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


Carbon Newsclips for 10 February 2010: A boatload of information... SEC announces climate disclosure requirements, while US companies are lagging on carbon reporting and the White House appears to abandon carbon trading; milquetoast Copenhagen followup; supply chain risk -- tied to carbon or otherwise -- still an unknown for most companies

S.E.C. Adds Climate Risk to Disclosure List




Published: January 27, 2010

WASHINGTON — The Securities and Exchange Commission said on Wednesday for the first time that public companies should warn investors of any serious risks that global warming might pose to their businesses.

Although the agency has long required companies to reveal possible financial or legal impacts from a variety of environmental challenges, it has never specifically cited climate change as bringing potentially significant business risks or rewards.

The S.E.C., on a party-line 3-2 vote, issued "interpretive guidance" to help companies decide when and whether to disclose matters related to climate change. The commission said that companies could be helped or hurt by climate-related lawsuits, business opportunities or legislation and should promptly disclose such potential impacts. Banks or insurance companies that invest in coastal property that could be affected by storms or rising seas, for example, should disclose such risks, the agency said.

Mary L. Schapiro, the S.E.C. chairwoman, who was appointed by President Obama, said that the commission was not creating new legal requirements for companies, nor did it intend to endorse any particular scientific or policy view of global warming. She said that including climate risks among other disclosures was a logical step.

"It is neither surprising nor especially remarkable for us to conclude that of course a company must consider whether potential legislation — whether that legislation concerns climate change or new licensing requirements — is likely to occur," Ms. Schapiro said in her opening statement before Wednesday's vote. "Similarly, a company must disclose the significant risks that it faces, whether those risks are due to increased competition or severe weather. These principles of materiality form the bedrock of our disclosure framework."

The agency took the action in response to petitions from environmental and investor groups that wanted specific recognition of climate change as an important factor in the present and future business environment.

"We're glad the S.E.C. is stepping up to the plate to protect investors," said Anne Stausboll, chief executive of the California Public Employees Retirement System, the nation's largest public pension fund and one of the parties that petitioned for the guidance. "Ensuring that investors are getting timely, material information on climate-related impacts, including regulatory and physical impacts, is absolutely essential. Investors have a fundamental right to know which companies are well positioned for the future and which are not."

According to an S.E.C. staff paper, the new guidance urges companies to consider, for example, whether any new law or international treaty limiting carbon dioxide emissions might increase operating costs and prompt a disclosure requirement. A company might also be well positioned to take advantage of a new law mandating increased production of renewable electricity, again requiring disclosure.

The two Republicans on the commission voted against the proposal, while all three Democrats voted for it. Commissioner Kathleen L. Casey, a Republican appointed by former President George W. Bush, called the new guidance unnecessary because the agency already required extensive disclosure of environmental factors. She also said the decision was driven by the political motives of advocacy groups.

"I can only conclude that the purpose of this release is to place the imprimatur of the commission on the agenda of the social and environmental policy lobby, an agenda that falls outside of our expertise and beyond our fundamental mission of investor protection," she said.

Ms. Casey said it made little sense to issue such guidance "at a time when the state of the science, law and policy relating to climate change appear to be increasingly in flux."

Ms. Schapiro and the commission staff were careful to avoid expressing an opinion on the issue of global warming itself. Ms. Schapiro emphasized that "we are not opining on whether the world's climate is changing; at what pace it might be changing; or due to what causes. Nothing that the commission does today should be construed as weighing in on those topics."

SEC tells US firms to disclose climate risks

Environmental Finance, 28 January 2010 - After substantial prodding from investor advocates, the US Securities and Exchange Commission (SEC) will provide guidance to companies about what they must tell their investors about climate risks and opportunities.

Companies must consider whether the impact of existing and potential climate legislation and regulation is material and warrants disclosure, according to the guidance announced yesterday. Companies should also consider and disclose any material risks or impacts from international accords or treaties related to climate change, the SEC said.

Reporting companies must also disclose material, indirect consequences of regulation or business trends such as decreased demand for goods that produce significant greenhouse gas (GHG) emissions.

"This area of indirect consequences is a more challenging area to put into practice," said Bill Thomas, a Washington, DC-based lawyer in the environmental and climate change practice of Skadden, Arps.

Companies should also evaluate the physical impacts of climate change on their business such as severe weather, the SEC guidance said.

"We are not opining on whether the world's climate is changing, at what pace it might be changing or due to what causes," said SEC chairwoman Mary Schapiro. "Today's guidance will help to ensure that our disclosure rules are consistently applied."

The guidance does not require companies to analyse their carbon footprints or disclose efforts to reduce GHG emissions. But companies would find it hard to offer full disclosure without this information, Thomas said.

Investor coalitions such as Boston-based Ceres and the Investor Network on Climate Risk have filed multiple petitions asking the SEC to force public companies to disclose material risks and opportunities related to climate change, arguing current disclosure is inconsistent and inadequate.

"We're glad the SEC is stepping up to the plate to protect investors," said Anne Stausboll, chief executive officer of the California Public Employees' Retirement System, the nation's largest public pension fund with more than $205 billion in assets under management.

But one of the SEC's five commissioners, Kathleen Casey, said the guidance was unnecessary because SEC disclosure requirements related to environmental issues are "highly developed and robust" and this action could do more harm than good by making the requirements more cumbersome. 

"I can only conclude that the purpose of this release is to place the imprimatur of the commission on the agenda of the social and environmental policy lobby, an agenda that falls outside of our expertise and beyond our fundamental mission of investor protection," she said.

Casey was appointed Commissioner by George W Bush in 2006.

Davos: Unilever chief in plea on climate change
David Wighton

Participant at the World Economic Forum

A participant heads for the World Economic Forum where business leaders were implored to take a longer-term view and to act on global issues such as sustainability and climate change

Paul Polman, the chief executive of Unilever, made an impassioned plea to fellow business leaders yesterday to ignore the demands of short-term shareholders and lead from the front on sustainability and climate change.
He told a session at Davos that he did not mind if hedge funds sold Unilever's shares because of worries over short-term profitability. "They would sell their grandmother if they could make money. They are not people who are there in the long-term interests of the company."
Mr Polman, who joined Unilever a year ago, said he was brought in to ensure long-term success not to focus merely on shareholder value. This required him to take costly actions to ensure it had a sustainable business, for example in terms of palm oil supplies. "We want to be in business for the next 500 years."
It was time to move beyond "shareholder value" as the guiding principle behind corporate leadership, he said. Chief executives needed courage to move out of their "comfort zone".
Mr Polman added that his decision last year to stop providing earnings guidance to investors, which resulted in a 6 per cent fall in the share price, was part of a concerted effort to move the focus away from short-term returns. This might have driven hedge funds to sell Unilever's shares but there were "socially aware" investors that companies could attract. "I can be a hero for six months by driving up the share price. But we are running the company for the long term."
Leo Apotheker, the chief executive of SAP, the German software company, agreed it was "time to talk about stakeholder value" not shareholder value. "This will be a hard transition for many chief executives because they are not trained to do that. It will be tough but we have to do it."
Mr Apotheker said that the Copenhagen conference on climate change had been a "massive failure" which had shown business could not wait for others to take the initiative.
Maurice Levy, the head of Publicis, the advertising and marketing group, said companies had to take the lead on sustainability and warned that consumers were "hugely disenchanted" by the gap between corporate rhetoric and actions. "If we are not proactive we will have a big issue with our consumers." He said that he had ordered his executives not to get involved with "greenwashing" campaigns where clients attempt to exaggerate their green credentials.
Mark Parker, the chief executive of Nike, said that companies could not wait for consensus on environmental issues. "We have to step up and help educate consumers."
Unilever and Nike are among the companies behind a Davos initiative focused on "sustainable consumption". Mr Polman said companies had to take the lead over issues such as deforestation — one of the successes of the Copenhagen conference — because consumers were "powerless" on their own.
Trevor Manuel, the South African National Planning Minister, said that action on climate change required very difficult decisions from governments, companies and consumers. He pointed to the fact that South Africa has huge quantities of dirty coal and that renewable energy was much more expensive for it. He said now was the "moment of truth for this generation of corporate leaders".
— For the inside track direct to your inbox, sign up for the Davos Download, The Times's twice daily update from the WEF, here.

Don't hold your breath - Carbon markets after Copenhagen

The Economist, February 6, 2010 - Carbon markets after Copenhagen

Why hasn't the carbon price fallen further?

SOMETHING curious has been happening in the carbon markets. They are entirely political creations—even the most inventive financial engineers would not, on their own, have come up with the idea of a difference in value between the air people breathe in and the air they breathe out. Yet traders seem pretty uninterested in political cues. At the chaotic end of the Copenhagen climate summit in December, prices in the largest market in carbon-dioxide emissions, the European Emissions Trading Scheme (ETS), did drop from ?14.60 ($20.50) to ?12.70. But that still left the price of a tonne of carbon dioxide comfortably above its lowest level last year.

