Sustainablog

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

29.11.07

Cost to avoid dangerous human interference with the climate system: minimum US$1.375 trillion annually.

Thanks to Toby for forwarding this white paper
--------------------------------------------------

(See attached file: Option13.pdf)



WHITE PAPER
november 27, 2007*
Cost to avoid dangerous human interference with the climate system: minimum US$1.375 trillion annually.
(Source: IPCC Working Group III Fourth Assessment Report, based on annual global fossil fuel carbon dioxide emissions of 27.5 GtCO2-eq in 2005 multiplied by US$50, which is the minimum price (applied from 2010-2050) on 100 per cent of GHG emissions consistent with stabilization of CO2-eq atmospheric concentrations at around 450 ppm by 2100).
Abstract: On January 1, 2013, the first phase of the Kyoto Protocol expires. In an effort to define what comes next, many proposals have been put forth—43 substantive ones to be exact**. This paper distills the 43 substantive proposals into three options. In addition to doing nothing or little of substance, the two main choices consistent with making deep reductions in global greenhouse gas emissions (GHGs) are to reach global agreement on a series of quantitative national greenhouse gas caps (associated with cap-and-trade); or to harmonize the price of carbon across jurisdictions at a singular value (a global carbon levy or tax), underpinned by one single desired global greenhouse target. Using the analytic prism of the China/US factor (will it involve China and the US?) and the scale factor (will it deliver meaningful greenhouse gas reductions sufficient to avoid dangerous human interference with the climate system?), this paper argues that a cap-and-trade system is unlikely to meet these objectives. This paper makes the case for a fresh approach to international climate policy, outlining how a global carbon charge administered locally at carbon bottlenecks, the key points where flows of carbon are the most concentrated (trunk pipelines for gas, refineries for oil, railroad heads for coal, LNG terminals, cement, steel, aluminum, and GHG-intensive chemical plants), offers the best chance of stabilizing the growth of global anthropogenic greenhouse gas emissions by no later than 2020, internalizing US$1 trillion of carbon costs per year, and generating US$50 billion per year of clean development flows from developed countries to the least developed and fast-industrializing world to invest in carbon sinks and adaptation.
Option:13 is an international body driving policy change and grassroots education campaign to help broker a post-2012 global agreement that broadens and builds on Kyoto and can be made to work for both industrializing and developed nations.
www.option13.org
* Starting in February 2007, in search of answers to the questions: “What mechanism will generate decarbonization on a sufficient scale to avoid dangerous human interference with the climate system? What mechanism will inspire and compel both China and the US (as proxies for the industrialized and industrializing world) to participate—and what are the plausible incentives and penalties to make this assertion credible?” Option 13 undertook a series of interviews with international policymakers from G8+5 countries, and conducted comprehensive research of pre-existing proposals for a global strategy on dealing with climate change post-2012. Forty-three substantive proposals were identified, and these 43 papers were then distilled into three options. Prior to the UN High-Level Event on Climate Change, the working version of the Option 13 white paper was delivered to the leading climate change policy leaders around the world, incorporating the best of their suggestions along the way. The Option 13 white paper was hand-delivered to the delegates at the Sept. 24-25, 2007 UN High-Level Event on Climate Change and to delegates at President Bush’s Sept. 26-27, 2007 Meeting of Major Economies on Energy Security and Climate Change. The goal of the Option 13 effort is to galvanize international action to put in place a global mechanism of sufficient scope to prevent dangerous anthropogenic interference with the climate system in advance of 2013.
** Aaron Cosbey, Deborah Murphy and John Drexhage, “Market Mechanisms for Sustainable Development: How Do They Fit in the Various Post-2012 Climate Efforts?,” International Institute for Sustainable Development (Winnipeg, Canada), July 2007.
Most of the world believes that humans have played a role in climate change and must play a role reining it in. Regardless of the degree to which one blames humans for climate change, the prospects for what we do about it as a race are limited to three options:
Option 1: Do nothing. Or do nothing of substance (i.e. what is happening now with voluntary agreements and aspirational sector targets) and greenhouse gas emissions will continue to grow.
Option 2: Quantitative national GHG caps . ��������q�����The prerequisite for the successful implementation of this approach is that all major emitting countries accept a firm national greenhouse gas emissions limit at an early stage. Without that agreement, global greenhouse gas emissions will almost certainly continue to grow well past 2020.
Fast-industrializing nations such as China and India are unequivocal that they will not accept a hard cap on their emissions within any sort of early time frame, which they see as a straightjacket on their economic growth and poverty eradication goals. This tension is grounded in the vast differences in circumstances between industrialized countries on one hand and the least developed and industrializing countries on the other. It is the industrialized countries that carry the brunt of historic responsibility (75 per cent) for the anthropogenic greenhouse gases in the atmosphere. It is the industrialized countries that have the highest per capita emissions rates. It is the industrialized countries that have the highest per capita gross domestic product and ability to pay for new low-carbon infrastructure. It is the industrialized countries that have reasonably reliable measurement systems of their greenhouse gas emissions in place which can be readily verified.
