This blog will cover some news items related to Sustainability: Corporate Social Responsibility, Stewardship, Environmental management, etc.


When do 'good' firms go 'bad'? Few firms widely regarded as socially responsible consistently exhibit ethical behaviors, while even the most criticized are not without virtues. The more closely one looks, the harder the determination gets,1,2966670.story
When do 'good' firms go 'bad'?
Ranking corporations by ethics is popular, but telling the good guys from the bad is not clear-cut.
By David Vogel
DAVID VOGEL teaches business ethics at UC Berkeley's Haas School of Business and is the author of "The Market for Virtue: The Potential and Limits of Corporate Social Responsibility."

February 13, 2007

SUSTAINABLE FIRMS. Green businesses. Socially responsible corporations. A growing number of magazines, activist groups and websites publish such lists, suggesting that one can distinguish the good companies from the bad.

The claim that such distinctions are possible is likewise central to ethical mutual funds, indexes and stock rating services that recommend "responsible" investing — with some even asserting that "better" firms have superior financial performance.

Exxon Valdez: An article on Tuesday's Opinion page about corporate responsibility misstated the date of the Exxon Valdez oil spill. It was in 1989, not 1979. —

But corporate social responsibility isn't such a clear-cut matter. People are rarely consistent in their ethical behaviors, as numerous psychological studies have shown. An individual can cheat on his spouse and file an honest income tax return, or be a model employee and an irresponsible parent. Andrew Carnegie and John D. Rockefeller were ruthless businessmen yet also generous philanthropists — a category in which some also place Bill Gates. Interestingly, the work of the Bill & Melinda Gates Foundation — criticized in The Times recently for "irresponsible" investing — reflected so well on Microsoft that the company topped the Wall Street Journal's Reputation Quotient survey.

So if it is difficult to judge the overall ethics of an individual, it is certainly more so in the case of complex business organizations. Few firms widely regarded as socially responsible consistently exhibit ethical behaviors, while even the most criticized are not without virtues. The more closely one looks, the harder the determination gets.

Consider, for example, British Petroleum — long entrenched in the pantheon of corporate responsibility because of its leadership on the issue of global climate change. Yet after a major oil leak last year, it was revealed that BP had not maintained its pipelines in Alaska. Corporate cost-cutting also contributed to a 2005 oil refinery explosion in Texas that resulted in 15 deaths and 180 injuries. How, then, should we rank BP's overall environmental record?

Another icon of corporate responsibility is American Apparel. This firm has been widely praised for manufacturing all of its products in the United States and for the high wages and other benefits it provides employees at its Los Angeles factory. Yet its marketing uses images of women that border on soft pornography, and its founder and chief executive has been repeatedly accused of sexual harassment. On balance, is American Apparel a virtuous firm?

Merck has been widely and appropriately applauded for its decision to develop, produce and distribute without charge the drug Mectizan, which prevents river blindness. Since 1987, Merck has distributed more than 250 million doses, and its programs currently reach 40 million patients a year. Yet this same pharmaceutical firm aggressively marketed the anti-pain drug Vioxx, which increased the risks of heart attacks and strokes. In measuring Merck's overall corporate virtue, how should we assess the millions of individuals saved from river blindness against the firm's belated response to the health risks of its highly profitable, bestselling drug?

On the other hand, consider Altria, which owns Philip Morris. It's shunned by virtually all ethical funds because it makes cigarettes, a product that is inherently harmful. Yet Philip Morris has long been a generous contributor to the arts as well as to the Congressional Black Caucus. Tobacco is still grown primarily on family farms, many of which are minority owned.

Wal-Mart, another corporate villain, is widely condemned for its low wages and unwillingness to provide adequate healthcare coverage for its employees. Yet by using its low costs to lower prices, Wal-Mart is estimated to save American consumers $30 billion a year — the equivalent of a gift of $270 to every family in the U.S. It has also embarked on a number of potentially far-reaching environmental initiatives.

No energy firm has been criticized as vehemently by environmentalists as Exxon Mobil, which refuses to acknowledge, let alone ameliorate, the risks of global climate change. Yet, in contrast to BP, since the 1979 Exxon Valdez oil spill, Exxon Mobil has had an exemplary record on both workplace safety and pollution control. And unlike Shell, another energy firm applauded for its commitment to "sustainability," its financial reporting has been a model of probity. How then should we rank Exxon Mobil's overall ethical behavior?

These examples are hardly atypical. Few "virtuous" firms are without sin, and few business "villains" have no good qualities. That does not mean we should give up comparing companies' social or environmental performance. But we shouldn't expect to find many black-hatted corporate villains or heroes on white steeds. In corporate America, it's usually shades of gray.


100 Best Corporate Citizens 2007 (IBM = 6)

100 Best Corporate Citizens 2007
Submitted by margo on Mon, 2007-02-05 16:19. Business Ethics

Environmental responsibility. Corporate governance and ethics. Fairness toward employees. Accountability to local communities. Providing responsible products and service to customers. Maintaining a healthy rate of return for investors.

Those are just some of the challenges of responsible business in the 21st century, challenges that are being met head-on by the 100 companies listed. These are the 100 Best Corporate Citizens for 2007—companies that are proving that good corporate citizenship and good business go hand in hand.

The 100 Best Corporate Citizens list takes a systematic approach to assessing the social and environmental characteristics of a good corporate citizen. The list is drawn from approximately 1,100 publicly held U.S. companies in the Russell 1000, S&P 500 and Domini 400 indices, relying on extensive data collected by KLD Research & Analytics, an independent investment research firm in Boston.

Now in its eighth year, the 100 Best Corporate Citizens list was developed by Business Ethics magazine, with statistical analysis designed by Sandra Waddock and Samuel Graves of Boston College. This is the first year the list has been published in CRO magazine, which salutes the 100 Best companies for their leadership roles in corporate citizenship.

Highlights of the List

Corporate responsibility is included with the SME Toolkit from IBM.

Last year, the information technology company approached the International Finance Corp. (IFC) of the World Bank to help improve a technology platform the IFC offers for free to owners of small- and medium-sized enterprises (SMEs) in the developing world. In the SME Toolkit, IBM saw a chance to use its technological expertise to address economic development, job creation and a more equitable distribution of wealth in emerging markets.

The new business management platform, which will also be available to women- and minority-owned businesses in the United States, will offer a versatile set of guidelines and tools for entrepreneurs to learn accounting practices, connect with other entrepreneurs or simply download purchase-order forms.

The project is an example of how Armonk, N.Y.-based IBM links good corporate citizenship with good business practices, a strategy the company sees as essential to the future of the corporation—and one that helped push IBM to sixth place on the 2007 list of 100 Best Corporate Citizens. "We don't think you can survive without integrating business and societal values," says Kevin Thompson, IBM's Manager of Corporate Citizenship.

In addition to addressing societal values, IBM's corporate citizenship strategy has two more goals. First, IBM aims to work on projects aligned with "what we do well," according to Thompson. Second, the company seeks projects offering potential business opportunities. The Toolkit fulfills both: IBM's technology will improve the Toolkit's functions and in turn, IBM will build relationships with companies in growing markets. These companies, IBM hopes, will eventually turn to it for their business needs. "We are addressing core social problems while simultaneously working with a market segment of strategic importance to IBM," Thompson says.

Serving the community in traditional as well as innovative ways is one of eight categories considered in compiling the 100 Best Corporate Citizens list. Corporate governance practices, diversity policies, employee relations, environmental practices, human rights issues and product quality and safety are also weighed in addition to total return to shareholders over three years. KLD Research & Analytics, an independent investment research firm, compiles the data and creates a ranking system by assigning points for strengths and weaknesses in each category, and giving each category equal weight in the final scoring (For more on how the list is compiled see Methodology).

The list represents the best corporate citizens as measured by performance in the eight stakeholder categories. It is not a list of perfect companies. These are firms with oftentimes far-flung, complex operations, whose performance is not always ideal. Despite good intentions and best efforts, they may not always succeed at correcting persistent problems. As the list of 100 Best Corporate Citizens has evolved over eight years, so too have the challenges of doing business in a fast-paced global economy.

Take the issue of labor rights abroad. Any company sourcing supplies from countries with a history of exploiting workers raises concerns because of potential human rights violations. Most apparel and footwear companies as well as technology companies on the list, however, rely on factories throughout Asia, Latin America and Africa where workers may be forced to work overtime for low pay, or aren't free to organize unions. The problems linger, but in the last five years KLD says it has seen evidence of some collaboration on tough issues involving companies, international and national institutions, non-governmental organizations, and labor groups, among other stakeholders.

Nike (No. 3), once a poster-child for sweatshop abuses, is a leader among apparel companies pushing for improvements throughout its supply chain. Now the Beaverton, Ore.-based shoe and apparel company wants to get at the reasons why suppliers don't comply with Nike's standards, and expects to find some answers within its own company as well as with the factory management. One idea being explored: creating strong human resources management at the factory level to tackle excessive overtime. Nike hopes factory owners will see lowering turnover and investing in workers is profitable. The company wants to get to the point where the "worker has stopped being seen as a commodity and is being seen as a value-added piece of the manufacturing process," says Hannah Jones, Nike's Vice President of Corporate Responsibility.

Nike is one of five consumer companies, in both cyclical and non-cyclical business, in the top 10. In addition to Timberland (No. 8), Starbucks (No. 9) and General Mills (No. 10), the consumer companies include the list leader, Green Mountain Coffee Roasters of Waterbury, Vt. Green Mountain is the first company ever to rank first two years in a row. IBM, which is the only other company to have topped the list twice, in 2000 and 2002, is joined in the top 10 by semiconductor chip makers Advanced Micro Devices (AMD) (No. 2) and Intel (No. 5), as well as Motorola (No. 4) and Agilent Technologies (No. 7).
Green Mountain didn't rest on its laurels last year. In 2006, the company published its first corporate social responsibility report, began to align its social and environmental initiatives with United Nations' Millennium Development Goals, designed a hot to-go coffee cup made out of renewable materials, and boosted its percentage of FairTrade Certified coffee shipped to 27 percent from 20 percent in 2005, exceeding its goal. Among goals yet to be achieved: developing sustainable coffee packaging.

Another challenge for Green Mountain is measuring the social effects of its advocacy work in coffee communities. By studying whether farmers are able to stay in their communities year-round, and whether they are able to reinvest in their farms, the company hopes to measure how its efforts affect poverty and hunger in coffee growing communities, says Rick Peyser, Director of Coffee Community Outreach and Social Advocacy, a new position at Green Mountain.

For fiercely rival semiconductor giants AMD and Intel, scoring well as a corporate citizen has involved cooperation as well as competition. Following in the footsteps of the apparel industry, AMD and Intel, as well as several other technology giants, are working together to develop guidelines and monitoring procedures to address social and environmental concerns at their factories. The effort is at the toddler stage and has yet to prove itself, but the aim of the Electronic Industry Code of Conduct these companies have created is to establish a common set of expectations, and to streamline monitoring procedures to avoid duplication. "It's almost a paradigm in how the world can regulate itself going forward," says Dave Stangis, Director of Corporate Responsibility at Intel.

The top 10 companies also represent firms with a consistent track record at corporate responsibility. Intel, Timberland and Starbucks have been among the 100 Best all eight years. Overall, the top 10 represent a trend among many corporations to be more accountable to a range of stakeholders in their companies, not just shareholders. All of the leaders have published corporate responsibility reports, most referencing Global Reporting Initiative (GRI) guidelines.

Protecting the environment is an important criterion for making the list. And this year, the environment was high on the agenda for many companies, with an increasing focus on using sustainable materials and on tackling climate change. Among the top 10, eight companies are members of the U.S. Environmental Protection Agency's (EPA) Green Power Partnership. These are businesses with a commitment to use green power for at least some portion of their electricity needs. Four of the top 10 are EPA Climate Leaders that work with the government devising strategies to address global warming.

Missing from the list and from the top 10 for the first time ever is Hewlett-Packard. Like many companies on the list, the Palo Alto, Calif., computer company has an impressive record in giving to the community, creating a diverse, fair workplace and actively protecting the environment. But last year, HP was charged with using illegal methods known as "pretexting," or pretending to be someone else, to investigate leaks of information from the board of directors. Patricia Dunn resigned as Chairman of the Board last September in the wake of the scandal, and HP paid $14.5 million to settle civil charges with the California Attorney General. The company is still under investigation by the U.S. Securities and Exchange Commission (SEC), the U.S. Department of Justice and the Federal Communications Commission.

Twenty-four newcomers made the list this year. Joining office furnishing companies Herman Miller (No. 14) and Interface (No. 16) is first-timer Steelcase (No. 17), the creator of the Think chair, an office chair made out of 44 percent recycled material, and designed to be recycled when no longer needed. Steelcase's leadership in environmental design is one reason for their making the list, but the company is also recognized for charitable giving and support for education. In 2005, the company helped plan and finance the West Michigan Center for Arts and Technology, an educational center for at-risk urban youth and a training center for underemployed adults. Steelcase, of Grand Rapids, Mich., helped design the center's space as well, using environmentally benign materials and lots of natural light.

"It was the convergence of certainly our first three priorities: education, diversity and economic development, but also our priorities of health care and the environment," says Brian Cloyd, Steelcase's Director of Corporate and Community Relations.

New to the list this year is Google (No. 30), while Microsoft (No. 41) returns after a hiatus of several years. Google, of Mountain View, Calif., receives high marks for providing some form of equity in the company to all its regular employees, and for encouraging its engineers to devote 20 percent of their working hours to independent projects. Microsoft, of Redmond, Wash., gains kudos for bridging the "digital divide" between technology haves and have-nots around the world, for accommodating disabled workers, and for providing restricted stock options to most employees. But both companies have faced anger from human rights groups over censoring Internet content in China. In late January, Google and Microsoft announced that they are working with Yahoo and Vodafone, as well as human rights groups, academics and socially responsible investors to develop a set of principles to protect human rights for Internet users worldwide. The companies stand for "maximizing free expression," as well "access to information," and for allowing individuals to use the Internet without threats to their freedom, says Bob Boorstin, Google's Director of Policy Communications.

Another issue that snared companies on the list this year was the backdating of stock options. The practice largely occurred in the stock market boom of the late 1990s and early 2000s so executives could gain from a dip in their company's stock price. Aside from the inflated payoff to the option holders, backdating presents problems because a company's annual revenues may appear higher. According to KLD, more than 100 cases of improper backdating are under investigation by the SEC and others. Three companies on the list, Autodesk (No. 47), Hansen Natural Corp. (No. 91) and Coherent (No. 93), face informal levels of inquiry.

The options backdating scandal demonstrates how far off perfection is among all corporations. SEC investigations, labor violations and disputes over cleanup of toxic pollutants pepper the records of even the best corporate citizens. Still, corporations that made the list are all making substantive efforts to improve society and do less harm to the environment in measurable ways, often because it is simply good business. The more corporations link good citizenship with good business, the more real and sustained their efforts at improving society and the earth are likely to be.

"Where we are really focused is in integrating business and societal values," says IBM's Thompson. "We feel for this to be sustainable long term, it needs to be linked and directly connected in terms of what we do with our business operations."

Find out more about the methodology behind the list...

  Learn more about the list:


Nomination Process

Repeat Performers


Past Lists and Features

Abby Schultz, author of this article, is a freelance journalist specializing in business and environmental issues, who has written for The New York Times, Fast Company and Fortune Small Business.

Canada’s wind power surges: Canada more than doubled its wind energy capacity in 2006, reaching 1,460 Megawatts and taking 12th spot among countries for installed wind energy, reports the Canadian Wind Energy Association (CanWEA).

Canada's wind power surges
OTTAWA, February 10, 2007 (GLOBE-Net) – Canada more than doubled its wind energy capacity in 2006, reaching 1,460 Megawatts and taking 12th spot among countries for installed wind energy, reports the Canadian Wind Energy Association (CanWEA).

Based on the latest data issued by the Global Wind Energy Council, Canada installed 776 MW of wind power capacity in 2006. Only six countries installed more: the United States (2,454 MW), Germany (2,233 MW), India (1,840 MW), Spain (1,587 MW), China (1,347 MW), and France (810 MW).

Worldwide, capacity of wind energy increased by a record 15,197 MW in 2006 (32%), bringing total wind energy capacity to 74,223 MW – enough to power around 22.5 million homes.

Canada now ranks twelfth among countries for installed wind power capacity. The leaders are long-time renewables supporters Germany, with 20,622 MW installed, and Spain, with 11,615 MW, followed by rising powerhouses the United States (11,603 MW) and India (6,270 MW).

A combination of federal and provincial support systems and the increasingly viable economics of wind power have led to a jump in capacity in Canada in recent years. Provincial governments are currently seeking to put in place a minimum of 10,000 MW of installed wind energy capacity by 2015. During that time, GWEC projects that installed wind energy capacity globally will increase to 171,000 MW.

The federal government's recently announced $1.48 billion ecoENERGY for Renewable Power program will provide a payment of one cent per kilowatt hour to producers of renewable energy for the first ten years of a project. A discussion paper released to stakeholders to help develop program specifics outlined that funding would be set aside for 3,000 MW of wind power, and 1,000 MW of other renewables.

Robert Hornung, President of CanWEA, says "Nonetheless wind energy continues to grow more quickly in many other countries and we are still far from tapping the full economic and environmental potential of wind energy in Canada".

CanWEA estimates that wind energy reduced global greenhouse gas emissions by 90 Megatonnes (Mt) in 2006. In Canada, it is estimated that every 1,000 MW of installed wind energy capacity will reduce annual emissions of carbon dioxide by a minimum of 1.2 Mt.

The total value of new wind energy generating equipment installed globally in 2006 was US$ 23 billion and it is estimated that some 163,000 people are now directly employed by the wind energy industry worldwide.

According to CanWEA estimates, Canada's wind energy industry contributed $736 million to the country's Gross Domestic Product in 2005. That same year, there were 1,200 full-time equivalent jobs (FTE) in the wind energy industry, an increase of 65% over 2004.

Call for "neuroethics" as brain science races ahead: brain scanners can now read a person's intentions before they are expressed or acted upon

Call for "neuroethics" as brain science races ahead
Thu Feb 15, 2007 5:52AM EST

By Tom Heneghan

PARIS (Reuters) - Neuroscientists are making such rapid progress in unlocking the brain's secrets that some are urging colleagues to debate the ethics of their work before it can be misused by governments, lawyers or advertisers.

The news that brain scanners can now read a person's intentions before they are expressed or acted upon has given a new boost to the fledgling field of neuroethics that hopes to help researchers separate good uses of their work from bad.

The same discoveries that could help the paralyzed use brain signals to steer a wheelchair or write on a computer might also be used to detect possible criminal intent, religious beliefs or other hidden thoughts, these neuroethicists say.

"The potential for misuse of this technology is profound," said Judy Illes, director of the Stanford University neuroethics program in California. "This is a truly urgent situation."

The new boost came from a research paper published last week that showed neuroscientists can now not only locate the brain area where a certain thought occurs but probe into that area to read out some kinds of thought occurring there.

Its author, John-Dylan Haynes of the Max Planck Institute for Human Cognitive and Brain Sciences in Leipzig, Germany, compared this to learning how to read books after simply being able to find them before. "That is a huge step," he said.

Haynes hastened to add that neuroscience is still far from developing a scanner that could easily read random thoughts.

"But what we can do is read out some simple things that are quite useful for applications, such as simple intentions, attitudes or emotional states," he said. "We're finding we can read out yes-or-no situations."


Haynes and his research team used a brain scanning technique called functional magnetic resonance imaging to detect a volunteer's unspoken decision to add or subtract two numbers flashed on a screen. They got it right 70 percent of the time.

