What if they held a UN climate conference and no one came? That's certainly not the case at this year's COP-17 (Conference of the Parties) meeting now underway in Durban, South Africa, but with expectations for dramatic progress low, and a breakthrough on the scale needed to salvage the expiring Kyoto Protocol nearly unimaginable, it could be where the UN-led process is headed. If Durban fails to deliver the goods, it won't be because the participants were any less concerned about climate change than those at past sessions. Nor will it be because of the latest release of Climategate emails, as embarrassing as some of them should be for the scientists involved. The reason is much simpler, and it's the same one that helped Bill Clinton unseat George H.W. Bush in 1992: "It's the economy, stupid." The solution to climate change is unlikely to be found in Durban or any future COP site until the leaders in Brussels, Washington and other capitals come to grips with the massive economic challenges they face and create the framework for a return to robust growth.
That observation might seem paradoxical, given the linkage between economic growth and the growth of greenhouse gas (GHG) emissions. One climate change expert at Shell recently questioned whether it's even possible to reduce these emissions, because the expansion of low-emission energy sources is merely displacing fossil fuels into other markets where the appetite for them remains insatiable. We've also seen the rebound in emissions that occurred once the US economy began to recover from the worst effects of the financial crisis and recession that began in 2008, and a new report from the International Energy Agency projects a similar result globally. Yet it's also the case that prosperity and concern for the environment go hand in hand, along with the capacity to afford the costs and penalties that a massive global reduction in GHGs would entail. It's no coincidence that the UN climate process and parallel US efforts lost most of their previous momentum during the Great Recession.
Although the "road map" that came out of 2007's Bali climate conference was ambitious, its timetable for developing a new set of binding emission-reduction commitments to dovetail with the end of the 2008-12 "first measurement period" of Kyoto looked achievable, allowing for some slippage. Just two years later, the delegates to Copenhagen were lucky to come away with a last-minute set of voluntary, non-binding commitments that, even if they were all implemented, would barely shift the trajectory of rising emissions. Nor did last year's meeting in Cancun restore the Bali road map.
At this point, even the less ambitious proposals on the agenda in Durban ultimately depend on developed countries that are grappling with high unemployment, crippling deficits and debt, and political turmoil underwriting large investments in the developing world. The present structure of the European Union--the primary supporter of action on climate change--is itself in jeopardy, and European economies are facing an oil price shock arguably as large as that of 2008. It's questionable that the EU can even pay for its own future emissions reductions, let alone subsidizing reductions and climate adaptation in the developing world. Meanwhile, support for Kyoto among other large emitting countries is flagging, and the US appears little closer to taking on binding emissions commitments than it was in 1997.
I don't dismiss the possibility that the Durban talks may accomplish more than just punting the ball to next year's session in Qatar. However, if they don't, then the folks that are footing the bills for this seemingly endless succession of sprawling confabs--wonderful for local chambers of commerce and tourism, but practically meaningless for tackling global emissions--should consider calling a hiatus pending the resolution of the global economic problems that will undermine any agreement they could reach in the interim. There might even be a scientific justification for that, in the form of a new, peer-reviewed paper in Science suggesting that the global climate's sensitivity to increasing concentrations of CO2 might not be as strong as previously thought. If Schmittner, et al, are correct, then we might have a bit more time before extreme climate change becomes imminent. Let's hope so, because it looks a lot more fruitful to reboot this whole effort once the global economy is back on an even keel.
Showing posts with label copenhagen. Show all posts
Showing posts with label copenhagen. Show all posts
Tuesday, November 29, 2011
Monday, December 13, 2010
The Post-Kyoto World
Saturday's conclusion of the Cancun climate talks yielded modest agreements that allowed the meeting to be described in positive terms by its hosts and organizers, but at least on the major question of a globally-binding treaty to extend or replace the expiring Kyoto Protocol, it merely kicked the can down the road to the late-2011 session in Durban, South Africa. As low as the expectations going into Cancun were, keeping the UN climate process on life support looks like a good result, compared to last year's fiasco in Copenhagen. However, in light of the objections raised by Japan, Russia, Canada and others, it's difficult to see how the Durban meeting could succeed where Cancun and Copenhagen failed. It looks increasingly likely that the replacement for Kyoto might appear face-savingly similar, but will lack that document's cohesiveness and global authority.
As I read the portion of the "Cancun Agreements" dealing with the extension of the Kyoto Protocol beyond its previously-set 2008-2012 term, the delegates mainly agreed to keep talking and to try to come up with a framework in time to avoid a "gap between the first and second commitment periods." Considering that last year's session in Copenhagen was widely viewed before its start as the last, best chance to accomplish that goal based on the timeline set in Bali two years prior, the end of 2011 looks pretty late in the game to deliver on that. Moreover, while Cancun was able to get by on low expectations, Durban will be unable to repeat that trick and avoid the kind of set-up that helped doom the Copenhagen talks.
The chasm that remains to be bridged doesn't seem to have changed much: the developing countries still insist on binding emissions reduction targets from the developed countries, to which the UN process attributes the majority of emissions under the "principle of historical responsibility, their emissions debt and addressing the needs of developing countries", but won't commit to binding targets themselves. (I've discussed this notion of "emissions debt" previously.) But while the US has signed up for voluntary emissions reductions under the Copenhagen Accord, it won't agree to binding cuts unless the world's largest emitter, China, also does. And all China appears willing to agree to, based on its Copenhagen commitments, is the sort of productivity-based reductions that the rest of the developed world rejected when the US advanced this idea for managing our emissions in the first term of the Bush administration. Even if China succeeds in cutting its emissions per GDP by 40-45% while its economy continues on its present growth trend, its overall emissions would still increase in absolute terms. Japan and some other Kyoto signatories are understandably reluctant to sign up for deeper cuts themselves, unless the world's two biggest emitters commit to sharing their pain.
And this is where the timing of any substantive Kyoto extension hits the wall of US politics. If the administration wasn't able to pass cap and trade legislation in the last Congressional session, when its party had an effective majority of 60 seats in the US Senate in 2009 and 59 in 2010, the prospect of ratifying a climate treaty with a majority of just 53 next year--including one who campaigned vocally against cap and trade--is nearly non-existent. The administration is struggling just to get the new strategic arms treaty with Russia ratified in the Lame Duck session--a treaty with solid bi-partisan endorsements from the foreign policy leadership of past administrations. The likely reception for a new climate treaty would be much less favorable than that until at least 2013 and probably beyond, in light of the ratio of seats up for reelection in 2012.
Unless I'm missing something major, without the US and China on board for binding cuts Japan and others won't agree to deeper reductions in the next round of Kyoto. That doesn't mean that the Durban Climate Conference won't cobble together an eleventh-hour agreement that looks like an extension of Kyoto, in order to avoid an irreparable rupture between the developed and developing world parties to the talks. The subtext for that is already in place in the Cancun outcome. However, it seems highly unlikely that such a document would actually do what Kyoto was intended to do. As a result, the UN process seems to be consigned to focusing on the secondary areas that progressed in Cancun, relating to funding for adaptation and technology transfer, and emissions reductions from sectors like land-use changes and forestry. With the economies of the developed world looking as weak as they do, and with domestic expenditure cuts in the EU having generated noisy and sometimes violent protests, coming up with the funding for those efforts looks more than challenging enough for now.
As I read the portion of the "Cancun Agreements" dealing with the extension of the Kyoto Protocol beyond its previously-set 2008-2012 term, the delegates mainly agreed to keep talking and to try to come up with a framework in time to avoid a "gap between the first and second commitment periods." Considering that last year's session in Copenhagen was widely viewed before its start as the last, best chance to accomplish that goal based on the timeline set in Bali two years prior, the end of 2011 looks pretty late in the game to deliver on that. Moreover, while Cancun was able to get by on low expectations, Durban will be unable to repeat that trick and avoid the kind of set-up that helped doom the Copenhagen talks.
The chasm that remains to be bridged doesn't seem to have changed much: the developing countries still insist on binding emissions reduction targets from the developed countries, to which the UN process attributes the majority of emissions under the "principle of historical responsibility, their emissions debt and addressing the needs of developing countries", but won't commit to binding targets themselves. (I've discussed this notion of "emissions debt" previously.) But while the US has signed up for voluntary emissions reductions under the Copenhagen Accord, it won't agree to binding cuts unless the world's largest emitter, China, also does. And all China appears willing to agree to, based on its Copenhagen commitments, is the sort of productivity-based reductions that the rest of the developed world rejected when the US advanced this idea for managing our emissions in the first term of the Bush administration. Even if China succeeds in cutting its emissions per GDP by 40-45% while its economy continues on its present growth trend, its overall emissions would still increase in absolute terms. Japan and some other Kyoto signatories are understandably reluctant to sign up for deeper cuts themselves, unless the world's two biggest emitters commit to sharing their pain.
And this is where the timing of any substantive Kyoto extension hits the wall of US politics. If the administration wasn't able to pass cap and trade legislation in the last Congressional session, when its party had an effective majority of 60 seats in the US Senate in 2009 and 59 in 2010, the prospect of ratifying a climate treaty with a majority of just 53 next year--including one who campaigned vocally against cap and trade--is nearly non-existent. The administration is struggling just to get the new strategic arms treaty with Russia ratified in the Lame Duck session--a treaty with solid bi-partisan endorsements from the foreign policy leadership of past administrations. The likely reception for a new climate treaty would be much less favorable than that until at least 2013 and probably beyond, in light of the ratio of seats up for reelection in 2012.
Unless I'm missing something major, without the US and China on board for binding cuts Japan and others won't agree to deeper reductions in the next round of Kyoto. That doesn't mean that the Durban Climate Conference won't cobble together an eleventh-hour agreement that looks like an extension of Kyoto, in order to avoid an irreparable rupture between the developed and developing world parties to the talks. The subtext for that is already in place in the Cancun outcome. However, it seems highly unlikely that such a document would actually do what Kyoto was intended to do. As a result, the UN process seems to be consigned to focusing on the secondary areas that progressed in Cancun, relating to funding for adaptation and technology transfer, and emissions reductions from sectors like land-use changes and forestry. With the economies of the developed world looking as weak as they do, and with domestic expenditure cuts in the EU having generated noisy and sometimes violent protests, coming up with the funding for those efforts looks more than challenging enough for now.
