Climate Change Agreement by 2009?

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.

Carbon Tax, CAFE Standards and Cap-and-Trade: An Economist's View

One Answer to Global Warming: A New Tax
September 16, 2007 -- By N. Gregory Mankiw, The New York Times

In the debate over global climate change, there is a yawning gap that needs to be bridged. The gap is not between environmentalists and industrialists, or between Democrats and Republicans. It is between policy wonks and political consultants.

Among policy wonks like me, there is a broad consensus. The scientists tell us that world temperatures are rising because humans are emitting carbon into the atmosphere. Basic economics tells us that when you tax something, you normally get less of it. So if we want to reduce global emissions of carbon, we need a global carbon tax. Q.E.D.

The idea of using taxes to fix problems, rather than merely raise government revenue, has a long history. The British economist Arthur Pigou advocated such corrective taxes to deal with pollution in the early 20th century. In his honor, economics textbooks now call them “Pigovian taxes.”

Using a Pigovian tax to address global warming is also an old idea. It was proposed as far back as 1992 by Martin S. Feldstein on the editorial page of The Wall Street Journal. Once chief economist to Ronald Reagan, Mr. Feldstein has devoted much of his career to studying how high tax rates distort incentives and impede economic growth. But like most other policy wonks, he appreciates that some taxes align private incentives with social costs and move us toward better outcomes.

Those vying for elected office, however, are reluctant to sign on to this agenda. Their political consultants are no fans of taxes, Pigovian or otherwise. Republican consultants advise using the word “tax” only if followed immediately by the word “cut.” Democratic consultants recommend the word “tax” be followed by “on the rich.”

Yet this natural aversion to carbon taxes can be overcome if the revenue from the tax is used to reduce other taxes. By itself, a carbon tax would raise the tax burden on anyone who drives a car or uses electricity produced with fossil fuels, which means just about everybody. Some might fear this would be particularly hard on the poor and middle class.

But Gilbert Metcalf, a professor of economics at Tufts, has shown how revenue from a carbon tax could be used to reduce payroll taxes in a way that would leave the distribution of total tax burden approximately unchanged. He proposes a tax of $15 per metric ton of carbon dioxide, together with a rebate of the federal payroll tax on the first $3,660 of earnings for each worker.

The case for a carbon tax looks even stronger after an examination of the other options on the table. Lawmakers in both political parties want to require carmakers to increase the fuel efficiency of the cars they sell. Passing the buck to auto companies has a lot of popular appeal.

Increased fuel efficiency, however, is not free. Like a tax, the cost of complying with more stringent regulation will be passed on to consumers in the form of higher car prices. But the government will not raise any revenue that it can use to cut other taxes to compensate for these higher prices. (And don’t expect savings on gas to compensate consumers in a meaningful way: Any truly cost-effective increase in fuel efficiency would already have been made.)

More important, enhancing fuel efficiency by itself is not the best way to reduce energy consumption. Fuel use depends not only on the efficiency of the car fleet but also on the daily decisions that people make — how far from work they choose to live and how often they carpool or use public transportation.

A carbon tax would provide incentives for people to use less fuel in a multitude of ways. By contrast, merely having more efficient cars encourages more driving. Increased driving not only produces more carbon, but also exacerbates other problems, like accidents and road congestion.

Another popular proposal to limit carbon emissions is a cap-and-trade system, under which carbon emissions are limited and allowances are bought and sold in the marketplace. The effect of such a system depends on how the carbon allowances are allocated. If the government auctions them off, then the price of a carbon allowance is effectively a carbon tax.

But the history of cap-and-trade systems suggests that the allowances would probably be handed out to power companies and other carbon emitters, which would then be free to use them or sell them at market prices. In this case, the prices of energy products would rise as they would under a carbon tax, but the government would collect no revenue to reduce other taxes and compensate consumers.

The international dimension of the problem also suggests the superiority of a carbon tax over cap-and-trade. Any long-term approach to global climate change will have to deal with the emerging economies of China and India. By some reports, China is now the world’s leading emitter of carbon, in large part simply because it has so many people. The failure of the Kyoto treaty to include these emerging economies is one reason that, in 1997, the United States Senate passed a resolution rejecting the Kyoto approach by a vote of 95 to zero.

Agreement on a truly global cap-and-trade system, however, is hard to imagine. China is unlikely to be persuaded to accept fewer carbon allowances per person than the United States. Using a historical baseline to allocate allowances, as is often proposed, would reward the United States for having been a leading cause of the problem.

But allocating carbon allowances based on population alone would create a system in which the United States, with its higher standard of living, would buy allowances from China. American voters are not going to embrace a system of higher energy prices, coupled with a large transfer of national income to the Chinese. It would amount to a massive foreign aid program to one of the world’s most rapidly growing economies.

A global carbon tax would be easier to negotiate. All governments require revenue for public purposes. The world’s nations could agree to use a carbon tax as one instrument to raise some of that revenue. No money needs to change hands across national borders. Each government could keep the revenue from its tax and use it to finance spending or whatever form of tax relief it considered best.

Convincing China of the virtues of a carbon tax, however, may prove to be the easy part. The first and more difficult step is to convince American voters, and therefore political consultants, that “tax” is not a four-letter word.

2007 Farm Bill

After searching for information on the 2007 Farm Bill, I realized that I was still uncertain of all the proposals and debates. Please let me know if you have any suggestions for good articles on this topic.