Given these differences in circumstance, only developed countries will be willing to agree to national GHG caps within an immediate or early time frame. The Montreal Protocol to reduce ozone-depleting substances worked along this sequence, with developed countries acting first to replace halocarbons, and developing countries, with financial assistance, following suit. To date, the Montreal Protocol has led to a seven per cent absolute reduction of halocarbons from their highest peak. This success, however, will be difficult to repeat in the context of greenhouse gases, a pervasive substance in a more globalized economy.
Th
e main reason is that uneven carbon pricing of a trillion dollar carbon cost will lead to carbon leakage. Carbon leakage
Mandatory product standards are a third mechanism, which can play a complementary role in establishing floors for minimum efficiencies; but product standards are less likely to spur innovation. There are a range of other complementary policies that bolster the effectiveness of carbon pricing detailed in Joanna Lewis and Elliot Diringer, “Policy Based Commitments in a Post-2012 Climate Framework,” Pew Center on Global Climate Change (Arlington), May 2007.
The SRES (non-mitigation) scenarios project an increase of baseline global GHG emissions by a range of 9.7 GtCO2-eq to 36.7 GtCO2-eq (25-90%) between 2000 and 2030.
A variety of national caps have been proposed including ones premised on grandfathering, carbon intensity, historical responsibility, and contraction and convergence. Contraction and convergence based on per capita emissions has an attractive logic from a fairness point of view, but if applied at the scale necessary to stabilize atmospheric concentrations under 450 ppmv CO2-eq, it would require much of the developed world to revert back to the Stone Age. happens when carbon-intensive industry relocates from jurisdictions with a high carbon price to ones with a low carbon price. Up until recently, the prospect of substantial carbon leakage had not been considered as a serious risk. The Synthesis Report of the IPCC Fourth Assessment Report shone new light on this by fingering the modeled global carbon price (US$20-$80/tCO2-eq by 2030) consistent with stabilization at around 550 ppm CO2-eq by 2100 [A Nov. 2007 report from the Confederation of British Industry fingered the marginal price on carbon to meet Britain’s 2020 targets to be at least £60-£90/ tCO2-eq. This price could be on the low side]. The mid-range of this multiplied by global fossil fuel carbon dioxide emissions of 27.5 GtCO2-eq in 2005 works out to more than US$1.1 trillion per year. When carbon costs this much, it has an impact on every industry, but disproportionately, the impact falls upon carbon-intensive industries or electricity intensive industries that rely on carbon-intensive electricity. With the prospect of avoiding a $40/tCO2-eq cost, mobile industries in the materials and manufacturing sector would face a compelling rationale to relocate existing and new production to low or no-price carbon jurisdictions.
Th
e other drawback of a cap-and-trade approach with uneven carbon pricing is that many opportunities are missed for economically attractive low-carbon technology deployment where the most action is happening: fast-industrializing countries like China and India. Missing these opportunities for any significant length of time will make it almost impossible to avoid dangerous human interference with the climate system. Between now and 2030, the IPCC projects that two thirds to three quarters of business-as-usual projected increase in energy CO2 emissions will come from non-Annex I (mostly from fast-industrializing countries) regions. Without a price on carbon, China alone is on track to be emitting twice the amount of total greenhouse gas emissions than the US, EU, Japan and all other industrialized nations combined in as little as 25 years, according to the forecasts of the chief economist of the International Energy Agency.
Given huge variations in national circumstances, it will be incredibly challenging to get agreement on a set of national GHG targets that are compatible with meeting the global GHG target necessary to avoid dangerous human interference with the climate system. This provides a strong case for a fresh approach that takes the focus away from national GHG limits, and puts the focus on integrating the environmental cost of carbon in a manner consistent with meeting the global GHG target necessary to avoid dangerous human interference with the climate system.
Option 3: A harmonized global carbon price would overcome the three main problems of a cap-and-trade system and would also provide an equitable approach based on the polluter-pays principle. The funds generated from the harmonized global carbon price would stay within each respective country, with the exception of a built-in annual $50 billion transfer (based on five per cent of the carbon charge) from industrialized countries to industrializing and the least developed countries for carbon sinks and adaptation.
Jim Yardley and Andrew Revkin, “China Issues Plan on Global Warming, Rejecting Mandatory Caps on Greenhouse Gases,” New York Times (New York), 5 June 2007.
With a single universal price on carbon, fast-industrializing countries would face a more predictable carbon pricing situation (which would rise as carbon emissions rose) rather than the price volatility and economic straightjacket that a hard cap entails. A harmonized global carbon price would avoid the carbon leakage that results from uneven carbon pricing, and it would also help ensure that the huge opportunities for deploying cleaner and more efficient low-carbon technologies in fast-industrializing countries are seized upon.
While a harmonized global carbon price addresses the main drawbacks of a cap-and-trade approach, it comes with its own risks.