Monday, November 29, 2010
Cancun Climate Talks: Irrelevant?
The mood going into this week's global climate conference in Cancun, Mexico is decidedly different than that for last year's session in Copenhagen, which had been intended to culminate the process begun two years earlier in Bali. It's not just that expectations for a comprehensive and binding global climate treaty have been dramatically lowered; much of the debate since Copenhagen has moved away from the notion that it's even possible to reduce emissions sufficiently to avert many of the adverse consequences of a warming and less stable climate. It's no coincidence that the cover story of this week's Economist is dedicated to the increased need for adaptation to climate change, while the lead op-ed in the energy pull-out section in today's Wall St. Journal highlights an agenda for making clean energy the cheapest kind--not by subsidizing it even more than we already are, but by driving innovation.
After describing the magnitude of the challenge involved in decarbonizing the global economy by enough, soon enough, to limit the increase in global average temperatures in this century to 2° C, The Economist concludes, "The fight to limit global warming to easily tolerated levels is thus over." That doesn't mean that agreements to bend the trajectory of emissions growth below the status quo trendline aren't worth pursuing, but it suggests that we need to devote much greater attention and resources to adapting to a world that will likely include more droughts, floods, famines, and human migration than we've had to deal with thus far, and for which both the drivers and consequences are being amplified by economic development and population growth. The Economist sees climate adaptation focused on three main areas: infrastructure, migration and food, and their analysis is worth reading.
Another factor I believe the magazine should have highlighted is the difficulty of undertaking any of these efforts at a time when the developed world is hobbled by weak economic growth and related deficit and debt problems that threaten to render even the current level of subsidies for renewable energy sources unsustainable. As the EU grapples with the debts of Greece and Ireland, with Portugal and Spain waiting in the wings, it's no accident that Spain has just cut its feed-in tariff for solar power, which had already been reduced from previously lavish levels. The elephant in the room in Cancun, as it was in Copenhagen, is that binding agreements requiring severe emissions reductions by and large transfer payments from the developed countries might have looked attainable when the economy was booming, but they have become much less feasible in the wake of the worst recession and financial crisis since the Great Depression.
That same fundamental challenge makes the innovation arguments raised by Ted Nordhaus and Michael Shellengerger of the Breakthrough Institute more urgent than they would be otherwise. Because today's renewable energy technologies remain more expensive without subsidies than coal, oil and natural gas--even when the consumption subsidies the latter receive are stripped away--the cost of replacing our existing, high-emitting energy sources with entirely green ones looks unaffordable in today's world. I would add that reliance on experience curve effects--building out a subsidized green energy economy and depending on volume to drive down its cost to the point of competitiveness--is unlikely close that gap, and where it can, there is no guarantee that the country providing the incentives will receive the benefits it is entitled to expect. To cite the most obvious current example, Germany has invested tens of billions of Euros subsidizing solar energy and has indeed created a globally competitive solar industry--mainly in developing Asia.
What makes Nordhaus and Shellenberger's suggestion seem much more practical than global climate treaties and mountains of green subsidies is that the money currently being spent on renewable energy deployment incentives, which constitute a small fraction of the total annual investment in energy infrastructure, would go much farther buying R&D, rather than hardware. The US investment tax credit paid to a single 100 MW wind farm could fund an entire university energy innovation laboratory and graduate degree program.
Of course none of these strategies should be regarded as entirely either/or propositions. Adaptation doesn't let us off the hook for trying to address the causes of climate change, nor does shifting more of government's limited resources into clean energy R&D mean we don't need any of the real-world learnings that only come from deploying technology and seeing how it works under uncontrolled conditions. There's also a parallel role for research into geoengineering to provide a backstop--a potential Hail Mary pass--should all of these other efforts fall short and climate change move beyond a range we can live with. If nothing else, the COP 16 meeting in Cancun might shed more light on the degree to which the UN body is the right umbrella to cover all this work.
Tomorrow at 1:00 PM EST I'll be presenting in a webinar entitled, "Natural Gas: Sustainability Friend or Foe". To sign up follow this link.
After describing the magnitude of the challenge involved in decarbonizing the global economy by enough, soon enough, to limit the increase in global average temperatures in this century to 2° C, The Economist concludes, "The fight to limit global warming to easily tolerated levels is thus over." That doesn't mean that agreements to bend the trajectory of emissions growth below the status quo trendline aren't worth pursuing, but it suggests that we need to devote much greater attention and resources to adapting to a world that will likely include more droughts, floods, famines, and human migration than we've had to deal with thus far, and for which both the drivers and consequences are being amplified by economic development and population growth. The Economist sees climate adaptation focused on three main areas: infrastructure, migration and food, and their analysis is worth reading.
Another factor I believe the magazine should have highlighted is the difficulty of undertaking any of these efforts at a time when the developed world is hobbled by weak economic growth and related deficit and debt problems that threaten to render even the current level of subsidies for renewable energy sources unsustainable. As the EU grapples with the debts of Greece and Ireland, with Portugal and Spain waiting in the wings, it's no accident that Spain has just cut its feed-in tariff for solar power, which had already been reduced from previously lavish levels. The elephant in the room in Cancun, as it was in Copenhagen, is that binding agreements requiring severe emissions reductions by and large transfer payments from the developed countries might have looked attainable when the economy was booming, but they have become much less feasible in the wake of the worst recession and financial crisis since the Great Depression.
That same fundamental challenge makes the innovation arguments raised by Ted Nordhaus and Michael Shellengerger of the Breakthrough Institute more urgent than they would be otherwise. Because today's renewable energy technologies remain more expensive without subsidies than coal, oil and natural gas--even when the consumption subsidies the latter receive are stripped away--the cost of replacing our existing, high-emitting energy sources with entirely green ones looks unaffordable in today's world. I would add that reliance on experience curve effects--building out a subsidized green energy economy and depending on volume to drive down its cost to the point of competitiveness--is unlikely close that gap, and where it can, there is no guarantee that the country providing the incentives will receive the benefits it is entitled to expect. To cite the most obvious current example, Germany has invested tens of billions of Euros subsidizing solar energy and has indeed created a globally competitive solar industry--mainly in developing Asia.
What makes Nordhaus and Shellenberger's suggestion seem much more practical than global climate treaties and mountains of green subsidies is that the money currently being spent on renewable energy deployment incentives, which constitute a small fraction of the total annual investment in energy infrastructure, would go much farther buying R&D, rather than hardware. The US investment tax credit paid to a single 100 MW wind farm could fund an entire university energy innovation laboratory and graduate degree program.
Of course none of these strategies should be regarded as entirely either/or propositions. Adaptation doesn't let us off the hook for trying to address the causes of climate change, nor does shifting more of government's limited resources into clean energy R&D mean we don't need any of the real-world learnings that only come from deploying technology and seeing how it works under uncontrolled conditions. There's also a parallel role for research into geoengineering to provide a backstop--a potential Hail Mary pass--should all of these other efforts fall short and climate change move beyond a range we can live with. If nothing else, the COP 16 meeting in Cancun might shed more light on the degree to which the UN body is the right umbrella to cover all this work.
Tomorrow at 1:00 PM EST I'll be presenting in a webinar entitled, "Natural Gas: Sustainability Friend or Foe". To sign up follow this link.
Wednesday, January 20, 2010
What Now for Cap & Trade?
In the course of a single month, from the conclusion of the Copenhagen climate conference to yesterday's special election in Massachusetts, the anticipated global response to climate change has shifted dramatically. What had once seemed a likely scenario of coordinated, mandatory cuts in global greenhouse gas emissions suddenly looks unattainable, at least any time soon, and the whole approach to addressing climate change is in urgent need of a rethink. While much of the attention in last night's election was focused on the prospect of a 41st Senate vote to block pending health care legislation, the same dynamic almost certainly applies to cap & trade, at least along the lines of the Waxman-Markey bill passed last June by the House of Representatives.
I'll leave it to others to comment on the extent of the political upheaval that the voters of Massachusetts have created by sending a Republican to fill the US Senate seat held for decades by the late Senator Kennedy, and by his brother before him. Whatever this means for the administration's health care agenda, you only need to view a short video clip from Senator-elect Brown's campaign to realize that President Obama's plans for cap & trade, on which only one chamber had acted while the Democrats held a 60-vote super-majority in the Senate, look like further collateral damage from last night's result. While supporting more energy from renewables and nuclear power, Mr. Brown opposes cap & trade, or at least the version now on the table.
I'm probably in a minority of those concerned about climate change who welcome the demise of the Waxman-Markey approach. As I've noted before, it made little sense to adopt a methodology designed to create a level playing field for energy technologies based on their emissions, if it was established on such an intentionally-uneven foundation of excessive free allowances handed out to favored sectors and constituencies. And on top of its basic flaws, Waxman-Markey exemplified the recent Congressional tendency to load up any big bill with mountains of pork and reams of tangential provisions.
Does this mean cap & trade itself is now dead? I hope not, because I believe its underlying concept remains the most efficient way to recognize the cost of the environmental externalities associated with our use of fossil fuels--which cannot be replaced overnight--and to shift our energy habits toward greater efficiency and a growing reliance on more sustainable energy sources. But the politics of that now look challenging, particularly in an election year that is shaping up so unpredictably. Democrats still hold commanding majorities in the Senate and House, but no bill without bi-partisan support could get past a cloture vote in the Senate. That gives greater leverage to the negotiations of Senators Lindsey Graham (R-SC) and John Kerry (D-MA) for a bi-partisan climate bill incorporating much broader support for domestic energy production--something that might be marketed as a genuine jobs bill without the cynicism of "green jobs" hype.
It also shifts attention to the EPA's Endangerment Finding on CO2 and that agency's proposals for regulating CO2 emissions. Last week the Washington Post was shocked by the apparent involvement of lobbyists in drafting proposed legislation to block any action by the EPA. Did their editors ever bother to scrutinize Waxman-Markey, which read like a lobbyist bonanza? Either way, extending the regulations of the Clean Air Act to CO2 would be a very expensive bad idea. CO2 is only a pollutant in the traditional sense by legal courtesy, and regulating the primary result of all carbon combustion in the same way we regulate much more easily managed fuel impurities and combustion byproducts like SOx and NOx--for which the term "Best Available Control Technology" actually has some meaning--looks orders of magnitude more expensive than a system that channels emissions reductions to the lowest-cost sources.