In addition to the article below, I would recommend these links:
Purdue University (including overviews of Energy and Conservation proposals within the bill)
Reflections on the 2007 Farm Bill Debate (3rd article down) by Brent Sohngen of Ohio State
Panel Discussion on 2007 Farm Bill at UC Berkeley

The Year of the Farm Bill
Summer 2007 -- By Amy Kiser, Terrain (a free publication of ecology center)

The nation's Farm Bill has likely never before made it to the Top Ten—or Top Two Hundred—of your focus factors. An enormous and complex piece of legislation, the bill grinds through Congress every half-decade or so. Allocating a staggering amount of money, its effects are profound—driving land-use decisions, dietary choices, and even immigration. This year the Farm Bill may vault into your consciousness as more people than ever try to shape it to align with pressing national interests.

The Farm Bill's many elements are organized into ten "Titles." One of the most contentious is Title I, which primarily subsidizes corn, soy, wheat, rice, and cotton. The federal government pays farmers to produce as much of these crops as possible. The effects of this free-market-tweaking policy could fill a book, but the most obvious is that farmers are rewarded for growing subsidized crops as monocrops for export, animal feed, and biofuels, rather than growing non-subsidized diverse market crops that could provide food for their surrounding communities and urban centers. According to the Congressional Research Service, the top 10 percent of farm-subsidy recipients (mostly corporations and absentee landowners) take in more than two-thirds of those payments.

This represents a considerable government giveaway to already-profitable farms. Last time the Farm Bill was passed, a coalition of Senators argued to lower the cap on subsidies from a half million to a quarter of a million dollars, claiming that "millionaire farmers" were reaping all the benefits of the legislation, and that it favored the consolidation of farms by pushing the smallest farms out of business and undermining the economic development of small farming communities...

Conservation and the protection of water, air, wildlife habitat, and farmland is the concern of Title II, a category whose funding is chopped away every year by Bush's budget. One of II's provisions is the Environmental Quality Incentives Program (EQIP), which rewards livestock and crop producers for making conservation and environmental improvements. Some of these improvements, however, you wouldn't wish on your best friend—and certainly not your next door neighbor's land.

Last year, the Union of Concerned Scientists submitted an excellent brief to the House Committee on Agriculture, analyzing perverse incentives in Title II and recommending remedies. The organization is particularly critical of the EQIP provisions that actually underwrite and promote the expansion of large concentrated animal feeding operations (CAFOs), which are bona-fide disasters from the standpoint of waste treatment, profligate use of antibiotics, and E. coli contamination.

Title III of the Farm Bill contains programs designed to develop and expand commercial outlets for US commodities. Unfortunately, the cheapness of the commodities subsidized by Title I gives our producers an unfair advantage over our so-called "free trade" agreement partners. Mexican corn growers, for example, cannot compete with the subsidized US corn that is dumped into their country, driving Mexican farmers out of business and indirectly creating economic refugees who may immigrate to urban centers in the US and elsewhere.

Title VII funds agricultural research and extension programs, including grants for food biosecurity and developing biotechnology crops for poor countries. In the last Farm Bill, a tiny wedge of funds was earmarked to support research and extension activities for organic agriculture. Needless to say, in Title VII and others, the federal government gives large-scale industrial agriculture and its methods a heavily weighted economic advantage over organic and small-scale family farms.

The behemoth Farm Bill of 2002 was launched with little fanfare. In the immediate wake of 9/11, Congress had little appetite for heated or prolonged debate about domestic issues, and we were about to invade Afghanistan. In the years since, skyrocketing obesity and Type II diabetes rates, E. coli scares, and books and films like Fast Food Nation, SuperSize Me, and the Omnivore's Dilemma have alerted the public that all is not right with our food and farming systems. Finally, scrutiny is turning to the role the federal government plays in this mess.

The Farm Bill can be a powerful vehicle, capable of driving entrepreneurship and research, protecting species and restoring habitat, supporting public health, and strengthening rural communities and regional food systems. With enough public input, this year's bill might just fulfill its promise.

Sustainable Development: A 21st Century American Vision?

As I watched E.O. Wilson speak on BookTV today I was reminded once again of how finite the world's resources are for ourselves and future generations. If every human consumed at equal rates to Americans, it would require four Earths to sustain it. This somber statistic persuaded me to post this snippet I read during a recent BART ride.

Excerpts from:
Learning from History: U.S. Environmental Politics, Policies, and the Common Good
November 2006 -- By Richard N.L. Andrews, Environment

In 2005, the United Nations commissioned Millennium Ecosystem Assessment reported that over the past 50 years, rapid and extensive change in human ecosystems has resulted in a substantial and largely irreversible loss in the diversity of life on Earth. More land has been converted to cropland since 1945 than in the eighteenth and nineteenth centuries combined, and water withdrawals from rivers and lakes have doubled since 1960. Since 1750, atmospheric concentrations of carbon dioxide, the major contributor to global warming, has increased, with 60 percent of that increase happening between 1959 and the present. Fifty percent of all the synthetic nitrogen fertilizer ever used has been applied since 1985; flows of biologically available nitrogen in terrestrial ecosystems have doubled since 1960 and may increase by two-thirds more by 2050. An estimated 10 to 30 percent of all mammal, bird, and amphibian species are currently threatened with extinction.