The Democrats' subsequent Senate-election loss in Massachusetts, which dealt a crippling blow to the prospects of an American cap-and-trade system that would have greatly expanded world carbon markets, had even less effect. And the announcement this week of the commitments to carbon reduction that countries were willing to accept under the Copenhagen "accord" caused scarcely a ripple.

There are two explanations for this sangfroid. One is that the markets had already priced in the likelihood of seeing neither a deal in Copenhagen nor a cap-and-trade bill on Barack Obama's desk. Another is that their long-term prospects remain reasonable, if humble.

The ETS is reckoned to be oversupplied at the moment because of the recession. Falling industrial output and lower electricity demand (see chart) mean that the pre-agreed amount of carbon allowances (known as EUAs) available over the 2008-2012 period will be greater than the actual amount of carbon emitted. A similar situation crashed the market in 2007 but that has not happened this time round because the EUAs issued from 2008 can be banked for use in the scheme's next phase, which will run from 2013-2020. Point Carbon, a research firm, estimates that under current EU policy, which calls for carbon emissions in 2020 that are 20% less than those of 1990, the price in 2016 should be ?20-40. If the EU opts for a 30% cut the range would be ?30-60.

Becalmed as they are, however, current prices are clearly not achieving the policy aims which led politicians to create them in the first place. The most obvious short-term way in which carbon prices in the ETS can reduce emissions is by encouraging electricity generators to switch from cheaper high-carbon fuels, like coal, which require them to buy more credits, to more expensive low-carbon fuels, like natural gas. At the moment, though, with gas prices comparatively low and coal prices creeping up, any such switching is going to be done anyway, according to Sabine Schels of Bank of America Merrill Lynch.

To encourage more profound changes in energy generation, such as the development of new types of nuclear-power stations or of coal plants that store away their carbon, the carbon price would have to be a great deal higher and have a pretty firm floor. As it is, current prices may be making industrialists more aware of their carbon footprints, but they are not having a huge effect on the world at large.

The biggest effect that carbon markets have had on emissions so far, according to Kristian Tangen of Point Carbon, has been on investment in developing countries. The Kyoto protocol, a 1997 agreement on emissions, set up a "clean development mechanism" (CDM) by which reductions in greenhouse gases in developing countries could generate a carbon credit that can be traded alongside the EUA.

A successor to the Kyoto protocol could greatly increase the size of this market, as could a cap-and-trade system in America. But neither is coming soon. At the moment the Kyoto protocol is due to run out in 2012, and may take the CDM with it. "The CDM will either be consigned to the dustbin for quaint market-based approaches that couldn't attract sufficient political will, or it will scramble to scale up massively," says Abyd Karmali of the Carbon Markets and Investors Association, a trade body.

That level of uncertainty is chilling new investments but not driving them away entirely. "If you are not in the market then it's rational to wait," says James Cameron, vice-chairman at Climate Change Capital, which manages CDM investments. "However, if you are confident about the public policy purposes that drive the market, and you know the problem hasn't been solved, your conviction drives you to continue to invest where value will be found."

If European politicians actually wanted to raise the price of carbon in the short term, they could, says Michael Grubb, a Cambridge professor who is also chair of Climate Strategies, a network of policy advisers. New EUAs are regularly auctioned by Germany and Britain. They could set a reserve price of, say, ?20. If no one were to bid, the supply of allowances would tighten until the price rose. When this idea was first raised last year, it attracted brickbats for constituting political interference. A fair criticism, perhaps, but given the political nature of the market, a redundant one.

U.S. Cap And Trade Must Take Back Seat: Executives
Date: 29-Jan-10
 Martin Howell and Gerard Wynn

Switzerland - Business executives and policy officials said a U.S. cap and trade scheme must give way to a clean energy law, after U.S. President Barack Obama favored "green jobs" in his State of the Union Address.
Cap and trade works by limiting carbon emissions from polluters, which then pass on the extra cost to consumers. That model is proving a hard sell during a slow U.S. economic recovery.
Obama said on Wednesday he wanted to create more clean energy jobs and supported a "comprehensive energy and climate bill" in the Senate. But he didn't mention cap and trade.
The U.S. House of Representatives passed a climate bill last year, featuring a cap and trade scheme, and is awaiting the passage of a similar Senate draft.
"I don't think that the House bill that passed will even be considered this year in the Senate," said Tom Donahue, President of the U.S. Chamber of Commerce, noting that it was an election year and there were so many other priorities, including Obama's latest jobs plan.
"We are in search of a solid domestic bill, whether its cap and trade or cap and carbon tax or however these things are put together. We just don't want a bill like the one that came out of the House," he told Reuters on Thursday on the sidelines of a business and policy summit in the Davos Swiss ski resort.
The industry looby group ran a high-profile campaign against the House climate bill, losing some members as a result, but even businesses with big investments in green technology are now calling for a backing from cap and trade for now.
"There is so much on the plates of politicians and regulators in the United States it is hard for me to envisage a strong movement to have a cap and trade system in place in the next eight or nine months," said John Rice, a vice chairman of General Electric Co, who also serves as chief executive of its GE Technology Infrastructure division.
GE is a top wind turbine manufacturer and also has investments in solar.
"I would worry if we tried to push it through in this environment we would end up with a very incomplete solution, and I think it is more important that we are thoughtful about it and if we do it, we do it correctly," Rice said.
"You can see in the U.S. we are getting a backlash in a lot of areas and I just don't think it would be helpful."
The House bill passed a scheme which would force polluters to buy carbon emissions permits from an economy-wide quota which would be ratcheted down, to drive carbon cuts.
"It's the dumbest idea," said Timothy Wirth, former U.S. senator and now President of the U.N. Foundation, on the idea of forcing businesses to buy emissions permits.
He expected a modified scheme to pass eventually which may apply only to utilities without enforced permit auctions.
In the near term, analysts expected the United States to pass a slimmer energy bill without cap and trade, focused instead on targets for renewables and nuclear power.
"I do not believe that there will be legislation on climate any time soon in the U.S., but they will address clean energy and that will have very good benefits for the climate," said Bjorn Stigson, president of the World Business Council for Sustainable Development, a green business lobby.
(Editing Stella Dawson)

U.S. Formally Embraces Copenhagen Climate Deal
Date: 29-Jan-10
 Richard Cowan

U.S. Formally Embraces Copenhagen Climate Deal Photo: Ints Kalnins
A worker walks past a billboard as the United Nations Climate Change Conference 2009 installation disassembling works are in progress in Bella Center Copenhagen December 20, 2009.
Photo: Ints Kalnins

WASHINGTON - The United States on Thursday formally notified the United Nations that it has embraced the Copenhagen Accord setting nonbinding goals for reducing greenhouse gas emissions that was negotiated last month.
Todd Stern, the top U.S. climate negotiator for the Obama administration, also gave notice that, as expected, it will aim for a 17 percent reduction in emissions of carbon dioxide and other gases blamed for global warming by 2020, with 2005 as the base year.
A final emissions reduction target will be submitted, the U.S. said, once the U.S. Congress enacts domestic legislation requiring carbon pollution cuts. But such legislation has an uncertain fate in the Senate.
(Editing by Sandra Maler)

U.S. Businesses Lag on Carbon Emissions Reporting
Posted By Environmental Leader On February 4, 2010 @ 8:39 am In Carbon ManagementChartsFeatureFinance & ReportingFinancial | No Comments
Driven in part by the Securities and Exchange Commission's recent guidance that requires [1] public companies to disclose any risks from climate change on their operations and the U.S. Environmental Protection Agency's new Greenhouse Gas (GHG) emissionsreporting requirement [2], carbon emissions management is becoming an increasingly important business objective for U.S. companies. However, outstanding questions about accounting, reporting and tax considerations have led to inconsistent practices, according to a report by Ernst & Young LLP [3].

The new report, "Carbon market readiness: accounting, compliance, reporting and tax considerations under state and national carbon emissions programs [4]" (PDF), concludes that companies should consider carbon emissions requirements as part of their businesses and financial management strategies now despite the uncertainty over the scope of climate change legislation in the U.S. The study also finds that many countries as well as states have some type of regulatory program to manage carbon emissions.

The report reveals in a survey of more than 1,000 U.S. public registrants with revenues between $1 billion and $100 billion that just 29 companies disclosed an accounting policy related to emissions credits or allowances in their financial statements.

A key finding from an Ernst & Young webcast in January indicates that far fewer than half of the approximately 1,000 corporate participants in the webcast claimed to have a strategy in place to deal with carbon emissions regulations or markets.

Ernst & Young recommends that companies include carbon-related considerations in their business strategies to address climate change issues effectively, and should review their risk management processes as well as day-to-day business operations, accounting and tax planning.