Barbara Sahakian, a clinical neuropsychologist at Cambridge University in Britain, saw possible misuse of this similar to the plot of Steven Spielberg's 2002 movie Minority Report, where police arrest people who psychics predict will commit a murder.

"We have to discuss how we want to use this technology and who should have access to it," she said.

Martha Farah, director of the University of Pennsylvania's Center for Cognitive Neuroscience, said advances such as Haynes's way of reading more out of imaging data were opening the path to very rapid growth in understanding the brain.

"We're just beginning to find out the power of these more fine-grained analyses," she said. "From the neuroethics point of view, this could be really big."

Farah, Illes and Sahakian are among a small group of neuroscientists who founded the Neuroethics Society in May 2006 to promote an international debate about the proper use of the discoveries their field was making and will make in future.

"As a neuroscientist, I'm trained to think about these issues once I have a result in hand," Illes said. "But we need to think about those ethical implications right now.

"People want to know if, when they go to an airport, their luggage will go through one scanner and their brains will go through another. Do I think that's around the corner? I do."


Haynes estimated his research into unspoken intentions could yield simple applications within the next 5 to 10 years, such as reading a person's attitude to a company during a job interview or testing consumer preferences through "neuromarketing."

There are already companies trying to use brain scanners to build a more accurate lie detector, a technology that could dazzle judges and juries so much that they could mistake it for the final word in deciding a case, the researchers said.

Law enforcement officials might use the technology, which tracks heightened activity in areas linked to mental responses to outside stimuli, to screen people for pedophilia, racial bias, aggression or other undesirable tendencies, they said.

"If you're reading out something for neuromarketing or job interviews, or doing this against people's wills, that could be considered unethical," Haynes said.

Lie detection is more complex, he said, because it can violate mental privacy but also prove innocence. In some cases, refusing to use it to uphold a right of mental privacy could end up denying an accused person's right of self-defence.

Amid all these worrying scenarios, Haynes said people should learn about the promise and the limits of brain scanning so they can make informed decisions when new applications arise. They should also keep the technology in its proper context.

"I still strongly support the power of simple questions in psychology," he said. "If you want to tell what someone is going to do, the best way to find out is to ask them."
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Exxon Chief Cautions Against Rapid Action to Cut Carbon Emissions: Tillerson predicted that hydrocarbons would dominate the world’s transportation as energy demand grows by an expected 40 percent by 2030

February 14, 2007
Exxon Chief Cautions Against Rapid Action to Cut Carbon Emissions

HOUSTON, Feb. 13 — The chief executive of Exxon Mobil, Rex W. Tillerson, warned Tuesday that governments should not rush into policies that could damage the global economy in order to limit carbon emissions.

In a speech at a major industry gathering, Mr. Tillerson acknowledged that the planet was warming while carbon dioxide levels were increasing, suggesting a more accommodating position than the hard-nosed stance Exxon had held.

But in the same speech, Mr. Tillerson, who leads the world's largest publicly traded company, gave an unalloyed defense of the oil industry and predicted that hydrocarbons would dominate the world's transportation as energy demand grows by an expected 40 percent by 2030.

There is no significant alternative to oil in coming decades and Exxon will continue to make oil and natural gas its primary products, he said.

"The scale advantages of oil and natural gas across a broad array of applications provide economic value unmatched by any alternative," he said.

Mr. Tillerson's tone, if not the substance of his remarks, at times broke with the rigid positions of his predecessor, Lee Raymond, who has long been considered a skeptic in the global warming debate.

"That's Exxon-speak," said Barbara Shook, an analyst for Energy Intelligence Group, a publishing and information services company. "It's their own dialect, but if you look at where Exxon was one and a half years ago they may not have shifted their position 180 degrees, but they are moving."

Mr. Tillerson's remarks were his first formal and extensive comments since the publication of a report two weeks ago by the Intergovernmental Panel on Climate Change, a leading panel of international scientists and reviewers, concluding that there is 90 percent certainty that human activity is decisive in changing the global climate.

Mr. Tillerson told reporters that he had not read the report but said, "My understanding is there's not a clear 100 percent conclusion drawn." He added: "Nobody can conclusively 100 percent know how this is going to play out. I think that's important."

Taken together, his statements suggested that Exxon was navigating between positions defending oil as an energy source and its core business, and showing sensitivity to growing public concerns about a warming climate.

President Bush has called for increasing development and use of biofuels. And Democrats now controlling Congress have said they favor higher taxes on oil companies to pay for research in alternative energy.

Mr. Tillerson acknowledged a small role for alternative fuels in the future, saying he thought that ethanol and other types of biofuels have "an important role to play" given the projected growth in energy demand.

He poked fun, however, at ethanol, calling it "moonshine."

"I am not an expert on biofuels," he said. "I am not an expert on farming. I don't have a lot of technology to add to moonshine."

But it was on the subject of global warming that Mr. Tillerson drew the most interest from energy leaders at the conference, which was organized by the energy consulting firm Cambridge Energy Research Associates.

"The risks to society and ecosystems from climate change could prove to be significant," Mr. Tillerson said. "So, despite the uncertainties, it is prudent to develop and implement sensible strategies that address these risks."

But at the end of speechmaking and answering questions, Mr. Tillerson expressed concern that policy makers could damage the world economy with precipitous environmental policies. He warned that future generations could be sorry for hasty policies taken today without more careful study.

"This is a centuries-long kind of problem, and we are going to learn more as we go," he said.

He noted that some scientific reports describing models of climate change concluded with a "range of potential outcomes." He added: "A range implies a certain degree of uncertainty. Policy decisions need to accommodate that uncertainty."

Exxon, which has had record earnings the last two years, has been a target of environmental groups for financing organizations that have questioned climate science and for its business activities around the world. Much of the emissions of greenhouse gases blamed for global warming come from the burning of fossil fuels like gasoline and natural gas.

Mr. Tillerson said his company supported breakthrough research in cellulosic ethanol, which is made from grasses and woodchips, and he was clear about Exxon's role. "There is really nothing I see Exxon can bring to this," he said. "We don't see a direct role for ourselves."

The report by the panel on climate change was widely considered the most authoritative study on the subject. It said for the first time that global warming was unequivocal and concluded that human activity had very likely caused most of the rise in temperatures since 1950. The report said that global warming could be blunted by prompt action.

Mr. Tillerson defended the energy industry as being environmentally responsible. "The footprint required of our activities is getting smaller and more efficient," he said, "proving that energy production and environmental protection need not be a zero-sum."

Climate top issue, says New Zealan PM: Helen Clark has issued a "call to action" on combating climate change, saying the quest to cut carbon emissions will become as vital as the country's nuclear-free status.

Climate top issue, says PM

Prime Minister Helen Clark has issued a "call to action" on combating climate change, saying the quest to cut carbon emissions will become as vital as the country's nuclear-free status.

In one of her strongest statements to Parliament since becoming Prime Minister in 1999, Clark said sustainability and climate change had become "the compelling issue of our times", replacing the threat of nuclear war as the greatest risk to the planet.

She detailed a host of new measures to cut greenhouse gas emissions, including the phased use of biofuels beginning next year, the replacement of the Government's petrol-guzzling car fleet, a carbon-trading regime, a new waste tax and a pledge to make the core public service carbon-neutral by 2012.

She tied New Zealand's nuclear-free status to an ambitious bid for carbon neutrality, saying the target could be as nation-defining as the country's nuclear-free legislation was in the 1980s.

"I believe that in the years to come, the pride we take in our quest for sustainability and carbon neutrality will define our nation, just as our quest for a nuclear-free world has over the past 23 years," Clark told Parliament.

National leader John Key, in his first leader's address to the opening of Parliament, dismissed Clark's speech as "motherhood and apple pie" and empty rhetoric. More trees had been felled and more coal burnt since Labour came to power in 1999, he said.

Nothing was said about the economy or tax cuts, Key said.

"Watching Michael Cullen on the topic of tax cuts is like being a witness to the longest striptease in New Zealand history – eight years and he's still fully clothed," he said.

Sustainability – a term mentioned 36 times in Clark's speech – was the Government's new buzzword, Key said.

In her speech, Clark said New Zealand could aim to be the first "truly sustainable" country across the four pillars of the environment, the economy, society, and nationhood.

Clark said Labour would support a Green Party waste-minimisation bill that would put a new tax on excessive rubbish – likely to hit producers of mass packaging such as fast-food and soft-drink companies.

Details of the levy, which will require legislation, will be outlined in the Budget, but Environment Minister David Benson-Pope said late yesterday it would be levied on a per-tonne basis of waste to landfill. Money collected by the levy would be ploughed into recycling projects.

The public will also be asked to do its bit, with a new advertising campaign aiming to raise the awareness of households about sustainable practice in energy and water use, transport, and waste disposal.

Six government departments have been told to significantly reduce their carbon footprint by the start of next year and become carbon neutral by 2012: Environment, Health, Economic Development, Inland Revenue, Conservation, and Treasury. All 39 departments must be on a path towards carbon neutrality by 2012.

By 2012 oil companies will be required to put biofuels into petrol and diesel, blended at a proportion of 3.4 per cent of annual sales. The Crown fleet of limousines would over time be replaced by more fuel-efficient vehicles that met a new European standard. Clark said this would save 400,000 litres of fuel and 550 tonnes of CO2.


Calculator will show business travellers' carbon bill: The calculator is backed by DEFRA, which said balancing the cost of travel with the impact of emissions was "a huge challenge that businesses need to face".

Calculator will show business travellers' carbon bill

By Roger Blitz, Leisure Industries Correspondent

Published: February 13 2007 02:00 | Last updated: February 13 2007 02:00

The damage done to the environment by business travel is about to be exposed.

The company that procures business travel for 700 UK businesses and most government departments is today launching a carbon calculator which will reveal to clients the environmental cost of a planned trip and suggest greener alternatives.

It comes as the green lobby's attack on flying found an unexpected ally this week when Stelios Haji-Ioannou, founder of EasyJet,accused some of his rivals in an article for the Financial Times, of operating "older aircraft flying half-empty with just one chief executive on board".

Carlson Wagonlit Travel, whose business clients spend up to £50m a year on travel, says that by using the calculator an executive planning to attend a conference in Paris will be told that flying from London to Paris will emit 100kg of CO2 compared with only 28.8kg if the journey was made by train.

CWT claims the "visual guilt" of comparing the impact on carbon emissions of different travel options will change behaviour. It hopes this will be more effective than carbon offsetting, a trend increasingly taken up by ministers and some companies, whereby the amount of emissions generated is offset by a payment towards a project, such as tree-planting, that cuts the same amount of emissions.

The carbon calculator will show clients the difference in CO2 emissions not just between air and rail but also between different airlines on long-haul trips.

CWT admitted its carbon calculations were based on data supplied by travel providers. Andrew Waller, its chief executive, said calculations would be "only as good as the data available to us", but would at least force companies and public sector clients to rethink their business travel strategies.

By showing up differences between airlines, the calculator is likely to inflame a debate in the airline industry about their relative environmental advantages, as it attempts to alter perceptions about the amount of CO2 emissions caused by aircraft.

"What happens when the preferred airline they have contacted has the highest carbon cost? Travel policies are going to have to be developed around that," Mr Waller said.

Jean-Claude Baumgarten, president of the World Travel and Tourism Council, said that while carbon calculators were a step in the right direction, two factors would speed up the process of carbon emissions reduction in future. "Consumer consciousness about environmental needs will impact all industries, products and the delivery of services. But also energy prices will force operators to save energy consumption and reconcile good management and good environmental behaviour. This creates a very positive dynamic," he said.

The calculator is backed by the Department for Environment, Food and Rural Affairs which said balancing the cost of travel with the impact of emissions was "a huge challenge that businesses need to face".

Copyright The Financial Times Limited 2007

[Slight Hyperbole] Solar Power Breakthrough: On a 24/7 operating schedule, an estimated 350 Megawatts of IAUS panels can be produced annually.

Solar Power Breakthrough: IAUS Hits Milestone Previously Thought to Be Impossible
Related information

International Automated Systems, Inc. IAUS announced today that it has successfully finished its first high-volume run of its new breakthrough solar panels. Nearly 1,000 Kilowatts of IAUS's solar panels were manufactured in a short 24-hour run. On a 24/7 operating schedule, an estimated 350 Megawatts of IAUS panels can be produced annually. In comparison, a traditional photovoltaic (PV) solar module manufacturing plant with a yearly capacity equal to IAUS would cost an estimated $840 Million to construct.

IAUS's unique thin-film solar lens can be produced at a fraction of the cost of today's traditional photovoltaic solar panels. IAUS believes its new product is the first solar power technology with legitimate potential to compete with gas and other fossil fuels in the immediate future. Low-cost energy produced by IAUS's new patented and patent-pending solar technology can be used to generate electricity or produce clean fuels such as hydrogen and green methanol (gasoline replacements) at a competitive price. Many experts had predicted that no solar power technology would likely accomplish this milestone before the year 2025.

IAUS plans to quickly expand its annual solar panel production capacity this year to 1 Gigawatt, which is enough to supply an estimated $2 Billion in sales per year.

"The discovery of economical solar energy is more valuable than oil," said Neldon Johnson, President and CEO of International Automated Systems, Inc. "The sun's energy is free, clean and virtually unlimited. IAUS's new solar technology is a discovery of historic proportions that we hope will revolutionize energy production throughout the world."

The world energy market is $3 trillion dollars per year. This $3 trillion does not represent nearly 30% of the world that exists without electricity.

About International Automated Systems, Inc. (; IAUS:OB)

Founded in 1988, International Automated Systems, Inc., develops high-technology products for diverse markets such as energy production, wireless communications, consumer purchasing and financial transactions. The company, founded by a former AT&T communications engineer, is based in Salem, Utah.

Rowntree dumps its Reed shares: Two investors in Reed Elsevier have sold their shares as a protest that the publishing giant runs arms fairs which have included the sale of torture equipment

Rowntree dumps its Reed shares

By Katherine Griffiths, City Correspondent

Last Updated: 2:23am GMT 13/02/2007

Two investors in Reed Elsevier have sold their shares as a protest that the publishing giant runs arms fairs which have included the sale of torture equipment.

F&C Asset Management and the Joseph Rowntree Charitable Trust sold their holdings after concerns about the companies selling equipment at Reed's fairs.

The IDEX arms fair, Rowntree dumps its Reed shares
The IDEX arms fair, one of the events run by Reed Elsevier's Reed Exhibitions division that have spurred investors to sell its shares

Reed Exhibitions, runs the UK's arms fair, Defence Systems and Equipment International (DSEi).

It is also responsible for the Shot Show in the US and recently bought the rights to organise the IDEX fair, which markets itself as "the world's largest and fastest growing defence exhibition". IDEX kicks off on Sunday in Abu Dhabi.

Security Equipment Corporation and Stinger Systems have been exhibitors at the annual Shot Show in the US. At the 2006 show Security Equipment Corporation sold stun guns. The company's tagline is "Making grown men cry since 1975". Stinger sold stun belts which are operated by remote control. Such equipment is legal in the US, but in 2005 the European Union prohibited exports and imports of devices which "have no practical use other than for the purpose of capital punishment, torture and other cruel, inhuman or degrading treatment".

Joseph Rowntree, founded on Quaker principles, sold £2m of Reed shares yesterday. Friends Provident sold all the Reed shares in its ethical "stewardship" fund.


Karina Litvak, head of governance at F&C, said the fund manager had probed Reed after last year's DSEi fair but had not been satisfied with the efficacy of the company's systems for ensuring exhibitors were properly vetted.

Reed, said: "Our portfolio of defence shows accounts for less than 1pc of total Reed Elsevier revenues." It added that its trade shows "all strictly comply with national and international laws and regulations".


Canada Sets US$1.3-Billion Fund to Fight Warming

Canada Sets US$1.3-Billion Fund to Fight Warming

OTTAWA - Canadian Prime Minister Stephen Harper, under pressure to do more on climate change, announced on Monday a C$1.5-billion (US$1.3 billion) fund to fight global warming and pollution.

He said the new "eco-trust" will involve new federal money set to be booked in the next budget and would yield "real results, real reductions and measurable progress." The federal budget is widely expected to be delivered late in March.

The prime minister, speaking to reporters in the province of Quebec, told the opposition in Parliament that the money will only be available if the budget is passed.

If the budget fails, Harper's minority Conservative government will fall and an election will be triggered.

"We have no plans to call an election," Harper said. "I hope the budget will pass so we can get on with these major projects in Quebec and across the country."

The money will be used to co-fund projects with the provinces. Harper said this funding would help resolve what has been termed a "fiscal imbalance," referring to a belief that Ottawa takes in too much money in relation to how much it spends or transfers to the provinces.

Canada's emissions of greenhouse gases, widely blamed for global warming, are 35 percent above the levels it has agreed to hit by 2012 under the Kyoto Protocol.

Harper reiterated on Monday that it would be impossible to meet that 2012 target but said: "We must take the measures that we can do to reduce emissions."

(US$1=$1.18 Canadian)

[CSR newsclip] China launches carbon trading initiatives

China launches carbon trading initiatives

SciDev.Net, 7 February 2007 - China has announced two new carbon trading initiatives to help develop its poorer regions and meet the UN Millennium Development Goals.

Both projects were launched in Beijing yesterday (6 February). The first, a joint venture between the UN Development Programme (UNDP) and the Chinese government, will establish a carbon trading exchange in Beijing — the first outside Europe and the United States.

Carbon trading was established by the UN under the Clean Development Mechanism (CDM) to reduce global emissions of carbon dioxide — a major greenhouse gas — as part of the Kyoto Protocol.

Nations are allocated 'carbon credits' — permits to emit carbon above a country's quota, as agreed under the Kyoto Protocol. They are issued to companies that can trade them in a free market.

The UN expects China to account for 41 per cent of all carbon credits issued by 2012, reported the UK Financial Times.

Khalid Malik, UNDP resident representative in China, said carbon trading presented China with a 'major opportunity' to forge a more sustainable development path.

According to the Financial Times, Malik hoped the Beijing exchange would trade in special carbon credits tied to the Millennium Development Goals (MDG). But the UN has expressed reservations about implementing these.

The second project, MDG Carbon: Carbon Finance for Achieving Millennium Development Goals, will invest US$1.7 million in 12 western Chinese regions to help the public and private sector deal in carbon credits.

The three-year project will establish service centres to help local governments, enterprises and individuals enter the carbon trade and will use carbon trading as a tool to generate income and job opportunities in western China by investing in green technologies in the region.

To date, few efforts have been taken to ensure that carbon trading benefits the country's poorer regions. Ongoing CDM projects often focus on reducing greenhouse gas emissions from chemical industries in China's richer coastal areas.

Zhang Chengyi of the Beijing Climate Center, said the MDG Carbon project would explore the huge potential for western China to enter the carbon trade.

He said recent forestation programmes in western China have already helped offset carbon dioxide emissions.

Related SciDev.Net articles:

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[CSR newsclip] UNEP report calls for responsible economics to save environment

UNEP report calls for responsible economics to save environment

AFP, 5 February 2007 - Governments should adopt responsible economics to help save the environment from the costs of rapid globalisation, a United Nations report said on Tuesday.

The UN Environmental Programme (UNEP) said rapid globalisation -- which is seen as contributing to the emission of greenhouse gases -- had an impact on the world's finite natural resources and, if unchecked, could eventually exercabate poverty and conflicts over scarce raw materials.

UNEP chief Achim Steiner said globalisation risked devouring its own gains, notably in the eradication of poverty.

"Wealth is being generated on an unprecedented scale and millions are being lifted out of poverty. But a big question mark hangs over its future and its sustainability for current and future generations," he said.