These changes have contributed to substantial gains in human well-being and economic development at growing costs to the essential services that ecosystems provide to human societies: providing food, water, fuel, wood, and fiber, supporting and regulating natural processes that are necessary for human life and health (nutrient cycling, soil formation, water purification, the climate system, and the control of disease organisms), and providing spiritual and recreational values. These damaging trends are substantially reducing the availability of these services for future use.

U.S. environmental policies have been prominent causes of these damaging trends and must be part of any solution. Throughout American history, the United States' dominant policies have been to promote the economic exploitation of natural resources, first nationally and now globally...

At times throughout this history, U.S. environmental policies also have included initiatives to manage and protect the natural environment...

The net effect of these policies has been to provide unprecedented levels of material comfort to many people and extraordinary affluence to a few and to reduce and even repair some environmental damage.

It would be a mistake to attribute the vast environmental changes in the United States entirely to public policies. Policies tend to lag behind economic and social trends, because government typically acts only in response to a buildup of pressure for collective action...

The enduring challenge for U.S. environmental policy is to build, maintain, and constantly renew public support for effective environmental governance, at home and worldwide. To meet that need, U.S. environmental policy today must recover an essential missing element: a broadly shared vision of the common environmental good. Such visions have emerged at several points in the past. Examples include the sanitation movement of the nineteenth century; the City Beautiful movement of the 1890s; the Progressive civic reform and conservation movements that followed it; the New Deal vision of combining ecological, social, and economic recovery; and the vision of a modern society in harmony with its natural environment that was articulated in NEPA and widely voiced by the American public on Earth Day in 1970...

The closest current approximation to such a vision is perhaps the idea of sustainable development, as articulated by the United Nations' World Commission for Environment and Development in 1987 and in the Agenda 21 document endorsed by the 1992 United Nations Earth Summit in Rio de Janeiro. The commission envisioned sustainable development as a pattern of development that would meet the needs of human communities today without jeopardizing those of the future, and its vision specifically included economic development, ecological sustainability, and social equity as essential and interdependent elements...

Barring some new defining crisis or leadership commitment, the future of U.S. environmental policy will be shaped by the reemergence--or failure to emerge--of a new broad-based national coalition for an ecologically sustainable economy and inclusive and democratic society.

Climate Change and Energy: 2008 Presidential Policy Directors

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

Click here for the video.

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

Banning Incandescent Light Bulbs: Economic Rationality

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Related post: Economic Irrationality

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.

We Need to Bring Climate Idealism Down to Earth

Excerpts from:
We Need to Bring Climate Idealism Down to Earth
April 30, 2007 -- By Larry Summers, commentary, Financial Times via Economist's View

With the accumulation of scientific evidence and its persuasive presentation to the public, the global warming debate has reached a new stage. ...

The real question for debate is not whether something should be done – that debate is over among the rational. The crucial question now is what should be done so as to leave our descendants with the highest possible quality of life. ...

There is a very real danger that the global cap and trade approach ... enshrined in the Kyoto protocol – now favoured by most European governments – could be ineffective or even counterproductive by substituting for more realistic approaches to the problem. Kyoto is now the only game in town for those who do not want to be ostriches with respect to global climate change and so one has to hope for its ultimate success. But it is surely useful to try to be clear about the potential pitfalls...

First, the Kyoto approach depends on the questionable premise that nations will, in fact, be bound by binding targets or penalties for not meeting them. It is instructive in this regard to consider the history of the Maastricht Treaty within the European Union. It addressed fiscal targets ... within a group of countries that had already achieved a high degree of cohesion. It broke down almost immediately when it looked like the targets would not be binding for big countries, with the goals abandoned and no payment of even the modest penalties.

There is to date little evidence that Kyoto is driving behaviour. Whatever evidence there is of impressive emissions reductions comes from countries such as the UK, Germany and the former communist states, where coal use was being phased out for other reasons. The limited impact of Kyoto is evinced by the fact that carbon permits are now selling in the range of a negligible one euro a ton.

Second, carbon markets are invitations to engage in pork-barrel corporate subsidy politics on a massive scale. If greenhouse gas emissions are to be substantially reduced, the value of the associated emissions rights will be in the tens of billions of dollars. While in principle emission permits could be auctioned, in practice they are always allocated administratively. ...[In addition]..., the clean development mechanism has resulted in substantial payments for emissions reductions that would have occurred anyway or could have been achieved at negligible cost. There is even reason to think that certain industrial gas emissions may have been increased so that credit could be claimed for their abatement.

Third, the most serious problem with the Kyoto framework is that it is unlikely to generate substantial changes in developing country policies. ...[D]eveloping country policymakers are not likely to accept binding targets ... that fall way short on a per-capita basis of emissions levels in the industrial world. ...

The truth about climate change policy is that developing countries are where most of the future action has to be. They will account for 75 per cent of the increase in emissions over the next quarter century and are now making the infrastructure investments that will shape their future economies. ... The 1997 vote cast by all the Democrats in the Senate suggests that approaches that do not involve the developing world are unlikely to command political support in at least some parts of the industrialised world.

Perhaps these problems and others, like the difficulty of establishing emissions targets given the magnitude of economic uncertainties, can be overcome with goodwill and extensive thought. But next month I shall suggest approaches that, while less dramatic in their immediate claims for emissions reductions, may over time provide a more secure foundation for the progress that the world must have.