With a 52-47 election victory for Scott Brown, voters in Massachusetts have completed the work begun in Copenhagen of upending the best-laid plans for dealing with climate change. Instead of a binding global treaty to replace the expiring Kyoto Protocol, we have the voluntary goal-tallying of the Copenhagen Climate Accord, and instead of legislative momentum towards mandatory cap & trade in the US, we have renewed uncertainty and the necessity of a scaled-back bi-partisan approach--if any at all this year--that must focus more on what we should add than on what should be taken away--with the threat of EPA regulations and endless legal wrangling over them lurking in the background. I'll be very interested to see what emerges from this.
I'll leave it to others to comment on the extent of the political upheaval that the voters of Massachusetts have created by sending a Republican to fill the US Senate seat held for decades by the late Senator Kennedy, and by his brother before him. Whatever this means for the administration's health care agenda, you only need to view a short video clip from Senator-elect Brown's campaign to realize that President Obama's plans for cap & trade, on which only one chamber had acted while the Democrats held a 60-vote super-majority in the Senate, look like further collateral damage from last night's result. While supporting more energy from renewables and nuclear power, Mr. Brown opposes cap & trade, or at least the version now on the table.
I'm probably in a minority of those concerned about climate change who welcome the demise of the Waxman-Markey approach. As I've noted before, it made little sense to adopt a methodology designed to create a level playing field for energy technologies based on their emissions, if it was established on such an intentionally-uneven foundation of excessive free allowances handed out to favored sectors and constituencies. And on top of its basic flaws, Waxman-Markey exemplified the recent Congressional tendency to load up any big bill with mountains of pork and reams of tangential provisions.
Does this mean cap & trade itself is now dead? I hope not, because I believe its underlying concept remains the most efficient way to recognize the cost of the environmental externalities associated with our use of fossil fuels--which cannot be replaced overnight--and to shift our energy habits toward greater efficiency and a growing reliance on more sustainable energy sources. But the politics of that now look challenging, particularly in an election year that is shaping up so unpredictably. Democrats still hold commanding majorities in the Senate and House, but no bill without bi-partisan support could get past a cloture vote in the Senate. That gives greater leverage to the negotiations of Senators Lindsey Graham (R-SC) and John Kerry (D-MA) for a bi-partisan climate bill incorporating much broader support for domestic energy production--something that might be marketed as a genuine jobs bill without the cynicism of "green jobs" hype.
It also shifts attention to the EPA's Endangerment Finding on CO2 and that agency's proposals for regulating CO2 emissions. Last week the Washington Post was shocked by the apparent involvement of lobbyists in drafting proposed legislation to block any action by the EPA. Did their editors ever bother to scrutinize Waxman-Markey, which read like a lobbyist bonanza? Either way, extending the regulations of the Clean Air Act to CO2 would be a very expensive bad idea. CO2 is only a pollutant in the traditional sense by legal courtesy, and regulating the primary result of all carbon combustion in the same way we regulate much more easily managed fuel impurities and combustion byproducts like SOx and NOx--for which the term "Best Available Control Technology" actually has some meaning--looks orders of magnitude more expensive than a system that channels emissions reductions to the lowest-cost sources.
With a 52-47 election victory for Scott Brown, voters in Massachusetts have completed the work begun in Copenhagen of upending the best-laid plans for dealing with climate change. Instead of a binding global treaty to replace the expiring Kyoto Protocol, we have the voluntary goal-tallying of the Copenhagen Climate Accord, and instead of legislative momentum towards mandatory cap & trade in the US, we have renewed uncertainty and the necessity of a scaled-back bi-partisan approach--if any at all this year--that must focus more on what we should add than on what should be taken away--with the threat of EPA regulations and endless legal wrangling over them lurking in the background. I'll be very interested to see what emerges from this.
Tuesday, December 29, 2009
2009: Energy Year in Review
As I was considering this year-end summary, it struck me that 2009 seemed to span more than a single year. It began with the economy plummeting with no obvious bottom in sight and energy demand falling with it. Later, as the financial system stabilized and the psychological impact of stimulus efforts in the US, China and the EU took hold, markets began to recover and the nascent depression became a nasty recession that apparently ended in the 3rd quarter. However, in a reversal of last year's dynamic, energy was mostly driven by the economy, instead of the former driving the latter. And unlike 2008, when oil grabbed the most headlines, the big energy stories of this year concerned natural gas and renewables, along with efforts to reduce emissions of the greenhouse gases that accompany most energy use.
For oil prices, 2009 was certainly two years in one: A weak first half in which the price of West Texas Intermediate Crude averaged just under $52 per barrel, and a much more stable second half averaging around $72. Nor did prices exhibit anything like their volatility of 2008, which started in the $90s, peaked near $150, and ended in the $40s after a dip to the low $30s. By comparison, 2009 looked more like a continuation of 2006 or 2007, as if 2008 never happened, but with the primary focus inverted from concerns about supply to worries about demand. It'll be a few months before the final figures are in, but it appears that global oil demand was down by 2% vs. 2007, with demand in the US off by a whopping 10% through September.
The impact of weaker demand on the refining sector was particularly severe, compressing margins and forcing the permanent closure of at least one major US refinery. The average US gasoline price for the year was nearly $0.90 per gallon lower than in '08, saving the average driver around $35 per month. The even larger savings in the first half probably constituted the most meaningful stimulus that most consumers were seeing at that point.
For oil prices, 2009 was certainly two years in one: A weak first half in which the price of West Texas Intermediate Crude averaged just under $52 per barrel, and a much more stable second half averaging around $72. Nor did prices exhibit anything like their volatility of 2008, which started in the $90s, peaked near $150, and ended in the $40s after a dip to the low $30s. By comparison, 2009 looked more like a continuation of 2006 or 2007, as if 2008 never happened, but with the primary focus inverted from concerns about supply to worries about demand. It'll be a few months before the final figures are in, but it appears that global oil demand was down by 2% vs. 2007, with demand in the US off by a whopping 10% through September.
The impact of weaker demand on the refining sector was particularly severe, compressing margins and forcing the permanent closure of at least one major US refinery. The average US gasoline price for the year was nearly $0.90 per gallon lower than in '08, saving the average driver around $35 per month. The even larger savings in the first half probably constituted the most meaningful stimulus that most consumers were seeing at that point.
If the oil news centered on weak demand and OPEC's efforts to restrain supply, for natural gas it mainly highlighted the remarkable resurgence of US gas production, thanks to the shale gas revolution. If this trend can be sustained it has significant implications for the entire economy and for the emissions we produce. It also poses a serious dilemma for environmentalists, because the shale gas bubble and its benefits for climate change would evaporate if the drilling practice called hydraulic fracturing were to be banned or severely restricted. Also at stake is the potential revival of the US petrochemical industry, which relies much more heavily than its foreign competitors on natural gas as a feedstock, instead of oil. The jobs involved might not be exactly "green", but they are certainly desirable ones, in the sense of providing above-average wages. Government regulation of gas drilling and other aspects of the energy industry will be the trend to watch next year.
Speaking of government influence, it was crucial to the survival of the renewable energy industry in 2009. Aside from the strong vote of confidence and hefty financial commitment to renewables embodied in the stimulus bill, government grants to renewable energy developers stood in for the frozen "tax equity" market on which developers had previously relied to help finance wind farms and other facilities. US wind power capacity is on track to grow by around 28% this year to roughly 33,000 MW, though even at this impressive level it will still contribute just 2% of net electricity generation, for which the bigger story this year was the more than 10% drop in coal consumption, mainly at the expense of lower demand and higher gas-fired generation. Solar power is growing by leaps and bounds, though it still has a ways to go to catch up with wind and has already started to attract a similarly mixed reception as it moves beyond rooftops into utility-scale installations.
Meanwhile, another big renewable energy sector was kept on life support by the steadily-expanding US Renewable Fuel Standard and a 30-year-old subsidy that has outlived its usefulness. Despite this support and an import tariff designed to confine that subsidy to US producers, 2009 continued the previous year's trend of ethanol suppliers going bust. It also saw the largest of the previous year's ethanol bankruptcies progress to liquidation, as most of VeraSun's facilities were ultimately absorbed by independent refining giant Valero, which also became an active investor in next-generation biofuel technology. Yet in spite of its continued growth and the unwavering support of federal and state governments, corn-based ethanol is hurtling toward a collision with the 10% limit on blending it into a shrinking gasoline pool--a limit that ethanol supporters want to have raised to 15%, regardless of the consequences for consumers. An even bigger problem lurks for corn ethanol, which has lately been promoted for its contributions to reducing emissions. The evidence is mounting that on a global basis its emissions might even be worse than from the petroleum products it displaces. The greater our commitment to addressing climate change and sustainability, the larger the contradictions of corn ethanol will loom.
And that brings us to Copenhagen, which served as the year's great energy anti-climax. While the outcome is being touted as a "Big Step Forward," the session in Denmark failed spectacularly to deliver the expected culmination of the two-year timeline set at Bali and built upon in a series of interim meetings. Instead of a binding global treaty to replace the expiring Kyoto Protocol, the Copenhagen Accord looks like a joint promise to make a list of independent targets--a promise that was only purchased with commitments for future aid that may never materialize, or that may only come at the expense of existing forms of aid to the developing world. With action on climate legislation in the US Congress stalled for now--for good reasons, in my view--that was probably all that could realistically be accomplished. Yet it still falls short of any objective metrics for judging the session, and indeed the entire Conference of the Parties (COP) process. I wouldn't be surprised to see the COP marginalized by the Major Economies Forum, an initiative that adds the EU central government to the group of large emitters first convened by the previous administration. When the COP manifests the dysfunctionality of the UN General Assembly, then climate change needs its own version of the Security Council to get things done.