"If rising living standards and inefficient methods of production and consumption intensify pressure on nature's natural resources -- from fish, freshwater and the atmosphere to forests and fragile land -- globalization could become a spectacular failure rather than a saviour," he warned.

"The question is not whether globalization is good or bad but whether we have in place the regulations, creative economic instruments, guidelines, rules and partnerships that ensure it delivers the widest possible benefits at the minimum price to the planet," he added.

While conceding that globalisation was the key to modern development, the agency warned that the model would undo its gains if governments fail to heed calls of sustaining the increasingly fragile environment.

"Action towards a more intelligent, socially acceptable and environmentally sensitive form of globalisation is long overdue," the UNEP report warned.

"In some ways the need for such action has become even more critical as the production and consumption pattern of the developed world are being marched by those rapidly developing economies such as Brazil, India and China," it added.

The annual Global Environental Outlook 2007 report was released here at the yearly meeting of UN Environment Program (UNEP) governors and comes three days after climate scientists issued a hard-hitting warning that global warming was "unequivocal" and that it was being spurred by a raft of human activity.

The report made a raft of reccommendations including the expansion of forests under the certification of the International Tropical Timber Organisation from the current 10.5 million hectares or three percent of the natural production forests.

"These could be expanded to other natural resources and complimented by green procurement policies," the report said.

In addition, it called for an expansion of the number of marine protected areas, warning that the rising demand for seafood and other marine products could lead to the collapse of commercial fish stocks by 2050.

In 2002, governments agreed to create a marine reserve network by 2012, but at the current pace, the network will be achieved three decades after the collapse of commercial stocks, in 2085, the report warns.

The report lamented that climate change -- chiefly caused by greenhouse gases -- may aggravate the situation by increasing the acidity of the oceans and seas by bleaching the coral reefs -- important nurseries for fish.

In India and Tunisia, the report said partnerships between the UNEP and the private sector had financed solar homesystems which had benefitted "consumers and the international fight against climate change."

The report called for the creation of a framework to "maximise benefits while reducing risks" posed by nanotechnology, which now stands at 0.1 percent of the global manufacturing economy and is set to rise to 14 percent by 2014.

[CSR newsclip] Biodiversity Goes to Market

Biodiversity Goes to Market

IPS, 5 February 2007 - Biodiversity, like the proverbial prophet, is not without honour save in its own country: it tends to be valued more highly abroad than at home. Brazil is now trying to become an exception to the rule by commercialising its native species on a large scale.

Brazil's biodiversity reserves are the greatest in the world, but so far it has seen little hard cash in return for its natural resources. It leads the world in production or export volume of coffee, cane sugar, soya, orange juice and beef, but these are all exotic, rather than native, species.

Only a few of its native plants, not all of which are exclusive to this country, are marketed to any extent nationally and abroad: peanuts, cassava, cocoa and mahogany.

Some have been developed more successfully in far countries, such as the rubber tree (Hevea brasiliensis), which was successfully cultivated in plantations in Malaysia, thus cutting short the prosperity boom in Brazil's Amazon region in the early 20th century, just as the automotive industry with its demand for natural rubber was taking off.

But a new attempt is under way to harness the economic potential of some of Brazil's biodiversity. Under an Environment Ministry initiative, research groups have selected 775 known species, many of them already exploited locally on a small scale, in order to encourage production and sell them in major markets.

Five books will be published this year, each dedicated to one of the five major regions of Brazil, containing the knowledge that has been accumulated about these "plants of the future". Seminars for the business community will be held to spread the word about the potential of these plants, which are ornamental or used to produce foods, beverages, medicines, oils and perfumes.

Environment Ministry coordinator of genetic resources Lídio Coradin, one of those responsible for the project, is particularly enthusiastic about the pupunha or peach-palm (Bactris gasipaes).

The pupunha is a fast-growing Amazonian palm tree which is also found in Central America, and is cultivated in other parts of Brazil for its heart-of-palm. Unlike other palm species which only grow a single stem, it has the advantage of producing multiple offshoots, and so yielding more heart-of-palm.

It also bears a reddish fruit about five centimetres in diameter which is rich in protein, can be used in various kind of foods and could supply oil, with a potential yield much greater than that of the African palm and soya, at present the world's main sources of vegetable oil, Coradin told IPS.

Charles Clements, an expert with the National Institute for Amazonian Research (INPA) who participated in the selection of native species, is also enthusiastic about the pupunha for making "tasty" fruit juices, which can be fermented to produce a beverage that could compete with beer.

The pupunha has many potential uses, but at present the best course would be to take advantage of the genetic improvements already carried out by indigenous people, who have selectively bred it for producing heart-of-palm and beverages, because developing it as a source of vegetable oil would be "a lengthy undertaking," Clements said.

Many Amazonian fruits are just waiting for entrepreneurs to take them to market, he said. For instance, the turu palm (Oenocarpus bacaba) fruit makes "good juice, with better flavour, and as much energy as the açaí (Euterpe oleracea)," which is highly popular in the Amazon region and is gaining ground throughout Brazil.

The turu palm has the advantage of small size and faster fruiting, but it must be cultivated, because extraction from naturally occurring trees would not support a business, as other Amazonian fruits do.

The need for plantation agriculture from the outset complicates commercial take-off, because more business links are required, Clements acknowledged.

But in his opinion the bottleneck in the process of unlocking the economic potential of some species is the lack of resources on the part of research and development institutes, which prevents them from responding quickly to the needs of people willing to start a business.

The Agriculture Ministry, for example, is not participating in this effort, which is not merely environmental, Clements complained.

Most of the 775 plant species selected from every region of Brazil are ornamental and medicinal, and are generally already used by the population, but lack formal commercial structures. "Many of them are undergoing rapid domestication," Coradin said.

The effort to systematise and spread information about the "plants of the future" arises from the need to "promote sustainable use of local biodiversity, as well as conserve and study it," Coradin said. This is important for the economy and also for the environment and food security, as it encourages agricultural diversity, which humanity has reduced to just a few species over recent centuries.

It is not a question of nationalism. Today, "no country can survive without genetic input from abroad," because interchanging plants and other genetic resources is essential, Coradin said. But Brazil, with its mega-diversity, "has to set an example by preserving its biological diversity, showing the importance of its species and adding value to them," he said.

The most recent example of a native species that has been taken up as an economic opportunity with more alacrity abroad than at home is the Brazilian guava (Acca sellowiana), a fruit from southern Brazil. It was introduced into New Zealand, where it serves as the raw material for over 20 products, including champagne, as well as preserves, juices and essential oils, Coradin said.

Meanwhile, in the south of Brazil, guavas are only beginning to be sold as fruit.

This country has an immense variety of flavours, aromas, cosmetics and natural foods with which to diversify and enrich its economy. "Putting these resources on the market will help society understand the importance of protecting biodiversity," Coradin concluded.

[CSR newsclip] EU pollution guidance package completed

EU pollution guidance package completed

ENDS Europe Daily, 6 February 2007- A ten-year effort by the EU to define best available techniques (BAT) for curbing pollution by major industries has reached its conclusion with publication of the last of 32 planned BAT reference documents, or brefs.

The brefs will play a crucial role in informing EU governments as they implement the 1996 integrated pollution prevention and control (IPPC) directive. The law requires governments to ensure that around 50,000 installations in sectors ranging from glass, steel, chemicals and food operate to BAT from this October. New installations must already comply.

IPPC bureau acting director Serge Roudier welcomed finalisation of the last bref as a "major achievement" for the EU. The bureau has coordinated ten years of intensive work involving more than 1,200 experts from EU governments, industry and civil society, he noted. They have defined literally hundreds of types of BAT for different industry sectors.

Bref documents are of "utmost importance" to EU industry, according to Mr Roudier. Their influence also extends outside Europe as they are often used by international financial institutions such as the World Bank for financing industrial projects.

The brefs run to hundreds of pages each. They have tended to require about three years to put together through a painstaking process of expert debate. The IPPC bureau's information exchange forum approved the last of the documents last December.

To take full effect, each must also be formally endorsed by the European commission. In practice, EU governments do not wait that long to begin implementation since the bureau's approval is generally seen as the main signal.

Although it has now completed its primary mission, the IPPC bureau will remain busy in the coming years. It should finalise additional guidance on how to maximise energy efficiency this year. This cross-sector document is separate from other brefs since it will not define specific instances of BAT.

The bureau has also begun revising some of the first brefs finalised in the early 2000s. The first of these, dealing with the cement industry, is expected to be completed next year. Four other BAT revisions regarding tanning, ferrous and non-ferrous-metal processing and waste gas treatment are expected to start this year.

[Energy newsclip] EPA's Top 25 Green Power Partners is as follows, listed in order of purchase size

Private Sector Tops Green Power List, 3 January 2007 - For the first time, a corporation leads EPA's national Top 25 list of green power purchasers. Wells Fargo & Company claimed the top spot, purchasing 550 million kilowatt hours annually. Organizations that purchase electricity generated from clean, renewable resources such as solar, wind, geothermal, biogas, biomass and low-impact hydro make up the quarterly list.

"These organizations are demonstrating that environmental stewardship and profitable business operations can go hand in hand," said Bill Wehrum, acting assistant administrator for EPA's Office of Air and Radiation. "Purchasing green power is good for the environment and supports our nation's efforts to increase the diversity in our energy supplies with alternative and renewable energy sources."

After Wells Fargo & Company, Whole Foods Market ranks second and the U.S. Air Force ranks third. The U.S. EPA ranks fourth, with Johnson & Johnson rounding out the top five. Newcomers to the list include Cisco Systems Inc., New York University,, the U.S. Department of Veterans Affairs, and Kohl's Department Stores.

EPA's Top 25 green power purchasers are buying more than 4 billion kilowatt-hours of green power on an annual basis. This is equivalent to the energy needed to power more than 350,000 average American homes each year.

The EPA Green Power Partnership encourages organizations to purchase green power as a way to reduce the environmental impacts associated with the use of electricity from fossil fuels and to diversify America's fuel supply. The partnership is comprised of a diverse set of organizations including Fortune 500 companies, small and medium businesses, government institutions as well as colleges and universities.

EPA's Top 25 Green Power Partners is as follows, listed in order of purchase size:

1. Wells Fargo & Company
2. Whole Foods Market
3. U.S. Air Force
4. U.S. Environmental Protection Agency
5. Johnson & Johnson
6. Starbucks
7. DuPont Company
8. U.S. Department of Energy
9. Vail Resorts Inc.
10. HSBC North America
11. Cisco Systems Inc.
12. Staples
13. New York University
14. The World Bank Group
15. University of Pennsylvania
16. IBM Corporation
18. U.S. Department of Veterans Affairs
19. NatureWorks LLC
20. Sprint Nextel
21. Safeway Inc.
22. Pennsylvania State University
23. Kohl's Department Stores
24. Commonwealth of Pennsylvania
25. The Tower Companies

[CSR newsclip] Financial Firms Detail Climate Change Risks, Opportunities

Financial Firms Detail Climate Change Risks, Opportunities, 2 February 2007 - Two leading financial institutions, UBS Wealth Management and Lehman Brothers, released reports detailing how companies and individuals might be affected by global warming and what steps they can take to offset the risks.

UBS report, "Climate Change: Beyond Whether," breaks down sector-by-sector into detailed key investment opportunities and risks for the individual investors.

Lehman Brothers' report, "The Business of Climate Change," warns that companies that do not respond quickly and effectively to changes in the physical and economic environments will face extinction. "The pace of a firm's adaptation to climate change is likely to prove to be another of the forces that will influence whether, over the next several years, any given firm survives and prospers; or withers and, quite possibly, dies," the report says.

Klaus Wellershoff and Kurt Reiman of UBS said of their report, "Whether or not you agree with the view that human activity is influencing the climate system is largely irrelevant to the investment thesis. What is important is that numerous policies to combat the threat of global warming are converging to influence people's behavior, alter the risk profile of various businesses, and improve the investment outlook for others."

The UBS report found that investors who seek to incorporate climate change risks and opportunities into their portfolios have several options, including:

  • Equity-related strategies include underweighting sectors, industries and companies that are highly carbon-intensive and have little potential to adapt to new technologies;
  • Investment in companies exposed to renewable and low-carbon energy production and energy efficiency;
  • Investment in theme funds focusing specifically on climate-change mitigation;
  • Socially responsible investment (SRI) funds and indices that follow one of three approaches: one that includes only the best companies, one that excludes laggards in the field, and one that focuses on the highest improvement potential
Lehman Brothers' John Llewellyn, the report's author, told Bloomberg News that "climate change is a slow but powerful force which will shape the economic landscape inexorably." He added that companies should hear the message that they should "take it seriously: try to think through carefully, slowly and rationally what it means for the activity you're engaged in."

"What effect do higher sea level, more frequent bad weather, storm surges, reduced rainfall in some regions, increased rainfall in others, have?" he explained. "What does it mean for the types of product that will be demanded; what does it mean for the sorts of places where you should be producing; the sorts of places that you should be sourcing materials from?"

The UBS report explains that winners and losers from climate change are not always obvious, but that industries whose operations depend on climate conditions have a high level of physical exposure, as do sectors whose operations would be interrupted by extreme weather events. Some examples of the most at-risk sectors include agriculture, fisheries, forestry, water utilities, and water-intensive operations, but also tourism, healthcare, insurance, and operations sensitive to storms, such as offshore oil drilling.

Some risks companies face from future climate change events include heightened regulation, increased impairment of physical property, loss of revenues and erosion of reputation, individually or in combination. But the report makes clear that companies and industries most at risk of negative effects from global warming are also best positioned to benefit from changing regulations that may arise.

Two broad categories of opportunities are detailed in the UBS report: products and processes that deliver improved energy efficiency, and development of renewable/low-carbon energy sources.

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[CSR newsclip] Chirac calls for new UN environment body

Chirac calls for new UN environment body

AFP, 3 February 2007 - French President Jacques Chirac led calls on Saturday for a powerful new UN environment agency and for a safe and protected environment to be enshrined as a fundamental human right.

Speaking at a conference here a day after a panel of UN experts issued their bluntest warning yet over global warming, Chirac said the proposal to replace the existing UN Environment Programme (UNEP) had the support of 46 countries.

"We call for the transformation of the UNEP into a genuine international organisation to which all countries belong, along the lines of the World Health Organisation," Chirac said.

However his call for a fully-fledged UN agency has not received unanimous backing, with opponents including the United States, the world's biggest polluter, Russia and the world's top three emerging economies: China, India and Brazil.

Russia had reservations about the creation of such an agency, Deputy Foreign Minister Andrei Denisov told the Itar-Tass news agency.

"Russia has certain doubts about the timeliness of such a step," he said. "At the moment the UNEP makes it possible to resolve the tasks in this area," said Denisov, who attended the Paris conference, though he agreed it should be reorganised so it could better "correspond to the demands of today."

Even many non-governmental organisations question whether another expensive supranational body is the answer to the world's problems.

"This UN agency for the environment will be a strong and recognised voice in the world," said Chirac, who is widely expected to leave office after 12 years as president following elections in May.

"It will be an instrument for evaluating ecological damage and how to remedy it ... for promoting those technologies and behaviour patterns most respectful of eco-systems ... and for supporting the implementation of environmental decisions across the planet," he said.

The Nairobi-based UNEP was set up in 1972 to promote environmental protection. But Chirac shares the belief of many experts that its capacities are insufficient to cope with the growing problems linked to global warming and habitat destruction.

Chirac also called on Saturday for a new "universal declaration of environmental rights and obligations" in order to guarantee "a new human right -- the right to a safe and protected environment."

He said the first meeting of a pioneer group of 46 nations pushing for a UN environmental agency would take place in Morocco.

The 46 include most countries in Europe and north Africa, Latin American states such as Chile and Ecuador, as well as some of the world's poorest nations like Burkina Faso and Cambodia.

The two-day "Citizens of the Earth" meeting was attended by some 200 degates and was timed to coincide with the meeting in Paris of the Intergovernmental Panel on Climate Change (IPCC) -- the UN's paramount scientific authority on global warming -- which on Friday delivered a stark assessment about the reality of climate change.

In its first report in six years, the IPCC said global warming was almost certainly caused by humans and that carbon pollution disgorged this century could disrupt the climate system for 1,000 years to come.

Washington has also argued that measures to lower emissions of greenhouse gases, blamed for global warming, should not come at the expense of economic growth.

But delegates at Saturday's conference tried to find a middle way.

Jeremy Rifkin, economist and former adviser to former US president Bill Clinton, said that society has to find ways to produce and consume differently -- an "industrial revolution" to arrive at a "post-carbon" era, he called it.

He argued that there were other ways than gross domestic product (GDP) to measure the strength of economy, such as quality of life.

[CSR newsclip] Triple green paper promotes sustainability: Sappi

Triple green paper promotes sustainability: Sappi

Did you know that sugar cane fiber can be used to make paper? Sappi Stanger Mill is one of only a few mills in the world that uses sugar cane fiber as its primary source of pulp. It is not only an annually renewable resource but a recycled raw material.

Sappi fine paper South Africa, a division of the global Sappi group, has announced a major upgrade of its coated paper range at Sappi's Stanger Mill in KwaZulu Natal. Known as "Triple Green", the upgrade is based on three environmental "pillars" and research indicates it is a world first.

Triple Green is the latest innovation from Sappi, which has an ongoing commitment to producing high-quality coated fine paper in a sustainable and environmentally sound manner.

Every product produced at Sappi Stanger Mill is manufactured according to the principles of Triple Green. These products include Avalon Supreme, Dukuza Plus, Crystal and Platinum Label coated fine paper ranges, as well as tissue wadding, which is used in the production of tissue products such as facial tissues.

Corporations and large companies can now choose an environmentally sound, locally manufactured coated fine paper for their printed communications. Sappi feels this will be important to all the companies listed on the JSE's Social Responsibility Investment Index, as well as to other companies pursuing or already implementing sustainable development principles.

Three pillars on which Triple Green is based are processes that not only minimize the environmental impact of paper manufacturing and ensure long-term sustainability, but assure end users that the procurement chain has been stringently monitored and certified by independent environmental bodies.

They represent Sappi Fine Paper South Africa's pledge that:

  • The primary source of pulp used in the production of paper products at Sappi Stanger Mill is sugar cane fiber, sourced from local suppliers;
  • The bleaching process is elemental chlorine-free;
  • The wood fiber used in the production process is obtained from sustainable and internationally certified afforestation, using independently audited chains of custody for incoming fiber.
Sappi Stanger Mill is one of only a few mills in the world that uses sugar cane fiber as its primary source of pulp. The pulp is a by-product of sugar production, the fibrous material remaining after raw sugar has been extracted from sugar cane. As such, it is not only an annually renewable resource but, in effect, a recycled raw material.

On average, the mill's coated paper and tissue wadding has a 60% cane fiber content and sourced from local suppliers, many of them previously-disadvantaged growers.

This practice not only supports regional enterprise, but also eliminates, amongst others, the need for long-distance road transport, in turn reducing wear and tear on the country's roads, fuel consumption and the emission of greenhouse gases from haulage trucks.

"With increasing concerns about energy conservation worldwide, it is equally important that the use of cane fiber in papermaking consumes less energy than traditional methods.

This aspect of Triple Green underscores Sappi's leadership position in world paper production," says Albert Lubbe, Managing Director of Sappi Fine Paper South Africa, "particularly given that only 6,5% of the fiber used internationally for paper production is derived from non-wood sources."