A major challenge is harmonizing all the various reporting frameworks in an organization, says Herb Listen, Ernst & Young LLP, a co-author of the Report and a partner in the firm's Americas Oil and Gas Center. He recommends that an overall approach to GHG management should involve a cross-functional team that includes representatives from the tax department to environmental sustainability to help identify and implement carbon management initiatives.

The report also includes methods for accounting for emissions credits and allowances, and the carbon market's impact on new tax rules.

Similarly, in an informal survey of 117 energy industry professionals attending the EUEC 2010 energy conference, Enviance, a provider of software solutions to help organizations manage and reduce GHG emissions and other regulatory risks, found [5] that 61 percent of the companies surveyed do not have a system in place to record carbon emissions.

Other findings show that 44 percent of respondents support the SEC's guidance and related carbon reporting, while 56 percent disagreed that this reporting was necessary. Fourteen respondents were not aware of the ruling.

In terms of carbon pricing , 46 percent of respondents said they will need to significantly reduce their GHG emissions in response to either a cap-and-trade program or carbon tax, and 39 percent said it would have no affect on their company, which correlates with the number of respondents that have a carbon management system in place, says Enviance.

Half of the survey respondents also indicated that their company's primary driver for GHG management is to implement corporate social responsibility and green best practices. Only 34 percent indicated that federal legislation has been the driving factor for prioritizing GHG, says Enviance.

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FTC moves may signal start of 'greenwashing' crackdown

Greenwire, 3 February 2010 - The Federal Trade Commission is expected to crack down on "greenwashing" when it updates its environmental marketing guidelines for the first time since 1998.

The agency's Guides for the Use of Environmental Marketing Claims, or Green Guides, define terms such as "recyclable" and "biodegradable" and explain how businesses should back up environmental assertions. Though FTC cannot force businesses to adopt greener practices, Section 5 of the FTC Act authorizes the agency to intervene when businesses are misrepresenting their practices to clients -- in other words, turning greenwashing into fraud.

FTC did not use those guidelines to file any complaints regarding environmental claims during the administration of President George W. Bush, but it has filed seven since Obama took office.

David Vladeck, director of FTC's Bureau of Consumer Protection, told the Senate Subcommittee on Consumer Protection last summer that tougher enforcement and environmental guidelines are a major part of the commission's agenda.

"In response to the explosion of green marketing in recent years, the agency initiated a review of its Green Guides to ensure that they are responsive to today's marketplace," Vladeck said in his written testimony. The commission is looking into topics beyond the scope of the existing guides, he noted, "because many currently used green claims, such as 'sustainable' and 'carbon neutral,' were not common when the Commission last revised the Guides."

Industry and environmental groups are also eager to find out whether the revised Green Guides will weigh in on the largely unregulated markets for carbon offsets, renewable energy credits and environmental certifications, all of which were addressed during public workshops in 2008. Regulatory experts say stricter marketing guidelines would fit into the Obama administration's efforts to expand environmental oversight by the executive branch.

"If they can't get climate change regulations passed through Congress, the administration is going to do whatever it can to keep moving the ball forward," said Hamilton Hackney, an environmental attorney and shareholder at the Boston office of Greenberg Traurig LLP. "Sometimes, these 'collateral regulations' can have almost as much of an impact."

Most industry groups are closely following U.S. EPA's efforts to regulate greenhouse gas emissions, Hackney said, but even agencies historically uninvolved with environmental issues have started assuming environmental oversight responsibilities. The Securities and Exchange Commission, for instance, voted last month to require publicly traded companies to disclose to investors the potential economic impact of new greenhouse gas regulations (E&ENews PM, Jan. 27).

Environmental groups are excited that FTC is examining the issue of greenwashing, though they are not sure what to expect. The agency has remained tight-lipped on details of the revisions, said Claudette Juska, a research specialist at Greenpeace. "It's been a little bit hard to see into the process," said Juska, who submitted a comment during the public review process in 2008.

FTC's information-gathering process was completed in the fall when the results of a consumer perception study arrived, said James Kohm, director of the commission's enforcement division, in an interview. The commission has begun deliberating on revisions, he said, but no timeline has been announced for their release or implementation.

Fighting greenwash

FTC takes action on relatively few environmental cases. Around 45 complaints have been filed under the Green Guides since their initial implementation in 1992, according to commission data.

While the complaints might only scratch the surface of greenwashing, Juska said, they serve as a deterrent. She said Greenpeace would like to see the Green Guides become stricter, but FTC could achieve the same goal by cracking down on greenwashing using the standards that are already in place.

"The Green Guides themselves serve as great guidelines," Juska said. "But if they're not being enforced, they're not useful."

As part of its environmental enforcement campaign last year, FTC went after Kmart Corp., which ultimately agreed to change the marketing for a line of house-brand paper plates. Kmart had advertised the plates as biodegradable, which FTC deemed misleading because the plates would not usually decompose in municipal solid waste facilities, where about 90 percent of garbage is disposed.

The commission filed two other complaints over the biodegradability of products, as well as four against companies using environmental claims in the marketing of bamboo clothing. In all four of those cases, FTC argued that because the clothing material had been made from bamboo into rayon using harsh chemicals, consumers were being misled by claims that the use of bamboo was environmentally friendly.

Stricter guidelines could signal an intention to step up enforcement, but revisions would also have an impact beyond the agency's own enforcement mechanisms, environmental attorneys say.

California state law has incorporated the Green Guides into its own environmental marketing laws, as has Indiana. The statutes defer to the Green Guides whenever certain environmental marketing claims are made, opening up violators of the Green Guides to criminal penalties and civil suits rather than just administrative action by FTC.

In emerging industries, where there is little legal precedent, courts would likely look to federal guidelines even if they lack the weight of law, said Brad Mondschein, an alternative energy and green development attorney at Hartford, Conn.-based Pullman & Comley LLC.

"The Green Guides would become extremely persuasive to a court, especially in the early cases, because the courts would otherwise have very little guidance to go on," said Mondschein, who has written about the guidelines. "While they certainly won't be definitive, I would think they probably hold a lot of sway."

New markets

FTC's consideration of guidelines for the marketing of renewable energy credits and carbon offsets has prompted particular debate, most of it hinging on the lack of a regulatory framework to ensure that the purchase of offsets actually reflects greenhouse gas reductions. Various studies have suggested a significant fraction of offsets are linked to projects that were already close to completion or that would have been completed regardless.

Terrapass Inc., a San Francisco-based carbon offset provider, submitted a letter to FTC during the comment process saying the integrity of the market depends on the interpretation of this concept, typically referred to as "additionality."

"If the offsetting reductions would have happened without a carbon market, the market as a whole will fail to achieve its environmental objective," the letter said.

Rep. Edward Markey (D-Mass.) specifically cited the carbon offset market as an area to examine when he asked FTC to begin review of the Green Guides in 2007, and the attorneys general of nine states submitted a letter during the review process urging the government to intervene in that market.

"The lack of common standards and definitions, along with the intangible nature of carbon offsets, makes it difficult if not impossible for consumers to verify that they are receiving what they paid for and creates a significant potential for deceptive claims," said the letter, sent by the office of Vermont Attorney General William Sorrell (D). "We need to ensure, by law, that carbon offsets are real, additional, verifiable, enforceable, and accompanied by some system that will permit average consumers to make informed decisions as to whether and what to buy," the letter went on to say.

Some industry groups asked FTC to avoid weighing in on the industry, saying oversight would quash the emerging market and the commission lacked the authority to impose new regulatory standards or testing protocols.

The Edison Electric Institute, which represents publicly held utilities, submitted a letter saying any attempt by FTC to define additionality would lead the commission into a "conceptual thicket."

"Any further encumbrance on qualifying offsets projects based on additionality would create confusion and be a barrier to GHG reductions, avoidances and sequestration from a policy standpoint," the group wrote.

Though some offset and renewable energy credit providers might currently provide a greater environmental benefit than others, FTC would have a hard time judging marketing practices as misleading, Hackney said.

"Most people at the consumer level are buying them as a feel-good sort of thing, which is a lot different from buying a $2,000 refrigerator on the assumption that you're going to save $500 over its lifetime through energy efficiency," Hackney said.

Kohm said FTC is careful not to issue guidelines that would stifle the development of an industry, such as the market for carbon offsets.

"The commission traditionally has been wary of getting involved in new technologies where the science isn't clear and where the market is developing," Kohm said. On the other hand, he added, "there's outright fraud, and the commission would always be concerned by that."

The Elephant in the Room Has a Big Carbon Footprint
By Frankie Ridolfi
Created 2010-01-27 00:01

Interface CEO Ray Anderson attended the CleanTech Investor Summit last week in Palm Springs, California. That's a good sign for innovative young companies like Climate Earth -- his presence is a signal that investors must participate in creating markets for green products.  