Neither Copenhagen nor Climategate spells the end of action on climate change, but they might just mark a turning point toward a more pragmatic and less dogmatic set of responses, perhaps along the lines of a compromise being floated in the US Senate that would consider the contributions of all forms of energy to a more secure energy future with lower emissions. That aligns with the gradual replacement of a narrative of oil scarcity by one of natural gas abundance and the deft use of renewables, with a much stronger emphasis on efficiency and conservation, which still look like the low-hanging fruit for both energy security and climate change.
Barring major events, this will be my last posting for the year. Best wishes for a happy and healthy New Year.
Friday, December 18, 2009
Climategate: Mountain or Molehill?
While the Copenhagen delegates, which now include many heads of state, wrangle about transparency and the size and funding of the pot of money that will be required to assist the developing world in mitigating its emissions and adapting to further climate change, another debate over transparency is brewing. Its range of potential outcomes is wide. At one end it entails a collision between science and the law--two less compatible spheres would be hard to imagine--over the issues raised by the emails and data leaked from the University of East Anglia. At the other extreme concerns about "Climategate" will gradually fade from our consciousness in the manner of Tiger Woods's fall from grace, but perhaps not without raising some interesting questions along the way.
To appreciate how matters might unfold, check out an op-ed in today's Wall St. Journal from Dr. Patrick J. Michaels, a climate scientist on the receiving end of some of those barbed emails revealed by the leak. In addition to calling into question the neutrality of the peer review process that underpins the science upon which the Copenhagen talks and any agreement that comes out of them are based, he provides a hint at the form that future legal challenges to the enforcement of such an agreement, or of rules arising from the EPA's recent endangerment finding, might take. These allegations are serious, particularly when you consider that Dr. Philip D. Jones, until this month the head of the Climate Research Unit at East Anglia, was also one of two Coordinating Lead Authors of Chapter 3 of the Fourth Assessment Review of the Intergovernmental Panel on Climate Change (IPCC.) That chapter (very large file) deals with actual observations of "surface and atmospheric climate change", including the temperature data. That makes him a key gatekeeper of the consensus.
I only ran across that connection, because I've been following a side debate concerning how actual temperature measurements at thousands of locations around the world over the last century have been tabulated. The barely civil online point-counterpoint between an anonymous blogger at The Economist and the proprietor of a well-known climate skeptic website gives a flavor for this complex topic. Along the way I was surprised to learn how frequently the actual temperature readings are adjusted, interpolated, and in some cases discarded. This involves many assumptions that I'm not qualified to question, though I am left with the conclusion that recent temperature trends fall into much the same category as the pre-measurement historical temperatures reconstructed from proxies such as tree rings. In other words, the familiar temperature trend graphs reflect mainly analysis, not primary data. That puts us all in the position of having to trust that this analysis was done properly and neutrally, and unfortunately that is precisely the trust that the leaked emails have undermined.
In a recent New York Times op-ed, Stewart Brand, an iconic figure and an acquaintance from my former work with Global Business Network when I was at Texaco, proposed a useful taxonomy for our reactions to climate change. He suggested four categories into which those with an opinion on the subject fall: Denialists, Skeptics, Warners, and Calamatists. The views of those in the first and last categories aren't likely to alter much, no matter what science and further evidence reveal about the climate. What they see reinforces pre-existing mindsets. The Skeptics and the Warners, on the other hand, are part of a legitimate scientific debate and are both amenable to adapting their views to new evidence.
I consider myself mainly a Warner in Stewart's terms, having consistently expounded the risks of climate change both in this blog and elsewhere, but I am still willing to give both sides of the argument a fair hearing. I want to see Climategate addressed openly and objectively. If the science turns out to be flawed because of bias and improper manipulation, we need to know that and correct the flaws. If the actual science is unaffected, but the means by which it has been conducted requires reform, then we need to address that as well, because if we don't the public's confidence in its findings won't be high enough to act on them. And I'd rather see this hashed out in an open scientific forum held by a body such as the AAAS and involving many disciplines outside climate science as a true jury of peers, than to see it resolved by litigation, which is where this all could be headed if scientists respond by shrugging it off or circling their wagons.
To appreciate how matters might unfold, check out an op-ed in today's Wall St. Journal from Dr. Patrick J. Michaels, a climate scientist on the receiving end of some of those barbed emails revealed by the leak. In addition to calling into question the neutrality of the peer review process that underpins the science upon which the Copenhagen talks and any agreement that comes out of them are based, he provides a hint at the form that future legal challenges to the enforcement of such an agreement, or of rules arising from the EPA's recent endangerment finding, might take. These allegations are serious, particularly when you consider that Dr. Philip D. Jones, until this month the head of the Climate Research Unit at East Anglia, was also one of two Coordinating Lead Authors of Chapter 3 of the Fourth Assessment Review of the Intergovernmental Panel on Climate Change (IPCC.) That chapter (very large file) deals with actual observations of "surface and atmospheric climate change", including the temperature data. That makes him a key gatekeeper of the consensus.
I only ran across that connection, because I've been following a side debate concerning how actual temperature measurements at thousands of locations around the world over the last century have been tabulated. The barely civil online point-counterpoint between an anonymous blogger at The Economist and the proprietor of a well-known climate skeptic website gives a flavor for this complex topic. Along the way I was surprised to learn how frequently the actual temperature readings are adjusted, interpolated, and in some cases discarded. This involves many assumptions that I'm not qualified to question, though I am left with the conclusion that recent temperature trends fall into much the same category as the pre-measurement historical temperatures reconstructed from proxies such as tree rings. In other words, the familiar temperature trend graphs reflect mainly analysis, not primary data. That puts us all in the position of having to trust that this analysis was done properly and neutrally, and unfortunately that is precisely the trust that the leaked emails have undermined.
In a recent New York Times op-ed, Stewart Brand, an iconic figure and an acquaintance from my former work with Global Business Network when I was at Texaco, proposed a useful taxonomy for our reactions to climate change. He suggested four categories into which those with an opinion on the subject fall: Denialists, Skeptics, Warners, and Calamatists. The views of those in the first and last categories aren't likely to alter much, no matter what science and further evidence reveal about the climate. What they see reinforces pre-existing mindsets. The Skeptics and the Warners, on the other hand, are part of a legitimate scientific debate and are both amenable to adapting their views to new evidence.
I consider myself mainly a Warner in Stewart's terms, having consistently expounded the risks of climate change both in this blog and elsewhere, but I am still willing to give both sides of the argument a fair hearing. I want to see Climategate addressed openly and objectively. If the science turns out to be flawed because of bias and improper manipulation, we need to know that and correct the flaws. If the actual science is unaffected, but the means by which it has been conducted requires reform, then we need to address that as well, because if we don't the public's confidence in its findings won't be high enough to act on them. And I'd rather see this hashed out in an open scientific forum held by a body such as the AAAS and involving many disciplines outside climate science as a true jury of peers, than to see it resolved by litigation, which is where this all could be headed if scientists respond by shrugging it off or circling their wagons.
Monday, December 14, 2009
Cash Is King, Even at Copenhagen
Although apparently brief, the suspension of the Copenhagen climate conference after a walkout by the Group of 77 developing countries confirms that the talks are as much about money as about healing the world's climate. It's not just that the G77 wants the Kyoto limits on the emissions of developed countries enforced, while leaving their own emissions uncapped; it also wants the developed world to kick in sizable sums--much bigger than the 2.4 billion Euros per year offered by the EU--to cover the improvements in energy efficiency and renewable energy that would enable them to tackle the growth of their own emissions. There's a solid argument there, though it is not the guilt-based logic of "carbon debt" that I explored a few weeks ago.
An op-ed in the Saturday Wall St. Journal got me thinking about this issue over the weekend, before the G77 delegates walked out of the COP-15 session in Copenhagen. This commentary by a Berkeley physics professor and author of "Physics for Future Presidents" was bursting with enough ideas to stimulate a dozen blog postings, but its key insight was that even the massive cuts in US emissions proposed for mid-century would be of little or no consequence in curbing global emissions that are increasingly concentrated in the developing world. He suggests that the emissions of developing countries will count the most, and that these countries will only adopt emission cuts that provide clear economic benefits to them. In that context and under the current Kyoto-based framework, the strongest argument for imposing deep cuts on the US and EU is not the reduction of our own emissions--which would have a minimal direct impact on the expected increase in the earth's temperature--but the role of these cuts in creating a market for offsets generated by investments in emission-reduction projects in the uncapped developing world via the Clean Development Mechanism, or CDM. Unfortunately, this logic has already led to notable distortions of the intent of the CDM.
There has to be a better way. As Dr. Muller notes, "A dollar spent in China can reduce CO2 much more than a dollar spent in the US." Yet US voters won't countenance providing that dollar out of guilt, nor will they acquiesce to a scheme that makes China and other developing countries more competitive at their expense. Paradoxically, even domestic measures such as European feed-in tariffs and the proposed federal Renewable Electricity Standard embedded in the Waxman-Markey climate bill could create such an outcome, if Chinese and Indian green technology firms come to dominate developed country green energy markets. There are already indications of this happening in the German solar market.
Instead of the technology transfer we've been talking about for more than a decade, what may be needed is a new mechanism that actually creates markets in the developing world for clean energy hardware and know-how produced in the developed world, so that these projects create jobs and wealth in the US and EU, rather than threatening them. I'm not sure precisely what form such a deal might take, but at a minimum it should incorporate both open access to developing country markets and uniform legal protection for the physical and intellectual property of the developed-country companies making these investments.
The best thing that could come out of today's disruption at Copenhagen would be the cancellation of the big heads-of-state photo-ops planned for the final days of the conference and a determination to put the delegates back to work crafting a new agreement that creates the right recipe for focusing the lion's share of climate investments on the rapidly growing emissions of the third world, rather than on the shrinking emissions of the EU and the plateaued GHG output of the US. That would be something worthy of bringing the world's leaders together to sign.