The second of the three pillars on which Triple Green is based is the fact the paper is produced without the use of chlorine in the bleaching process. The pulp is bleached using an elemental chlorine-free (ECF) process, which has the following benefits:

  • Bleaching process is benign to the environment and paper treated in this way is more easily recyclable;
  • Use of chlorine dioxide and hydrogen peroxide is internationally accepted as being environmentally friendly and complies with the stringent environmental regulations of United States Environmental Protection Agency and World Health Organization;
  • Use of the ECF process results in the strongest of paper fibers, ensuring that primary fiber sources are optimally utilized; and
  • ECF process also provides the highest yield of any bleaching process, also serving to ensure optimal use of raw materials.
As far as wood fibre is concerned, Sappi tracks and verifies the sources of all incoming fibre to ensure that it has been produced in renewable tree plantations and not derived from ancient, indigenous or rain forests.

All wood fibre used at Sappi Stanger Mill is certified by either the Forest Stewardship Council, the Programme for the Endorsement of Forest Certification, the Sustainable Forestry Initiative or Canadian Standards Association International.

These are the world's foremost forestry certification programs and are based on a comprehensive system of principles, objectives and performance measures that have been developed co-operatively by industry, environmental and social bodies.

To receive certification from any of these organizations, wood products must go through a rigorous auditing process, confirming their origin.

Sappi's commitment to using only certified source fibre, together with its conservation programs, demonstrates that the group is fundamentally committed to preserving indigenous forests and areas with a high conservation value and does not use wood from poorly- managed, non-certified plantations.

At Sappi, conserving and protecting natural resources is a fundamental business philosophy. It is an integral aspect of every part of the group's business, as this ensures an investment in its own future as well as in the environment and the communities in which it operates.

Triple Green is a reflection of Sappi's overall strategy. Sappi is committed to sustainability in all areas of its business and lives this commitment by promoting long-term socioeconomic development, ensuring the overall well-being of all people working for and with Sappi, and by carefully managing the impact of its operation on the natural environment.

In line with this strategy, Sappi is also committed to good corporate governance in all aspects of its business, which includes its commitment to broad-based black economic empowerment.

Sappi further supports many environmental initiatives in KwaZulu Natal and across South Africa. Those operating close to Sappi Stanger Mill include the Sappi/WWF TreeRoutes Partnership, the Ixopo Bee-Keeping Project, the Project Grow small timber growers scheme, the Sappi/ Endangered Wildlife Trust Blue Swallow Working Group and the Sappi Stanger Mill Environmental Liaison Committee.

Sappi feels that these initiatives are as fundamental to long- term sustainability as good corporate governance and environmentally sound production. Sappi's approach is to seek integrated solutions to the challenges facing its business, staff, communities and the environment.

The Sappi/WWF TreeRoutes Partnership was created in 1999 with grant funding of R10 million from Sappi. Administered by the WWF, the objective of the partnership is to create and support eco-tourism projects that allow for both the socio-economic development of rural communities and the preservation of rare habitats.

One of the most significant community-based projects undertaken by Sappi in KwaZulu Natal has kept this balance firmly in mind.

The KwaDukuza Resource Centre was established by Sappi in 1996, after it had identified the need for a center of this kind to service the communities in which the workers from Sappi Stanger Mill and Sappi Tugela Mill live.

It provides educational and ICT facilities, resources and training programs that would otherwise not be available to these communities.

Given the many environmental and social benefits of the process, Sappi looks forward to marketing the Triple Green products to corporate companies, publishers, printers and consumers who support the use of recyclable, biodegradable and acid-free local paper.

Further information

  • Contact:
  • Download the full case study (148 kb)
  • Sappi group
  • National Business Initiative (NBI)

    The National Business Initiative (NBI) of South Africa produced this case study. As a voluntary business coalition of 140 leading South African and international companies, the National Business Initiative (NBI) seeks to enhance the business contribution to sustainable growth and development in South Africa.

[Energy newsclip] Scientists are taking 2nd look at biofuels

Scientists are taking 2nd look at biofuels

This article is part of the IHT's The Business of Green series.

Visit the IHT's website for more coverage of the Business of Green and Energy and the Environment, as well as interactive dialogue with IHT columnists and New York Times reporters on these issues.

IHT, 31 January 2007 - Just a few years ago, politicians and green groups in the Netherlands were thrilled by the country's early and rapid adoption of "sustainable energy," achieved in part by coaxing electricity plants to use some biofuel — in particular, palm oil from Southeast Asia.

Spurred by government subsidies, energy companies became so enthusiastic that they designed generators that ran exclusively on the oil, which in theory would be cleaner than fossil fuels like coal because it is derived from plants.

But last year, when scientists studied practices at palm plantations in Indonesia and Malaysia, this green fairy tale began to look more like an environmental nightmare.

Rising demand for palm oil in Europe brought about the razing of huge tracts of Southeast Asian rain forest and the overuse of chemical fertilizer there. Worse still, space for the expanding palm plantations was often created by draining and burning peat land, which sent huge amount of carbon emissions into the atmosphere.

[CSR newsclip] Sustainable supermarkets – An emissions trading scheme for tomatoes?

Sustainable supermarkets – An emissions trading scheme for tomatoes?

Ethical Corporation, 30 January 2007 - As the UK government starts to act on climate change, supermarkets could play a leading role in weaning the country off carbon.

Since the esteemed economist Sir Nicholas Stern called climate change "the greatest and widest-ranging market failure ever seen", carbon dioxide, and how to cut it, has become the hot topic in UK public policy.

The 600-page Stern review, which was published in October at the behest of UK chancellor Gordon Brown, confirmed what environmentalists have been saying for decades: that current levels of carbon consumption in the UK and around the world are dangerously unsustainable.

Stern estimates that 1% of UK gross domestic product must be spent on tackling climate change, leading to a 25% cut in greenhouse gas emissions by 2050. If measures are not taken before then and temperatures increase by 5ºC, Stern warns, rising sea levels could put London underwater.

Faced with doomsday scenarios like this, even politicians cannot fail to act. A climate change bill, proposing a 60% cut in greenhouse gas emissions by 2050, formed the centrepiece of the Queen's Speech outlining the UK government's plans at the state opening of parliament in November.

For these ambitious reduction targets to be met, even less energy-intensive industries will have to address their carbon footprint. Now supermarkets, along with banks, hotel chains and universities, are the subject of a proposed emissions trading scheme under the government's climate change bill.

Supermarkets are an obvious next candidate for carbon-cutting measures. The food and drinks industry may only account for 14% of all UK carbon dioxide emissions, but when Tesco alone accounts for one pound in every seven spent on the UK high street, there is tremendous potential for supermarkets to facilitate more sustainable methods of food production and consumption.


There are signs that supermarkets are beginning to recognise their responsibility to take a lead on carbon cutting. Representatives of all the large retailers gathered for the Sustainable Food Industry Summit, held in London in November, to discuss how they could reduce the industry's energy consumption.

This meeting followed several high-profile moves by supermarkets to demonstrate their green credentials. A £100 million environment fund is central to Tesco's ten-point "community plan", released in May, just after all supermarkets were referred to the UK Competition Commission for investigation into alleged anti-competitive practices. The Tesco money will fund eye-catching green measures, such as powering stores with wind turbines.

Rival chain Asda, whose chief executive, Andy Bond, convened the sustainability summit, is putting its energy into reducing food packaging and waste. The chain has pledged to stop sending any waste produced at its stores to landfill by 2010. It has also promised to cut the volume of all packaging on its products by at least 10% by the end of 2007.

Blake Lee-Harwood, campaigns director at environmental campaign group Greenpeace, who addressed the London summit, is encouraged by these developments. He said: "Clearly there is a new wave of sustainability consciousness sweeping through the retail sector in the UK … We don't see it as greenwash."

Common measures

Despite these encouraging signs, it seems unlikely such disparate moves on the part of supermarkets can deliver carbon cuts on the radical scale Stern says is needed. That would require supermarkets to collaborate, working with the government to establish a way to calculate their carbon footprints and agree upon policy measures to reduce them.

At the moment some supermarkets speak of emissions per store, others emissions by square foot. At Marks & Spencer, widely regarded as a sustainability leader in the sector, carbon dioxide emissions are down 30% per square foot from three years ago – but for many environmentalists, the fact the chain is growing renders that figure almost meaningless.

Measuring the energy consumption of supermarket operations would be relatively easy but of very limited use. In-store use of refrigerators, lights and air-conditioning systems accounts for just a fraction of the carbon use that supermarkets could be held responsible for.

A more accurate assessment of supermarkets' environmental impact would have to consider the carbon footprint of food products on their shelves. But so-called product "life-cycle" data, which looks at the energy consumption of products passing along the entire value chain from farm to fork, is hard to find.

Sources at the UK Department of the Environment, Food and Rural Affairs say that supermarkets could better assist the government in life-cycle analysis to calculate the environmental impacts of the products they sell.

Defra welcomes supermarkets' talk of engagement, but it remains to be seen how far the retail giants will co-operate in building an evidence base that could, potentially, lead to green levies on more energy-intensive foodstuffs.

Debunking myths

The fact the evidence for environmental impacts of food products is complex and incomplete makes it hard to gauge how green supermarkets really are. It is even harder for consumers to make truly sustainable food choices.

For example, tomatoes grown under glass in the UK will consume more energy in their life cycle than tomatoes grown and flown in from Spain, says Defra.

Rowland Hill, corporate responsibility manager at M&S, uses New Zealand apples to illustrate the point. Apples transported from halfway round the world by boat are responsible for less carbon dioxide on the sea-leg of their journey than on the road trip from a supermarket distribution centre to a store, Hill says. (On top of this, of course, there are also road miles at either end of the shipping route.)

These examples could complicate the prevailing assumption, encouraged by green campaigners, that local sourcing is fundamental to a sustainable food system. For Hill and M&S, local sourcing is not the solution to climate change. He says: "In carbon terms the argument is very weak. In fact, there is no argument."

This does not detract from the campaigners' case that for truly sustainable food production and consumption, environmental impacts must be factored into the cost of goods on supermarket shelves.

Tim Lang, professor of food policy at London's City University, says: "You can't get mangoes in Lancashire, but if you want mangoes, pay the full environmental price for them."

To achieve this would meet the Stern report's key recommendation: that the cost of carbon should be internalised across the economy. An emissions trading scheme for supermarkets would be the first step. Hill says M&S is preparing for such a scheme to come into force by 2011.

Green visions

But campaigners are more ambitious in their hopes for the industry. For Lee-Harwood, supermarkets' rightful role is no less than to use their influential position to shape consumer consciousness in a new, low-carbon economy.

He says customers should be made aware of the carbon impact of their food. Just as we can see how much fat or sugar is in a product, so we should know the amount of carbon it is responsible for.

Through offering incentives, via reward schemes, for buying food products that produce less carbon, supermarkets could create a "grey economy" in carbon, which would become an "alternative" or "shadow currency", Lee-Harwood says, as people would adjust their behaviour accordingly.

This could reduce our energy consumption in ways government could only dream of. Lee-Harwood argues: "That is an essential precursor for creating the political space for a carbon-rationing regime. At the moment, although this kite has been flown by [UK environment minister] David Miliband and others, everyone knows it would be politically impossible to introduce carbon-rationing into Britain."

Given their difficulty in reaching agreement on health labelling for food, the idea of supermarkets spearheading the UK's transition to a low-carbon future may be far-fetched. No doubt retailers have the power to change consumer behaviour. But whether a highly competitive sector, traditionally resistant to government intervention, can be persuaded to work together to reduce our dependency on carbon remains to be seen.

Food miles: room for reductions

  • Deliveries to supermarkets and their distribution centres make up 25% of road miles travelled by heavy goods vehicles in the UK every year.
  • On average these vehicles run at only half capacity.
Carbon calculations

Prince Charles's Duchy Originals food range is leading the way on informing consumers of their products' carbon footprint. Labels will show how much climate-changing gases are released in the production of 200 items, ranging from sausages to shampoo. A spokesman for the prince says the aim is for "people to know the cost of their food in greenhouse gas terms as well as in terms of pounds and pence".

Article first published in Ethical Corporation on 12 January

[CSR newsclip]

Financial Firms Detail Climate Change Risks, Opportunities, 2 February 2007 - Two leading financial institutions, UBS Wealth Management and Lehman Brothers, released reports detailing how companies and individuals might be affected by global warming and what steps they can take to offset the risks.

UBS report, "Climate Change: Beyond Whether," breaks down sector-by-sector into detailed key investment opportunities and risks for the individual investors.

Lehman Brothers' report, "The Business of Climate Change," warns that companies that do not respond quickly and effectively to changes in the physical and economic environments will face extinction. "The pace of a firm's adaptation to climate change is likely to prove to be another of the forces that will influence whether, over the next several years, any given firm survives and prospers; or withers and, quite possibly, dies," the report says.

Klaus Wellershoff and Kurt Reiman of UBS said of their report, "Whether or not you agree with the view that human activity is influencing the climate system is largely irrelevant to the investment thesis. What is important is that numerous policies to combat the threat of global warming are converging to influence people's behavior, alter the risk profile of various businesses, and improve the investment outlook for others."

The UBS report found that investors who seek to incorporate climate change risks and opportunities into their portfolios have several options, including:

  • Equity-related strategies include underweighting sectors, industries and companies that are highly carbon-intensive and have little potential to adapt to new technologies;
  • Investment in companies exposed to renewable and low-carbon energy production and energy efficiency;
  • Investment in theme funds focusing specifically on climate-change mitigation;
  • Socially responsible investment (SRI) funds and indices that follow one of three approaches: one that includes only the best companies, one that excludes laggards in the field, and one that focuses on the highest improvement potential
Lehman Brothers' John Llewellyn, the report's author, told Bloomberg News that "climate change is a slow but powerful force which will shape the economic landscape inexorably." He added that companies should hear the message that they should "take it seriously: try to think through carefully, slowly and rationally what it means for the activity you're engaged in."

"What effect do higher sea level, more frequent bad weather, storm surges, reduced rainfall in some regions, increased rainfall in others, have?" he explained. "What does it mean for the types of product that will be demanded; what does it mean for the sorts of places where you should be producing; the sorts of places that you should be sourcing materials from?"

The UBS report explains that winners and losers from climate change are not always obvious, but that industries whose operations depend on climate conditions have a high level of physical exposure, as do sectors whose operations would be interrupted by extreme weather events. Some examples of the most at-risk sectors include agriculture, fisheries, forestry, water utilities, and water-intensive operations, but also tourism, healthcare, insurance, and operations sensitive to storms, such as offshore oil drilling.

Some risks companies face from future climate change events include heightened regulation, increased impairment of physical property, loss of revenues and erosion of reputation, individually or in combination. But the report makes clear that companies and industries most at risk of negative effects from global warming are also best positioned to benefit from changing regulations that may arise.

Two broad categories of opportunities are detailed in the UBS report: products and processes that deliver improved energy efficiency, and development of renewable/low-carbon energy sources.

Safety failures and delays force BP to slash targets: BP has been forced to slash some production targets by up to 20% and increase capital expenditure as it moves to tackle safety and output problems in the aftermath of accidents in the US

Safety failures and delays force BP to slash targets

City disappointed as flat oil and gas output is predicted
Strong prices push up profits by 15% on 2005

Terry Macalister
Wednesday February 7, 2007

The Guardian

BP has been forced to slash some production targets by up to 20% and increase capital expenditure as it moves to tackle safety and output problems in the aftermath of accidents in the US.

Oil and gas output was now expected to fall or be flat until 2009, when it would grow only marginally from 3.9m to 4m barrels a day - compared with previous targets of just under 5m - the company told a disappointed City yesterday.

"While this new conservative guidance is a reduction on what we have said previously, it is important to remember that the reserves have not gone away, their production will merely be delayed," said Tony Hayward, the head of exploration and production who becomes group chief executive when Lord Browne steps down on July 31.

"We have further increased our focus on safety and operational integrity, and will in some cases deliberately slow the pace of our activity in order to improve safety and efficiency," he added, pointing to potential lower production from the North Sea.

The production outlook has already been hit by delays in output from the Atlantis and Thunder Horse fields in the Gulf of Mexico, divestments of lower-quality producing assets and a reduction in volumes from production-sharing agreements because of higher oil prices.

The company said it was also suffering from a shortage in the supply chain which was forcing prices up by 40% in some cases year on year. Increased demand for staff meant many inexperienced workers coming into the industry, which could also affect safety levels. Capital expenditure is being raised from $16.9bn (£8.6bn) in 2006 to $18bn for 2007.

BP was severely criticised over safety at the Texas City refinery in the US by the Baker panel, a body established by the company to assess its performance in the aftermath of an explosion that killed 15 and injured 150 workers.

Mr Hayward said he would take over from Lord Browne "a great company with great assets and great people" but needed to put emphasis on operational integrity. "My priority is simple and clear, it is to implement our strategy by focusing like a laser on safe and reliable operations." The future leader of the company was sitting alongside Lord Browne as BP reported annual replacement cost profits of $22.25bn - up 15% from 2005 on the back of strong oil prices. The fourth quarter income came in at $3.89bn, down 12% on the same period of 2005.

Giving his last annual results presentation, Lord Browne said the company had learned and responded to the Baker panel and other problems in the US. He did not accept that there was any systemic failure at BP America, involving pipeline spills in Alaska, suspected propane trading irregularities and the disaster at its Texas City plant. He insisted he had no regrets. "My bias is not to have regrets. Things are the way they are. You have got to be a concrete realist," he said.

But Lord Browne also sought to defend his legacy, saying the staff at BP had built a "truly great" company and this should not blind people to its successes. "Some report cards were better than others...when you step back you can see what has been accomplished. There has been a lot of noise and talk about BP this last year. A lot of this has obscured many of the great accomplishments made by our staff around the world," he said.

Citigroup analyst Jonathan Wright said BP's cautious growth forecasts gave the appearance it was getting bad news out of the way before Mr Hayward's formal takeover. "In some respects the market will assume BP has 'kitchen-sinked' expectations ahead of the new chief executive taking the reins. Nevertheless, the market will need to wait another year for growth and beyond that growth expectations are now in line with Shell," Mr Wright said.

Another investment house, Investec Securities, described the BP results and trading update as "adequate but underwhelming". "Although the results are slightly ahead of market expectations, a modest 10% dividend increase and a scaled-back production growth expectation demonstrates that BP is also wrestling with industry-wide pressures," analyst Tony Eccles said.

BP shares fell 6.5p to 535p in a rising market.

One of the largest makers of chocolate bars whose brands include Mars and Snickers will stop advertising to children

Mars will stop advertising to children
By Thair Shaikh
Published: 05 February 2007

One of the largest makers of chocolate bars whose brands include Mars and Snickers is to stop marketing to children younger than 12 by the end of the year.

It is the first time a major foodmaker has set out to stop targeting snack foods to such a wide age group. Masterfoods, which also makes Maltesers, Topic, Revel and Twix, said: "We have decided to make an official policy change to a cut-off age of 12 years for all our core products."

The measure reflects mounting concerns about the links between advertising and childhood obesity and follows moves by some public authorities to bring in tighter food regulations.

The company already has a policy of not advertising to children under six and, earlier this year, said its chocolate bars would display calorie counts on wrappers. A spokesman said the firm had written to Robert Madelin, the European Commission's director-general for health and consumer protection, outlining its new policy.

The letter said the policy, which will apply to all advertising, including online, will be adopted by the end of the year.

Firms told to cut CO2 or leave FTSE4good

Firms told to cut CO2 or leave FTSE4good

Terry Macalister
Tuesday February 6, 2007

The Guardian

Companies wanting to demonstrate corporate social responsibility by being a member of the FTSE4Good stock market index will be forced to show they are reducing their carbon emissions.

About a quarter of the energy-intensive users in the FTSE4Good are heading for removal unless they change their ways, according to the index's organisers.

Oil companies, airlines and mining firms will be told today they must deliver a 2.5% per annum reduction in carbon emissions and publish specific climate-change policies for which their boards must take direct responsibility under a first phase of the new initiative that will gradually be rolled out for all members.