A lot of work has been done to figure out how a cap-and-trade mechanism could deal with GHGs, and shifting to a harmonized carbon pricing approach risks losing this work. This is true to a certain extent, but there are valuable lessons and mechanisms in this body of work that could inform important elements of a harmonized global carbon pricing approach, including how to best allocate the annual $50 billion transfers from industrialized countries to industrializing and the least developed countries for carbon sinks and adaptation.
Th
ere is a big question mark on enforcement. Why would fast-industrializing countries that oppose a cap agree to impose a harmonized carbon price on their economy? And how is this verified? A key motivation for the least developed and industrializing countries to opt into a harmonized global carbon pricing agreement is that it provides a source of government revenue without risking loss of international competitiveness in energy-intensive industries such as steel-making.
On the carrot side, there is the $50 billion dollar built-in transfer of wealth from industrialized countries for carbon sinks and mitigation that industrializing and the least developed countries could access if they opted into the system.
Th
e least developed and industrializing countries could also be granted a cushion-period of up to five years to implement the harmonized global carbon price, without creating substantial carbon leakage.
Th
e stick for countries that relieve their industries of the internationally accepted cost of carbon comes in the form of incrementally severe penalties for noncompliance, leading up to countervailing duties on carbon-intensive imports. This stick , openly mused about by President Sarkozy, is also an option that could be applied in a cap-and-trade context to countries that did not impose a GHG cap on their industries, but it would be much messier and subject to protectionist abuse in the absence of a single carbon price to serve as a clear reference point for being in compliance. Once a significant region adopts the principles of a harmonized global carbon price, there will be substantial motivation for large trading partners to do so as well.
Richard N. Cooper (Harvard University), 2004, “A Carbon Tax in China?”
International trade law asserts that countries would be within their rights to apply a border transfer adjustment tax on imports of fossil fuels in a case such where the domestic industry was subject to a domestic carbon levy. International trade law is not clear on the potential application of a countervailing duty on carbon-intensive manufactured products (such as cars), which would depend on the process (i.e. whether hydro power or coal power was employed), and would be more complex to administer and determine. (Taken from: Cosbey, Aaron and Tarasofsky, Richard. May, 2007. “Climate Change, Competitiveness and Trade.” Chatham House.)
Verifying GHG emissions presents challenges in any context. Administratively, the harmonized carbon price would be most easily levied at GHG-intensive materials facilities (cement, aluminum, steel, and chemicals) and the key bottlenecks in the fossil energy system: trunk pipelines for gas, refineries for oil, and railroad heads for coal. Almost all countries are now members of the International Monetary Fund (IMF), and as such their economic policies, including fiscal policies, are subject to detailed annual surveillance by the IMF staff. Under a harmonized global carbon pricing agreement, the IMF could be asked to pay special attention during these reviews to sources of revenue, and in particular to carbon levy revenues. Each country’s revenue books would be open to inspection, and its finance officials available for questioning. Countries’ fiscal systems would also be monitored to assure that the carbon levy was not nullified by changes in other fiscal instruments which indirectly favored CO2-emitting activities. Furthermore, physical readings of the largest sources of emissions, such as power plants, could be taken (e.g. by satellite and by on site inspection) as part of the compliance regime.
Another drawback of a harmonized global carbon price approach is that it provides less certainty about the volume of GHG emissions reductions that will be achieved. This is why any harmonized global pricing framework must be joined at the hip with a global GHG emissions target, with the price adjusted accordingly to stay on track with that target. According to The IPCC Fourth Assessment Report, modeling studies show global carbon prices rising to 20-80 US$/tCO2-eq by 2030 is consistent with stabilization at around 550 ppm CO2-eq by 212100. As the modeling process is highly uncertain, it would be necessary to review the carbon price at regular intervals (i.e. every two to three years) and adjust it accordingly to steer actual emissions levels and atmospheric concentrations toward the desired stabilization outcome. A likely effect of reviewing and adjusting the carbon price would be to create an expectation of a rising carbon price over time, which would significantly affect investments in future infrastructure.
A further potential risk of a harmonized global carbon pricing approach is that it could be labeled as a tax, and it is hard to raise taxes. This nomenclature could be somewhat neutralized if the ‘tax’ increase is explained as part of a national duty (and legal obligation) in the international effort to protect the climate. Other objections pertaining to a carbon charge hurting low-income people, or increasing the size of government could be headed off by each country with a design specific to their circumstances. The carbon levy could, for example, be used to reduce corporate and personal income taxes and offset the impacts of price increases on low-income groups in distributionally neutral ways , or to create a carbon innovation fund to deploy low-carbon technologies and invest in infrastructure.
America’s Climate Security Act (Lieberman-Warner), currently considered to be the federal carbon pricing bill most likely to become law, would distribute its carbon permit auction revenues 55 per cent to emission reductions, 20 per cent to help low-income people, 5 per cent to help affected workers, and 20 per cent for adaptation to climate change.
