send shock waves throughout the world economy.

Robert Wisner, Iowa State University economist, reports that Iowa’s demand for corn from processing plants that were on line, expanding, under construction, or being planned as of late 2006 totaled 2.7 billion bushels. Yet even in a good year the state harvests only 2.2 billion bushels. As distilleries compete with feeders for grain, Iowa could become a corn importer.

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. 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: chaos in the world food economy.

Corn-based ethanol's a flawed concept

Corn-based ethanol's a flawed concept
February 16, 2007 -- By Myra P. Saefong, MarketWatch

Ethanol as an alternative energy source is a flawed concept -- at least when corn is used to produce it.

And the consequences of using corn to create ethanol are far-ranging - they even impact consumers and the price they pay for meat.

So is it worth it? It depends who you ask.

"There have been numerous studies completed regarding the energy efficiency of ethanol vs. its production," said John Eichberger, vice president of government relations for the National Association of Convenience Stores.

"These range from a positive net energy return in excess of 30% to a negative net energy return of more than 30%," he said. "Researchers on both sides of the issue argue that the other research is significantly flawed."

Even so, policymakers insist that ethanol is a "positive replacement product for crude-oil based fuels and have proceeded down a path to subsidize and mandate its use," said Eichberger, whose trade organization represents the convenience and petroleum-retailing industry.

There's no doubt that renewable fuels are a good idea, said Darin Newsom, a senior analyst at Omaha, Nebraska-based DTN. "That means putting more research into more efficient ways" of making them.

That said, "corn is a short-term end to the means."

Invest energy to get energy

"Some of the warts associated with ethanol production are [real] -- it does use a lot of water, electricity and natural gas," said Newsom.

So "the problem with corn-based ethanol is that, at best, you don't get more energy out of it than it costs to grow and make it," said Sean Brodrick, a contributing editor at MoneyandMarkets.com.

"At worst, you lose energy."

A math and science lesson is in order.

An easy-to-read measure of whether ethanol's economically viable can be derived from taking a look at its "energy return on energy invested," or EROI, according to Brodrick.

"It is at the crux of why corn-based ethanol is a boondoggle," he said.

EROI can be expressed as "net energy," he explains. The EROI for corn-based ethanol is 1.2:1, so the net energy is 0.2, he said.

That means you put in 1 British thermal unit to get 1.2 BTUs from it, he said.

"At EROI of 1.2 to 1, the 3.9 billion gallons that the U.S. produced in 2005 required 3.29 billion gallons of BTU energy input, resulting in a 'net energy' of 610 million gallons," he said.

And that's being generous, he said. "There are some computations that show corn-based ethanol has a net energy of zero. Others show it as a net energy loser."

So it all depends on how you look at it.

A "break even" with the cost of production would be largely based on the cost of crude oil and the cost of corn, said Rick Kment, an analyst at DTN.

For example, if crude-oil prices are at $70 to $100 per barrel, very high corn prices can be paid and ethanol can still economically work in the system, he said.

But with $30 crude and $4 corn, "it becomes unprofitable," he said.

At current price levels, DTN estimates a net profit -- after depreciation and all other factors -- to be near 5 cents per gallon of ethanol produced, he said.

That's down from a 50-cent per gallon net profit at the first of the year, and down from $2.50 a gallon in June 2006, Kment said.

March crude-oil futures closed Thursday at $57.99 a barrel on the New York Mercantile Exchange, while March corn futures were trading around a 10-year high above $4 a bushel on the Chicago Board of Trade. And March ethanol stood at $2.08 a gallon on the CBOT.

'Dead argument'

Still, there are many more experts who say there's really no question as to whether corn-based ethanol puts out more than it uses up.

"The argument over the energy balance of ethanol is really a dead argument," said Matt Hartwig, a spokesman for the Renewable Fuels Association, the national trade group for the ethanol industry. "Study after study has proven them [the critics] to be flat out wrong," he said.

Hartwig called attention to the Web site for the biomass conversion research laboratory at Michigan State University.

A Feb. 5 note on the site prepared by Bruce Dale, professor of chemical engineering at the university, said the net energy analysis is "simple and has great intuitive appeal," with net energy defined as ethanol's heating value minus the fossil energy inputs required to produce the ethanol.