Article continues
US companies look under particular threat under the criteria to be announced at Canary Wharf in London today with a keynote speech from the environment secretary, David Miliband. "It used to be accepted that we cannot afford to be green. Now the opposite is true: we cannot afford not to be," he will argue.

Craig Morrison, head of business ethics at Glasgow Caledonian University and a FTSE4Good committee member, said last night that some companies were working very hard to reduce their carbon footprint but "incredibly" some were failing badly and letting their pollution levels rise.

"We will give companies time for change but after that they will be removed from the index if they do not show that they are making improvements," he said.

FTSE4Good already demands higher environmental standards but today the criteria will be raised to include CO2 emissions and climate change for the first time.

Mr Morrison accepts that a 2.5% decrease is not much to ask. "We could have made it 5% but quite honestly it would have decimated the index - removing 60% or 70% of the constituents."

Mr Miliband will also argue that environmentalists who push punitive measures on business "must not forget that without a stable and prosperous economy the public appetite for green measures will dwindle".

EU to compromise on auto emissions: carmakers will be encouraged to find other ways to reduce emissions, such using more biofuels, improving tires and gear boxes, educating motorists about fuel-efficient driving and requiring roads to be smoother

International Herald Tribune
EU to compromise on auto emissions
By Dan Bilefsky
Tuesday, February 6, 2007



The European Commission will unveil a compromise proposal Wednesday on limiting emissions from new passenger cars in a battle that has pitted Europe's ambitious environmental goals against some of the world's biggest car makers.

After fierce lobbying by European automakers, the 27-member EU executive is expected to endorse a watered- down blueprint to impose a mandatory limit on carbon dioxide emissions from new cars to an average of 130 grams per kilometer by 2012. The initial proposal, which the EU was forced to shelve last week, set a target of 120 grams.

Environmentalists criticized the EU for surrendering to the auto industry, saying the plan would do little to dissuade European car makers from continuing to produce gas-guzzlers.

But the powerful auto lobby, concerned that the measure risked denting profits and spurring factory closures across the Continent, is girding for a further fight on the initiative, which forms the basis for upcoming EU legislation that must be approved by EU member states.

Under the proposal, the commission will accept the industry's demand for an approach that reduces pressure on manufacturers to alter their car designs.

Instead, carmakers will be encouraged to find other ways to reduce emissions, such using more biofuels, improving tires and gear boxes, educating motorists about fuel-efficient driving and requiring roads to be smoother.

Sigrid de Vries, a spokeswoman of the European Automobile Manufacturers Association, which represents 13 automakers, including BMW, Volkswagon and Ford, said the compromise still placed an expensive burden on the automotive industry.

"The risk is that it will lead to a loss of jobs and production in Europe," she said, "while making cars more expensive for consumers."

The auto industry employs six million people in Europe, the bulk of them in big EU countries like Germany, France, Italy and Spain.

Sergio Marchionne, the chairman of Fiat, warned the European Commission president, José Manuel Barroso, that the previously proposed 120 gram emissions cap would shift thousands of jobs overseas.

He argued that the commission's own consultants had calculated that the cap would add €3,650, or $4,800, to the average retail price of a new car.

Some auto executives say they also fear that a mandatory EU cap on carbon-dioxide emissions would unfairly favor companies like Renault and Fiat, which produce smaller cars.

"This is a business war in Europe," the chief executive of Porsche, Wendelin Wiedeking, said at a recent meeting of shareholders in Stuttgart. "It's the French and Italians up against the Germans."

Environmental groups sought to rein in the automakers' campaign, arguing that cars accounted for more than one 10th of the EU's emissions of carbon dioxide.

They said many European car companies were intent on producing gas-guzzling cars, even though Japanese, French and Italian automakers had shown that producing more fuel-efficient cars was a viable option.

The Toyota Prius hybrid, for example, emits 104 grams of carbon dioxide emissions per kilometer, while the Citroen C1 produces 109 grams.

"This proposal is a pathetic caving in to industry — the car makers are choosing to market big gas guzzlers" said Dudley Curtis, spokesman for Transport & Environment, an environmental group.

"The European Commission's target has been watered down several times and in light of the climate change threat, this is very, very disappointing."

Barbara Helfferich, spokeswoman for the European Commission's environmental minister, said she was confident the EU would still be able to reach its Kyoto Protocol target, which aims to reduce greenhouse gas emissions by 8 percent below 1990 levels by 2012.

EU officials who have seen the proposal said the environmental commissioner, Stavros Dimas, had wanted to introduce far more ambitious mandatory carbon-dioxide limits for cars.

But officials, who asked not to be named because they were not authorized to speak publicly, said he was blocked by a group of commissioners led by industry commissioner Gunter Verheugen, who wanted the burden to be shared by car makers and equipment makers.

Even Chancellor Angela Merkel of Germany, holder of the EU's rotating presidency, waded into the debate, threatening last week to block the commission proposal and calling for different limits to be set for different types of cars.

The battle over the car industry's responsibility to lower emissions comes just weeks after the EU unveiled a "low- carbon" strategy to fight global warming by reducing its reliance on imported oil and natural gas and by promoting the use of renewable energy sources.

In an effort to promote the commission's climate-friendly agenda, EU officials said Dimas indicated recently that he was considering trading his large luxury model Mercedes for a more fuel- efficient Toyota Lexus.

Such a move would breach convention in Brussels, where commissioners typically use European cars, usually German-made BMWs or Audis.

Shell hires Bush's environmental adviser

Shell hires Bush's environmental adviser

Terry Macalister
Monday February 5, 2007

The Guardian

Gale Norton, a former interior secretary for the Bush administration and a supporter of opening up the Arctic National Wildlife Refuge and other sensitive environmental landscapes for oil production, has taken up a senior legal post at Shell.

The 52-year-old's arrival is the latest in a series of controversial US appointments at the company which has been trying to increase output of carbon-intensive shale and oil sands schemes from places such as Colorado while also arguing it wants a key role in the fight against climate change.

Ms Norton has joined as a general counsel for Shell's exploration and production business in the US and will be based primarily in Colorado, where she was once state attorney general.

Shell confirmed she would concentrate on "unconventional" resources, meaning shale. "Ms Norton will provide and coordinate legal services for Shell," said a company spokeswoman.

Critics in the local environment movement believe it was Ms Norton's advice that led President Bush to open up the sensitive Bristol Bay area of Alaska to oil and gas development.

Shell, which reported record profits last week, has also recently appointed another perceived enemy of the green lobby, Cam Toohey, to work in Alaska.

Mr Toohey used to work for Ms Norton in the interior department having moved from a post as head of Arctic Power, a group which lobbied for oil development in the Arctic National Wildlife Refuge.

When he was taken on by Ms Norton, one Democrat critic described the move as an "ethical oil spill".

In addition, Shell has taken on Elizabeth Stolpe, a Bush environment adviser and former oil industry lobbyist.

She previously worked for a former Republican senator and governor of Alaska, Frank Murkowski. In an address to the Alaska state legislature in January 2003, Mr Murkowski said he was doing all he could to "open the coastal plain of ANWR".

Also involved in Shell's government affairs team is Brian Malnak, who worked at the interior department and was a chief of staff for Mr Murkowski at the influential senate energy committee, where he too tried to push forward drilling in the Alaskan wildlife sanctuary.

Another former government official involved in developing Shell's policy work in the US is Kevin O'Donovan, a former domestic policy adviser to vice president Dick Cheney who was responsible for his climate change and energy policy.

In an article written for the FT last week, Shell chief executive Jeroen van der Veer outlined the different steps his company was taking to help tackle CO2 emissions and therefore global warming.

"Companies such as Shell clearly have an important role to play. Our own energy efficiency improvements are already delivering CO2 savings of about 1m tonnes a year. We are already one of the world's largest distributors of biofuels," he argued.

Friends of the Earth said it was time Shell stopped saying one thing and doing another. "The PR department is always talking about Shell's work on the environment while the rest of the business is working hard on producing as much oil as it can," said its corporate campaigner, Hannah Griffiths.

The former banker advertising his green conversion -- Sir Monty asks in the most recent ad: "Why stop doing flying because the world might be in perilous danger and tens of millions might die?"

The former banker advertising his green conversion
By Jonathan Brown
Published: 06 February 2007

Peter Myers remembers his environmental epiphany very clearly. As a corporate financier working in the frenzied atmosphere of the City in the late 1990s he was responsible for a £100m portfolio of loans on behalf of his employer, a company in the NatWest group.

He had been asked to analyse the impact of new green regulations on some of the bank's biggest clients, customers who included the oil giant BP. "I realised then that what the bank was concerned about was growing ever faster and that this was going to destroy the planet," he said. Deciding it was time to act, he put the question to the chief executive at the time, Derek Wanless, during the filming of a "meet-the-staff" promotional video to mark the bank's annual celebration of its outsize profits.

"I asked him where the future was in a system that worshipped the goal of infinite profits based on the finite resources of the planet," he said. Mr Myers' future as a career capitalist was to take a dramatic turn for the worse.

Mr Wanless, who told his upstart employee that sustainable banking was all about striking the right balance, was soon to depart the firm after a bitter boardroom battle. His £3m pay-off prompted a fat-cat row and in 2002 Mr Wanless wrote a major report for the Government on the future of the National Health Service. Mr Myers took a different path. He decided to put his environmental principles into practice and answered a Greenpeace job advertisement and ended up working there for five years.

Today, having left the campaign group, he is the mastermind behind and responsible for the acclaimed advertising campaign against the huge growth in aviation, the fastest rising source of greenhouse gases.

Along with Joshua Blackburn, of the advertising agency Provokateur, they have invented the fictitious industry lobby group Spurt, headed by Sir Montgomery Cecil who campaigns under the slogan, "Sod them, let's fly". Sir Monty made his third appearance in the national press this week when Enoughsenough, backed by Greenpeace and Airportwatch, took out double-page ads in the national press once more lampooning what they say is the aviation industry's - and the Government's - cynical attitude to the threat of global warming.

Under the headline: "Flying: Your Patriotic Duty", Sir Monty rages: "I am bored of the 'tofu mafia' and their climate change hysterics... I didn't fight in two world wars to see communist liberals tell me, or my shareholders, what to do."

The ad features a link to a Spurt website where an actor playing Sir Monty can be seen tying an environmentalist to a tree and taping his mouth shut. The ads, which have prompted complaints by the industry, have further fuelled the debate over the huge increase in aviation and raised the profile of the campaign out of all proportion to the £100,000 spent on the campaign in the past year.

Mr Myers is reluctant to step into the spotlight - he says he doesn't want to be an "eco-ego". However, he is forthcoming about the need to get the message across.

"It has now been established beyond doubt that climate change is caused by humans - no other issue has been the subject of so much scientific study and consensus.

"One of the most significant things that you can do is cut down on your flying," said Mr Myers, who limits himself to a single flight a year which he triple carbon offsets to combat the pernicious effect of the greenhouse gases emitted by planes. He hopes that Enoughsenough will continue to punch above its weight.

Recent ads have attracted in excess of 50,000 hits to the website and enough donations to keep the campaign rolling, he says. There are no firm plans for the future, only to keep waging an "opportunistic" campaign against the aviation industry and the Government and attitudes to flying like those held by Sir Monty, who asks in the most recent ad: "Why stop doing something you enjoy because the world might be in perilous danger and tens of millions might die?"

Warning on quick fix for climate change

Warning on quick fix for climate change

By Roland Gribben

Last Updated: 12:20am GMT 05/02/2007

A Rush to implement recommendations from the Stern report on climate change runs the risk of "knee jerk" regulation damaging to business and the economy, the Government will be warned today.

The Better Regulation Commission, in a review of the regulatory aspects of the report, expresses concern about the impact of "hasty and inappropriate action".

Rick Haythornwaite, its chairman says: "We must not let climate change become a victim of quick-fix legislation. Failing to live up to expectations and consequently losing public support is a real possibility and one that must be avoided at all costs."

The commission sets seven stiff tests for policymakers drawing up proposals, including ensuring climate policy is consistent with a healthy economy and does not involve a piecemeal approach.

"Knee-jerk regulatory responses to the climate change challenge and announcements of measures in a piecemeal fashion should be avoided.

''New initiatives should be evidence-based, add value

to the existing climate programme and make clear which market imperfections they are seeking to resolve," the commission adds.

Concern about changes in carbon policy is reflected in a plea to the Government to "carefully assess the level of intervention and avoid 'double banking' of carbon whereby emissions are counted twice under different emissions".

The commission wants the Government to publish a price for carbon by September in the absence of a global market and tells ministers to keep administrative costs to a minimum and resist the temptation to use climate change as a "justification for measures which have other motivations".

EU Environmental regulation has been tightening in many regions of Europe as concerns grow over pollution and climate change.

EU regulatory regime put to test at borders

By Fiona Harvey in London and Andrew Bounds in Brussels

Published: February 7 2007 02:00 | Last updated: February 7 2007 02:00

Environmental regulation has been tightening in many regions of Europe as concerns grow over pollution and climate change.

Tighter UK regulations mean companies face much heavier fines than in the past. Company directors can be held personally liable for pollution and face jail terms or anti-social behaviour orders if they breach environmental regulations. Individuals can be fined up to £5,000 for failing to dispose of waste correctly.

Changes were brought in partly because companies were ignoring the previous system of fines. There were cases of companies taking payment for disposing of waste, then dumping it in fields because the fines were so small they could pay them and still make profits.

Now the UK has a "pretty tough regime", said Brian Hall, head of the environmental group at Clifford Chance, the law firm.

But he said environmental legislation and the enforcement of it differed widely across Europe. "You can shoot sparrows in Spain and not in the UK. There will be profound changes and cultural problems associated with bringing these situations [together]," he said.

As some environmental crimes can cross borders, the European Union has been trying since 1999 to find ways to plug loopholes between the different national legal systems.

However, national sovereignty in this area is a sensitive topic. While the European Commission tabled a proposal in 2001, it was ignored when justice ministers adopted their own plan in 2003. The Commission went to court to prove it should have been involved and won a victory at the European Court of Justice last year.

Whether governments agree, by majority voting, to accept its new directive depends on how close it is to their original proposal. The proposal prescribes minimum penalties for the most serious crimes, those in which those liable were negligent and caused death or acted as part of a gang. They extend to up to 10 years in prison.

Fines for companies or other institutions should be between €750,000 and €1.5m (£990,000). Only those governments that wish to recognise the criminal liability of individuals acting for a company need do so, however.

Other penalties include winding companies up, excluding them from aid and forcing them to clean up.

"Criminal sanctions are not in force in all member states for all serious environmental offences even though only criminal penalties will have a sufficiently dissuasive effect," the directive says.

The new proposals would lead to fewer companies breaching environmental laws, Mr Hall predicted, because "it's harder to flout EU law [than national law] because you know you will be facing sanctions from Brussels".

Elsewhere in the world, there is a mixed picture on enforcement. The dumping of waste, ranging from toxic to radioactive material, in developing nations is an increasing problem. China has been cracking down on some polluters recently, with mixed results.

India claims to have good environmental laws but international controversies still occur.

Threat of personal loss focuses minds

Proposals for stiffer penalties against companies committing environmental crimes, such as polluting rivers and illegal dumping, will have a "profound" effect on companies' behaviour, experts said yesterday, report Fiona Harvey in London and Andrew Bounds in Brussels.

Brian Hall, the head of the environmental group at Clifford Chance, the law firm, said tougher sanctions that allowed company directors to be prosecuted personally for environmental breaches were prompting businesses to take more care to comply with green regulations. "We have clients who are going through the process [of prosecution]. My goodness, that is concentrating the minds of company directors when they see they could be taken away in chains."

Companies operating in European Union member states with relatively lower environmental standards would be most affected, said Sue Davidson, a senior associate in the environmental group at

SJ Berwin, the law firm. "They will have to take a lot more care about how they behave in these states. My understanding of the proposals is that they will raise standards in member states that currently do not have strict regulatory arrangements or enforcement."

Mr Hall said the creation of consistent environmental regulations throughout Europe would encourage inward investment. "It's much easier if you can say, these are the laws [applying to all member states]."

John Sauven, the acting executive director of the campaigning group Greenpeace, said: "If this is going to ratchet up the standards and make them applicable across Europe, then that would be very beneficial."

He said such a move could discourage companies from moving from member states with high environmental standards to those with lower standards.

Global warming debate heats up in Washington: "There's a major shift in the science and there's a major shift in the way that this issue is conceived"

Global warming debate heats up in Washington

AFP, 10 February 2007 - Global politicians and business leaders aim to turn the unfertile territory of Washington into a hotbed of action against climate change this week.

German Chancellor Angela Merkel will be among those addressing a two-day forum on Capitol Hill that comes at a time when scientific warnings about the catastrophic potential of global warming are reaching a fever pitch.

"The science has become more clear, more certain and more urgent," says British Environment Secretary David Miliband, who will attend the forum at the US Senate along with World Bank president Paul Wolfowitz.

"There's a major shift in the science and there's a major shift in the way that this issue is conceived," he told reporters on a conference call.

The Republican administration of US President George W. Bush insists that it takes the issue of man-made climate change seriously, but remains opposed to endorsing the Kyoto treaty against global warming.

Heavyweight US senators including 2008 presidential contenders Joe Biden (Democrat) and John McCain (Republican) will speak at the forum to drive home the message that not everyone in the United States opposes action.

With the Democrats back in control of Congress, initiatives such as enforced caps on greenhouse gas emissions from industry, and European-style carbon markets, are getting a new hearing.

California and northeast US states are driving forward their own anti-warming initiatives, while evangelical Christians argue that man has a God-given duty to safeguard the planet for future generations.

"So what we're starting to see is a coalition for action in the US," said Robert Watson, the World Bank's chief scientist who from 1997 to 2002 headed the Intergovernmental Panel on Climate Change (IPCC).

The IPCC, the UN's top scientific authority on global warming, delivered its starkest warning yet at a Paris conference this month.

The UN body's first report for six years said fossil fuel pollution would raise temperatures this century, worsen floods, droughts and hurricanes, melt polar ice and damage the climate system for a thousand years to come.

Last Wednesday, the White House issued a rare open letter defending Bush's record on climate change, rejecting criticisms that he has only recently awakened to the problem.

But the letter coincided with hearings in Congress in which experts and politicians accused the Bush administration of repressing public debate over global warming in what one witness branded "a conspiracy of silence."

This week's Senate gathering will hear company leaders such as Virgin Group boss Richard Branson, BP America president Bob Malone and Tata Steel managing-director B. Muthuraman discuss corporate action on the issue.

The forum will also debate how best to bring fast-growing economies such as India and China into the Kyoto fold, with lawmakers from both those countries due to attend.

Beijing has repeatedly insisted that industrialized countries must take the lead on solving a problem they created. That argument has merit, Watson said.

"But without working with China and India, we cannot ever stabilize the world's climate," he said.

During their two-day meeting, the participants aim to forge a consensus statement to deliver to Merkel, this year's chairman of the Group of Eight nations who will give the opening address by video-link on Wednesday.

The forum aims to hammer home that economic security goes hand in hand with fighting climate change, and press the message that Bush is wrong to fear economic disaster from aggressive caps on industrial emissions.

"There is clear evidence that the old argument that you have to choose between the environment and the economy just doesn't stack up any more," Miliband said.

Significant cut in gasoline use is decades away: automakers

Significant cut in gasoline use is decades away: automakers

AFP, 10 February 2007 - It will be decades before the world will see a significant cut in global automotive gasoline consumption, automakers and analysts said.

While there have been major improvements in fuel economy and reduced emissions through the development of technologies such as hybrids and clean diesel, consumers are not adopting them quickly enough to make a serious dent.