Anderson is a legend for rethinking business as usual. He made flooring manufacturer Interface an industry leader by investing in green technologies and using sustainability as a key performance indicator. 

His vision continues to drive profitability and market leadership for the company. At the 
GreenBuild conference and trade show in November, Interface's booth featured an enormous pachyderm hanging from the ceiling above pillars of fossil fuel -- the proverbial elephant in the room. It wasn't just clever marketing.

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According to an Interface representative at the show, the company has extracted so much fossil fuel from its supply chain that it was buffered from fluctuations in oil prices last year.

While competitors had to raise prices, Interface proudly told customers about their efficiency and had no cost increases to pass along. Talk about a competitive advantage. 

Associated Press reported Tuesday that oil prices rose to a 15-month high in January as a result of cold and snowy conditions. Now, prices are being impacted as much by China's bank lending practices as domestic supply and demand.

Weather and foreign economic policies are only two of an infinite number of factors that affect oil availability and price. This unpredictability presents a threat to profits, especially for companies dependent upon low-margin products and carbon-intensive materials.

CEOs looking for new ways to cut costs should focus on reducing their company's supply chain dependence on oil. The first step is to understand their current fossil fuel exposure.

<!--pagebreak--> Fortunately, carbon accounting offers a business-friendly way to achieve this goal. Like financial accounting, it provides a consistent and reliable way to measure the performance of your company, its supply chain, products and raw materials.

Full-service carbon accounting is managed by specialized experts in carbon science, and as a result, it overcomes historical limitations with timeframes, expense and scope while maintaining high standards of accuracy. For instance, Climate Earth's accounting system can analyze an entire company's operations 10 times faster than typical lifecycle assessment can complete a much smaller one-off project. This is not your father's carbon accounting.

Why start now?

The market is increasingly demanding action. Everyone from industry giants like Walmart to individual citizens want to buy green products and services. 

Companies that wait until they are pushed will end up doing carbon accounting regardless. But they will lose out on the time-value of carbon cost reductions and the benefits of market leadership for reputation and top-line revenue.

Meeting the letter of compliance is like receiving a D- grade in school. It's the bare minimum level of performance acceptable to society. That's no way to run a company.

CEOs and investors should acknowledge the elephant in the room -- enterprise and supply chain carbon emissions -- and take their rightful leadership roles in building a prosperous, low-carbon economy.

Frankie Ridolfi is director of marketing for climate accounting company 
Climate Earth Inc., which helps executives understand their full enterprise and supply chain carbon footprint.

Elephant images CC licensed by Flickr user 
digitalART2 and sxc user Chemtec.
Ray Anderson inset courtesy of Interface.

Investors Remain at Risk Due to Corporate Breaches of Supply Chain Standards 
by Robert Kropp

According to a new EIRIS report, companies in consumer industries are responding to NGO pressure, but recommends investor engagement with companies on supply chain polices, management, and reporting. -- Basing its analysis of corporate supply chain standards on the framework of the Declaration on Fundamental Principles and Rights at Work adopted in 1998 by theInternational Labour Organization (ILO)EIRIS, a UK-based provider of corporate environmental, social, and governance (ESG) research, found that 45% of companies "have no policy or management systems in place to protect labor standards in their supply chain and fail to report on the issue." 

The categories included in the ILO's Declaration are freedom of association and recognition of the right to collective bargaining, elimination of forced or compulsory labor, abolition of child labor, and elimination of discrimination in employment and occupation. 

The EIRIS report, entitled 
A Risky Business? Managing Core Labor Standards in Company Supply Chains, focused its analysis on the clothing and footwear, consumer electronics, and agricultural crops industrial sectors, where the risk of breach of the ILO standards is highest. Problematic areas of the world identified by EIRIS include trade union rights in Export Processing Zones (EPZs), child labor in the Indian embroidery industry, forced labor in Jordan's Qualifying Industrial Zones (QIZs), and forced pregnancy testing in maquiladoras in Central and South America. 

Investors should be concerned about breaches of labor standards for several reasons, according to EIRIS. The concerns include reputational risk, time spent by management addressing issues raised by nongovernmental organizations (NGOs), poor product quality, and legislation that could limit access to markets. 

EIRIS assessed 13% of the companies in its research as high or medium risk for supply chain labor standards, of which 66% are in the consumer industry sector, which include "food and drug retailers and general retailers which have been the focus of NGO campaigns" for years. Companies in the consumer industry have the lowest proportion of those showing no evidence of policy, management systems, and reporting on the issue, while 7% of them were assessed as good in their response. 

On the other hand, more than half of industrial and technology industries show no evidence of any policies or systems, although a small number of such companies have begun to develop comprehensive policies and systems, according to the report. 

While European and North American companies are more likely to have been accused of breaching labor standards in their supply chains, companies in those regions were assessed as having the highest response to such allegations. 

The report concludes with a number of recommendations for investors, including engaging with companies on supply chain labor standards policies and management systems, encouraging companies to join such multi-stakeholder initiatives as the 
Ethical Trading Initiative (ETI), calling for comprehensive reporting, and encouraging long-term relationships with suppliers. 

EIRIS also suggested that investors consider joining the 
Principles for Responsible Investment (PRI), whose Engagement Clearinghouse provides PRI signatories with a forum to share information about engagement activities.

Aravo Poll: Most Fortune 1000 Companies Manage Risk for Less Than 20 Percent of Suppliers

January 12, 2010

I expected the percentage to be low, but when the final results were calculated, I have to admit, my jaw dropped.

In a recent survey of financial, procurement and risk executives who participated in Aravo's supply chain risk webinar series, we found that:

  • Even though well more than two-thirds (71.4 percent) of those polled said that their biggest concern continues to be risk of supplier financial viability,more than half have less than 20 percent of their supplier base under active risk management.
"More than half have less than 20 percent of their supplier base under active risk management?" That's an alarming statistic –particularly now, when for the past few years we've seen headline after headline about how supplier failure can lead to business failure on a global scale.

That response from our survey participants says screams to me that corporations need a wake-up call. They need to realize that it is critical for any company depending on suppliers –whether here, there, or anywhere –to implement supplier risk management solutions that are comprehensive and proactive.  Why? Because if you want your company to successfully compete in today's unpredictable and complex global marketplace, you need supplier risk management strategies that: 1) reduce the possibility of supplier failures and supply disruptions, 2) improve supplier performance management, and 3) enhance supplier compliance initiatives.

There's no doubt about it: Robust supplier risk management systems are becoming increasingly essential as supplier networks become more fractured and multifaceted. And, interestingly, our survey of more than 200 Fortune 1000 companies also revealed that:

  • Businesses are continuing to explore opportunities to maximize budgets by adding more suppliers in emerging markets.  Nearly one-third (31.2 percent) of survey participants are "heavily penetrated in emerging markets." A equal percentage (31.2 percent) has "already sourced some suppliers in emerging markets and are looking to expand low-cost country suppliers in 2010."
  • Not surprisingly, the top concern around suppliers in emerging markets is regulatory compliance (41.7 percent), followed by the financial viability of these suppliers (33.3 percent).  Only 25 percent of those polled were concerned about product quality.

Copenhagen Climate Deal Gets Low-Key Endorsement
Date: 01-Feb-10
 Alister Doyle

Copenhagen Climate Deal Gets Low-Key Endorsement Photo: David Gray
A chimney billows smoke behind electricity wires in central Beijing December 21, 2009. Nations accounting for most of the world's greenhouse gas emissions have restated their promises to fight climate change
Photo: David Gray