Metcalf, Gilbert E. June 2007. “A Green Employment Tax Swap: Using a Carbon Tax to Finance Payroll Tax Relief.” Tax Reform, Energy and the Environment. Washington, DC: Brookings Institution and World Resources Institute.
How to Determine the Harmonized Global Price for Carbon
In order to ensure that the harmonized global carbon price delivers the intended result (avoiding dangerous human interference with the climate system), there are two pricing approaches.
The Two-Step Approach
Get global agreement from a critical mass of countries on:
1
. Reducing global GHGs by 50 per cent by 2050 from 1990 (base year).
2
. Annual target milestones and adjust price accordingly at regular intervals to stay on track.
The Four-Step Approach
Get global agreement from a critical mass of countries on:
1
. An acceptable temperature increase range (i.e. less than 2°C);
2
. Th The corresponding maximum atmospheric concentration of carbon dioxide equivalent (i.e. 450 parts per million by volume provides about a 50 per cent likelihood of staying below 2°C of warming);
3
. Th The annual modeled rate of absolute emissions growth, stabilization point and then decline needed to ensure that that concentration is not exceeded (i.e. absolute growth at
B. Mertz, O. R. Davidson, P. R. Bosch, R. Dave, L. A. Meyer, et al, “Climate Change 2007: Mitigation, Contribution of Working group III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change,” IPCC, Cambridge University Press (Cambridge), 2007. not more than 1 per cent per annum between 2010 to 2020, stabilize emissions levels by 2020, then 1-2 per cent per year global reduction in absolute emissions from 2020 to 2030);
4. Th The modeled price on large carbon bottlenecks expected to deliver those annual global absolute reductions of carbon dioxide equivalent emissions (i.e. $1050/t CO2-eq11 phased in over five years, and moving to $100/t CO2-eq by 203012). The IPCC identified $50/t CO2-eq from 2010 to 2030 as the minimum price required to achieve the stabilization of atmospheric concentrations of CO2-eq at 450 ppmv. A $50/t CO2-eq could start with a levy of $15/ t CO2-eq at carbon bottlenecks and move incrementally with a clear timeline to $50 /t CO2-eq and beyond).
Bottom Line: The process to get to a global price for carbon will eventually have to be put in place if we are to efficiently manage and reduce carbon emissions. The choice is whether it happens in an orderly way or in a messy and complicated manner.
one climate one price one hope
10 The currency should be a weighted basket of international currencies. $US is used in this instance as a proxy.
11 Roughly, this would add an additional US 10-15 cents per litre to the cost of gasoline, and would add an additional 5 cents per kilowatt hour to the cost of traditional coal-fired electricity.
12 Ibid. Pg. 23.
Built-in Annual US$50 billion Transfer of Funds for Carbon Sinks and Adaptation
A harmonized global carbon pricing architecture would include a well-defined built-in annual $50 billion transfer (based on five per cent of the carbon charge) from industrialized countries to industrializing and the least developed countries for carbon sinks (forests, agricultural land use management, and landfills) and adaptation.
Cap-and-trade
Pro
In theory delivers certainty of GHG reductions.
Cap-and-trade
Con
Fast-industrializing nations such as China and India will not accept a hard cap.
Cap-and-trade
Con
Uneven carbon pricing of a trillion dollar carbon cost will lead to carbon leakage.
Cap-and-trade
Con
Uneven carbon pricing misses opportunities for economically attractive low-carbon technology deployment in fast-industrializing countries like China and India.
Harmonized Global Carbon Price
Pro
Provides fast-industrializing countries with a more predictable carbon pricing situation and new source of revenue (which rises as carbon emissions rise) rather than the price volatility and economic straightjacket that a hard cap entails.
Harmonized Global Carbon Price
Pro
Avoids carbon leakage that results from uneven carbon pricing, which removes the central competitive concern of the US.
Harmonized Global Carbon Price
Pro
Helps ensure that huge opportunities for deploying cleaner and more efficient low-carbon
technologies in fast-industrializing countries are seized upon.
Harmonized Global Carbon Price
Pro
Equitable approach based on the polluter-pays principle.
Harmonized Global Carbon Price
Pro
Built-in annual $50 billion transfer (based on five per cent of the carbon charge levied in industrialized countries) made available to the least developed countries for carbon sinks and adaptation.
Harmonized Global Carbon Price
Con
Shifting to a harmonized carbon pricing approach risks losing cap-and-trade work. Valuable
lessons and mechanisms in this body of work will inform important elements of a harmonized global carbon pricing approach.
Harmonized Global Carbon Price
Con
Enforcement question marks. Provides a source of government revenue without risking loss of international competitiveness; $50 billion built-in transfer carrot for LDCs and NICs to use for carbon sinks and mitigation; incrementally severe penalties for noncompliance,
leading up to countervailing duties on carbon-intensive imports; levied at administratively efficient GHG intensive materials facilities (cement, aluminum, steel, and chemicals) and the key bottlenecks in the fossil energy system: trunk pipelines for gas, refineries for oil, railroad heads for coal; verified by IMF annual review.
Harmonized Global Carbon Price
Con
Provides less certainty about the volume of GHG emissions reductions that will be achieved. Must be joined at the hip with a global GHG emissions target, and adjusted accordingly to stay on track with that target.
Harmonized Global Carbon Price
Con
If labeled as a tax, is hard to raise taxes. ‘Tax’ increase can be explained as part of a national duty (legal obligation) in the international effort to protect the climate.
Harmonized Global Carbon Price
Con
Carbon charge could hurt low-income people, or increase the size of government Carbon levy could be made revenue neutral along with provisions to offset the impacts of price increases on low-income groups in distributionally neutral ways.
A strong case for a fresh global approach