Gasoline electric hybrids -- which can improve fuel economy by anywhere from 20 percent to 60 percent -- currently make up less than one percent of global sales.

Hybrid demand is primarily in the US market and is not expected to expand significantly as consumers shy away from the high price tag coupled with fuel economy improvements that only apply to stop and go city driving, said Eric Fedewa, an analyst at CSM Worldwide.

Biofuels such as ethanol -- which were touted by President George W. Bush in his state of the union speech last month -- actually reduce fuel efficiency and there are questions as to when they will become widely available.

Zero-emission hydrogen and electric-powered vehicle are still five to ten years away from becoming marketable and a hydrogen fuel delivery system still has to be developed.

Aerodynamic and engine efficiency improvements to traditional vehicles can barely keep pace with an expected two-percent annual increase in driving as a result of economic expansion.

But the biggest delay will come from the length of time it will take consumers to adopt new technologies and for automakers to shift the production systems away from traditional vehicles, said Larry Burns, GM's vice president for research and development.

"There are 850 million internal combustion vehicles in the world today. No matter what you come up with you're going to have to let that global car park play out and that's going to consume petroleum for some time going forward," Burns told AFP.

About 66 to 70 million new vehicles are sold every year and it will take 12 to 15 years to replace the global fleet, Burns said.

"It's going to take time to totally fix it and we don't have a 70 million unit a year solution sitting here that we can implement immediately nor will we take it in a step that big because that's not how technology is developed."

One major source of improvement in petroleum consumption has come from a preference shift among consumers towards smaller more fuel-efficient vehicles amid rising and unpredictable gasoline prices.

"That pressure on economy is going to continue going forward," Mike Manley, vice president for sales and market at the Chrysler Group told AFP.

"Many consumers now are looking at the total cost of ownership which obviously includes alternative fuels."

Manley said Chrysler expects demand for gasoline-electric hybrids and clean diesel vehicles -- which also improve fuel economy by 30 to 35 percent -- to grow to five to fifteen percent of the US market over the next five years.

But he warned that a dramatic shift away from trucks and large sports utility vehicles is unlikely, especially given that sales in those segments have already started to bounce back.

"A large percentage of the consumer market does care about (the environment) but for a lot of segments, their purchase decisions are not as discretionary as we think," he said.

"You get down to a level where people need a truck for the work they do and they need the utility," he said, adding that consumer preferences for riding high in an SUV also play a large part in purchasing decisions.

Ford has also shifted its production plans with the expectation that consumers will continue to focus on fuel economy and alternative vehicles, said Cisco Codina, vice president for North American sales and marketing.

The automaker is fighting perceptions that it has not focused on alternative fuels -- despite the fact that it was the first domestic automaker to bring a hybrid vehicle to the US market -- and plans to offer E-85 flexible fuel engines in half its nameplates, Codina told reporters recently.

"We are committed to being more fuel efficient and bringing more fuel efficient vehicles to the marketplace," he said.

"I think the consumer is really going to look at whether they want a V6 a 4-cylinder or a hybrid and that's just going to be another powertrain in the market place."

The question is how many consumers will choose the hybrid -- and how much more damage will be done to the environment in the meantime.

China prepares to launch climate adaptation plans

China prepares to launch climate adaptation plans

SciDev.Net, 9 February 2007 - China will soon release its first comprehensive national programme to mitigate and adapt to climate change. This follows the release of two reports with dire predictions for China's food production and coastal cities due to global warming.

According to Lu Xuedu, deputy director of the office of global environment affairs, the four-year programme will outline goals for reducing emissions of greenhouse gases and developing green technologies.

It will solicit international cooperation for technology transfer projects, include policy guidelines to support studies or corporate plans to combat climate change, and will seek to raise public awareness of the effects of climate change.

Lu said the programme would be a "guideline", and therefore mentions few numerical targets in describing future goals.

He told SciDev.Net it was "hard and unrealistic" to set specific goals in some areas and that, despite increased attention from the government to climate change, many government officials are still not aware of its threats.

The plans, which took two years to prepare, will go to the State Council for final approval later this month with a view to launching the programme in two months.

Zou Ji, a climate policy expert involved in drafting the plans, said issues related to improving energy efficiency, developing recycling energy and coal-gas exploration play a key role.

Zou, of the Renmin University of China, said the programme would provide a strong basis for coordination between departments at different government levels with the same goal of battling climate change.

Earlier this week (6 February), six central departments and academic organisations — including the Ministry of Science and Technology, China Meteorological Administration and the Chinese Academy of Sciences — released a report on climate change in China.

It predicts that China will see continued temperature rises up to 2100, which could reduce grain production by up to 37 per cent in the second half of this century.

The report also warns of rapidly melting glaciers. Fang Aimin, a glacier expert at the Institute of Geology and Geophysics told SciDev.Net that glacier loss on the Qinghai-Tibet Plateau would severely reduce flow in some major rivers, including the Yangtze and Yellow rivers.

A separate report released by the State Oceanic Administration last month highlighted how coastal cities have suffered terrible erosion due to recent sea-level rise.

The report predicts a rapid rise in sea level of 9–31 millimetres over the next 3–10 years, largely due to global warming. However, the authors also blame groundwater extraction in some cities.

Lu Xuedu said the speed of sea-level rise was "astonishing". He told SciDev.Net that if the situation continued, the government would "either have to build coastal dams or relocate local people, both of which will definitely be costly".

He added that strengthening research capacity would enable China to come up with radical solutions to the threat.

Recapturing Carbon Won't Come Cheap: Putting climate-altering greenhouse gases back in the ground where they came from is an essential part of any global plan to avoid catastrophic climate change

Recapturing Carbon Won't Come Cheap

IPS, 9 February 2007 - Putting climate-altering greenhouse gases back in the ground where they came from is an essential part of any global plan to avoid catastrophic climate change, scientists say.

Capturing carbon dioxide emissions from coal-fired power plants and pumping the global warming gas deep underground or under the sea "may well be the most critical challenge we face, at least for the next 100 years," writes Daniel Schrag, director of Harvard University's Centre for the Environment, in the journal Science Friday.

Coal is, and will continue to be, a major source of the world's energy and emissions of carbon dioxide (CO2), writes Schrag in the report "Preparing to Capture Carbon".

"By the end of the century, coal could account for more than 80 percent" of all CO2 emissions -- double the present level -- he writes.

Coal produces nearly twice as many emissions as natural gas, but coal is cheaper, and vast quantities are available and in the right places. The enormous and growing energy needs of the United States, India and China are matched by their even larger reserves of coal. It seems inevitable that thousands of new coal-fired power plants will be built.

Schrag is just one of a host of scientists, politicians, business leaders and even environmental groups who want to lower the amounts of CO2 going into the atmosphere by capturing and storing it.

"We cannot stabilise the global climate without India and China reducing their future emissions," says Robert Watson, chief scientist and director of Sustainable Development at the World Bank.

The industrialised countries will have to work with India and China on carbon capture and storage technologies, Watson said at a press conference Thursday.

Mary Griffiths, senior policy analyst at the Pembina Institute, an environmental group in Calgary, Alberta, adds, however, that "Carbon capture and storage is not our first choice for reducing emissions."

Carbon capture and storage (CCS) doesn't even come in second or third. Caps on CO2 emissions, energy efficiency, renewable energy and conservation are better ways to tackle the problem, she said.

"Avoiding dangerous climate change is a major challenge and therefore we need to use all the tools that are available," Griffiths told IPS.

And one of those tools is the much-touted -- and much-maligned -- "clean" coal technology.

Capturing CO2 from coal plants requires special processing of the coal with chemicals or through a gasification process. Both processes require extra energy and boost costs by as much as 50 percent, according to Schrag. Then the CO2 has to be pressurised, transported and pumped into a deep underground location.

Studies show there is potentially enough underground storage capacity, but there is limited data on whether such sites would leak and by how much. Schrag estimates that millions and eventually as much as 10 billion tonnes of CO2 per year will need to stay where they are put for "the next few millennia".

One leak-proof storage option is injecting CO2 below the sea floor but that would be very expensive.

There are no commercial-scale CCS examples but there are a few test sites demonstrating that it is technically feasible. One such site is in Norway, where about one million tonnes of CO2 is pumped into saline aquifers a kilometre below the bed of the North Sea.

The world's largest existing project has pumped five million tonnes of CO2 over four years into an old oil field in Weyburn, Saskatchewan in Canada to help pump put out more oil. The CO2 comes from a North Dakota coal gasification plant 325 kilometres away. This is a 40-million-dollar research effort funded by Canada, Europe, Japan and the United States.

There are also safety issues. CO2 is heavier than air and a large gas cloud could be lethal, as happened in a natural catastrophe at Lake Nyos in Cameroon in 1986 that killed 1,700 people.

Aside from the many environmental impacts of the coal industry as a whole, the most controversial aspect of CCS for coal power is who is going to pay for the development and additional ongoing costs.

"Governments shouldn't be making major investments in CCS, companies should be doing it," Griffiths argued.

Governments should put CO2 emissions caps in place, and that would create a market for investing in CCS, she said.

At the moment there are no such emissions caps in North America. In Europe, caps are in place, but the price of CO2 is well below the per tonne costs of CCS. That, plus uncertainty about future caps and liability regarding leaks, means companies are unlikely to make the long-term investments that are needed, notes Schrag.

FutureGen is the George W. Bush administration's much promoted effort to build the first commercial-scale near-emission-free coal power technology. Announced in 2003, the billion-dollar, public-private project has yet to find a site to build the plant.

SaskPower, a government power utility in Canada, could beat FutureGen as the world's first near-emission-free coal power plant. The 300-megawatt plant -- more than enough to supply a city of 200,000 -- could begin construction as early as this year.

However, none of these projects are guaranteed to work. Indeed energy experts still think CO2-free coal plants, if feasible at all, are well into the future.

Coal will not become carbon-free for another one or two decades, Wulf Bernotat, chief executive of the major German utility E.ON, told Reuters this week. E.ON is involved in several CCS projects around the world, but Bernotat said there are additional energy and financial requirements, as well as technical and legal problems to be overcome.

Europe's coal plants are investing in efficiency improvements first. But those five and 10 percent improvements won't be enough to avoid catastrophic climate change. The U.S. needs to encourage and sponsor 10 to 20 full-scale CCS efforts so that there will be a number of documented and verifiable CCS options available, writes Schrag.

"The United States and the world need carbon sequestration -- not right now, but soon and at an enormous scale," he said.

EPA Launches Green Building Design Challenge

EPA Launches Green Building Design Challenge, 6 February 2007 - The U.S. Environmental Protection Agency and partners are calling on the nation's architects, builders and others to participate in a competition seeking designs that facilitate reuse and minimize waste.

The "Lifecycle Building Challenge" -- co-sponsored by the Building Materials Reuse Association, the American Institute of Architects and West Coast Green -- invites professionals and students nationwide to submit designs and ideas by May 15 that support cost-effective disassembly and anticipate the future use of building materials. Students, architects, reuse experts, engineers, builders, product designers, educators and environmental advocates are encouraged to apply for the web-based competition.

The challenge, open to built and un-built work, focuses on three main categories: buildings, such as an entire building from foundation to roof; components, as in a single building assembly, system, or connector; and service, a tool, method, or other idea.

Outstanding entries in each category will be recognized and publicized, and top student designs will receive cash awards. All winners will be honored at the West Coast Green Conference in San Francisco in September. For more information or to enter the competition, visit .

Lifecycle building maximizes material recovery to reverse the trend of disposing of large quantities of construction and demolition debris in landfills. Reusing building components also reduces the energy and greenhouse gases emissions associated with producing and transporting materials.

In the United States, buildings consume 60 percent of total materials flow (excluding food and fuel) and account for 33 percent of the solid waste stream. Building renovation and demolition accounts for 91 percent of the construction and demolition debris generated each year, while new construction accounts for only 9 percent. Between 2000 to 2030, 27 percent of existing buildings will be replaced and 50 percent of the total building stock will be constructed.

These issues can be addressed by planning for a building or building component's eventual deconstruction or adaptation. By creating building components that can be easily recovered and reused, materials are kept at their highest value, resulting in reduced consumption of energy and resources.

"Lifecycle building innovations are about improving the efficiency of our resource utilization and heading towards a more sustainable environment." said Wayne Nastri, administrator of the U.S. EPA's Pacific Southwest Office in San Francisco. "This challenge raises the standard for both green building and environmental protection."

The challenge grew out of a project by the Chartwell School in Seaside, Calif., the EPA helped fund that demonstrates lifecycle building concepts. The school tested new systems including nail-free paneling, centralized utility raceways, structural insulated panel roofing, and cold joint sidewalks that can be easily moved for reuse.

The challenge officially launched Jan. 22 and will be open for four months. At the end of the competition, expert judges will determine the best entries in each category.

Dimas: EU businesses stand to profit from climate measures

Dimas: EU businesses stand to profit from climate measures, 9 February 2007 - European businesses will be in a better position than Chinese and US competitors to reap the full benefits of the low-carbon economy if the EU undertakes ambitious measures, Environment Commissioner Stavros Dimas told EurActiv in an interview.

In a series of proposals submitted on 10 January 2007, the Commission put forward plans for a 'unilateral' 20% reduction in greenhouse-gas emissions by 2020 in a bid to reduce the EU's dependency on imported fuels and trigger a new 'industrial revolution'.

Dimas brushed aside criticisms about Europe 'going it alone' on climate change and holding back its economic performance in the face of competition from the US or China, which are currently free from any carbon constraint.

"We know in the EU that the businesses which have reacted to the issue before regulators are at a comparative advantage," he said. "They will get a profit. And they know this."

"The public is growing aware of the environmental problems and consumers will behave in a way that rewards sustainable products and sustainable businesses," Dimas said. And if the US and China refuse to join global-warming mitigation efforts, he added, "the EU will then be better prepared for the low-carbon future".

"This will provide European business with a competitive advantage."

Dimas admits that the EU's Emissions Trading Scheme has thus far not delivered in fostering investments in clean energy originally sought by the Commission.

"First of all, higher prices of oil and gas play a great role and are important for investment decisions in the energy sector," Dimas recalls.

But he is also willing to take some of the responsibility. "As you know, during the first trading period [2005-07], we had an over-allocation of CO2 emission allowances and this did not provide the incentive to invest, especially for long-term investments."

And, following the bitter experience of Germany and other member states, he showed he was determined not to let the same thing happen in the second trading period (2008-12) to keep up the scheme's credibility.

On 9 February, Germany dropped plans to challenge a Commission decision, taken in November last year, to tighten its National Allocation Plan for CO2 emissions quotas. Environment Minister Sigmar Gabriel said he would accept the decision, which saw the Commission slash its quotas to 453 million tonnes of CO2 for the period 2008-12, instead of the 482 it had originally asked for.

"Most of the submitted plans went above what we expected, and so we had to make the relevant adjustments," Dimas explained. "I hope that during the second period we will have the scarcity needed in order for companies to make investments" in low-carbon technologies.

Responding to critics who argue that the EU-ETS leaves too short a timeframe for investments in cleaner energy, Dimas reiterates that the scheme was designed to coincide with the second phase of the Kyoto protocol, which expires in 2012.

And he says longer timeframes, above the current five-year horizon, is one of the issues currently being debated for the third trading period, after 2012: "We shall see".

Progress, however, is apparently being made on other issues. "It seems we are heading towards an agreement to have more allowances auctioned after 2012," he said.

"Currently, there is a ceiling for voluntary auction of up to 10% of total allowances. Now, we are thinking the other way around - requiring a minimum level of auctioning."


EU official documents

Major barriers preventing use of energy-efficient products -- report

Major barriers preventing use of energy-efficient products -- report

Greenwire, 9 February 2007 - Significant market barriers are hindering the use of cost-effective energy efficiency technologies in the United States and other countries, according to a new International Energy Agency-funded study.

The study conducted by the American Council for an Energy-Efficient Economy explored the effects of "market failures" in Australia, Japan, the Netherlands, Norway and the United States.

The study reviews several types of problems, including "principal-agent" barriers, in which one party makes decisions on energy use while another pays for it.

One example: Homebuilders seek to minimize construction costs, but buyers pay energy costs of occupying a less-efficient dwelling. "They [builders] frequently under-invest in energy efficient designs and construction methods that would be cost-effective," the report states. "This constitutes a market failure."

The study delves into several other barriers, including "information cost barriers." These are cases in which decisions on energy end-use -- such as appliances or commercial equipment -- are made without sufficient information or expertise. Another is externality cost barriers -- the idea that energy costs do not reflect the true costs of environmental and health effects.

The effects of these barriers is dramatic, the report says. Principal-agent barriers in the United States affect 50 percent of overall residential end use. For some types of appliances, the number is quite high. The report finds that principal-agent barriers in the U.S. affect 77 percent of the energy used in residential water heating.

More broadly, the multi-nation study finds barriers are prevalent. Up to 90 percent of energy use in many major markets is affected by the principal-agent market barrier, the report says. To take one example, in Norway, information barriers affect 85 percent of the energy used in residential water heating.

The council said the study shows cost-effectiveness is not enough.

"While getting energy price signals right is an important part of energy policy, this study shows that prices alone will not generate the level of energy investment needed to meet this century's energy challenges," said the council's acting executive director, Bill Prindle, in a prepared statement.

"The study strongly supports the need for targeted policies to overcome these kinds of market barriers," Prindle said. The report said price signals are not enough to meet challenges regarding energy consumption, air pollution and greenhouse gas emissions.

The findings support increased use of labeling, efficiency standards for appliances and other equipment, building energy codes, incentive programs and more consumer information and assistance, the council said. It also calls for further research to identify the largest market barrier impacts and other inquiries.

The Senate Energy and Natural Resources Committee holds a hearing on energy efficiency Monday.

UNEP meeting warns of impact of biofuel production

UNEP meeting warns of impact of biofuel production

SciDev.Net, 6 February 2007 - Environmentalists meeting in Nairobi say the trade in biofuels should be governed by environmental standards, and warn that planting crops solely for biofuels may cause catastrophic damage to the planet.

Speaking at the UN Environment Programme (UNEP) Governing Council meeting held in Nairobi yesterday (5 February), Danish environment minister Connie Hedegaard said that environmental standards were vital if the international trade in biofuels was to be allowed to begin on a massive scale.

"We should be careful on biofuels…not everything that is biofuel is good for the environment. We should focus on second-hand generation of biofuels, not first generation," she explained.

Second-hand generation biofuels are produced from the by-products of food crops, such as sugarcane, rather than crops grown purely for biofuel production.

Hedegaard fears that large-scale production of biofuels in Asia — such as palm oil plantations in Papua New Guinea — could cause serious environmental challenges for the entire planet, starting with the clearance of forested land for plantations.

An increased focus on biofuel production across Asia and Latin America has spurred a "tropical agricultural revolution", with intense competition for land to grow food and fuel crops. The resultant forest clearance has led to a loss of biodiversity, as well as health problems in Southeast Asia due to smoke from forest fires.

It also contributes to global warming, as forest clearance releases carbon dioxide — the main gas responsible for climate change — into the atmosphere. Forests are considered better carbon sinks than agricultural fields.

According to UNEP, 10 million hectares of the Cerrado — one of the biggest biodiversity hotspots in Brazil — has been converted to soy plantations in the past 15 years.

UNEP executive director Achim Steiner said several companies had consulted the agency on how best to develop environmentally-sound standards for using biofuels.

"It is an economic choice. We have been holding meetings with biotech companies to look into standards for biofuels," Steiner said during a news conference in Nairobi.

FTSE4Good sets out climate criteria: Companies will have to meet a new set of climate change criteria or face expulsion from the FTSE4Good socially responsible investment (SRI) index family.