OSLO - Nations accounting for most of the world's greenhouse gas emissions have restated their promises to fight climate change, meeting a Sunday deadline in a low-key endorsement of December's "Copenhagen Accord."
Experts say their promised curbs on greenhouse gas emissions by 2020 are too small so far to meet the accord's key goal of limiting global warming to less than 2 degrees Celsius (3.6 Fahrenheit) above pre-industrial times.
The U.N. Climate Change Secretariat plans to publish a list of submissions on Monday. That may put pressure on all capitals to keep their promises.
Countries accounting for at least two-thirds of emissions -- led by China, the United States and the European Union -- have all written in. Smaller emitters, from the Philippines to Mali, have also sent promises or asked to be associated with the deal.
The Secretariat says the January 31 deadline is flexible.
"Most of the industrialized countries' (promises) are in the 'inadequate' category," said Niklas Hoehne, director of energy and climate policy at climate consultancy Ecofys, which assesses how far national commitments will help limit climate change.
"The U.S. is not enough, the European Union is not enough. For the major developed countries it's still far behind what is expected, except for Japan and Norway," he said.
Some developing nations, such as Brazil or Mexico, were making relatively greater efforts, he said.
The accord's goal of limiting warming to below 2 C -- meant to help limit floods, droughts, wildfires and rising seas -- is twinned with promises of $28 billion in aid for developing nations from 2010-12, rising to $100 billion a year from 2020.
Ecofys reckons that the promised curbs will set the world toward a 3.5 degrees Celsius rise in temperatures, not 2.
PricewaterhouseCoopers LLP said that on current projections the world would exceed an estimated "carbon emissions budget" for the first half of this century by 2034, 16 years ahead of schedule.
The European Union plans to cut emissions by 20 percent below 1990 levels by 2020, and 30 percent if others make deep cuts. The United States plans a cut of 17 percent below 2005 levels by 2020, or 4 percent below 1990 levels.
"Carbon prices look set to remain relatively low until economic growth picks up or until a more ambitious target is adopted," Richard Gledhill, a climate expert at PricewaterhouseCoopers, said of the EU goal.
"This will continue to delay major capital investment in low carbon technology," he said in a statement.
The Copenhagen Accord, reached after a summit on December 18 in Denmark, was not adopted as a U.N. plan for shifting from fossil fuels after opposition by a handful of developing nations such as Venezuela and Sudan.
One possible complication is that some countries, including China and India, have written to the United Nations giving 2020 targets but without explicitly backing the Copenhagen Accord. The U.N. has asked all to take sides by January 31.
An Indian document sent to the U.N. Secretariat does not mention the accord, for instance, but says it is giving details of plans to 2020 "in view of the current debate under way in the international climate negotiations."
(Editing by Andrew Roche)

India Reiterates Carbon Goals For Climate Accord
Date: 01-Feb-10
 Krittivas Mukherjee

NEW DELHI - India has reiterated a goal of slowing the rise of its carbon emissions by 2020 as part of pledges due by Sunday under a "Copenhagen Accord" to fight climate change, an official statement said.
Many other nations have also reiterated existing goals for slowing global warming before a Sunday deadline for making commitments under the "Copenhagen Accord," which sets an overriding goal of limiting a rise in world temperatures to less than 2 degrees Celsius (3.6 F).
The statement said India will "endeavor" to reduce its carbon emission intensity by 20 to 25 percent by 2020 in comparison to the 2005 level.
Carbon emissions intensity refers to the amount of carbon dioxide emitted for each unit of gross domestic product.
The statement said India's actions will be legally non-binding and its carbon intensity cut target will not include emission from the agriculture sector.
Last week, China reiterated a voluntary domestic target to lower its carbon emissions intensity by 40 to 45 percent by 2020 from 2005 level while also stepping up the use of renewable energy and planting more trees.
The non-binding accord was described by many as a failure because it fell far short of the Copenhagen conference's original goal of a more ambitious commitment to prevent more heat waves, droughts and crop failures.
So the more top emitters such as China and India there are committing numbers to the accord, the better its chances of survival.
China, India, South Africa and Brazil met in the Indian capital on January 24 and expressed support for the "Copenhagen Accord," while urging donors to keep promises of aid.
(Editing by David Fox)
© Thomson Reuters 2010 All rights reserved

World's top polluting nations submit plans to cut emissions

The International Herald Tribune, February 3, 2010 Wednesday - The climate change accord reached at Copenhagen in December has passed its first test as countries responsible for the bulk of climate-altering pollution formally submitted their emissions reductions plans, meeting the agreement's Jan. 31 deadline.

Most major nations - including the United States, the 27 nations of the European Union, China, India, Japan and Brazil - restated on Monday earlier pledges to curb emissions by 2020, some by promising absolute cuts, others by reducing the rate of increase from a business-as-usual curve.

In all, 55 developed and developing countries submitted emissions reduction plans to the U.N. Framework Convention on Climate Change, the body overseeing global negotiations. Two major nations - Mexico and Russia - had not submitted plans as of Monday evening.

U.N. officials said nations that had already filed plans accounted for 78 percent of global greenhouse gas emissions.

The so-called Copenhagen Accord was pasted together in the final hours of the U.N.-sponsored climate summit meeting that ended Dec. 19. The skeletal agreement was not formally adopted by the conference, is not binding on the parties and sets no deadline for reaching a formal international climate change treaty.

Analysts said that even if all nations met their promises, the world would still be on a path to exceed the Copenhagen agreement's central goal of limiting global warming to less than 2 degrees Celsius (3.6 degrees Fahrenheit) above the pre-industrial era.

But it was the first time that major developing nations put on paper their plans for slowing global warming. China said it would reduce its carbon intensity by 40 to 45 percent by 2020, compared with 2005 levels. India said its carbon intensity would fall by 20 to 25 percent and South Korea by 30 percent below 2005 levels by 2020.

The European Union said it would cut emissions by 20 to 30 percent over 1990 levels by 2020. Japan's target is 25 percent over the same period. U.S. promises were ''in the range of'' 17 percent by 2020 compared with 2005 levels, pending congressional legislation.

Survey: 56% of CDP Members May Cut Out Suppliers Who Don't Manage Carbon
Posted By Environmental Leader On February 1, 2010 @ 8:57 am In Carbon FootprintChartsFeatureResearch & TechnologySupply Chain | No Comments
cdp2More than half (56 percent) of Carbon Disclosure Project members surveyed said that in the future they would cease doing business with suppliers that do not manage their carbon, according to the "Supply Chain Report 2010 [1]" (PDF) from the Carbon Disclosure Project [2].

Surveyed member companies included firms like PepsiCo, Dell, Google, IBM, Kellogg, HP and Unilever.

To assemble the report, 44 CDP member firms reached out to 1,402 of their suppliers. About 51 percent of suppliers responded to the survey, 7 percent declined to participate and another 42 percent did not respond.

The survey found that 38 percent of supply chain respondents have carbon reduction targets in place.

Most of those supply chain firms have short-term carbon reduction goals of about five years. More than 80 percent do not have goals beyond 2012.

About 62 percent of suppliers report Scope 1 emissions and 63 percent report Scope 2  emissions. Only 8 percent report Scope 3 emissions.

Twice as many supply chain firms are having their emissions data verified by third parties as last year.

Beginning this year, CDP also is requesting water-related data from 300 large firms in water-intensive industries.

For a look at the estimated annual carbon reduction of supply chain members, see the first chart below.

The second chart looks at the percentage of suppliers reporting exposure to regulatory and physical risks related to climate change.


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White House Budget Suggests Abandonment of Cap and Trade
Posted By Environmental Leader On February 1, 2010 @ 9:19 am In Carbon Finance & OffsetsEmissionsFundingGovernmentPolicy & Law | 1 Comment
obama with lampThe fact that the White House is not including projected revenues from cap and trade suggests that the Obama Administration is acquiescing to the notion that Congress may not pass such legislation, observers say.

Last year the Obama Administration projected [1] that cap and trade would provide $646 billion in revenues from 2012-2019, but those numbers do not appear in the new budget, reports Reuters [2].

Instead, the White House budget includes a "placeholder" for revenues from cap and trade, provided that Congress passes it, reports the New York Times [3]. The placeholder status assumes that no cap and trade revenues will be coming into the Treasury.

The $3.8 trillion budget would result in a record annual deficit of $1.56 trillion, reports Reuters [4]. That compares to $1.41 trillion last year, which at the time represented 9.9 percent of the gross domestic product.

In energy related news and the budget, the White House plans to cut subsidies for fossil fuels to the tune of $40 billion over 10 years.

Clean energy projects would get a fresh injection of $6 billion, on top of previously announced spending.

Obama did not mention cap and trade during his State of the Union address last week, while he did mention comprehensive climate legislation.

White House aides say they are still working with members of Congress on climate legislation, according to the article.

The White House is likely to insist that any climate legislation be paid for without adding to the federal deficit.