What North America is likely to get around to doing in 2009... If we are lucky

Thanks to Steve (and apologies for the tricky subject line... emphases below are mine)


The UK Government has published its landmark Climate Change Bill, said to be the first of its kind in the world, setting out a framework to put Britain on the path to become a low-carbon economy. Key points in the Climate Change Bill include:

legally-binding targets to cut carbon dioxide emissions against 1990 levels by at least 60% by 2050 and 26–32% by 2020

a new system of legally-binding five year “carbon budgets”, set at least 15 years ahead and designed to give investors and policy makers certainty and direction

a new statutory body — the Committee on Climate Change — to provide independent expert advice and guidance to the Government on achieving its targets and staying within its carbon budgets

a new system of annual reporting to Parliament; the Committee on Climate Change will provide an independent progress report to which the Government must respond, designed to ensure the Government is held to account every year on its progress towards each five-year carbon budget and the 2020 and 2050 targets

a requirement for the Government to report at least every five years on current and predicted impacts of climate change and on its proposals and policy for adapting to climate change

enabling powers to introduce new trading schemes through secondary legislation, similar to the Carbon Reduction Commitment (a new cap and trade scheme for large organisations such as local authorities, supermarkets and other large retailers, and government departments). The Carbon Reduction Commitment will also be introduced through the Bill.