FTSE4Good sets out climate criteria

Environmental Finance, 8 February 2007 - Companies will have to meet a new set of climate change criteria or face expulsion from the FTSE4Good socially responsible investment (SRI) index family.

Mark Makepeace, chief executive of the FTSE Group, said: "Climate change is an important issue for companies and investors alike, and investors understand these criteria will make an important contribution to helping companies manage their risks."

Speaking at the launch of the criteria in London on Tuesday, UK Environment Secretary David Miliband added: "Companies will not be profitable – or at least they will be less profitable – without credibility on environmental issues."

Stuart Rose, chief executive of UK retail giant Marks & Spencer, which recently pledged to go carbon neutral, said the launch was "clear evidence of the interest that shareholders are taking in sustainability".

The FTSE4Good index family, launched in 2001, includes four tradable and five benchmark indexes, covering the UK, Europe, Japan, US and global markets.

FTSE4Good has identified 255 constituent companies out of 898 with a high or medium operational impact on climate change, who will have to meet the criteria within two years or lose their place in the index. Of these, less than 50 already meet the new standard. But all firms admitted to the index in the future will have to meet the criteria immediately.

High-impact companies, in sectors such as mining, steel, building materials, electricity, oil and gas, air travel and coal, will be expected to have a climate change policy, demonstrate board level responsibility for climate change issues, set long- or short-term goals to reduce greenhouse gas (GHG) emissions and disclose their GHG emissions.

Medium-impact companies will have to meet the same conditions on climate change policy and disclosure, but will not be expected to set goals to reduce emissions or carbon intensity.

Companies in the aerospace, oil and gas, automobile and coal sectors will have to meet extra requirements, because their products have a particularly high impact on climate change. For example, car firms will have to disclose and improve the fuel efficiency of their fleets.

FTSE4Good has also flagged a number of medium-impact sectors, which it may reclassify as high impact at a later date. Speciality chemicals, paper, construction, brewers, soft drinks and food producers all fall into this category.

Other sectors, such as computer hardware and consumer electronics, house builders and commercial developers may be asked to meet the criteria in future. FTSE4Good also said it expects to tighten up its criteria over time, but has not yet set any timetable.

Brazil, U.S. partnership to promote biofuels in Latin America, officials say -- Brazil and the United States will unveil a new partnership in the coming months to expand the use of ethanol and other biofuels in Latin America

Brazil, U.S. partnership to promote biofuels in Latin America, officials say

Greenwire, 5 February 2007 - Brazil and the United States will unveil a new partnership in the coming months to expand the use of ethanol and other biofuels in Latin America in an effort to increase energy security and create rural jobs for poorer nations, officials familiar with the deal said this week.

The partnership will study the feasibility of introducing ethanol in countries and identify areas where the private sector could invest more. It will largely be funded by the United States, but Brazil is expected to provide some support. The Inter-American Development Bank and the Organization of American States are also expected to participate.

U.S. Undersecretary of State for Political Affairs Nicholas Burns will finalize the deal next week while visiting Argentina and Brazil, and Brazilian President Luiz Inacio Lula da Silva may visit the United States later this year for a formal signing event.

The idea for the partnership was proposed at a Senate Foreign Relations Committee hearing last year by Sao Paulo Sugarcane Agroindustry Union head and former Brazilian agriculture and finance minister Eduardo Pereira de Carvalho. Since then, the committee's ranking member, Sen. Richard Lugar (R-Ind.), began pushing the Bush administration to pursue such a deal.

The partnership is in the interests of Brazil and the United States because Brazil would like to send more ethanol to the United States and wants other regional nations to use the fuel more too, thus turning it into a tradable commodity like oil. The United States would benefit from the repeal of Brazilian domestic taxes on ethanol that discourage its entry to the United States in the current marketplace, especially since increased use of ethanol recently became a long-term goal for the Bush administration.

Also, an influx of ethanol could help other countries. Mexico could save $2 billion per year on the country's fuel bill and create 400,000 farm jobs by mandating a 10 percent ethanol mix in gasoline.

"In our view, there is not going to be a global market until we see ethanol being produced and consumed in many countries," Pereira de Carvalho said. "We need more players."

"The United States and Brazil are the world's two largest biofuels producers so cooperation is natural," State Department spokesman Eric Watnik said. "Our goal is advance to global energy security by helping countries diversify their supply."

"This alliance will probably serve for U.S. producers to learn more about the efficiency of the Brazilian process," Center for Strategic and International Studies energy specialist Luis Giusti said (Pablo Bachelet, Miami Herald , Feb. 5)

Saviour of the planet - or a space-hopping hypocrite? If scientists can devise a sustainable and cheap way of capturing and storing the CO2 being pumped into the atmosphere, it could amount to a huge breakthrough in tackling climate change

Saviour of the planet - or a space-hopping hypocrite?
By Steve Connor
Published: 09 February 2007

The latest "green" offering by Sir Richard Branson has much to commend it. If scientists can devise a sustainable and cheap way of capturing and storing the CO2 being pumped into the atmosphere, it could amount to a huge breakthrough in tackling climate change.

However, this initiative by Sir Richard has to be seen in the wider context of what else he is doing to encourage the profligate use of fossil fuel - such as generating a new market for space tourism where none yet exists. Almost everyone today uses airlines at some time to get from one place to another. But what is the use of a trip that takes you nowhere but 70 miles above ground - with the "space" bit of the ride lasting just a couple of minutes?

Virgin Galactica, the company set up by Sir Richard to offer trips in space, estimates that there are 3,000 people in the world who are rich enough and keen enough to spend £100,000 on a ticket. The first flights are scheduled for 2009, but Sir Richard says he wants to bring down the price so that all of us can go into space. Virgin Galactica's publicity extols the virtues of the "howl of rocket motors" and "eye-watering" acceleration. It even describes the 90-second view from the aircraft: "The incredibly narrow ribbon of atmosphere looks worryingly fragile. What you are looking at is the source of everything it means to be human." There is no mention, however, that for a 90-second thrill, space tourists will have produced a carbon footprint many times bigger than the equivalent 90 seconds spent on a transatlantic jet - not to mention other modes of transport.

Sir Richard says that he wants to make a difference. He says he wants to use his influence and wealth to leave a better world for our children and our children's children. The prize he is announcing today to capture and store man-made CO2 is a commendable gesture in that direction. But how does he square that with his desire to turn us all into an army of carbon-crazed space cadets?

Café society: The rise of consumers with a conscience

Café society: The rise of consumers with a conscience
For most Westerners, the notion of fair trade was born with bags of coffee from Nicaragua. Jerome Taylor sees how the ethical pound is transforming a nation
Published: 12 February 2007

Fourteen years ago a small group of buyers from a little-known British coffee company arrived in the dusty Nicaraguan market town of Esteli. The veterans of the solidarity campaigns that supported the left-wing Sandinista government in their fight against United States-backed Contra rebels during the Eighties were going to see old friends at a farmer's co-operative. While they were there they bought a single container of coffee.

Those beans, sold in the UK under Café Direct's Fairtrade label, were part of a new movement that aimed to revolutionise the way the world did business. It hoped to transform the lives of coffee farmers from a powerless pool of labour for the multinationals to viable small-holders and experts in their own trade.

Their simple idea has become a mainstay for ethical shoppers in countries such as Britain. But it is an idea under attack and free-trade bibles such as The Economist have recently dismissed the scheme as little more than inefficient Western aid in disguise.

This is an argument lost on Alaides Vilchez Zamora. High up in the Nuevo Segovia mountains, in the same coffee-growing region where Café Direct bought its first container, Alaides has been working 15 hours a day harvesting a crop that is the world's second-most traded commodity after oil.

Under the flat, waxy leaves of the shoulder-height bushes lie bright red coffee cherries that need to be picked at just the right time. He places the ripest ones into a wicker basket tied to his waist before returning to his village where they are dried and then sent to the plains below to be washed and processed.

"I started with just one hectare that my father gave me but over the years I've been able to buy a few more small plots of land," says the wiry 28-year-old with an infectious grin that reveals a number of shiny gold teeth. "Even during the coffee crisis we were able to keep going."

There are about 25 million coffee farmers around the world and all remember the second coffee crisis of seven years ago. Almost overnight, international prices crashed. Hundreds of thousands of farmers from the cloud forests of Peru to the steep slopes of Kilimanjaro were forced out of business. It was yet another grim reminder of just how vulnerable coffee farmers are to the volatile international market and its wildly fluctuating prices.

Nicaragua, the second poorest country in Central America after Haiti, was hit hard. Unable to pay their debts, many farmers were forced to sell up and head to the city to join the burgeoning slums that are appearing across much of Latin America. Many more headed to neighbouring countries looking for cheap labour. They joined the one million Nicaraguans already living in exile, one-fifth of the country's entire population. But Alaides and thousands of his fellow farmers came through the crisis relatively unscathed thanks to a remarkable marriage over the past two decades between conscientious Western consumers and commercially astute farmers in the developing world.

Over the past 16 years Nicaragua has been undergoing a silent revolution, led by one of the most impoverished sections of society, the peasant farmers, or campesinos. It is a revolution that fundamentally challenges the traditional free market and its neo-liberal economics, which favours paying farmers the lowest price possible, leaving them powerless to do anything but sell direct to the multinationals at prices they dictate. It is a revolution that has allowed a group of people to produce, market and sell their produce on their own terms and in so doing challenge the multinationals that still dominate the trade.

On the plains below the Segovias, at the back of a processing plant built by the farmers using the extra money gained through Fairtrade, two young Nicaraguans are playing what, at first glance, looks like a game. Fatima Lopez and Alex Medina are sitting round a table full of steaming cups trying to guess which farm the coffee they are tasting comes from. Sucking the hot liquid off silver soup spoons they swirl it around their mouths before spitting it into a bowl. They fall about laughing each time the other gets a tasting wrong and holler triumphantly when they guess correctly.

But coffee tasting is not a game. It is a deadly serious business, one that can make the difference between making a profit for the farmers and a catastrophic loss. Not long ago, all taste testing was done by professional middlemen, the farmers were not trained in the art of knowing what western shoppers consider to be a good cup of coffee. But Fatima and Alex are not university graduates or profit-taking middlemen, they are the son and daughter of farmers who have become experts through training programmes run by the co-ops.

"Now we know what we are actually producing," says Fatima, who left school at 15 to work on the farm. "We never even knew what our coffee tasted like. Now we can tell farmers when they produce an amazing coffee." The farmers have come a long way from the days when coffee in the UK was sold through the Nicaragua Solidarity Campaign, where the joke was that you might be doing a good deed in buying Nicaraguan coffee but the price for that deed was a terrible-tasting brew. Yet despite two coffee price crashes, regular droughts, two devastating hurricanes and 16 years of a government that ignored the country's stricken agricultural industry in favour of a small urban elite, the coffee industry is not only surviving, it is thriving.

Campesinos earning little more than $2 (£1) a day have, collectively, been able to build multi-million dollar co-ops that can directly compete with the multinationals. The quality of Nicaraguan coffee has risen dramatically and farmers are increasingly beating Costa Rica, traditionally the best-quality producer in the region, in international tasting competitions.

What makes the success of Nicaragua's farmers so remarkable is that it is the ethically minded consumer in Western countries who has ensured the survival of Nicaragua's co-op revolution. Nicaragua now accounts for 8 per cent of the global Fairtrade market and most of the successful co-operatives that survived the coffee crisis say they were only able to do so because they could sell their crop at a guaranteed minimum price. "Had Fairtrade not come along when it did, I don't think we would have survived," says Blanca Torrez, a former Sandinista who manages Cecocafen, one of the most successful co-operatives. "Before, all we were doing was selling our coffee locally at whatever price we could get, without any idea of the quality. We had no idea our coffee was any good." The arrival of Fairtrade in the early Nineties changed that.

"We started with nothing, just 35 farmers with no money and nowhere to meet," says Edmundo Hunoz, a farmer from the village of San Juan, when asked to recollect what it was like to return to coffee farming after years of civil war. "We desperately needed access to credit because coffee farmers only get paid once a year. That's when we realised we needed to form a co-operative."

The co-operative movement is a quintessentially Nicaraguan creation, heavily tied to the country's recent violent history. Born during the civil war as a way for farmers to continue growing crops and defend their land during the guerrilla war against the US-backed Contra rebels, it is perhaps not surprising that coffee farmers still look to co-ops to fight their current battle with the international markets and corporations.

Villages such as San Juan, where the black and red flags of the Nicaraguan revolution fly from every house, are Sandinista to a man. Much of the coffee producing regions were the front lines during Nicaragua's civil war, a war that claimed more than 60,000 lives in a country of little more than 5.5 million, and most farmers over 40 fought in the ranks of the Sandinista army.

By the end of the 1980s a truce had been signed between Daniel Ortega's Sandinistas and the Contra rebels who were determined to overthrow him. Nicaraguans slowly began to rebuild their country and the coffee farmers returned to their ravaged and land-mined farms. The one thing that helped them to return to making a living were relatively buoyant coffee prices. But in 1991 the international coffee markets were liberalised, triggering the first worldwide price crash. The next year Nicaragua's campesinos were hit by another disaster, Ortega's government fell to be replaced by a coalition of right-wing parties who promptly cut all access to credit for coffee farmers, reversed much of the rural social reforms that had won international praise for the Sandinistas and began handing back farms to the landowners.

"The previous government completely abandoned the agricultural classes," says Cecocafen's president, Pedro Haslam, a former Sandinista guerrilla who was elected to parliament in November with the new Ortega coalition that finally ended 16 years of right-wing rule. "Poverty, illiteracy and inequality all increased. We may have had 5 per cent growth year on year but nowhere in the countryside has seen any improvements."

Driving north from Managua, the capital, into the coffee growing regions it is not difficult to see the shocking lack of infrastructure that has blighted the country's rural workers. Within minutes of turning off the smooth Pan American highway that leads away from Managua's fancy restaurants and international airport the roads soon give way to a pot-holed ribbon where progress of a even a few kilometres can be measured in hours.

Blanca Torrez argues that one of the co-ops greatest successes is the way the movement was able provide social services for its members when the government abandoned them. "During the 1990s we had to do what the government was not doing," she says. "We hired teachers, built schools and roads and saved up for health care. Why? Because the government totally abandoned the rural areas. I think the revolution taught us a lot of things but most importantly it taught us to get on and do things and not wait for outside assistance. You can't achieve things individually, you have to work together."

In San Juan, the villagers say they were only able to send their children to school in the neighbouring villages because financial support from the co-operative and the money earned through Fairtrade meant they could bus their children to the neighbouring village where the school is located. "Look at the house you're in," says Edmundo Hunoz, as he sits on the wooden porch of his neighbour's house, eating a simple chicken stew with rice. "All 10 children here have been able to go to school and one has even gone to university. This would never have been possible without Fairtrade ensuring the success of our co-operative."

It is a success that is being replicated in many of Nicaragua's agricultural industries, including the sesame, nut, milk and cattle trades. Meanwhile, President Ortega has even suggested that the co-op model could be replicated nationally, something that will send the shivers down the spines of the old Cold War warriors in the Bush administration.

Nicaragua is now a powerful example of how Fairtrade has truly begun to challenge the free marketeers who have dominated countries in central and South America for decades and is a potent rebuttal to those neo-liberal economists who argue that Fairtrade is not working.

As the mid-afternoon sun begins its descent behind the crown of mountains that ring San Juan, Alaides starts preparing to take his latest patch of dried coffee beans down the hair-raising mountain road to the plains below. "We've been able to get through the bad years, we've survived," he says. "We are the lucky ones, we've been given the opportunity to think about and plan for the future, for our children's future."

Regulator raps banks which close disgruntled customers' accounts

Regulator raps banks which close disgruntled customers' accounts
By David Prosser, Personal Finance Editor
Published: 12 February 2007

Britain's biggest banks are behaving unfairly and unreasonably in closing the accounts of customers who have challenged potentially illegal bank charges, a City regulator has ruled.

The Financial Ombudsman Service (FOS), an independent arbitration service, this weekend ordered Alliance & Leicester to compensate a customer whose account it had closed. The bank has a policy of closing the accounts of customers who take legal action against it, but the FOS said customers had the right to complain without facing such punitive action.

The case follows a huge increase in the number of bank customers complaining about overdraft fees and charges for bounced cheques since an Office of Fair Trading ruling last year that similar penalties in the credit card industry were illegal.

Although the OFT has not yet ruled on test cases in the banking sector, it is widely expected to say later this year that any bank which charges more than £12 when a customer goes into unauthorised overdraft or bounces a cheque is breaking the law.

Before the ruling, thousands of customers have demanded their banks refund such charges, which can be as high as £40, and in many cases begun legal proceedings against them. However, several leading banks have fought back by agreeing to refund the charges but then closing the accounts of customers who have taken legal action.

While the FOS refuses to comment publicly on individual cases, it is understood that it has ordered A&L to compensate the customer who complained about his account being closed, rather than to reopen the account.

Tony Boorman, the FOS's principal ombudsman, told BBC Radio 4's MoneyBox programme he was concerned banks were trying to punish customers for challenging their practices. "We strongly believe customers have a right to complain," he said. "I would be concerned about any financial institution which stood in the way of this and took action to actively discourage people from complaining."

A spokesman for Alliance & Leicester said it had accepted the Ombudsman's ruling. "We never prevent customers from complaining," he said. "We only ever close accounts when it has become clear we cannot offer what the customer wants."

The FOS's decision to speak out follows a report by Which?, the consumer group, that accused banks of using a string of dirty tricks to curb complaints about charges. In addition to closing the accounts of customers who complain, some banks have been overcharging customers who request old copies of statements, which they need to check previous charges, Which? said. In other cases, customers have found themselves pursued by debt collectors.

Doug Taylor, a personal finance campaigner at Which?, said: "In an attempt to avoid paying consumers what they are due, we have found that banks are employing increasingly underhand methods to avoid their responsibility to treat their customers fairly and refund the charges."

Which? said more than 150,000 people had downloaded a guide to reclaiming illegal bank charges published on its internet site. The group estimates banks collectively made more than £4.5bn from the charges last year. But leading banks insist they have a right to close the accounts of customers with whom they believe a working relationship has irretrievably broken down.

Wave of eco-marketing predicted: The biggest advertising agencies are predicting a wave of green marketing campaigns as businesses compete on their environmental claims - some even arguing that it could become a matter of their very survival.

Wave of eco-marketing predicted

By Carlos Grande,Marketing Correspondent

Published: February 12 2007 02:00 | Last updated: February 12 2007 02:00

The biggest advertising agencies are predicting a wave of green marketing campaigns as businesses compete on their environmental claims - some even arguing that it could become a matter of their very survival.

Agencies say communicating green values is fast becoming an act of "corporate hygiene" needed to retain competitiveness and standing with customers.

The heads of AMV BBDO, JWT, Ogilvy, RKCR/Y&R and Saatchi & Saatchi have told the FT they believe green advertising will grow in the next 12 months. All were in the top six UK agencies by gross income in the most recent industry report by Willott Kingston Smith, the leading advertising auditing firm.

The agencies say environmental branding has risen up boards' agendas, and point to the spate of recent rival green announcements in the grocery retail sector.

Farah Ramzan Golant, chief executive of AMV, said: "We're at a tipping point. I really believe we are going to see more of this."

Advertisers that make green claims for products and services however face unprecedented public scrutiny, particularly from bloggers and other web users.

Some experts warn those that unveil unpersuasive or me-too initiatives on carbon neutrality or sustainable sourcing, for instance, will see little benefit.

At best they would not receive the free press coverage some announcements had enjoyed but would have to use paid-for marketing to persuade sceptics. At worse they could suffer a backlash if their claims proved wrong or inconsistent.