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CO2 abatement: Exploring options for oil and natural gas companies
Oil and natural gas companies play a central role in CO2 emissions. How can the industry meet the challenge from climate change regulations?
February 2010 • Scott Nyquist and Jurriaan Ruys
The oil and natural gas industry is directly responsible for just 6 percent of global CO2 emissions, but the debate over how to reduce the global greenhouse gases (GHG) commonly associated with climate change focuses primarily on oil and natural gas companies. These companies are under constant regulatory and reputational pressure to reduce both upstream and downstream CO2 emissions, and in the coming years they will increasingly be expected to provide solutions and make investments. The reason for this emphasis on the industry is that when you add the CO2 emitted in the end uses (transportation, power and heat generation), the petroleum and gas sectors account for almost half of all global emissions.
It is important to understand the position of the oil and gas industry in the context of the larger debate over climate change. By exploring some of the options that the sector has for reducing GHG emissions, oil and natural gas companies can not only stay ahead of regulatory and economic developments but also potentially profit from them.
Current environment
In 2005, direct greenhouse gas emissions from the oil and gas sector totaled 2.9 billion tons CO2 equivalent (CO2e), spread equally along the value chain: petroleum upstream and downstream emissions were each about 1.1 billion tons CO2e per year, and emissions from gas transport totaled 0.7 billion tons per year. Assuming no additional abatement measures, emissions are projected to grow by a third (even allowing for a major reduction of 72 percent in flaring as a result of public pressure and high gas prices). Upstream production and processing are expected to become more energy intensive as a result of more complex operational requirements, while energy intensity downstream is expected to stay relatively constant.
It is safe to assume, however, that the growth predicted in this business-as-usual scenario will not be realized. Political and economic realities will result in reductions of greenhouse gas emissions. Since that is the case, it is useful to have a straightforward way to evaluate the cost and the impact of the various options. The McKinsey abatement curve, which charts total reduction potential per measure versus the euro per ton of CO2 abated (exhibit), shows that by 2030, an additional 1,100 million tons of CO2 abated (mmtCO2e) can be avoided beyond the business-as-usual scenario with investments that cost €60 per ton of CO2e or less.1 The key opportunities include increasing energy efficiency through operational changes and small investments, reducing flaring, improving gas pipeline planning, and investing in cogeneration and carbon capture and storage (CCS).

Back to top
The dominant abatement methods differ significantly by region: for North America, Latin America, Western Europe, and OECD2 Pacific, CCS will be the main opportunity through 2030; in Africa, it will be further reduction of flaring; in Eastern Europe and Russia, reducing emissions from the gas pipeline network will have the greatest potential; in China, India, and the rest of developing Asia, energy-efficiency programs and cogeneration will be the most effective levers.
From society's point of view, the average lifetime cost of these measures will be close to zero, as energy savings will on balance pay for the more expensive ones. The challenge is that most of these measures require upfront investments: capital expenditure to implement abatement in 2030 will be approximately 3.5 percent of annual capital expenditure of the combined oil and natural gas industries—the equivalent of approximately €18 billion per year.
Most companies already have plans for reducing emissions. These include measurement and reporting, operational improvement, and incorporating carbon-abatement objectives in investment proposals. Implementation, however, is in an initial stage and faces several barriers: resources are scarce, in terms of both capital and technical capabilities, and CO2 reduction is not always a top priority. In the near future, however, companies will have to overcome those barriers and move beyond the initial phases of emissions abatement.
Significant regulatory impact
Although climate change regulation is in flux, many countries have concrete regulations or proposals in place. In Europe, the refining industry falls under the cap-and-trade scheme. Credits are auctioned and refineries have to pay for part of their emissions. The United States may soon impose a more rigorous regimen. The Waxman-Markey and Kerry-Boxer bills, currently making their through the US Congress, would also force refineries to buy credits for the CO2 emitted in the combustion of fuel they sell.
The benefit of a trading scheme is that it optimizes the abatement cost by realizing the lowest-cost CO2 reduction first, irrespective of the sector or geography in which it occurs. A drawback is that the CO2 price will fluctuate over time, making the return on investments volatile. Should CO2 prices remain low for a sustained period—caused, for example, by depressed economic activity, softened CO2 caps, or leakages in the system due to the Clean Development Mechanism (CDM, allowing credits from developing countries)—investments in emission reductions are likely to decline. As a result, some countries, such as Norway, have implemented a straightforward, fixed CO2 tax. Some economists and oil and gas companies support a tax scheme because it is more predictable and simpler to implement.
Alternative forms of regulation have been implemented or are being considered. California may impose a CO2 regulation that accounts for CO2 emissions through the entire value chain (including upstream). In Australia and Canada, CCS requirements are being discussed for CO2-intensive upstream operations. Finally, low-carbon fuel standards are being considered in California, and biofuels mandates are being implemented in the European Union and across North America.
For some of the schemes mentioned above, regulators may use benchmarking to steer toward emission improvements. Benchmarking can be done on a product basis (for example, CO2 content or CO2 emitted per volume sold) or on a process basis (for example, relative CO2 emission performance for operating an oil sands asset).
Benchmarking can have a direct implication on the public image of companies, and eventually on company valuations. Some organizations already publish rankings of oil and gas companies, and the results are widely covered in the press. Because of all this attention, oil and gas companies could benefit from a joint approach to determining what the best measures for CO2 emission performance are.
Silver linings
Despite significant downside risks, the upcoming climate change regulation and trends also provide revenue opportunities, both in improving internal operations and by capturing growth opportunities.
Energy efficiency. Oil and gas companies can continue to take a leading role in identifying and implementing energy-efficiency programs. Good programs should also focus on organizational challenges, particularly how to make the improvements stick. Programs focused on energy efficiency could be justified, at least for the next few years, as most companies can make large improvements and there is specific interest from the outside world for progress in that field.
GHG trading. Oil and gas companies with trading capabilities can make significant profits in the CO2 markets. Arbitrage opportunities exist for companies that have both existing CO2 emissions and abatement opportunities. CDM projects, in which CO2 reductions are captured in approved projects outside the European Union, can have good returns. Companies with both proprietary views on how CO2 regulation will be developing and views on the longer-term price development of CO2 can make portfolio adjustments that could create value if CO2 regulation continues to strengthen.
Biofuels. Some oil and gas companies are well positioned to become biofuels marketers and even producers. Second-generation biofuels appear to be harder to commercialize than originally anticipated, and it is still unclear which technology or technologies will succeed—for example, enzyme conversion of cellulosic material and algae. Until that time, stakes in first-generation fuels may become attractive again should oil prices rise or biofuel mandates increase.
Other fuels. On the commercial side of the business, retail and B2B customer offerings can be expanded with CO2-focused solutions. This expansion could include offering fuels and lubricants that yield higher mileage or creating energy-efficiency programs for business-to-business (B2B) customers. Complementing retail sites with electricity or hydrogen fueling stations could become a new source of income, it could also improve the public profile of the brand.
CCS. Carbon capture and storage is likely to become a long-term internal-abatement opportunity (or requirement) for refineries and upstream operations with high CO2 emissions. Beyond this, oil and gas companies may be well positioned to develop and implement CCS for third parties, since they have the access to and knowledge of depleted oil and gas fields that could become storage sites, and they have experience with handling CO2 through Enhanced Oil Recovery. They might have additional synergies with liquefied natural gas (LNG) regasification plants to cool and compress CO2 into the storage locations.
In addition to the list above, investments in renewable power sources such as solar, wind, and geothermal may be more or less attractive depending on specific company capabilities and the appetite to enter a nascent and not directly related industry.
Oil and natural gas companies play a central role in global emissions both as direct emitters of CO2 and as suppliers of fossil fuels. Regulation will therefore increasingly affect the profitability of these companies in selected regions, and it will change long-term demand patterns. The top performers in this sector will be the ones that stay ahead of these changes by mitigating the downside risks through internal-abatement efforts and by taking advantage of value creation opportunities that this rapidly changing business environment presents.

About the Authors
Scott Nyquist is a director in McKinsey's Houston office, and Jurriaan Ruys is a principal in the Amsterdam office.
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1 A threshold of €60/t is applied, as this covers most technical measures available today.
2 Organisation for Economic Co-Operation and Development.

Green Newsclips for 10 February 2010: The role of water vapour explained, and what cities should look like in five years -- while arctic ice and topsoil vanishing
(Bonus feature: a nice little YouTube clip on micro-forecasting)