Progress
The Bill was introduced into the House of Lords on 14 November 2007. The aim is to receive Royal Assent by spring or early summer 2008.

Available at:

www.publications.parliament.uk/pa/ld200708/ldbills/009/2008009.pdf.

9.11.07  US can cut 4.5 billion tonnes CO2e at low cost by 2030: McKinsey

Thanks to Peter

29.11.07  US can cut 4.5 billion tonnes CO2e at low cost by 2030: McKinsey

The US could reduce its greenhouse gas emissions by up to 4.5 gigatonnes between 2005 and 2030 at moderate costs and using existing technologies, according to a new report by consultancy McKinsey & Company.

The study, “Reducing US Greenhouse Gas Emissions: How Much at What Cost?” says that to achieve those reductions, the US must use a “wide array of abatement options available at marginal costs less than $50 (€34) per tonne.”

Reductions of between 3 and 4.5 billion tonnes of carbon dioxide equivalent (CO2e) would reduce US emissions 7 to 28 per cent below 2005 levels.

“Achieving these reductions at the lowest cost to the economy, however, will require strong, coordinated, economy-wide action that begins in the near future,” the report says. “Any approach that does not simultaneously unleash a full range of abatement options risks missing proposed 2030 reduction targets and/or driving up total cost to the economy.”

Along a business-as-usual trajectory, McKinsey projects that US GHG emissions would rise by 35 per cent to reach 9.7 billion tonnes CO2e in 2030. One billion metric tonnes is roughly the size of Germany’s total annual emissions.

The targets of one of the climate change bills introduced in Congress would cut US emissions between 3.5 and 5.2 billion tonnes below that business-as-usual scenario, the report finds.

It also points out that the cost of undertaking the necessary emissions cuts would be lower if the US can immediately “capture sizable gains from energy efficiency.”

“About 40 per cent of the [abatement] potential we identify can be done at negative cost,” Jack Stephenson, director of McKinsey & Company, said at a press conference Thursday, noting that 70 to 80 per cent of energy-efficient technologies necessary to achieve the targets already exist.

“If we saved that money, it would offset the significant cost needed to move the country toward a low-carbon economy,” he added.

Stephenson added that energy efficiency opportunities are “inherently perishable,” and require higher investment in the early years to lock in energy efficiency gains at lowest overall costs and accelerate the development of key technologies.

“The cost of building energy efficiency into an asset when it is created is typically a fraction of the cost of retrofitting it later, or retiring an asset before its useful life is over,” the report says.

The report identifies 250 abatement opportunities within five “clusters” of initiatives. Improving energy efficiency in buildings and appliances would reduce between 710 and 870 million tonnes; fuel efficiency gains in vehicles and reducing the carbon content of transportation fuels would reduce 340 to 660 million tonnes; targeting the industrial sector would reduce 620 to 770 million tonnes; enhancing carbon sink capacity of forests could reduce up to 590 million tonnes and cutting emissions in electric power production could reduce up to 1,570 million tonnes.

Investment needed

The report puts a price tag on the investments required to achieve necessary reductions by 2030. In order to achieve a cut of 3 billion tonnes by 2030, the capital costs would amount to $50 billion per year through 2030.

Cumulative net new investment in emissions-cutting technologies through 2030 would be $1.1 trillion, which is equivalent to 1.5 per cent of the $77 trillion the US is predicted to spend overall during the same period. The investments would occur in the power and transport sectors, which is likely to drive up electricity prices and vehicle costs.

Stephenson noted that the study did not assume an implementation of cap-and-trade systems or other regulations at the state or national level, nor did it factor in any significant changes in the standard US lifestyle over the course of the next decade.

But the report stresses that legislative action must be taken now to foster use of the existing technologies it finds could cut emissions. “Without a forceful and co-ordinated set of actions, it is unlikely that even the most economically beneficial options would materialise at the magnitudes and costs estimated here,” the report says.

Washington DC

27.11.07

The next big eCommerce opportunity for Google, Amazon, eBay - carbon trading: To my mind the trading and exchange of bits and bandwidth for carbon represents an entire new eCommerce business model with significant revenue potentials. Companies that are first movers in this space will quickly dominate this new market


Thanks to Currie for this one


For more information on this item please visit my blog at
http://green-broadband.blogspot.com/ or http://billstarnaud.blogspot.com
-------------------------------------------


[Google, Amazon and eBay are classic examples of the best of what America
is good at-  ingenuity and entrepreneurial capitalism.  They dominate the
global eCommerce marketplace.  