Costs Shrinking For Solar Thermal

Shrinking the costs for solar power
May 11, 2007 -- By Michael Kanellos, CNET News via Peak Energy

One of the big problems with solar power has been that it costs more than electricity generated by conventional means. But some experts think that, under certain circumstances, the premium for solar power can be erased, without subsidies or dramatic technical breakthroughs. A sufficiently large solar thermal power plant (also called concentrated solar power, or CSP) could potentially generate electricity at about the same cost as electricity from a conventional gas-burning power plant, experts say.

It's not easy. The plant would also have to come with a large energy storage system, be built next to others and be located close to users. To date, no one has completed a facility that comports to all of these parameters, said Fred Morse, an energy analyst who has studied the issue. "Solar thermal is available at much more attractive prices than solar photovoltaic. The land mass isn't huge, but it does take a while to build these," said Stephan Dolezalek, a managing partner and co-head of the clean tech practice at venture firm Vantage Point Venture Partners, an investor in Bright Source Energy, which builds solar thermal plants and components.

Both Dolezalek and Jiang Lin, who heads up the China Energy Group at the Lawrence Berkeley National Laboratory, said that solar thermal is likely the most promising technology in the entire alternative-energy field right now. When asked when solar thermal can hit parity, Lin responded "now." Conventionally generated electricity ranges between 5 and 18 cents per kilowatt hour (the amount of money to get a kilowatt of power for an hour) but in most places it's below 10 cents, according to the Energy Information Agency. Solar thermal costs around 15 to 17 cents a kilowatt hour, according to statistics from Schott, a German company that makes solar thermal equipment.

A solar thermal plant would need a facility to store the heat harvested in the day by its sunlight-concentrating mirrors so that the heat could be used to generate electricity at night. "You need the kind of system that can run in the evening," Morse said. At some sites, such as Nevada Solar One, excess heat is stored in molten salt and released at night to run the turbine. The plant, ideally, should be capable of generating about 300 megawatts of electricity. Those plants can churn out electricity at about 13 cents a kilowatt.

That's still a relatively high price, so utilities would need to group two, three or more 300-megawatt plants together to share operational resources, Morse said. "They could share control rooms or spare parts," he said. That would knock the price closer to 11 cents a kilowatt hour. "Under 10 cents is sort of the magic line," he said.

Dolezalek puts it another way: the plants need to be around 500 megawatts in size. Most solar thermal plants right now aren't that big. The 22-year-old thermal plant in California's Mojave Desert is 354 megawatts. Utility company Southern California Edison is erecting a 500-megawatt plant scheduled to open in 2009. By 2014, solar thermal plants located in the Southwest could crank out nearly 3 gigawatts of power, estimated Travis Bradford of the Prometheus Institute for Sustainable Development, a nonprofit based in Cambridge, Mass. That's enough for about 1 million homes.

Costs can then be reduced further by building the plants close to consumers. It costs about $1.5 million per mile for transmission lines, according to statistics from Acciona Solar Power, which owns solar thermal plants. Solar thermal plants work best in arid deserts that get little rainfall. Since some of the fastest-growing cities in the world are located in sun belts, that's less of a problem than it used to be. ...

Even if all of these factors could be completely optimized, solar thermal power plants would likely not produce electricity at a level that would compete with coal plants. Coal plants, however, will likely be hit with carbon taxes in the near future, which will make solar thermal more competitive. Still, at less than 10 cents a kilowatt, solar thermal would be competitive with electricity from gas-powered plants.

Utilities will also likely work hard to lower the costs of solar thermal in the coming decades, Morse added. Utilities are under mandates to increase their renewable energy sources. Citizen groups often complain about wind turbines and the wind doesn't blow at a constant, predictable rate. Several companies are intent on tapping heat from under the surface of the earth to generate power. Geothermal power, however, works best only in certain locations.

"There is an enough flat, unproductive land in the U.S. to power the U.S.," Morse said. "We just don't have the wires to get there. Eisenhower built the national highway system. Some president will build the national grid."

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.

Designing Cities For People

Designing Cities For People
May 1, 2007 -- By Lester R. Brown, Earth Policy Institute

As I was being driven through Tel Aviv from my hotel to a conference center a few years ago, I could not help but note the overwhelming presence of cars and parking lots. Tel Aviv, expanding from a small settlement a half-century ago to a city of some 3 million today, evolved during the automobile era. It occurred to me that the ratio of parks to parking lots may be the best single indicator of the livability of a city--whether a city is designed for people or for cars.

The world's cities are in trouble. In Mexico City, Tehran, Bangkok, Shanghai, and hundreds of other cities, the quality of daily life is deteriorating. Breathing the air in some cities is equivalent to smoking two packs of cigarettes per day. In the United States, the number of hours commuters spend sitting in traffic going nowhere climbs higher each year.

In response to these conditions, we are seeing the emergence of a new urbanism. One of the most remarkable modern urban transformations has occurred in Bogotá, Colombia, where Enrique Peñalosa served as Mayor for three years, beginning in 1998. When he took office he did not ask how life could be improved for the 30 percent who owned cars; he wanted to know what could be done for the 70 percent--the majority--who did not own cars.