An op-ed in the Saturday Wall St. Journal got me thinking about this issue over the weekend, before the G77 delegates walked out of the COP-15 session in Copenhagen. This commentary by a Berkeley physics professor and author of "Physics for Future Presidents" was bursting with enough ideas to stimulate a dozen blog postings, but its key insight was that even the massive cuts in US emissions proposed for mid-century would be of little or no consequence in curbing global emissions that are increasingly concentrated in the developing world. He suggests that the emissions of developing countries will count the most, and that these countries will only adopt emission cuts that provide clear economic benefits to them. In that context and under the current Kyoto-based framework, the strongest argument for imposing deep cuts on the US and EU is not the reduction of our own emissions--which would have a minimal direct impact on the expected increase in the earth's temperature--but the role of these cuts in creating a market for offsets generated by investments in emission-reduction projects in the uncapped developing world via the Clean Development Mechanism, or CDM. Unfortunately, this logic has already led to notable distortions of the intent of the CDM.
There has to be a better way. As Dr. Muller notes, "A dollar spent in China can reduce CO2 much more than a dollar spent in the US." Yet US voters won't countenance providing that dollar out of guilt, nor will they acquiesce to a scheme that makes China and other developing countries more competitive at their expense. Paradoxically, even domestic measures such as European feed-in tariffs and the proposed federal Renewable Electricity Standard embedded in the Waxman-Markey climate bill could create such an outcome, if Chinese and Indian green technology firms come to dominate developed country green energy markets. There are already indications of this happening in the German solar market.
Instead of the technology transfer we've been talking about for more than a decade, what may be needed is a new mechanism that actually creates markets in the developing world for clean energy hardware and know-how produced in the developed world, so that these projects create jobs and wealth in the US and EU, rather than threatening them. I'm not sure precisely what form such a deal might take, but at a minimum it should incorporate both open access to developing country markets and uniform legal protection for the physical and intellectual property of the developed-country companies making these investments.
The best thing that could come out of today's disruption at Copenhagen would be the cancellation of the big heads-of-state photo-ops planned for the final days of the conference and a determination to put the delegates back to work crafting a new agreement that creates the right recipe for focusing the lion's share of climate investments on the rapidly growing emissions of the third world, rather than on the shrinking emissions of the EU and the plateaued GHG output of the US. That would be something worthy of bringing the world's leaders together to sign.
Thursday, December 10, 2009
Reconciling Emission Baselines
As the nations represented at Copenhagen debate proposals for reducing their absolute emissions or carbon intensity, I was reminded that we shouldn't just focus on the percentages being offered, but also on the reference year emissions on which these proposals are based, since these aren't necessarily comparable. That's particularly true for the US and EU, which have consistently referred to 2005 and 1990 base years, respectively. This distinction is crucial in understanding how much of what each party might commit to has already been achieved and how much remains to be accomplished.
Start with the EU, which has proposed a reduction of 20% versus its 1990 emissions levels. Based on a recently-issued report by the European Environment Agency, the 27 countries constituting the European Union today have already reduced their emissions by 10.7% as of last year, compared to 1990. According to this report their collective emissions in 2005 were 9.3% below 1990, so that 20% figure for 2020 really translates to roughly 12% below 2005--and only a bit more than 10% below where they are now--which is substantially less than the 17% reduction that the US has put on the table. However, the US proposal should also be put into context, because of the divergent emissions trends of the two regions since 1990, which was the base year for the Kyoto Protocol that has guided EU policy in the intervening years, but which the US never ratified.
Between 1990 and 2005 total US greenhouse gas emissions increased by 16.5%. After counting net emissions including all sources and sinks--mostly natural processes such as forestry that absorb these gases--the increase was about 14%. So either way, that 17% cut that US negotiators were authorized to take to Copenhagen is really 1990 less about 3-5%. At the same time, 17% vs. 2005 is no slam dunk, even if it appears that the recession helped ax 2% of our emissions as of last year, and this year could be down a bit more. A recovering economy will use more energy and emit more GHGs, even if only from the work commutes of millions of re-employed people.
While I don't expect nearly as much controversy over the choice of baseline years as surrounded the Kyoto negotiations, 1990 and 2005 represent very different worlds, with the former largely pre-dating the collapse of the high-emission Soviet bloc economies, giving rise to all those Russian "hot air" allowances and a major portion of Germany's cuts post-reunification, along with a big shift in UK power generation away from coal and toward natural gas. Although the EU has certainly instituted comprehensive policies to reduce its emissions, including a cap on industrial emissions and a union-wide Emissions Trading System, a large chunk of the reductions for the current membership were achieved before any of these policies went into effect, through the rationalization of the inefficient economies of formerly-communist Central and Eastern Europe. 1990 looks even less relevant to the current economies of large developing countries like Brazil, China and India.
On the other hand, while 2005 has much to recommend it as probably the most recent year for which fully-audited emissions data are available globally, it also represents nearly the high-water mark of a world of easy money and massively-globalized supply chains that may never return in quite the same form. Choosing it might also appear to let the US off the hook for a decade of relative inactivity on climate change, though that ignores the fact that our actual emissions have grown by much less than the 33% business-as-usual increase that was expected in the late 1990s, presumably because of the discipline imposed by the steadily-rising energy prices that accompanied our bubble economy of recent years.
Whatever emerges as the baseline for an agreement or framework coming out of Copenhagen, it ought to be a single year that provides both ease of comparison and a reasonable congruence with the realistic starting point for any actions that countries will commit to undertaking in the years ahead.
Start with the EU, which has proposed a reduction of 20% versus its 1990 emissions levels. Based on a recently-issued report by the European Environment Agency, the 27 countries constituting the European Union today have already reduced their emissions by 10.7% as of last year, compared to 1990. According to this report their collective emissions in 2005 were 9.3% below 1990, so that 20% figure for 2020 really translates to roughly 12% below 2005--and only a bit more than 10% below where they are now--which is substantially less than the 17% reduction that the US has put on the table. However, the US proposal should also be put into context, because of the divergent emissions trends of the two regions since 1990, which was the base year for the Kyoto Protocol that has guided EU policy in the intervening years, but which the US never ratified.
Between 1990 and 2005 total US greenhouse gas emissions increased by 16.5%. After counting net emissions including all sources and sinks--mostly natural processes such as forestry that absorb these gases--the increase was about 14%. So either way, that 17% cut that US negotiators were authorized to take to Copenhagen is really 1990 less about 3-5%. At the same time, 17% vs. 2005 is no slam dunk, even if it appears that the recession helped ax 2% of our emissions as of last year, and this year could be down a bit more. A recovering economy will use more energy and emit more GHGs, even if only from the work commutes of millions of re-employed people.
While I don't expect nearly as much controversy over the choice of baseline years as surrounded the Kyoto negotiations, 1990 and 2005 represent very different worlds, with the former largely pre-dating the collapse of the high-emission Soviet bloc economies, giving rise to all those Russian "hot air" allowances and a major portion of Germany's cuts post-reunification, along with a big shift in UK power generation away from coal and toward natural gas. Although the EU has certainly instituted comprehensive policies to reduce its emissions, including a cap on industrial emissions and a union-wide Emissions Trading System, a large chunk of the reductions for the current membership were achieved before any of these policies went into effect, through the rationalization of the inefficient economies of formerly-communist Central and Eastern Europe. 1990 looks even less relevant to the current economies of large developing countries like Brazil, China and India.
On the other hand, while 2005 has much to recommend it as probably the most recent year for which fully-audited emissions data are available globally, it also represents nearly the high-water mark of a world of easy money and massively-globalized supply chains that may never return in quite the same form. Choosing it might also appear to let the US off the hook for a decade of relative inactivity on climate change, though that ignores the fact that our actual emissions have grown by much less than the 33% business-as-usual increase that was expected in the late 1990s, presumably because of the discipline imposed by the steadily-rising energy prices that accompanied our bubble economy of recent years.
Whatever emerges as the baseline for an agreement or framework coming out of Copenhagen, it ought to be a single year that provides both ease of comparison and a reasonable congruence with the realistic starting point for any actions that countries will commit to undertaking in the years ahead.
Tuesday, December 08, 2009
The Copenhagen Scenario
It wasn't supposed to turn out this way. When delegates to the climate conference in Bali in December 2007 agreed on a two-year roadmap culminating in Copenhagen this week and next, they were widely understood to be buying time for the US to elect a new administration committed to much stronger action on climate change, for the remaining scientific uncertainties to be resolved, and for the large developing countries to be brought around to make binding commitments regarding their own growing emissions. Yet while progress has been made on all three fronts, the changes over the last couple of years have manifested in ways that still don't quite deliver the scenario necessary to set up Copenhagen to deliver on all of Bali's promises.
As I noted during the run-up to last year's election, both major US political parties chose nominees who had made climate change a central issue of their campaigns. Neither an Obama administration nor a McCain one was going to look much like its predecessor on this issue. Yet we've also seen that the partisan differences on climate change reflect deeper underlying concerns about the impact of greenhouse gas regulations on parts of the economy that aren't evenly distributed across the states, some of which rely much more than others on the production or consumption of the highest-emitting fuels, particularly coal. Those economic concerns loom larger after what we've been through in the last year or so. Together with the inability of recent Congresses to refrain from festooning every piece of major legislation with grab bags of peripheral regulations and pork, this resulted in a badly flawed House bill on cap and trade--and much else--and a Senate counterpart that is starting to look dead on arrival. With President Obama needing to arrive in Copenhagen armed with more than empty promises, we now get an anything-but-coincidental Endangerment Finding that could end up reducing emissions in the most costly way imaginable.
Then there's the science and even the climate itself, which has hardly cooperated in the two years since Bali. While this decade is still on track to be the warmest on record globally, 2008 was the also coolest year since 2000, and despite some rebound 2009 won't set any new records. And just when the science was looking settled, the emails and computer files hacked--or leaked--from a major climate research center in the UK have raised concerns about the peer review of papers questioning the consensus view, and about the processing of raw data for the "climate proxies" used to recreate historical conditions before the century or so that they have been observed accurately--data that incidentally provide key inputs to the climate models predicting the temperature and other outcomes from steadily increasing levels of CO2 and other greenhouse gases in the atmosphere. The likelihood that the timing of this leak is no more coincidental than that of the EPA's finding doesn't alter the need for these questions to be assessed by someone besides the scientists whose work was involved.
Then there are the large, rapidly growing emissions from China, India and other developing countries, especially when changes in land use are taken into account. As I mentioned the other day, China's announcement that it would reduce the carbon intensity of its economy as it grows is a big first step, but it also falls into the category of things necessary, but not sufficient, to induce the US to commit to deep absolute cuts, particularly in light of polling that suggests the US public is less worried about climate change than it was when the economy was booming a couple of years ago--again, no coincidence.