Although the ecommerce economy has grown leaps and bounds over the past
decade the eCommerce activities of these companies is still a relatively
small part of the overall economy.

While click advertising, etrading and selling merchandise over the Internet
has done wonders for the bottom line of these companies in the past decade,
these markets are now maturing.  The entire global advertising market is
still very small compared to other economic activities. As well large
portions of society still do not use eBay or Amazon for a variety of reasons
including security, cross border shipping issues and so on.  It is unlikely
that these companies will be able to continue their spectacular growth of
the past decade without some fundamental new business paradigm shift.
Mobile eCommerce may provide some incremental revenues but I think its
contribution to the bottom line will be miniscule at best.

The big challenge for these companies and many others like them is to move
to the next wave of eCommerce which I believe will be carbon trading in
exchange for bits and bandwidth.

There is a growing consensus that global warming is one of the greatest
threats facing humanity.  Increasingly governments and citizens are becoming
aware of the severity of this threat and are clamouring for solutions.

To date the most obvious approaches to mitigate against global warming is to
impose carbon taxes or implement various forms of carbon trading such as cap
and trade or carbon offsetting.

Carbon taxes however, even if revenue neutral, are going to meet with stiff
political resistance.  Rather than imposing taxes can we instead provide
carbon "rewards" where consumers and businesses are rewarded for reducing
their carbon footprint, rather than being penalized if they don't?

To date carbon trading has been associated with various government mandated
cap and trade systems or unregulated carbon offset trading.  In cap and
trade systems large carbon emitters are allocated  carbon emission targets
and can only exceed these targets by purchasing carbon permits from
organizations who produce far less carbon. In offset trading there are a
number of independent companies that audit and trade carbon offsets of
individuals and businesses for high carbon emission activities such as air
travel offset against telecommuting and other energy saving practices.

However these markets are very immature and relatively small.

Instead of trading carbon emission for carbon reduction, perhaps a better
scheme would be to trade bits and bandwidth which have an extremely small
footprint against activities that have a heavy carbon footprint.

A couple of simple examples come to mind which have been mentioned before on
this blog:

(a) Amazon could work with public transportation systems and offer free
eBooks with its new Kindle eReader to people who buy public bus and subway
passes.  Amazon would get a small percentage of every bus pass to pay for
its ebooks and consumers would have a new incentive in which to take the bus
or subway.   Even if consumers still drive their SUV to work they would be
helping out by providing a new revenue source to public transportation

(b) Free broadband Internet could be offered to consumers who are willing to
pay a carbon premium on their gas and/or electric bill.  See
http://green-broadband.blogspot.com

(c) University students could be awarded with free cell phone, music and or
videos if they agree to pay a carbon premium on their parking passes.

Etc

To my mind the trading and exchange of bits and bandwidth for carbon
represents an entire new eCommerce business model with significant revenue
potentials. Companies that are first movers in this space will quickly
dominate this new market.

Carbon credit trading does not need to be limited to simple bilateral
transactions, but like money can it can create multiplier effects, where
consumers of bits and bandwidth can purchase other products and services
with their carbon credits.

For example, universities could offer voluntary programs where students pay
a premium on anything that creates a carbon footprint such as parking fees
or residence power consumption etc. In exchange the students would be
granted free access to the music and film industry libraries.  

The "bits for carbon" fee would encourage students to reduce use of their
automobiles and/or reduce their energy consumption within their residences
or other activities.  The university could also undertake energy audits on
the students activities to earn additional valuable carbon credits, in the
same businesses now earn carbon credits for promoting tele-working,
tele-presence etc

But instead of paying the record and music industry actual money for the
designated authorized music and video services, they instead would be paid
in equivalent value of carbon credits, or the university would only purchase
"originating" credits that were produced by the music/video industry through
their own carbon reduction activities.  The music and motion picture could
then possibly double down their money by instituting their own carbon
reduction schemes and trade in these credits or they could sell them to a
variety of carbon trading brokers.

As one start to think about these concepts it becomes apparent there could
be a whole range of business opportunities in trading bits and bandwidth for
carbon.

--BSA]



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Climate change - everyone's business: Report of the CBI Climate Change Task Force


Thanks to Brian for this one

http://www.avtclient.co.uk/climatereport/



Foreword by Ben Verwaayen, Chairman of the Climate Change Task Force and Chief Executive, BT
This report has not been written by evangelists but by business people.