Lee Daley, chairman and chief executive of Saatchi & Saatchi UK, said: "Brands will not be able to opt out of this. Companies which do not live by a green protocol will be financially damaged because consumers will punish them. In the longer term, I do not think they will survive."

There is still some scepticism at the commercial benefits of making environmental commitments. But they have long been seen as a display of corporate social responsibility. More recently it has been argued that they can influence brand preferences of some consumers.

Alison Burns, chief executive of JWT London, said: "Once a company makes an environmental statement, its direct competitor is now conspicuous by its absence if it hasn't too. Consumers are suspicious of that silence. This isn't restricted to a particular industry. It is in-creasingly pervasive. There is an underlying expectation that we are asking more questions about companies' intentions. That is partly a phenomenon of the digital age where consumers are used to interviewing brands like they might be interviewing people for a job."

Agencies warn companies against "rushing in" and exaggerating their environmental commitments, if they cannot substantiate them.

The Advertising Standards Authority has upheld complaints about green campaigns from Scottish & Southern Energy, Npower and Volkswagen. Although such complaints are rare, the ASA expects them to increase.

James Murphy, chief executive of RKCR/Y&R, the advertising agency for Marks and Spencer, adds: "There is no shortage of interest groups scrutinising brands and businesses. This whole area is a bit of a vigilante market. I think in time a strong environmental brand will become a hygiene factor of doing business. It will also allow you to increase customer loyalty and charge a premium."

Businesses urged to beware activist blog views

Businesses keen to market themselves as green have been warned not to mistake the activist views of eco-bloggers for those of mainstream internet users.

Initiative Media, the media buying group, tracked environmental discussions among 18,000 users on specialist English language blogs and websites as well as mainstream online forums.

It advises advertisers to be selective about the causes they endorse and to ensure any new green products serve a consumer need rather than appeal to the altruism of a minority.

In its research, Initiative classified 47 per cent of the online messages it surveyed as ambivalent towards "the state and future of the environment", and 39 per cent as optimistic. This is in contrast to the often cautionary, urgent tone of green campaigners.

Consumers' moods also varied by subject. They were more likely to be positive on alternative energy and vehicle emissions than global warming. Many were confused or apathetic because of apparently conflicting arguments.

Initiative said the study, conducted between April and June 2006, was skewed towards US sites and the findings might reflect this.

Untangling the global warming paradox: A strong economy is bad for the climate but allows space to deal with the problem

Untangling the global warming paradox

A strong economy is bad for the climate but allows space to deal with the problem

Larry Elliott, economics editor
Monday February 12, 2007

The Guardian

Larry Elliott graphics

Here's a strange thing. The global economy has been growing at its fastest rate in decades. China and India are booming, and the demand of the big developing countries for raw materials is even helping Africa to put on a spurt. In the developed world, there may be clouds on the horizon but policymakers don't wake up in the middle of the night in a cold sweat worrying about double-digit inflation or an imminent slump.

A more rapid pace of growth adds to the pressure on the environment. Almost without exception, the recent scientific evidence has indicated that man-made factors are leading to global warming. As economies expand, they need more power, more steel, more concrete. As consumers get richer, they demand cars, holidays, flat-screen TVs. Feedback mechanisms come into play as well. Wealthier consumers can afford to put in air-conditioning to cope with the heat but cooling systems require even more power, which adds to carbon emissions and ultimately - assuming the science is right - to global temperatures.

Yet, perversely, the fact that the global economy is in a "sweet spot" has created the policy space to deal with the problem that a period of strong growth has itself helped to create. When unemployment is going through the roof, politicians want as much growth as they can get as soon as they can get it, and the environment is a long-term problem that can be put off until another day.

Different agenda

So, when Tony Blair goes to Berlin tomorrow to meet Angela Merkel, the agenda for the mini-summit will be totally different from what it would have been when the prime minister met Helmut Kohl in the early days of his premiership. There will be no talks about the euro or the stability and growth pact; economics will be tangential to discussions on securing a post-Kyoto treaty on climate change, what needs to be done to clinch a deal on global trade, how Europe should respond to the latest developments in the Middle East peace process, and a package of help for Africa, concentrated on HIV/Aids treatment and education.

Overwhelmingly, it is a good thing that there is a different agenda from a decade ago. For a long time, lobby groups complained - with some justification - that the issues that mattered (ie the issues they were interested in) were ignored at international gatherings. Now global warming and Africa have moved centre-stage, and that's progress.

There is, however, reason to be cautious. Firstly, the fact that there are no longer meetings of the G7 called to stabilise currencies does not mean that the big economic issues have all gone away. What it means, worryingly, is that the main players are either unable or unwilling to do anything about them.

This impotence was well illustrated by the weekend's meeting of the G7 in Essen - a far cry from that held 20 years ago this month at the Louvre in Paris, which agreed to use intervention in the foreign exchange markets to put a floor under the falling dollar. In theory, there was similar business for finance ministers and central bank governors to get their teeth into this weekend.

For a start, they could have taken up the suggestion of the host nation to do something about the weakness of the yen, which is being dragged lower by Tokyo policymakers' unwillingness to risk raising interest rates for fear that the result would be to kill off what already looks like a faltering economic recovery. Germany, relying heavily as it does on exports, is worried about this trend - and about the growing tendency of hedge funds to borrow money cheaply in yen and invest it in higher-yielding assets elsewhere, often at considerable risks. Yet the Japanese did not want to talk about the yen, while the countries with a light-touch approach to hedge funds (Britain and the US) will do nothing to risk the ire of the City of London and Wall Street.

The G7 might also have taken steps to tackle the chronic global imbalances, and in particular the need to massage down the US trade deficit through a controlled depreciation of the dollar. This, though, would require reciprocal action from China, which has been running up record trade surpluses with the US, and it has become abundantly clear that the G7 is not the body for achieving this end. The penny dropped three years ago in Boca Raton, Florida, when the G7 found that any discussions on global imbalances were otiose in the absence of China, which is not a full member of the club.

The real difficulties the G7 finance ministers have in cutting currency deals points to another reason for some hard-nosed realism about possible action on climate change - namely, that nation states are terrified of signing international treaties that might damage their economies. In the US, members of both houses of Congress are convinced that China is manipulating its currency to secure a competitive advantage in its trade with the US; as such, Washington is going to be mightily wary about signing anything that puts tougher burdens on businesses in the developed world than it does on those in the developing world. On the other hand, the Chinese and the Indians do not want to accept any agreement that might hinder their attempts to lift hundreds of millions of people out of poverty. Beijing and New Delhi are becoming increasingly aware of the dangers of global warming - hardly surprisingly given the smog that blankets their cities - but say that the developed countries, having caused most of the problem, have to accept more of the responsibility when it comes to clearing up the mess.

Blair has been around long enough to know that this could be a potential deal-breaker before negotiations have even begun, so what he is looking for by the time Merkel hosts the G8 summit in June is an agreed set of principles to help speed up negotiations on a post-Kyoto deal by two or three years. He would like all the major countries to be part of the process (unlike Kyoto); agreement that there should be a stabilisation target for emissions; acceptance of the need for a global carbon-trading scheme, and a commitment to a technology transfer process.

New urgency

The prime minister believes there is a new urgency in the international community as a result both of the recent scientific evidence and concerns about energy security. The mood music out of Washington is certainly far more emollient than it was when Blair made climate change one of the two priorities for Britain's G8 presidency in 2005.

Even so, it remains the fact that the international community has known for more than half a decade that the global imbalances are a threat but done nothing about them. Almost every leader in the world professes to want a new trade deal, but negotiations are still going on after more than five years.

So, there's still much to do over the next four months, not least the conundrum of how a business-as-usual model of growth-based global economics can be squared with putting a meaningful ceiling on emissions.

If, as many environmentalists believe, the cost-free approach to saving the planet is a modern variant of alchemy, Blair's best efforts will have been in vain.

Understandably, though, he doesn't want his last months in Downing Street to be marked by anti-climax and he remains upbeat about a deal that would last and have teeth. If he's right, the dog days of his premiership may prove the most significant of the lot.

Recent Reports on CSR/Sustainability

Many thanks to Scot for this report

Scot Holliday/Bethesda/IBM@IBMUS

12/02/2007 12:26

Hello IBM CSR Community,

I recently attended a conference on implementing solutions toward the climate crisis (   At the conference I received several good references for reliable information for solutions and recent reports about climate issues, CSR and sustainability.  Here are a few good links:

U.S. Environmental Protection Agency (EPA) tips on what you can do to reduce global warming:
- at home:
- at the office:
- on the road:
- at school:

Sustainability, Ltd, Report on Sustainability for 2006
- Description: Tomorrow's Value, SustainAbility's fourth international benchmark of corporate sustainability reporting, has once again been developed in partnership with the United Nations Environment Programme (UNEP) and Standard & Poor's. This year we introduce a revised methodology, developed in close consultation with experts and leading corporate reporters, and — in line with our sense that the focus also needs to shift beyond disclosure and reporting to communication — we have adopted a portfolio approach. Tomorrow's Value is the flagship document in a suite of publications exploring wider aspects of reporting, including communication with financial analysts and the wider innovation agenda
- Link:

The United Nations Environment Programme Finance Initiative (UNEP FI) Report- "Show Me The Money"
- Description: This report illuminates links between ESG issues, financial value and company profitability across eight industry sectors. It directly complements the 11 reports from nine brokerage houses that were involved the group's earlier research in 20041. In a global effort, the compilation of this document has involved the expertise of more than 22 different financial services firms internationally, including sell side research houses, asset management firms and an investment consultancy. The most salient factors have been extracted from more than 1,000 pages of financial analysis.
- Note: The United Nations Environment Programme Finance Initiative (UNEP FI) is a unique global partnership between the United Nations Environment Programme (UNEP) and the private financial sector.
- Link:

Leading Research on Climate Change- The Intergovernmental Panel on Climate Change (IPCC)
- Note: Recognizing the problem of potential global climate change, the World Meteorological Organization (WMO) and the United Nations Environment Programme (UNEP) established the Intergovernmental Panel on Climate Change (IPCC) in 1988. It is open to all members of the
UN and WMO.  The role of the IPCC is to assess on a comprehensive, objective, open and transparent basis the scientific, technical and socio-economic information relevant to understanding the scientific basis of risk of human-induced climate change, its potential impacts and options for adaptation and mitigation. The IPCC does not carry out research nor does it monitor climate related data or other relevant parameters. It bases its assessment mainly on peer reviewed and published scientific/technical literature. Its role, organisation, participation and general procedures are laid down in the "
Principles Governing IPCC Work"
- New Report to be released any day, Link:


Scot B. Holliday
Senior Consultant
Organization & Change Strategy

Adobe and green buildings

Hi all -- this bit from Susan:

Adobe's green office space
February 9, 2007 12:20 PM PDT

When the maker of Photoshop pursued green-building credentials for its San Jose, Calif., headquarters, it sought to do more than airbrush its corporate image. Adobe Systems estimates that cutting waste and energy usage has translated into $1 million in savings annually, not including utilities rebates. The company's investment was $1.2 million.

In December, Adobe's three towers became the first existing commercial offices to get the highest rating--platinum--under the Leadership in Energy and Environmental Design standards. Adobe's "greening" project began in 2001. In recent months, both Boston and Washington, D.C., started requiring large, newly built offices to achieve LEED certification. San Francisco city officials are expected to follow suit.

The nonprofit U.S. Green Building Council runs LEED, the most popular yardstick of sustainable building design. Several buildings on Microsoft's Redmond, Wash., campus meet LEED certification.
Credit: Adobe Systems

IPCC summary article from New Scientist

Thanks to Brian for this one

IPCC summary article from New Scientist

0.13 °C. The amount the atmosphere is warming each decade

1.3 times as much CO2 is entering the atmosphere compared with just 20 years ago

3 kilometres. The depth to which the oceans have warmed

3.1 centimetres. The rise in sea level each decade

90 per cent certainty that we are to blame

The word they were most pleased with was "unequivocal". Three hundred government-appointed delegates from 113 countries were last week unanimous in agreeing what most climate scientists have believed for years: that the world is warming fast and that humans are almost certainly to blame.

Some 600 scientists wrote the summary of the fourth assessment by the Intergovernmental Panel on Climate Change, published this week. Virtually everything they wanted to say in it survived the politicians, but the IPCC's review process was so rigorous that research deemed controversial, not fully quantified or not yet incorporated into climate models was excluded. The benefit - that there is now little room left for sceptics - comes at what many see as a dangerous cost: many legitimate findings have been frozen out.

This is the untold story of the report, uncovered in interviews with many of the scientists involved, the story of how a complex mixture of scientific rigour and political expediency resulted in many of the scientists' more scary scenarios for climate change - those they constantly discuss among themselves - being left on the cutting room floor.

Dozens of climate scientists, including many of the leading lights of the IPCC study, came together two years ago this month to discuss "dangerous" climate change at a conference organised by the UK government in Exeter. They identified a series of potential positive feedbacks and "tipping points" not included in current models of the Earth's climate system that could accelerate global warming or sea-level rise. These included the physical collapse of the Greenland ice sheet, rapid melting in Antarctica, a shut-down of the Gulf Stream in the Atlantic, and the release of carbon dioxide and methane from soil, the ocean bed and melting permafrost.

"Current models assume the ice sheets will melt only slowly, but many glaciologists no longer believe this will happen"

Yet last week's summary report virtually ignored most of the Exeter findings. One concern is that the huge ice sheets of Greenland and Antarctica could be close to disintegration. This would cause rises in sea levels that would be measured in metres, but the report restricts itself to noting that sea levels are rising by 3.1 centimetres a decade - still almost twice the rate of the early 1990s. Current climate models assume that the ice sheets will melt only slowly, as heat works its way down through ice more than 2 kilometres thick. But many glaciologists no longer believe this is what will happen.

In reality, they say, ice sheets fracture as they melt, so water can penetrate to the bottom of the ice within seconds, warming its full depth and lubricating the frozen join between ice and the bedrock. Physical break-up of the ice sheets will happen long before thermal melting, they say.

Richard Alley, a US glaciologist who has published widely on the dangers, says climatologists have yet to be convinced that they need to rewrite their models, even though the rate of ice loss in Greenland has unexpectedly doubled in the past decade. The report does note that permanent Arctic sea ice is contracting by 7 per cent every decade.

"Our chapter of the report will say that Greenland is doing things that could make it disintegrate much faster than people think," Alley says. "But we don't have a strong basis yet for projecting exactly what the ice sheets will do," So, he says, the summary excluded the new thinking.

Last week another IPCC author, Stefan Rahmstorf of Germany's Potsdam Institute for Climate Impact Research, published a paper showing that world sea levels are rising 50 per cent faster today than predicted in the last IPCC report in 2001 (Science, DOI: 10.1126/science.1136843). Co-author Jim Hansen of NASA's Goddard Institute for Space Studies believes this is the first sign of a dramatic acceleration of sea level rise likely in the coming decades, as ice sheets start to disintegrate.

Both acknowledge in the paper that there may not yet be enough data to extrapolate a trend, but the IPCC last week reduced its estimate of worst-case sea level rise in the coming century from 88 to 59 centimetres. Real-world evidence was specifically excluded, the IPCC said, because it is not yet included in the models.

"Real-world evidence was specifically excluded because it is not yet included in the models"

Researchers outside the IPCC process have been outspoken in condemning this approach. Bob Corell, a leading US meteorologist and chairman of the Arctic Climate Impact Assessment, warned before the report's publication that any prediction of sea level rise of less than 1 metre would "not be a fair reflection of what we know".

The IPCC team also sidelined findings from the British Antarctic Survey. BAS researchers say that the Antarctic Peninsula is warming faster than almost anywhere on the planet. They have documented a sharp decline in sea ice around the peninsula, and warn that the giant West Antarctic ice sheet is "unstable and contributing significantly to sea level rise".

In contrast, the IPCC summary claims there are "no statistically significant average trends [in sea ice]," and that this is "consistent with a lack of warming, reflected in atmospheric temperatures averaged across the region". It asserts that overall "the Antarctic ice sheet... is expected to gain in mass due to increased snowfall".

Researchers at the UK's National Oceanography Centre, Southampton, will also feel overlooked. In 2005, they reported that the Gulf Stream slowed by about 30 per cent between 1957 and 2004. The Gulf Stream is a key feature of the world ocean circulation system, and any failure could have huge and unpredictable repercussions for world climate. But the IPCC summary insists that "there is insufficient evidence to determine whether trends exist".

Water vapour is increasing in the atmosphere, the summary says, thanks to more evaporation from the oceans. Weather systems are changing, with more intense droughts and tropical cyclones at low latitudes. Rainfall, when it occurs, is measurably heavier because the warmer air holds more moisture.

However, the summary fails to take up warnings made at the Exeter meeting about "carbon-cycle feedbacks" - the release of greenhouse gases from warmed soils, forests, permafrost and sea beds. It does note that carbon dioxide is accumulating in the atmosphere at a record rate, with annual increases now a third greater than even 20 years ago.

Another IPCC author, Venkatchalam Ramaswamy of the National Oceanic and Atmospheric Administration, told New Scientist that the IPCC's predictions of significant warming in northern latitudes should give urgency to assessing potential methane releases from Siberia and the Arctic. But, he said, his fears had failed to make it into the summary.

"The chapters went through three sets of reviews," said Ramaswamy. "Anything qualitative rather than quantitative was knocked out. And if it got into the chapter, then the question was whether it would get into the summary. By and large where there was ambiguity or controversy, it didn't make it."

From issue 2590 of New Scientist magazine, 09 February 2007, page 6-8

Reasons to be cautious

Any committee that requires politicians to agree is going to take time arriving at a consensus. Last week climate scientists had to run the gauntlet of government delegations, who had to approve every word of the summary prior to publication.

Delegates spent five hours debating whether it was "extremely likely" or only "likely" that humans were responsible for global warming since the mid-20th century (see Graphs below for changes in man-made emissions). In the language of the IPCC "extremely" means a greater than 95 per cent certainty and "likely" a certainty greater than 66 per cent. A hawkish British government delegation wanted the summary to say "extremely likely"; the Chinese and Saudi Arabians wanted "likely"; in the end exhausted delegates settled for "very likely", meaning a certainty of at least 90 per cent.

Old IPCC hands say that Saudi delegations have a track record of vocal intransigence in the face of scientists' findings; this time they were more constructive. The main problem came from the large Chinese delegation, which was asking for the removal of five key passages from the summary.

They got their way only once when, after a 10-hour debate on the relative influences of solar and human activity, an exasperated meeting agreed to remove a sentence saying that the change in radiative forcing - the heat entering the system - that is attributable to human activities was "likely" to have been at least five times greater than that due to changes in solar activity. The Chinese argued that the influence of the sun could be greater.

"We let it go in the end, because the figure was in a graph anyway," says Kenneth Denman of the Institute of Ocean Sciences in Sidney, British Columbia, Canada (see "The solar effect").

Fears that the US delegation might try to veto the scientists' findings proved unfounded. "We could all sense a change with the American delegation, which behaved with great scientific integrity," Denman says. Others put this down to the Democratic victory in November's congressional elections. "The timing could not have been better," says one scientist. "If we had been writing this report any time in the last five years, we would have expected a lot more trouble."

Other insiders complain that the US group in charge of the current assessment, headed by Susan Solomon of the National Oceanographic and Atmospheric Administration, has been inherently more cautious than the British team from the Met Office's Hadley Centre for Climate Change, who ran the previous three assessments. Fear of the wrath of sceptics back home may have contributed to their caution.

By and large, the scientists insist they faced down political interference. The prize of having governments formally sign off on the report will, they hope, make any compromises worthwhile.