Peñalosa realized that a city that is a pleasant environment for children and the elderly would work for everyone. In just a few years, he transformed the quality of urban life with his vision of a city designed for people. Under his leadership, the city banned the parking of cars on sidewalks, created or renovated 1,200 parks, introduced a highly successful bus-based rapid transit system, built hundreds of kilometers of bicycle paths and pedestrian streets, reduced rush hour traffic by 40 percent, planted 100,000 trees, and involved local citizens directly in the improvement of their neighborhoods. In doing this, he created a sense of civic pride among the city's 8 million residents, making the streets of Bogotá in strife-torn Colombia safer than those in Washington, D.C.

Enrique Peñalosa observes that "high quality public pedestrian space in general and parks in particular are evidence of a true democracy at work." He further observes: "Parks and public space are also important to a democratic society because they are the only places where people meet as equals. In a city, parks are as essential to the physical and emotional health of a city as the water supply." He notes this is not obvious from most city budgets, where parks are deemed a luxury. By contrast, roads, the public space for cars, receive infinitely more resources and less budget cuts than parks, the public space for children. Why, he asks, are the public spaces for cars deemed more important than the public spaces for children?

Now government planners everywhere are experimenting, seeking ways to design cities for people not cars. Cars promise mobility, and they provide it in a largely rural setting. But in an urbanizing world there is an inherent conflict between the automobile and the city. After a point, as their numbers multiply, automobiles provide not mobility but immobility. Congestion also takes a direct economic toll in rising costs in time and gasoline. And urban air pollution, often from automobiles, claims millions of lives.

Another cost of cities that are devoted to cars is a psychological one, a deprivation of contact with the natural world--an "asphalt complex." There is a growing body of evidence that there is an innate human need for contact with nature. Both ecologists and psychologists have been aware of this for some time. Ecologists, led by Harvard University biologist E.O. Wilson, have formulated the "biophilia hypothesis," which argues that those who are deprived of contact with nature suffer psychologically and that this deprivation leads to a measurable decline in well-being.

Throughout the modern era, budget allocations for transportation in most countries--and in the United States, in particular--have been heavily biased toward the construction and maintenance of highways and streets. Creating more livable cities and the mobility that people desire depends on reallocating budgets to emphasize the development of rail- or bus-based public transport and bicycle support facilities.

The exciting news is that there are signs of change, daily indications of an interest in redesigning cities for people, not for cars. One encouraging trend comes from the United States. Public transit ridership nationwide rising by 2.1 percent a year since 1996 indicates that people are gradually abandoning their cars for buses, subways, and light rail. Rising gasoline prices are encouraging still more commuters to abandon their cars and take the bus or subway or get on a bicycle.

When Beijing decided to promote an automobile-centered transportation system, a group of eminent scientists in China protested. They pointed out that the country does not have enough land to accommodate the automobile and to feed its people. What is true for China is also true for India and dozens of other densely populated developing countries.
Some cities are far better at planning their growth than others. They plan transport systems that provide mobility, clean air, and exercise--a sharp contrast to cities that offer congestion, unhealthy air, and little opportunity for exercise. When 95 percent of a city's workers depend on the automobile for commuting, as in Atlanta, Georgia, the city is in trouble.

By contrast, in Amsterdam only 40 percent of workers commute by car; 35 percent bike or walk, while 25 percent use public transit. Copenhagen's commuting patterns are almost identical to Amsterdam's. In Paris, just under half of commuters rely on cars. Even though these European cities are older, with narrow streets, they have far less congestion than Atlanta.

Not surprisingly, car-dependent cities have more congestion and less mobility than those that offer a wider range of commuting options. The very vehicle whose great promise was personal mobility is in fact virtually immobilizing entire urban populations, making it difficult for rich and poor alike to move about.

Existing long-term transportation strategies in many developing countries assume that everyone will one day be able to own a car. Unfortunately, given the constraints of land available for cars, not to mention those imposed by oil reserves, this is simply not realistic. These countries will provide more mobility if they support public transportation and the bicycle.

Fuel taxes: An important instrument for climate policy

Fuel taxes: An important instrument for climate policy
July 14, 2006 -- By Thomas Sterner, Energy Policy, Vol. 35, Issue 6, June 2007 via Greg Mankiw

Abstract

This article shows that fuel taxes serve a very important role for the environment and that we risk a backlash of increased emissions if they are abolished. Fuel taxes have restrained growth in fuel demand and associated carbon emissions. Although fuel demand is large and growing, our analysis shows that it would have been much higher in the absence of domestic fuel taxes. People often assert that fuel demand is inelastic but there is strong research evidence showing the opposite. The price elasticity is in fact quite high but only in the long-run: in the short run it may be quite inelastic which has important implications for policy makers. Had Europe not followed a policy of high fuel taxation but had low US taxes, then fuel demand would have been twice as large. Hypothetical transport demand in the whole OECD area is calculated for various tax scenarios and the results show that fuel taxes are the single most powerful climate policy instrument implemented to date—yet this fact is not usually given due attention in the debate.

Gore, Gandhi, and Dioum

Al Gore at TED

March, 2008







Here is an excellent presentation on issues pertaining to the new environmental movement--global climatic disruption and resource constraints (in comparison to the previous environmental movement--biodiversity, toxins, air/water quality, and population). In the past, I have been skeptical towards Al Gore for a few reasons. The most prevalent being that he flies around the world, after leaving one of his mansions, to tell the general public to reduce emissions.



"You must be the change you wish to see in the world."

-Mohandas Gandhi



However, I am beginning to think less about his vanity and more about his ability to promote ideas in a compelling way.