Water vapour caused one-third of global warming in 1990s, study reveals
Experts say their research does not undermine the scientific consensus on man-made climate change, but call for 'closer examination' of the way computer models consider water vapour
David Adam, environment correspondent
The Guardian, Friday 29 January 2010
 larger | smaller
A 10% drop in water vapour, 10 miles up has had an effect on global warming over the last 10 years, scientists say. Photograph: Getty
Scientists have underestimated the role that water vapour plays in determining global temperature changes, according to a new study that could fuel further attacks on the science of climate change.
The research, led by one of the world's top climate scientists, suggests that almost one-third of the global warming recorded during the 1990s was due to an increase in water vapour in the high atmosphere, not human emissions of greenhouse gases. A subsequent decline in water vapour after 2000 could explain a recent slowdown in global temperature rise, the scientists add.
The experts say their research does not undermine the scientific consensus that emissions of greenhouse gases from human activity drive global warming, but they call for "closer examination" of the way climate computer models consider water vapour.
The new research comes at a difficult time for climate scientists, who have been forced to defend their predictions in the face of an embarrassing mistake in the 2007 report of the Intergovernmental Panel on Climate Change (IPCC), which included false claims that Himalayan glaciers could melt away by 2035. There has also been heavy criticism over the way climate scientists at the University of East Anglia apparently tried to prevent the release of data requested under Freedom of Information laws.
The new research, led by Susan Solomon, at the US National Oceanic and Atmospheric Administration, who co-chaired the 2007 IPCC report on the science of global warming, is published today in the journal Science, one of the most respected in the world.
Solomon said the new finding does not challenge the conclusion that human activity drives climate change. "Not to my mind it doesn't," she said. "It shows that we shouldn't over-interpret the results from a few years one way or another."
She would not comment on the mistake in the IPCC report - which was published in a separate section on likely impacts - or on calls for Rajendra Pachauri, the IPCC chairman, to step down.
"What I will say, is that this [new study] shows there are climate scientists round the world who are trying very hard to understand and to explain to people openly and honestly what has happened over the last decade."
The new study analysed water vapour in the stratosphere, about 10 miles up, where it acts as a potent greenhouse gas and traps heat at the Earth's surface.
Satellite measurements were used to show that water vapour levels in the stratosphere have dropped about 10% since 2000. When the scientists fed this change into a climate model, they found it could have reduced, by about 25% over the last decade, the amount of warming expected to be caused by carbon dioxide and other greenhouse gases.
They conclude: "The decline in stratospheric water vapour after 2000 should be expected to have significantly contributed to the flattening of the global warming trend in the last decade."
Solomon said: "We call this the 10, 10, 10 problem. A 10% drop in water vapour, 10 miles up has had an effect on global warming over the last 10 years." Until now, scientists have struggled to explain the temperature slowdown in the years since 2000, a problem climate sceptics have exploited.
The scientists also looked at the earlier period, from 1980 to 2000, though cautioned this was based on observations of the atmosphere made by a single weather balloon. They found likely increases in water vapour in the stratosphere, enough to enhance the rate of global warming by about 30% above what would have been expected.
"These findings show that stratospheric water vapour represents an important driver of decadal global surface climate change," the scientists say. They say it should lead to a "closer examination of the representation of stratospheric water vapour changes in climate models".
Solomon said it was not clear why the water vapour levels had swung up and down, but suggested it could be down to changes in sea surface temperature, which drives convection currents and can move air around in the high atmosphere.
She said it was not clear if the water vapour decrease after 2000 reflects a natural shift, or if it was a consequence of a warming world. If the latter is true, then more warming could see greater decreases in water vapour, acting as a negative feedback to apply the brakes on future temperature rise.

The role of stratospheric water vapor in global warming
There's been a number of queries regarding a new paper examining the role of stratospheric water vapor in global warming. The paper is Contributions of Stratospheric Water Vapor to Decadal Changes in the Rate of Global Warming (Solomon 2010). There are a few overly excited interpretations of the paper's results circulating around the blogosphere. This is presumably from readings of media clippings, not the actual paper. To accurately determine the significance of Solomon 2010, the best course is to see what the paper actually says.
The atmosphere is divided into several layers. The troposphere is the lowest part of the atmosphere. It contains most of the atmosphere's water vapor, predominantly supplied by evaporation from the ocean surface. Through the troposphere, temperature falls as altitude rises. The boundary between the troposphere and stratosphere is called the tropopause. This is known as the "cold point", the coldest point in the lower atmosphere. In the stratosphere, temperature actually rises with altitude. It warms as you get higher - the opposite of the troposphere.
Atmospheric layers: Troposphere, Stratosphere and Mesosphere
Figure 1: Atmospheric layers: Troposphere, Stratosphere and Mesosphere

Solomon 2010 looks at the trend of water vapor in the stratosphere. Before 1993, the only observations of stratospheric water vapor were made by weather balloons above Boulder, Colorado (black line in Figure 2). They observed a slight increase from 1980. After 1993, several different satellites also took measurements (coloured circles, squares and diamonds in Figure 2). The various observations all found a significant drop in stratospheric water vapor around 2000. Most of the change in water vapor occurs in the lower stratosphere, just above the tropopause. The greatest changes also occur in the tropics and subtropics.
Water Vapor in stratosphere
Figure 2: Observed changes in stratospheric water vapor. Black line: balloon measurements of water vapor, taken near Boulder Colorado. Blue diamonds: UARS HALOE satellite measurements. Red diamonds: SAGE II instruments. Turquoise squares: Aura MLS satellite measurements. Uncertainties given by colored bars (
Solomon 2010).
What effect would this have on climate? Figure 2 shows the change in radiative forcing imposed by changes in stratospheric water vapor. The dotted line is the radiative forcing without the effect of stratospheric water vapor changes. The grey shaded region shows the possible range of contribution from changing stratospheric water vapor. As it's a greenhouse gas, increasing water vapor has a warming effect. Consequently, the steady rise from 1980 to 2000 added some warming to the existing warming from greenhouse gases. The drop in water vapor after 2000 had a cooling effect.
Figure 3: Impact of changes in stratospheric water vapor on radiative forcing since 1980 due to well-mixed greenhouse gases (WMGHG), aerosols, and stratospheric water vapor. The shaded region shows the stratospheric water contribution (
Solomon 2010).
What caused these changes? Water vapor in the stratosphere has two main sources. One is transport of water vapor from the troposphere which occurs mainly as air rises in the tropics. The other is the oxidation of methane which occurs mostly in the upper stratosphere. Most of the change in water vapor occurs in the lower stratosphere in the vicinity of regions affected by the El Nino Southern Oscillation. This seems to point towards convection and internal variability driving the changes. A comparison between stratospheric water vapor and tropical sea surface temperatures show good correlation which corroborates a link with El Nino. However, the correlation breaks down in some periods suggesting other processes may also be important. Consequently, the authors are cautious in coming to a firm conclusion on the cause.
There seem to be two major misconceptions arising from this paper. The first is that this paper demonstrates that water vapor is the major driver of global temperatures. In fact, what this paper shows is the effect from stratospheric water vapor contributes a fraction of the temperature change imposed from man-made greenhouse gases. While the stratospheric water vapor is not insignificant, it's hardly the dominant driver of climate being portrayed by some blogs.
The other misinterpretation is that this paper proves negative feedback that cancels out global warming. As we've just seen, the magnitude of the effect is small compared to the overall global warming trend. The paper doesn't draw any conclusions regarding cause, stating that it's not clear whether the water vapor changes are caused by a climate feedback or decadal variability (eg - linked to El Nino Southern Oscillation). The radiative forcing changes (Figure 3 above) indicate that the overall effect from stratospheric water vapor is that of warming. The cooling period consists of a stepwise drop around 2000 followed by a resumption of the warming effect. This seems to speak against the possibility of a negative feedback.

What cities will look like in five years
Predicting disease, preventing crime, charging vehicles with renewable energy sources and buildings that sense and respond to conditions like living organisms are only five years away, according to IBM. But don't expect utopia in Canada, says a U of T professor of urban planning and design
By: Jennifer Kavur
ComputerWorld Canada (19 Jan 2010)

IBM Corp. recently released a list of five predictions for how cities around the globe will change over the next five years. The predictions, explained Don Campbell, CTO of business analytics for IBM in Ottawa, focus on technologies coming into play that help cities deal with rising populations.

"It's our observation that there is a massive trend towards urbanization. For the first time in our history, we've now reached the point where more people live in cities than not and so we are seeing the stresses," he said.

Campbell is already seeing some of the technologies in play in Canada and other parts of the world. "In all of these cases, IBM has a significant amount of research activity going on and some early stage involvement in making cities smarter and better," he said.

IBM's first prediction calls for cities with healthier immune systems. "Given their population density, cities will remain hotbeds of communicable disease. But in the future, public health officials will know precisely when, where and how diseases are spreading – even which neighborhoods will be affected next."

The prediction is based on the expectation that more health information will be shared among health officials, which will allow greater opportunities for tracking diseases and knowing where to put health care, explained Campbell.

"We believe very strongly that cities will become healthier as a result of the analytics that come into play, allowing us to map and analyze and predict the spread of infectious diseases and understand more about them," he said.

The second prediction anticipates buildings with sense-and-response systems. "In the future, the technology that manages facilities will operate in like a living organism that can sense and respond quickly in order to protect citizens, save resources and reduce carbon emissions," IBM states.

Buildings can become a type of live infrastructure and smarter about how it leverages its own systems by co-ordinating information from heating, water, sewage, electricity and security systems, explained Campbell. "As we go forward, now that these systems are online, we can actually have [them] share information and track information regarding the usage patterns of its occupants," he said.

A third prediction sees vehicles that "run on new battery technology that won't need to be recharged for days or months at a time, depending on how often you drive. Smart grids in cities could enable cars to be charged in public places and use renewable energy, such as wind power, for charging."

In general, battery life improves at a rate of eight per cent per year, but IBM is anticipating a big change in battery storage capacities, noted Campbell. IBM is also looking at ways of using wind and solar power to charge batteries so vehicles operate cleanly in the environment, he said.  