Are we sure that climate change exists? I am sorry, but that is not a question for us. The best question for the business community is whether we can be certain that climate change presents a substantial risk; a risk that will have a profound impact on society and the economy? To this the answer is clearly 'yes'. And so, as with all substantial risks, it is vital to mitigate the danger.

This report contains the independent conclusions and responses of some of the leading companies headquartered in the UK and represented by their CEO or Chairman. It makes far-reaching commitments and recommendations after a journey of intensive discussions and study. Not easy, not always unanimous, but ultimately underwritten by all. We submit this to the CBI, and to the wider public in the belief that it can be a catalyst for change.

Any response to the threat of climate change requires three components for success. Politicians must give much greater priority to the subject, and not just on an ad hoc basis. Consumers have to be empowered to make the right decisions and need to be given the facts to make informed judgements. And business must become green to grow.

Of course climate change is a global challenge. But in the UK we should not wait for others. The issue at hand is serious and requires an immediate response. Action taken sooner is both better and cheaper. And it is clear that alongside the challenge lies an opportunity. One we can harvest by acting now and in concert to build a low carbon economy.

You can download Windows Media Player here.


Summary (pdf 221kb)

Full report (pdf 1.4mb):

Appendix one: UK cost curve (McKinsey) (pdf 207kb)

Appendix two: adaptation report (Met Office) (pdf 157kb)

If you need free Adobe Acrobat PDF reader software or help with pdfs, go to:
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If you need pdf documents in alternate formats, email
rhian.kelly@cbi.org.uk or call 020 7395 8188.


Lehman Bros. - Climate Change


Colin is an absolute wealth of information, thanks  :-)


THE MAGLEV: The Super-powered Magnetic Wind Turbine







Thanks to Andy for this one










November 26, 2007

THE MAGLEV: The Super-powered Magnetic Wind Turbine
by Mahesh

Maglev, wind turbine, chinese wind power, wind power, wind turbine china, big wind turbine, magnetic levitation wind turbine, magnetic wind power, levitation wind power

Renewable energy produced from the wind has garnered much attention and support in recent years but is often criticized for its low output and lack of reliability. But now a super power wind turbine has come along that may be just what the renewable energy industry needs. The MagLev wind turbine, which was first unveiled at the Wind Power Asia exhibition in Beijing, is expected take wind power technology to the next level with magnetic levitation.


Maglev, wind turbine, chinese wind power, wind power, wind turbine china, big wind turbine, magnetic levitation wind turbine, magnetic wind power, levitation wind power

Magnetic levitation is an extremely efficient system for wind energy. Here's how it works: the vertically oriented blades of the wind turbine are suspended in the air above the base of the machine, replacing the need for ball bearings. The turbine uses "full-permanent" magnets, not electromagnets — therefore, it does not require electricty to run. The full-permanent magnet system employs neodymium ("rare earth") magnets and there is no energy loss through friction. This also helps reduce maintenance costs and increases the lifespan of the generator.

Maglev wind turbines have several advantages over conventional wind turbines. For instance, they're able to use winds with starting speeds as low as 1.5 meters per second (m/s). Also, they could operate in winds exceeding 40 m/s. Currently, the largest conventional wind turbines in the world produce only five megawatts of power. However, one large maglev wind turbine could generate one gigawatt of clean power, enough to supply energy to 750,000 homes. It would also increase generation capacity by 20% over conventional wind turbines and decrease operational costs by 50%. If that isn't enough, the maglev wind turbines will be operational for about 500 years!

Construction began on the world's largest production site for maglev wind turbines in central China on November 5, 2007. Zhongke Hengyuan Energy Technology has invested 400 million yuan in building this facility, which will produce maglev wind turbines with capacities ranging from 400 to 5,000 Watts. In the US, Arizona-based MagLev Wind Turbine Technologies will be manufacturing these turbines. Headed by long-time renewable energy researcher Ed Mazur, the company claims that it will be able to deliver clean power for less than one cent per kilowatt hour with this new technology. It also points out that building a single giant maglev wind turbine would reduce construction and maintenance costs and require much less land than hundreds of conventional turbines. The estimated cost of building this colossal structure is $53 million.

+ Maglev Wind Turbine

Treehugger MagLev WindTurbine Image


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