When I return from my current travels I'll be watching the news from Copenhagen with great interest. I expect to post more on this subject, as developments warrant.
As I noted during the run-up to last year's election, both major US political parties chose nominees who had made climate change a central issue of their campaigns. Neither an Obama administration nor a McCain one was going to look much like its predecessor on this issue. Yet we've also seen that the partisan differences on climate change reflect deeper underlying concerns about the impact of greenhouse gas regulations on parts of the economy that aren't evenly distributed across the states, some of which rely much more than others on the production or consumption of the highest-emitting fuels, particularly coal. Those economic concerns loom larger after what we've been through in the last year or so. Together with the inability of recent Congresses to refrain from festooning every piece of major legislation with grab bags of peripheral regulations and pork, this resulted in a badly flawed House bill on cap and trade--and much else--and a Senate counterpart that is starting to look dead on arrival. With President Obama needing to arrive in Copenhagen armed with more than empty promises, we now get an anything-but-coincidental Endangerment Finding that could end up reducing emissions in the most costly way imaginable.
Then there's the science and even the climate itself, which has hardly cooperated in the two years since Bali. While this decade is still on track to be the warmest on record globally, 2008 was the also coolest year since 2000, and despite some rebound 2009 won't set any new records. And just when the science was looking settled, the emails and computer files hacked--or leaked--from a major climate research center in the UK have raised concerns about the peer review of papers questioning the consensus view, and about the processing of raw data for the "climate proxies" used to recreate historical conditions before the century or so that they have been observed accurately--data that incidentally provide key inputs to the climate models predicting the temperature and other outcomes from steadily increasing levels of CO2 and other greenhouse gases in the atmosphere. The likelihood that the timing of this leak is no more coincidental than that of the EPA's finding doesn't alter the need for these questions to be assessed by someone besides the scientists whose work was involved.
Then there are the large, rapidly growing emissions from China, India and other developing countries, especially when changes in land use are taken into account. As I mentioned the other day, China's announcement that it would reduce the carbon intensity of its economy as it grows is a big first step, but it also falls into the category of things necessary, but not sufficient, to induce the US to commit to deep absolute cuts, particularly in light of polling that suggests the US public is less worried about climate change than it was when the economy was booming a couple of years ago--again, no coincidence.
When I return from my current travels I'll be watching the news from Copenhagen with great interest. I expect to post more on this subject, as developments warrant.
Monday, November 30, 2009
Unrealistic Goals
A couple of stories over the long weekend highlighted growing disconnects between major elements of energy and environmental policy and what is actually possible in the real world. The first concerns China's gambit that committing to a carbon-intensity target that could be met with initiatives already under way might be sufficient to induce the US and EU to sign up for deeper cuts in actual emissions--and incidentally release a flood of "carbon debt" payments from the OECD to the developing world. Meanwhile a pair of articles on ethanol highlight the infeasibility of the biofuel mandates established by the US Congress a few years ago and about to be embedded in new EPA regulations. In both cases, practical reality is at odds with the aspirations of regulators in ways that threaten to undermine support for less ambitious but more achievable efforts.
The Copenhagen climate meeting, officially the 15th Conference of the Parties to the UN Framework Convention on Climate Change, begins in one week. Politicians and diplomats have been scrambling to avert the possibility that after two years of work on the details of the framework set in Bali, the meeting might conclude without producing an agreement that could take the place of the Kyoto Protocol, which expires in 2012. Last-minute actions by the world's two largest emitters may have rescued the conference from this fate, in the form of a pledge by President Obama that the US will reduce its emissions by 17% below 2005 levels by 2020 and a commitment by China to reduce its emissions per unit of economic activity by 40-45% below 2005 levels. But while this might save Copenhagen from irrelevance, it illustrates how far the available degrees of freedom for action in countries that must keep their economies moving forward fall short of what would be required to halt the accumulation of greenhouse gases in the atmosphere and begin to reverse it.
As it is, President Obama is taking a considerable risk in offering emission cuts that have not been approved by Congress, which might not be inclined to stick out its neck quite so far going into a tough mid-term election that will hinge on the economy and employment. While China's offer represents a serious first step, a similar focus on "carbon intensity" by the previous US administration was met with derision by environmentalists. The problem is that the level of emissions this would yield if China's economy continues to grow at 8% per year or more is incompatible with scenarios for limiting peak CO2 concentrations in the atmosphere to 450 parts per million and eventually restoring them to pre-industrial levels. If we can't avoid blowing past the 450 ppm limit that was the basis of the Bali framework, then growing efforts to shift the official goalpost back to 350 ppm--a level we passed in 1988--look like King Canute ordering the tide not to rise. Expect a great deal of attention to be focused on these numbers in the next couple of weeks.
The disconnect on US ethanol policy is even more pronounced, because the current path can only be sustained for a few more years. An op-ed in Saturday's New York Times reminds us of the shortcomings of our current reliance on ethanol produced from corn, while comments by the CEO of Shell, a major investor in next-generation biofuels, makes it clear that the extremely ambitious targets for cellulosic ethanol and other non-food-based biofuels that the Congress mandated in the Energy Independence and Security Act of 2007 are extremely unlikely to be met. And even before that shortfall becomes serious, the nation's distilleries will exceed the capacity of current US motor gasoline sales to accommodate all the ethanol they can produce, unless the government also lifts the 10% blending limit.
While we can argue about whether that ought to happen, the bigger issue is that these two developments expose the failure of the key assumptions under which the Congress crafted the Renewable Fuel Standard: E85 has turned out to be a dud in the marketplace for good reasons--consumers have figured out that a fuel that costs more dollars to go fewer miles is a bad deal--and it turns out to be really hard to make fuels on a large scale or at an affordable cost from non-food biomass. The appropriate response when your expectations of the future turn out to be so badly wrong would be to freeze the status quo in place while revamping the standard to reflect more realistic assumptions, not to enshrine the false assumptions in new EPA rules that will drive up fuel costs for consumers without doing a thing to improve the environment.
The Copenhagen climate meeting, officially the 15th Conference of the Parties to the UN Framework Convention on Climate Change, begins in one week. Politicians and diplomats have been scrambling to avert the possibility that after two years of work on the details of the framework set in Bali, the meeting might conclude without producing an agreement that could take the place of the Kyoto Protocol, which expires in 2012. Last-minute actions by the world's two largest emitters may have rescued the conference from this fate, in the form of a pledge by President Obama that the US will reduce its emissions by 17% below 2005 levels by 2020 and a commitment by China to reduce its emissions per unit of economic activity by 40-45% below 2005 levels. But while this might save Copenhagen from irrelevance, it illustrates how far the available degrees of freedom for action in countries that must keep their economies moving forward fall short of what would be required to halt the accumulation of greenhouse gases in the atmosphere and begin to reverse it.
As it is, President Obama is taking a considerable risk in offering emission cuts that have not been approved by Congress, which might not be inclined to stick out its neck quite so far going into a tough mid-term election that will hinge on the economy and employment. While China's offer represents a serious first step, a similar focus on "carbon intensity" by the previous US administration was met with derision by environmentalists. The problem is that the level of emissions this would yield if China's economy continues to grow at 8% per year or more is incompatible with scenarios for limiting peak CO2 concentrations in the atmosphere to 450 parts per million and eventually restoring them to pre-industrial levels. If we can't avoid blowing past the 450 ppm limit that was the basis of the Bali framework, then growing efforts to shift the official goalpost back to 350 ppm--a level we passed in 1988--look like King Canute ordering the tide not to rise. Expect a great deal of attention to be focused on these numbers in the next couple of weeks.
The disconnect on US ethanol policy is even more pronounced, because the current path can only be sustained for a few more years. An op-ed in Saturday's New York Times reminds us of the shortcomings of our current reliance on ethanol produced from corn, while comments by the CEO of Shell, a major investor in next-generation biofuels, makes it clear that the extremely ambitious targets for cellulosic ethanol and other non-food-based biofuels that the Congress mandated in the Energy Independence and Security Act of 2007 are extremely unlikely to be met. And even before that shortfall becomes serious, the nation's distilleries will exceed the capacity of current US motor gasoline sales to accommodate all the ethanol they can produce, unless the government also lifts the 10% blending limit.
While we can argue about whether that ought to happen, the bigger issue is that these two developments expose the failure of the key assumptions under which the Congress crafted the Renewable Fuel Standard: E85 has turned out to be a dud in the marketplace for good reasons--consumers have figured out that a fuel that costs more dollars to go fewer miles is a bad deal--and it turns out to be really hard to make fuels on a large scale or at an affordable cost from non-food biomass. The appropriate response when your expectations of the future turn out to be so badly wrong would be to freeze the status quo in place while revamping the standard to reflect more realistic assumptions, not to enshrine the false assumptions in new EPA rules that will drive up fuel costs for consumers without doing a thing to improve the environment.
Wednesday, November 04, 2009
"Carbon Debt"
A new term has entered our lexicon without much fanfare, but that is about to change. When the Conference of the Parties to the UN Framework Convention on Climate Change (UNFCCC) meets next month in Copenhagen, we will hear a lot more about "carbon debt" and the obligation that developing countries believe the developed world owes them for having used the atmosphere as a sink for CO2 and other gases since the Industrial Revolution. From my perspective, this approach looks counterproductive and risks scuttling the principal process for coordinating the actions of independent nations in addressing the most global of problems. The issues of international and inter-generational environmental equity raised by the accumulation of greenhouse gases (GHGs) are serious and complex, but framing them in this way will make it much harder to find acceptable middle ground, unless the delegations show restraint and common sense about how far to reach back into history to assess blame for a warming earth.
It was always going to be tricky reconciling the competing interests of the developed and developing worlds sufficiently to craft a new global climate agreement to replace the expiring Kyoto Protocol. In addition to large differences in per-capita wealth and income, many of the main players fall into one of two key categories: countries with large historical and current emissions of GHGs that are now moderating or even decreasing, and countries with relatively much smaller historical emissions but large and/or rapidly-growing current emissions. The nature of the cumulative climate impact of these GHGs makes that distinction a crucial one and the source of much rancorous debate. I've been thinking about the resulting issues of equity for some time, but I am extremely concerned by the turn that I see the negotiating process that started in Bali two years ago having taken.