But "it is also dead wrong and dangerously misleading."

Tadeusz Patzek, professor of civil & environmental engineering at the University of California at Berkeley, said in a report last year that the "energy cost of producing and refining carbon fuels in real time, e.g., corn and ethanol, is high relative to that of fossil fuels deposited and concentrated over geological time."

"We do not value energy per se, but rather the services or 'qualities' that the energy provides," argued Dale.

"We need to carefully choose our metric of comparison," he said.

One gallon of ethanol contains 84,000 BTUs, which is about 2/3 that of gasoline, according to Neil Koehler, chief executive of Pacific Ethanol Inc.

"Since ethanol burns more completely (and cleanly) than gasoline, this lower energy density can be completely offset by increased efficiency," he said.

It's eating at corn

But ethanol's impact on the corn market has been "dramatic," said DTN's Newsom.

"If ethanol demand increases to projected levels, corn supplies will be incredibly low at the end of the 2006-2007 marketing year in August 2007," he said.

The U.S. produced an estimated 4.9 billion gallons of ethanol last year and used more than 5.5 billion, according to the Renewable Fuel Association's Hartwig. Ethanol is blended in more than 46% of the nation's gasoline, he said.

"It would seem that the corn market is poised for a long-term rally in price," said Newsom. He predicts that the high of $5.54 a bushel from 1996 seems like a "reasonable price target."

Meanwhile, limitation in the corn market itself should be considered.

"Corn-based ethanol will be of limited supply," said Charles Perry, chairman of energy-consulting firm Perry Management. The U.S has a limited amount of productive land so we "can spare only a limited amount of our corn crop for ethanol."

At the same time, this corn use for ethanol has been "hampering feeding, with some talk in the livestock industry of herd reduction due to higher feed costs," said Newsom.

"Our food prices will go through the roof -- $4-$5 corn makes for very expensive beef, pork and chicken," said Bernie Feshbach, president of investment firm Feshbach & Sons.

Also, "the use of corn makes ethanol a regional (Midwest) issue as the U.S. lacks the infrastructure to move the product around to meet demand," said Newsom.

But the logistics involved with ethanol production could be irrelevant.

"More attention needs to be paid to the personal economics of ethanol since many consumers are more concerned with cost, than with how a fuel is derived," said Geoff Sundstrom, a spokesman for motorist group AAA.

The industry will get a chance to discuss all of these things soon. The Renewable Fuels Association's 12th annual National Ethanol Conference is next week from Feb. 19-21 in Tucson, Ariz.

The group's Web site says registration for the conference is closed because it's reached its capacity. Interested parties are being placed on a waiting list.

Corporations Agree To Cut Emissions

Corporations Agree To Cut Emissions
February 20, 2007 -- Reuters via CNN

More than 100 corporate heads, international organizations and experts set out a plan on Tuesday to cut greenhouse gas emissions, calling on governments to act urgently against global warming.

"Failing to act now would lead to far higher economic and environmental costs and greater risk of irreversible impacts," the Global Roundtable on Climate Change warned in a statement, announcing their first major agreement since they began talks in 2004.

The group, which includes executives from a range of industries including air transport, energy, and technology, called on governments to set targets for greenhouse gases and carbon dioxide (CO2) emissions.

The agreement urged governments to place a price on the carbon emissions released by power plants, factories and other sectors to discourage emissions.

"Of course, addressing climate change involves risks and costs. But much greater is the risk of failing to act," said Alain Belda, chairman and CEO of the world's top aluminum producer Alcoa, who signed the pact.

The group includes General Electric, Ford Motor Co., Toyota Motor North America, investment bank Goldman Sachs, and Wal-Mart among its major corporations.

President George W. Bush's administration has rejected mandatory caps on emissions of carbon dioxide and other gases in the United States that contribute to a documented rise in world temperatures -- which is linked to more severe storms, worse droughts, rising seas and other ills.

But the White House has recently been on the defensive, especially since the February 2 release of a report by the Intergovernmental Panel on Climate Change, which called global warming "unequivocal" and said with 90 percent probability that human activities help cause it. (Full story)

The atmospheric concentration of carbon dioxide is about 30 percent higher than in 1900 and nearly half of this increase has occurred since 1980.