"For in the end, we will conserve only what we love. We will love only what we understand. We will understand only what we are taught."

-Baba Dioum



He is one of many voices that need to be listened to as humanity attempts to reduce the tragedy of the commons and improve the living conditions for all of life.

ConocoPhillips First Major U.S.-Based Oil Company To Call For Emissions Cap

Conoco Calls for Emissions Cap (Subscription)
April 11, 2007 -- By Jeffrey Ball, The Wall Street Journal

Oil Producer Joins Effort To Shape New U.S. Policy On Greenhouse-Gas Limits

ConocoPhillips became the first major U.S.-based oil company to add its voice to the call for a federal global-warming-emission cap, in the latest sign that U.S. companies are jockeying to shape any legislation.

ConocoPhillips said it was joining the U.S. Climate Action Partnership, a group of corporations that have called for a U.S. emissions cap and have outlined broad principles that they want any cap to include. The group formed earlier this year, following the takeover of Congress by Democrats, whose leaders have said they want to legislate an emissions cap.

"We believe that the science is quite compelling and that climate change is certainly attributed to human activity and to the substantial use of fossil fuels," Jim Mulva, chairman and chief executive of Houston-based ConocoPhillips, said in announcing the company's position.

Exxon Mobil Corp., the world's biggest publicly traded oil company by market value, also has begun talking about what it wants any global-warming constraint to include, including market flexibility. But Exxon isn't saying it either endorses or opposes a federal cap. Said Dave Gardner, an Exxon spokesman: "The devil's in the details."

European-based oil giant BP PLC has endorsed a U.S. global-warming emissions cap. It is the only other oil company in USCAP.

ConocoPhillips's announcement comes amid mounting political and consumer concern about global warming and rising gasoline prices. The U.S. Energy Information Administration said yesterday that the global oil market is likely to remain tight -- and pump prices volatile -- during the summer driving season. Regular-grade gasoline should average $2.81 per gallon this summer, it said, compared with $2.84 per gallon last summer.

Companies like ConocoPhillips that are endorsing a federal global-warming cap are doing so largely in the belief that they can shape it to minimize the cost to them. Many companies, eyeing the proliferation of differing global-warming rules in places such as California and the Northeast, are concluding that a single nationwide cap will be less onerous than a patchwork of state rules.

A U.S. policy, they figure, would be easier to integrate into global-warming regulations being implemented in other countries where U.S.-based multinationals like ConocoPhillips also do business. That integration would make it easier for companies to satisfy any U.S. obligation by buying cheaper emission "credits" from the developing world, where the cost of projects to reduce or offset fossil-fuel emissions is lower. ConocoPhillips's Mr. Mulva stressed that his company wants a U.S. cap to "have linkages" to policies in other countries.

Mr. Mulva also said he wants to ensure than any federal emissions cap doesn't "create winners and losers" in the economy. But companies already are ratcheting up their lobbying push in Washington to influence the details of whatever cap emerges. That scramble is particularly intense among the industries likeliest to be hit: electric utilities, heavy manufacturers, auto makers and oil producers.

Transportation isn't likely to be hit as hard as the utility sector. That is because it is cheaper for the economy to curb a ton of emissions of carbon dioxide, the main global warming gas, by targeting utilities than by targeting cars and trucks. Still, the transport sector is likely to be hit. The bulk of that burden could fall either on fuel producers, which might be required to produce fuel that contains less carbon, or on auto makers, which might be required to engineer their vehicles so they burn less fuel.

In an indication of that tension, Mr. Mulva all but blessed a toughening of a policy the auto industry reviles: the federal government's decades-old requirement that each auto maker's fleet of new vehicles each year meets a minimum average fuel economy. "We need to do everything we can to just have more energy efficiency," he said, adding: "If that leads to higher requirements -- more miles per gallon in terms of the automobiles we drive -- that all does help in the more efficient use of energy."

The auto industry, for its part, is trying to push much of the burden onto others. It, too, has begun talking favorably about an economy-wide cap on global-warming emissions, which it figures is likely to go easier on the auto industry than would a significant toughening of the federal automotive-fuel-economy requirements.

US biofuels: A field in ferment

US biofuels: A field in ferment (Subscription)
December 7, 2006 -- By Katharine Sanderson, Nature

To move US biofuels beyond subsidized corn will be a challenge, reports Katharine Sanderson.

Critics of the US ethanol industry have long derided it as an environmentally questionable subsidy to Mid-western farmers that simply serves a transparently political purpose. Voters in Iowa, the buckle in the US corn belt, get first say in the process of choosing presidential candidates. All such candidates are in favour of turning corn (maize), which the state produces in abundance, into ethanol. This pre-presidential support is good for the Iowan economy, but not necessarily that great for the environment.

Studies that compare the energy that goes into making ethanol — expended during the harvesting, fertilizing and transporting of the corn to refineries, and then refining it — with the energy that is released when it is burned routinely show that the net gain is at best small. The American Coalition for Ethanol says that ethanol contains twice the amount of energy that is used to make it; critics see no net gain whatsoever.

This criticism has had little effect, and since 1980, US ethanol production has risen from an average of 6,500 barrels (1 million litres) a day to 260,000 barrels a day. Federal mandates call for a further doubling by 2012. But it is increasingly clear to many in the industry that the criticisms of corn-based ethanol have merit, and in 2006, the need for an alternative was given the highest profile it could get when President George W. Bush brought it up in his state of the union address. In order to improve US energy security, he said, his government intended to make cellulosic ethanol (ethanol made from the rougher and woodier parts of plants) a competitive biofuel within six years.