The UNFCC doesn't make it easy to follow what's going on. Of all things it took a visit to a climate change skeptic's website to track down a reasonably current version of the negotiating draft that is being prepared for consideration in Copenhagen. That enabled me to locate the document on the UN site once I had its file name. Having scanned through it for references to carbon debt, I can see why they might have wanted to make it hard to find, since the principles embodied there are bound to strike most Americans as at least counter-intuitive. For starters, the notion of carbon debt is introduced early in the draft as a "guiding principle of the Convention", and described as, "historical responsibilities in greenhouse gas emissions and the related historical ecological debt generated by the cumulative greenhouse gas emissions since 1750 and the most recent scientific information." That word "debt" crops up many times in the document, with repeated references to the "emissions debt", "historical climate debt" and "adaptation debt" that developed countries "owe" to developing ones.
Lest you think that this is merely intended as an abstraction governing philosophical discussions of equity, the document makes it abundantly clear that this is about money and who shall pay whom. One of several examples in the text puts this in admirably concrete terms:
"Developed country Parties shall provide financial resources and transfer technology to developing country Parties to make full and effective repayment of climate debt, including adaptation debt, taking responsibility for their historical cumulative emissions and current high per capita emissions."
Unfortunately, as I noted in a lengthy posting on this topic a year-and-a-half ago, matters aren't nearly as clear-cut as this wording suggests. While the consequences of many decades' worth of emissions of CO2 and other long-lived GHGs certainly appear to be putting an unfair burden on developing countries, it would be equally unfair to the citizens of developed countries to tax them for emissions that occurred before the scientific consensus on global warming emerged in the last couple of decades. Arrhenius may have worked out that CO2 could warm the planet a century ago, but the relative importance of that effect amidst the many complex factors influencing the climate was anything but obvious then, and it is still not fully understood. It makes no more sense to burden modern Europeans and Americans for the emissions of our parents, grandparents, and great-to-the-nth grandparents going back 10 generations than it does to tax modern Chinese, Indians and Brazilians for the entire edifice of Western technology that has enabled their present and future development.
We are all in this together, and the only emissions we have control over are those that occur from here on out. Having said that, it's clear that without some recognition that developing countries didn't create this problem--no matter how much they might be contributing to it now--there will be no deal in Copenhagen. The only viable middle ground I see, if not from the standpoint of the inter-governmental delegations, then for the citizenry they represent, would be to recognize the disparities in historical emissions but impose an effective statute of limitations on them. No emissions prior to the establishment of the Framework Convention on Climate Change at the Second Earth Summit at Rio de Janeiro in 1992 should be counted for purposes of allocating emission targets or financial assistance. While such a compromise would greatly diminish the imputed carbon debt of the developed world and allocate a bigger portion of it to large developing countries like China and Indonesia--particularly when changes in forestry and land-use are factored in--it would hardly let the rich world off the hook. The countries of the OECD have collectively emitted on the order of 200 billion tons of CO2-equivalent GHGs since then--roughly half the world's total emissions in that interval.
It would be tragic if the Copenhagen climate conference could only arrive at a new global agreement on emissions by relying on a principle that American voters would ultimately find as unacceptable as the allocation of national emission-reduction targets in the Kyoto Protocol. It is challenging enough for our elected representatives to attempt to match federal tax revenues to our existing obligations, foreign and domestic. I can't imagine any President or Congress wanting to explain to the electorate--particularly with so many of them already exercised over growing deficits and the current tax burden--why they must pay higher taxes to send carbon-debt payments to some of the same countries that are competing for our jobs and industries, on the basis that previous generations of Americans put more CO2 into the atmosphere than past generations of Chinese, Indians and Brazilians. That sounds like political suicide to me.
It was always going to be tricky reconciling the competing interests of the developed and developing worlds sufficiently to craft a new global climate agreement to replace the expiring Kyoto Protocol. In addition to large differences in per-capita wealth and income, many of the main players fall into one of two key categories: countries with large historical and current emissions of GHGs that are now moderating or even decreasing, and countries with relatively much smaller historical emissions but large and/or rapidly-growing current emissions. The nature of the cumulative climate impact of these GHGs makes that distinction a crucial one and the source of much rancorous debate. I've been thinking about the resulting issues of equity for some time, but I am extremely concerned by the turn that I see the negotiating process that started in Bali two years ago having taken.
The UNFCC doesn't make it easy to follow what's going on. Of all things it took a visit to a climate change skeptic's website to track down a reasonably current version of the negotiating draft that is being prepared for consideration in Copenhagen. That enabled me to locate the document on the UN site once I had its file name. Having scanned through it for references to carbon debt, I can see why they might have wanted to make it hard to find, since the principles embodied there are bound to strike most Americans as at least counter-intuitive. For starters, the notion of carbon debt is introduced early in the draft as a "guiding principle of the Convention", and described as, "historical responsibilities in greenhouse gas emissions and the related historical ecological debt generated by the cumulative greenhouse gas emissions since 1750 and the most recent scientific information." That word "debt" crops up many times in the document, with repeated references to the "emissions debt", "historical climate debt" and "adaptation debt" that developed countries "owe" to developing ones.
Lest you think that this is merely intended as an abstraction governing philosophical discussions of equity, the document makes it abundantly clear that this is about money and who shall pay whom. One of several examples in the text puts this in admirably concrete terms:
"Developed country Parties shall provide financial resources and transfer technology to developing country Parties to make full and effective repayment of climate debt, including adaptation debt, taking responsibility for their historical cumulative emissions and current high per capita emissions."
Unfortunately, as I noted in a lengthy posting on this topic a year-and-a-half ago, matters aren't nearly as clear-cut as this wording suggests. While the consequences of many decades' worth of emissions of CO2 and other long-lived GHGs certainly appear to be putting an unfair burden on developing countries, it would be equally unfair to the citizens of developed countries to tax them for emissions that occurred before the scientific consensus on global warming emerged in the last couple of decades. Arrhenius may have worked out that CO2 could warm the planet a century ago, but the relative importance of that effect amidst the many complex factors influencing the climate was anything but obvious then, and it is still not fully understood. It makes no more sense to burden modern Europeans and Americans for the emissions of our parents, grandparents, and great-to-the-nth grandparents going back 10 generations than it does to tax modern Chinese, Indians and Brazilians for the entire edifice of Western technology that has enabled their present and future development.
We are all in this together, and the only emissions we have control over are those that occur from here on out. Having said that, it's clear that without some recognition that developing countries didn't create this problem--no matter how much they might be contributing to it now--there will be no deal in Copenhagen. The only viable middle ground I see, if not from the standpoint of the inter-governmental delegations, then for the citizenry they represent, would be to recognize the disparities in historical emissions but impose an effective statute of limitations on them. No emissions prior to the establishment of the Framework Convention on Climate Change at the Second Earth Summit at Rio de Janeiro in 1992 should be counted for purposes of allocating emission targets or financial assistance. While such a compromise would greatly diminish the imputed carbon debt of the developed world and allocate a bigger portion of it to large developing countries like China and Indonesia--particularly when changes in forestry and land-use are factored in--it would hardly let the rich world off the hook. The countries of the OECD have collectively emitted on the order of 200 billion tons of CO2-equivalent GHGs since then--roughly half the world's total emissions in that interval.
It would be tragic if the Copenhagen climate conference could only arrive at a new global agreement on emissions by relying on a principle that American voters would ultimately find as unacceptable as the allocation of national emission-reduction targets in the Kyoto Protocol. It is challenging enough for our elected representatives to attempt to match federal tax revenues to our existing obligations, foreign and domestic. I can't imagine any President or Congress wanting to explain to the electorate--particularly with so many of them already exercised over growing deficits and the current tax burden--why they must pay higher taxes to send carbon-debt payments to some of the same countries that are competing for our jobs and industries, on the basis that previous generations of Americans put more CO2 into the atmosphere than past generations of Chinese, Indians and Brazilians. That sounds like political suicide to me.
Monday, July 06, 2009
The Forgotten Renewable
An editorial in the New York Times last week highlighted a topic I've been meaning to comment on for some time, the gradual demise of our oldest and still largest source of renewable energy: hydroelectric dams. Along with lauding plans to remove several West Coast dams in order to protect fish populations, the Times urged the dismantling of the four large power dams on the lower Snake River in Washington state. The disconnect between that position and the paper's long-standing advocacy of stronger measures to address climate change is remarkable, considering the elimination of 3,000 MW of zero-emission power generation that would accompany the loss of these dams. But if the unpopularity of existing hydropower dams in environmental circles explains the exclusion of this vital energy resource from the definition of "qualified renewables" included in the proposed national Renewable Electricity Standard (RES) of the Waxman-Markey climate bill, that hardly excuses a policy so counter-productive for our efforts to reduce greenhouse gas emissions.
Consider the four dams in question. I can't speak to concerns about declining salmon populations or other habitat issues, though I note that the dams in question are all "run of river" facilities, without large reservoirs. What is clear, however, is that if the four facilities typically operate at the national average hydropower utilization rate of around 36%, their annual power generation would come to about 10 million megawatt-hours (MWh) of electricity, equivalent to the output of 4,000 MW of wind capacity, or roughly 20% of the entire US wind power output in 2008. After a banner year for wind turbine installations in 2008, the US might not add much more new wind capacity than that this year, and wind remains the largest-scale technology among our preferred renewable power options. In fact, since 1999 US hydropower output has declined by an amount greater than the entire current contribution of wind power. That means the emissions benefits of a decade of dramatic growth in wind and solar power have been negated by the loss of hydroelectric generation--a loss that the authors of Waxman-Markey have chosen to ignore by counting in their RES only "incremental hydropower", which they define as
"(A) energy produced from increased efficiency achieved, or additions of capacity made, on or after January 1, 1988, at a hydroelectric facility that was placed in service before that date and does not include additional energy generated as a result of operational changes not directly associated with efficiency improvements or capacity additions; or
`(B) energy produced from generating capacity added to a dam on or after January 1, 1988, provided that the Commission certifies that--
(i) the dam was placed in service before the date of the enactment of this section and was operated for flood control, navigation, or water supply purposes and was not producing hydroelectric power prior to the addition of such capacity;
`(ii) the hydroelectric project installed on the dam is licensed (or is exempt from licensing) by the Commission and is in compliance with the terms and conditions of the license or exemption, and with other applicable legal requirements for the protection of environmental quality, including applicable fish passage requirements; and
`(iii) the hydroelectric project installed on the dam is operated so that the water surface elevation at any given location and time that would have occurred in the absence of the hydroelectric project is maintained, subject to any license or exemption requirements that require changes in water surface elevation for the purpose of improving the environmental quality of the affected waterway."