Given fast-rising emissions from developing nations, the group estimated that a "business-as-usual" path could put the planet at three times the carbon dioxide levels seen before 1900.

The largest carbon-emitting sector is power generation, responsible for more than 40 percent of global energy-related emissions.

Industry accounts for more than 18 percent of emissions, transport contributes another 20 percent, and the residential and services sector roughly 13 percent.

The group estimates that technology to head off mounting carbon dioxide concentrations would cost about 1 percent of global gross domestic product. Costs would fall as technologies become more established, it predicted.

"If we delay too long in beginning the changeover to increasingly de-carbonized energy systems, the eventual costs will only rise and the impact of climate change will only become more severe," the group wrote in its agreement, warning that poorer nations would see the worst impact from climate change.

The Sum of All Ears: Corn Ethanol to Replace Gasoline, A Bad Idea

Excerpts from:
The Sum of All Ears
January 29, 2007 -- By Paul Krugman, The New York Times via Economist's View

Corn Cop-Out, Commentary, NY Times: For those hoping for real action on global warming and energy policy, the State of the Union address was a downer. There had been hints and hopes that the speech would be a Nixon-goes-to-China moment, with President Bush turning conservationist. But it ended up being more of a Nixon-bombs-Cambodia moment.

Too bad... The only real substance was Mr. Bush’s call for ... ethanol to replace gasoline. Unfortunately, that’s a really bad idea. There is a place for ethanol in the world’s energy future — but that place is in the tropics. Brazil has managed to replace a lot of its gasoline consumption with ethanol. But Brazil’s ethanol comes from sugar cane.

In the United States, ethanol comes overwhelmingly from corn, a much less suitable raw material. In fact, ... researchers ... estimate that converting the entire U.S. corn crop — the sum of all our ears — into ethanol would replace only 12 percent of our gasoline consumption.

Still, doesn’t every little bit help? Well, this little bit would come at a very high price compared with ... conservation. The Congressional Budget Office estimates that reducing gasoline consumption 10 percent through ... fuel economy standards would cost ... about $3.6 billion a year. Achieving the same result by expanding ethanol production would cost taxpayers at least $10 billion a year...

What’s more, ethanol production has hidden costs. ...[T]he Department of Energy ... says that the net energy savings from replacing a gallon of gasoline with ethanol are only ... about a quarter of a gallon, because of the energy used to grow corn, transport it, run ethanol plants, and so on. And these energy inputs come almost entirely from fossil fuels, so it’s not clear ... ethanol does anything to reduce carbon dioxide emissions.

So why is ethanol, not conservation, the centerpiece of the administration’s energy policy? Actually, it’s not entirely Mr. Bush’s fault.

To be sure, ... Mr. Bush’s people seem less concerned with devising good policy than with finding something, anything, for the president to talk about that doesn’t end with the letter “q.” And the malign influence of Dick “Sign of Personal Virtue” Cheney, who no doubt still sneers at conservation, continues to hang over everything.

But even after the Bushies are gone, bad energy policy ideas will have powerful constituencies... Subsidizing ethanol benefits two well-organized groups: corn growers and ethanol producers (especially the corporate giant Archer Daniels Midland). As a result, it’s bad policy with bipartisan support. For example, earlier this month legislation calling for a huge increase in ethanol use was introduced by five senators, of whom four, including ... Barack Obama and Joseph Biden, were Democrats. In a recent town meeting in Iowa, Hillary Clinton managed to mention ethanol twice...

Meanwhile, conservation doesn’t have anything like the same natural political mojo. Where’s the organized, powerful constituency for tougher fuel economy standards, a higher gasoline tax, or a cap-and-trade system on carbon dioxide emissions?

Can anything be done to promote good energy policy? Public education is a necessary first step, which is why Al Gore deserves all the praise he’s getting. It would also help to have a president who gets scientific advice from scientists, not oil company executives and novelists.

But there’s still a huge gap between what obviously should be done and what seems politically possible. And I don’t know how to close that gap.