Corn stores
The advantage of an ear of corn as a source of ethanol (or for that matter as a bit of food) is that it is mainly starch, which is made up of sugars linked in a regular way with bonds that can be broken easily. Breaking the bonds between sugars and using yeast in the fermentation to produce ethanol is a straightforward task for the biorefineries. The disadvantage is that corn is a crop that needs a lot of inputs — fertilizers, water and pesticides — and that doesn't put as much of the sugar it creates through photosynthesis into its ears as one might wish. A lot of the sugar is instead turned into stalks and 'stover' — structural material rich in cellulose and considerably more difficult to break down.

Plants that store up a significant amount of energy in easily usable forms such as starch or sugar are exceptions, encouraged in their oddities by millennia of selective breeding — and of them all, only sugar cane grown in the tropics puts enough energy into its easily purified products to make bioethanol obviously attractive. Most plants put the bulk of the energy they store up from the sun into cellulose and a related polymer, hemicellulose, and woody plants add another substance, lignin, to the mix. Cellulose makes up the plant's cell walls and, like starch, it is a polymer of sugars containing six carbon atoms linked one to the next. Hemicellulose, on the other hand, is based on a five-carbon sugar, xylose, although it contains many other sugars as well; its various components are thrown together in messy looking chains with many branches. Lignins are huge crosslinked jumbles of organic molecules which reinforce cellulose and hemicellulose to turn them into wood.

The energy that the plants put in to making the bonds in these various substances could, in principle, be extracted by fuel makers. And these molecules — particularly cellulose, which is both the most abundant and the easiest to dismantle — are much more plentiful than starches and sugars. But they are also much harder for microbes to break down; if they weren't, there'd be no trees, just pools of green goo. As yet, there are no cellulosic ethanol refineries operating at full commercial capacity, and assessments of the technology's readiness for market vary a great deal, as do opinions on how to get there from here. Government incentives and tax breaks might be one solution, but big energy companies also have a role to play, as do the smaller companies that have already worked on developing the technology, but have not yet found the best ways of spreading and licensing it.

The most expensive part of making ethanol from cellulose is pretreating the biomass to make it accessible to the enzymes that will then cut the sugars from the polymers so that they can be fermented. Typical pretreatments reduce the feedstock's volume chemically using acids, peroxides and ammonia, often along with some form of mechanical pressing or shredding. Unfortunately, this is not a step that can be skipped to cut costs, says Charles Wyman of the University of California, Riverside, because high sugar yields are essential, and untreated biomass gives very low yields. "The only step more expensive than pretreatment is no pretreatment," he says. Instead, the hunt is on for pre-treatment technologies that involve fewer chemicals, require less energy and don't degrade the sugars that are set free in the process.

After the pre-treatment stage comes the snipping out of the sugars, which is the point at which biotechnologists think they can greatly improve on the current process. Abengoa Bioenergy of St Louis, Missouri, a subsidiary of the Spanish engineering group Abengoa, recently invested $10 million in Dyadic International, a biotechnology company that is concentrating on enzymes for degrading cellulose.

Based in Jupiter, Florida, Dyadic didn't start out as an energy company — in the 1970s it was a leading supplier of pumice for stonewashing jeans. But the enzymatic expertise it developed for distressing denim was then turned to a number of other ends. One of those was breaking down wood, a job that in nature largely falls to fungi. The company's research has centred on a filamentous mess of a fungus discovered by accident in a Russian forest that now, after ten years of processing and genetic engineering, makes up Dyadic's patented C1 fungal cell system. The fungus has been fully sequenced and encouraged to overexpress the genes that then make cellulases and xylanases — the proteins that break up cellulose and hemicellulose to produce fermentable sugars. "We have the world's most prolific filamentous fungus," boasts Dyadic's chief executive Mark Emalfarb.

Cellulose solutions
Emalfarb believes that the cellulosic ethanol market could eventually be worth $20 billion a year in the United States, and suggests that there is enough raw material available in the United States to produce 2.4 billion barrels of cellulosic ethanol a year. This is a bit more than half of what some estimates claim is needed to completely replace petrol as a fuel — the United States gets through some 3.3 billion barrels a year, but the energy content of ethanol is lower than that of petroleum.

The current leader in the cellulosic ethanol market, Iogen, also uses fungal enzymes. The company makes small commercial quantities of ethanol from straw at its pioneering cellulosic ethanol facility in Ottawa, Canada. As the first of its kind, this is an undoubted achievement. But even when it reaches its full capacity, which it is taking quite some time to do, it will be capable of producing only 2.5 million litres (16,000 barrels) a year, which is not a great deal.

Iogen chief executive Brian Foody is not worried. The critical steps for getting the right enzymes, the right pretreatment systems and the right yeast systems, have all been done, he says. "We just need to go through the nuts and bolts of the process." This means making sure that the demonstration plant works well enough to be replicated elsewhere — the company is looking to build new facilities in Idaho, Saskatchewan and Germany.