In other words, a utility would be able to count increases in hydropower towards its RES compliance only if they came from certain carefully-specified improvements, while the sole penalty for lost hydropower capacity and output would be an increase in the base amount on which the RES would be calculated. So at the full 20% RES level for 2020 and beyond, a MW of new wind, solar or other "qualified renewable" capacity would count 5 times as much as a MW of hydro dismantled.
This mismatch speaks to our conflicted attitudes toward climate change and the broader issues of sustainability. I'm sure that those advocating the removal of these dams would argue that we shouldn't make such decisions on the basis of any single criterion, even one as important as greenhouse gas emissions. Yet that view is at odds with the underlying philosophy of a climate bill that aims to do more than just level the playing field by imposing a charge on greenhouse gas emissions to account for the environmental externality not captured in the economics of the energy market. In addition to its skewed version of cap & trade, Waxman-Markey would stack the deck for a chosen group of renewable energy technologies, in the process excluding the one that produces more zero-emission MWhs than all the rest put together. When the Senate takes up this legislation, it should abandon this narrow focus on specific technologies in favor of one that creates a positive bias for all our low-emission sources, including hydropower and nuclear energy. For a government so determined to demonstrate our seriousness about tackling our emissions, in advance of December's Copenhagen climate conference, that would speak far more loudly than another thousand-plus pages of convoluted new regulations.
Consider the four dams in question. I can't speak to concerns about declining salmon populations or other habitat issues, though I note that the dams in question are all "run of river" facilities, without large reservoirs. What is clear, however, is that if the four facilities typically operate at the national average hydropower utilization rate of around 36%, their annual power generation would come to about 10 million megawatt-hours (MWh) of electricity, equivalent to the output of 4,000 MW of wind capacity, or roughly 20% of the entire US wind power output in 2008. After a banner year for wind turbine installations in 2008, the US might not add much more new wind capacity than that this year, and wind remains the largest-scale technology among our preferred renewable power options. In fact, since 1999 US hydropower output has declined by an amount greater than the entire current contribution of wind power. That means the emissions benefits of a decade of dramatic growth in wind and solar power have been negated by the loss of hydroelectric generation--a loss that the authors of Waxman-Markey have chosen to ignore by counting in their RES only "incremental hydropower", which they define as
"(A) energy produced from increased efficiency achieved, or additions of capacity made, on or after January 1, 1988, at a hydroelectric facility that was placed in service before that date and does not include additional energy generated as a result of operational changes not directly associated with efficiency improvements or capacity additions; or
`(B) energy produced from generating capacity added to a dam on or after January 1, 1988, provided that the Commission certifies that--
(i) the dam was placed in service before the date of the enactment of this section and was operated for flood control, navigation, or water supply purposes and was not producing hydroelectric power prior to the addition of such capacity;
`(ii) the hydroelectric project installed on the dam is licensed (or is exempt from licensing) by the Commission and is in compliance with the terms and conditions of the license or exemption, and with other applicable legal requirements for the protection of environmental quality, including applicable fish passage requirements; and
`(iii) the hydroelectric project installed on the dam is operated so that the water surface elevation at any given location and time that would have occurred in the absence of the hydroelectric project is maintained, subject to any license or exemption requirements that require changes in water surface elevation for the purpose of improving the environmental quality of the affected waterway."
In other words, a utility would be able to count increases in hydropower towards its RES compliance only if they came from certain carefully-specified improvements, while the sole penalty for lost hydropower capacity and output would be an increase in the base amount on which the RES would be calculated. So at the full 20% RES level for 2020 and beyond, a MW of new wind, solar or other "qualified renewable" capacity would count 5 times as much as a MW of hydro dismantled.
This mismatch speaks to our conflicted attitudes toward climate change and the broader issues of sustainability. I'm sure that those advocating the removal of these dams would argue that we shouldn't make such decisions on the basis of any single criterion, even one as important as greenhouse gas emissions. Yet that view is at odds with the underlying philosophy of a climate bill that aims to do more than just level the playing field by imposing a charge on greenhouse gas emissions to account for the environmental externality not captured in the economics of the energy market. In addition to its skewed version of cap & trade, Waxman-Markey would stack the deck for a chosen group of renewable energy technologies, in the process excluding the one that produces more zero-emission MWhs than all the rest put together. When the Senate takes up this legislation, it should abandon this narrow focus on specific technologies in favor of one that creates a positive bias for all our low-emission sources, including hydropower and nuclear energy. For a government so determined to demonstrate our seriousness about tackling our emissions, in advance of December's Copenhagen climate conference, that would speak far more loudly than another thousand-plus pages of convoluted new regulations.
Wednesday, December 03, 2008
The Road to Copenhagen
The road to Copenhagen goes through Poland. If you know what that geographically-dubious statement refers to, then you must follow the news relating to climate change pretty closely. This week and next, the UN Framework Convention on Climate Change (UNFCCC) is holding its fourteenth Conference of the Parties (COP-14) in Poznan, Poland. Along with conducting the ongoing business of the UNFCCC, the main goal of the meeting is to table a first draft of the replacement for the Kyoto Protocol, which expires in 2012. A new agreement is meant to be finalized in a year's time, at COP-15 in Copenhagen, Denmark. While this is all consistent with the "road map" agreed at last year's conference in Bali, the current conference is taking place in a remarkably different context, with financial uncertainties that were never contemplated in Bali.
Two changes, in particular, will affect the effort to develop a new set of international commitments on the emissions contributing to climate change, and for addressing the consequences of further warming. The election of a US President with a very different approach to climate change alters the negotiating dynamic, even though he has not yet taken office. The official US delegation is accompanied by a Congressional delegation headed by Senator John Kerry (D-MA.) Although Sen. Kerry does not officially represent the President-Elect, he certainly brings a point of view much closer to that of the incoming US administration than to the outgoing one, reflecting a shift back toward greater harmony with the positions of the EU members, Japan and other countries that adopted the Kyoto targets. Considering the views on climate change of Senator McCain, however, this change since Bali is not nearly as surprising as the one that ultimately may overwhelm it: the evolution of a US housing slump and already-nascent recession into a global financial and economic crisis.
We don't know what lies ahead, but we can make some reasonable guesses. Unemployment will continue to increase in the US and EU, and even if the recession in Asia proves less severe than the one in the late 1990s, as a recent article in the Economist suggested, China and India will face the prospect of millions of people falling back into poverty, after having risen close to middle class status. That will make it harder for their governments to devote resources to reducing CO2 or to be seen to sacrifice future economic growth to slow emissions. Nor will it be easy for Western governments to agree to terms on delayed targets and generous technology transfers benefiting countries that many of their citizens worry are competing for their jobs.
It was always going to be tricky for the delegates following the Bali road map to design an agreement that would reconcile the divergent emissions histories and economic growth rates of the developed and developing countries in a way that left all parties feeling fairly-treated, while still making meaningful progress on stabilizing and ultimately reducing global greenhouse gas emissions. Attempting this against the backdrop of a major global recession complicates matters greatly, going beyond the question of whether economic priorities will trump environmental challenges for the next few years. Depending on the ultimate duration of the current crisis and the manner in which it is resolved, the future mechanisms of our international system might look quite different, and the scope for a global response to climate change could alter significantly. Simply put, the delegates to Poznan cannot assume that the world in which a Copenhagen Protocol would be implemented will resemble the one in which the process for negotiating its terms was outlined a year ago.
Two changes, in particular, will affect the effort to develop a new set of international commitments on the emissions contributing to climate change, and for addressing the consequences of further warming. The election of a US President with a very different approach to climate change alters the negotiating dynamic, even though he has not yet taken office. The official US delegation is accompanied by a Congressional delegation headed by Senator John Kerry (D-MA.) Although Sen. Kerry does not officially represent the President-Elect, he certainly brings a point of view much closer to that of the incoming US administration than to the outgoing one, reflecting a shift back toward greater harmony with the positions of the EU members, Japan and other countries that adopted the Kyoto targets. Considering the views on climate change of Senator McCain, however, this change since Bali is not nearly as surprising as the one that ultimately may overwhelm it: the evolution of a US housing slump and already-nascent recession into a global financial and economic crisis.
We don't know what lies ahead, but we can make some reasonable guesses. Unemployment will continue to increase in the US and EU, and even if the recession in Asia proves less severe than the one in the late 1990s, as a recent article in the Economist suggested, China and India will face the prospect of millions of people falling back into poverty, after having risen close to middle class status. That will make it harder for their governments to devote resources to reducing CO2 or to be seen to sacrifice future economic growth to slow emissions. Nor will it be easy for Western governments to agree to terms on delayed targets and generous technology transfers benefiting countries that many of their citizens worry are competing for their jobs.
It was always going to be tricky for the delegates following the Bali road map to design an agreement that would reconcile the divergent emissions histories and economic growth rates of the developed and developing countries in a way that left all parties feeling fairly-treated, while still making meaningful progress on stabilizing and ultimately reducing global greenhouse gas emissions. Attempting this against the backdrop of a major global recession complicates matters greatly, going beyond the question of whether economic priorities will trump environmental challenges for the next few years. Depending on the ultimate duration of the current crisis and the manner in which it is resolved, the future mechanisms of our international system might look quite different, and the scope for a global response to climate change could alter significantly. Simply put, the delegates to Poznan cannot assume that the world in which a Copenhagen Protocol would be implemented will resemble the one in which the process for negotiating its terms was outlined a year ago.
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