Iogen recently secured a $30-million investment from the bankers Goldman Sachs, bringing the total invested in it since the 1970s up to $130 million. But not all potential investors are convinced. "I don't really understand what Iogen is doing," says Matt Drinkwater, market analyst at New Energy Finance in London, UK. And his concerns are not unique to Iogen — many of the companies in the sector, he says, hold details of their processes so close to their chests that they are hard to evaluate, whether they be relatively small outfits such as Iogen or giants such as DuPont, which is also developing cellulosic ethanol technologies. Robert Wilder, who manages the Wilderhill clean energy index — the first such index to be accepted on Wall Street — agrees, but acknowledges the constraints that the chief executives of small cellulosic ethanol companies work under in terms of not tipping their hands to larger competitors.

Smells like green spirit
Perhaps because of these uncertainties over the technology's readiness, most of the money that has been invested recently in ethanol production both within the United States and beyond has been in the more traditional technologies. The sizable investments being made by agribusiness giant Archer Daniels Midland — the biggest ethanol producer in the United States and, perhaps tellingly, a company run by a chief executive who was recruited from the oil industry — seem mostly to be in traditional corn ethanol. The same applies to high-flying UK entrepreneur Richard Branson's recent investments in Ethanol Grain Processors of Tennessee and a new grain-based Californian ethanol venture, Cilion.

But there is some evidence that enthusiasm for investing in corn ethanol may be waning. Various ethanol companies that were riding high earlier in the year saw their stock slump after the summer when oil prices came down from their $78 a barrel peak.

This might mean the market is aware that, although subsidies may be able to keep it profitable for the time being, there is no way that corn ethanol can make a marked difference to long-term energy use in the United States. To make enough ethanol to start seriously displacing oil imports requires a process that can use cellulosic materials such as switchgrass, a tall prairie grass, or miscanthus, a grass imported from Asia, which provide far more tonnes of biomass per hectare than corn kernels ever can, and can be grown on land not suitable for conventional agriculture. Other sources could be farm waste or trees or newly engineered plants of some sort.. This leads to something of an investing impasse: the companies in the business at the moment make money; the ones that might take it to the next stage do not, in large part because no one has made the heavy capital investments needed for plants that make use of the technologies that have already been piloted.

One way round this is to invest across the board. This is the strategy pursued by Vinod Khosla, the Silicon Valley venture capitalist who is one of the founders of Cilion. Khosla is also involved in cellulosic technologies through two companies based in Cambridge, Massachusetts: Celunol, which has just started to operate its own pilot plant, and Mascoma, which concentrates on process engineering and which last month raised $30 million in second-round venture funding. Farther afield in the biofuels world, Khosla is also a major investor in Kergy, a company that turns biomass into fuel in a completely different 'thermochemical' way, using just heat and catalysts. For some observers, such as Dan Schrag, a geochemist at Harvard University, these approaches are more attractive than fermentation, not least because they need no witches' brews made from fiddly feedstock-specific enzyme. "When the dust clears, cellulosic ethanol is unlikely to be where we end up," he predicts.

To Drinkwater, investors such as Khosla, with their broad-based approach to the problem, are exactly what the industry needs to drive the market forwards and get it over the final bump it needs to clear before commercial success. Unfortunately, there are few such people. In their absence, many in the industry, not without self-interest, see the responsibility resting with governments to provide attractive tax incentives. "All forms of energy should face market prices that reflect the cost to society that they impose," says Foody. And to set those market prices, the right tax incentives and government mandates need to be in place.

But government incentives won't make the scientists any smarter, and observers outside the pioneering companies believe there is still basic work to be done before those companies, or their eventual competitors, make the process economically viable. Thus they welcome increasing levels of basic research from the government, such as the US Department of Energy's pledge of $250 million to set up two bioenergy research centres that are largely focused on cellulosic ethanol. The European Union has set aside E100 million (US$132 million) for cellulosic ethanol in its seventh Framework Programme on research.

Ethanol alternative
Companies large enough to afford it are also following the basic research route rather than placing early bets on particular technologies. BP has announced it will invest $500 million over ten years to fund an Energy Biosciences Institute, which will be a dedicated facility based at a university. The University of Cambridge, Imperial College London, Massachusetts Institute of Technology, Stanford, the University of California, Berkeley, and Lawrence Berkeley National Laboratory have all been mentioned as possible hosts — the final decision is expected in December.

One intriguing possibility for such research to pursue is replacing ethanol with another form of alcohol. The fact that ethanol is easy to ferment can blind people to the fact that it has almost as many inherent problems as a fuel as corn has as a feedstock. Its tendency to pick up water wherever it goes makes it hard to transport, particularly in pipelines. It's corrosive. It's more volatile than one might wish. And its energy density is low compared with regular petrol.

For these reasons, BP and DuPont are working with British Sugar to adapt their ethanol fermentation facility in East Anglia to produce butanol — an alcohol with four carbons in it, as opposed to ethanol's two. This requires training microbes in new tricks, but it is not as hard a problem as breaking down woody plant material. The East Anglia plant will use locally grown sugar beet as the feedstock, but in the long term the aim would be to use a cellulosic feedstock. "We accept that taking stuff out of the food chain is not the right way to go," says Robert Wine, a BP spokesman.

Drinkwater thinks that an industry demand for butanol as an end product could actually increase interest in cellulosic approaches. "Most refiners would be much happier to use butanol than ethanol," he says. If oil companies become confident in biofuel technologies, investors would in turn be more confident of the biofuels industry as a whole, giving the industry that elusive final shove that it seems to need.

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.

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.