Another prediction involves cities installing smarter water systems to reduce water waste by up to 50 per cent and smart sewer systems that not only prevent run-off pollution in rivers and lakes, but purify water to make it drinkable.

Over last 100 years, the world's population has grown significantly and water usage has grown at twice that rate, said Campbell. "We are rapidly consuming and running out of water, and part of that is through leaky infrastructure," he said.

IBM's fifth prediction calls for cities that will be able to predict emergencies in order to reduce and prevent them. Campbell envisions the time frame for responding to emergency activities to be reduced to the point "where we can respond before there is a call to 911."

Technologies that allow cities to sense gunshots in downtown streets through microphones on telephone poles that triangulate where that that gunshot was fired and relay that information to the police is one example, Campbell explained.

Rapid response systems can become even more effective in preventing crime by using analytics to understand patterns and trends that would allow police departments, for example, to clean up areas of a city before the crimes occur, he added.

The Edmonton Police department is already working to collect as many as 10 million pieces of disparate data that come together on any particular crime and analyze this to spot trends, solve crimes and understand where they are likely to occur in the future, said Campbell.

But cities across Canada will certainly not become utopia in five years, according to Robert Wright, a professor at the University of Toronto's Faculty of Architecture, Landscape and Design, who specializes in urban design and planning.

"We have much more technology now and we don't apply a lot of that technology to start with because we don't have the resources or we don't have the expertise to apply all this technology. It's very expensive and it's constantly changing," he said.

Canadian culture is another obstacle to this utopian vision, according to Wright.

"We create a lot of really interesting technology, but we are not necessarily early adopters on that technology … Canadians are not risk-takers. We like to see technologies really well-established before committing ourselves to them. We are just very conservative that way," he said.

Other countries may also have greater incentives to invest these technologies, according to Wright, because many of the technologies are so new that they "almost assume" to work inside of a new system.

China adopted cell phone technology much faster than Canada did, primarily because they didn't have the infrastructure that we have vested under the ground with all of our telephone lines, he explained. Transportation technologies in South America and other parts of the world are also being adopted very quickly because they don't have older systems already in place, he said.

Cities will definitely become hotbeds of communicable disease, but it is a chaotic phenomenon, according to Wright. Knowing which neighbourhoods will be affected next is like trying to predict climate, he said. "You can know patterns, but it's really hard to predict a specific event," he said.

But Wright does expect buildings will become more intelligent, react to existing conditions and use ambient technologies that are user-aware. "That's definitely beginning to happen, and there are examples in the City of Toronto that have these systems build into them," he said.

Transportation will also become more efficient, but "it depends on how you calculate how energy consumption takes place," he said. It takes a lot of energy to make a bus, he pointed out. While he anticipates more electric cars and bikes in the future, batteries remain "a sticking point."

But if smart car technologies increase and costs are reduced, we are going to have a lot of cars all over the country and that's not necessarily a good thing, he noted. Referring to the Jevons Paradox, Wright pointed out that increases in efficiency do not necessarily lower consumption. "In many cases, increasing efficiency actually increases consumption," he said.

Wright does anticipate more water-saving technologies to come, such as rainwater harvesting from roofs and green roofs used for irrigation. But one of the problems with water systems in Canada is that we are not re-investing enough in our cities to actually replace the amount of infrastructure we need, he said.  

Response times for emergency systems like 911 are pretty good, but "the fact that the technology is always going to resolve this problem is one of the great illusions," said Wright. "A lot of the time, the technologies actually create the problems."

Looking ahead five years, Wright predicts increased public participation in Canadian cities.

Technology will allow cities to provide more information (such as by-laws) online and citizens to react to city proposals faster, he explained. "You are going to see a lot more people trying to be involved in the process, so they are really going to confront the bureaucracy of existing cities," he said.

He also expects some commitment from cities to repair their older and existing infrastructure. Roughly 70 per cent of building stock in Toronto consists of buildings that are 20 to 30 years old and totally energy inefficient, according to Wright. Toronto also has the second highest amount of energy inefficient tower structures and buildings in North America next to New York, he said.

Follow me on Twitter @jenniferkavur.

Copyright © 2009

Bill Gates Sinks $4.5M into 'Transparent' Climate Change Research
Posted By Environmental Leader On February 1, 2010 @ 9:30 am In ClimateEmissionsFundingGovernmentResearch & Technology | No Comments
earthBill Gates is investing at least $4.5 million of his own money into geoengineering research, aimed at combating global climate change, with an emphasis on transparency, reports Wired [1]. At the same time, in light of the hacked climate e-mails, a former Commander of the Pacific fleet is asking President Obama Administration to establish an independent panel to evaluate the link between climate change and security.

Administered by two high-level scientists at the forefront of geoengineering research, climate scientist Ken Caldeira, of Stanford's Carnegie Department of Global Ecology, and physicist David Keith of the University of Calgary will decide which technologies will receive funding for research that includes reducing solar radiation and filtering carbon dioxide from the atmosphere, reports Wired.

One goal would be to develop governance structures to provide transparent risk analysis, as well as manage feedback from global participants.

Keith co-authored a Nature editorial calling for an international fund for "solar-radiation management" in addition to traditional carbon emissions cuts, reports Wired.

He and his co-authors, Edward Parson at the University of Michigan and Granger Morgan at Carnegie Mellon University, propose a $10 million a year budget now for solar-radiation management, growing to $1 billion annually by the end of 2020, reports Wired.

In the wake of climate-change scandals [2], Adm. James A. Lyons, Jr., USN (Ret.), former Commander-in-Chief, U.S. Pacific Fleet and Chairman of the Center for Security Policy's Military Committee, is asking President Barack Obama to appoint an independent panel of experts to evaluate the link between climate change and national security, reports the Center for Security Policy [3].

In the open letter, Lyons states: "I recommend that you consider establishing an independent commission of military and national security experts to examine the implications of climate change and related policies to national security. It is too important an issue to be driven by unsubstantiated claims, tainted by scandal and to result in counterproductive policies."

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Nike, Best Buy, Yahoo to Share Sustainable Patents Via GreenXchange
Posted By Environmental Leader On February 1, 2010 @ 9:59 am In FeatureGreen TechnologyPartnershipsResearch & Technology | 2 Comments
NikeCreated to speed up the development of "green" innovation, ten leading organizations have launched [1] the GreenXchange [2] (GX), a Web-based marketplace where companies can collaborate and share intellectual property (IP) that can lead to new sustainability business models.

Launched at the World Economic Forum in Davos, Switzerland, the founding companies are Best Buy, Creative Commons, IDEO, Mountain Equipment Co-op, Nike, nGenera, Outdoor Industry Association,, 2degrees, and Yahoo.

The benefit of placing intellectual property on GX is that IP owners can choose the licensing approach they feel comfortable with from research and attribution recognition to non-competitive use and simple fee structures, says Don Tapscott, chairman of think tank nGenera Insight in an editorial for The Globe and Mail [3].

Nike says it will share more than 400 of its patents on GX for research. As an example of IP that could have cross-industry benefits is Nike's Environmentally Preferred Rubber, which contains 96 percent fewer toxins than the original formulation. It could, for example, be used by Mountain Equipment Co-op for bicycle inner tubes, helping the company bring a greener product to market cheaper and faster, according to the exchange.

Other partners such as Best Buy are committed to licensing patents and related information on GX to support sustainable innovation, while other founding companies such as nGenera and are providing the technology that enables the exchange of IP including support of "private rooms," where patent holders and patent seekers can discuss prior usage, patent fees, patent restrictions and other confidential details.

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Scant Arctic Ice Could Mean Summer "Double Whammy
Date: 05-Feb-10
 Deborah Zabarenko,

Scant Arctic Ice Could Mean Summer
A large iceberg is seen on the edge of a morning fog over Frobisher Bay, Nunavut in the Canadian Arctic August 21, 2009.
Photo: Andy Clark

WASHINGTON - Scant ice over the Arctic Sea this winter could mean a "double whammy" of powerful ice-melt next summer, a top U.S. climate scientist said on Thursday.
"It's not that the ice keeps melting, it's just not growing very fast," said Mark Serreze, director of the U.S. National Snow and Ice Data Center.
In January, Arctic sea ice grew by about 13,000 square miles (34,000 sq km) a day, which is a bit more than one-third the pace of ice growth during the 1980s, and less than the average for the first decade of the 21st century.
Arctic ice cover is important to the rest of the world because the Arctic is the globe's biggest weather-maker, sometimes dubbed Earth's air-conditioner for its ability to cool down the planet.
More melting Arctic sea ice could affect this weather-making process; it is unlikely to lead to rising sea levels, any more than an ice cube melting in a glass of water would make the glass overflow.
If Arctic ice fails to build up sufficiently during the dark, cold winter months, it is likely to melt faster and earlier when spring comes, Serreze said by telephone from Colorado.
"We've grown back ice in the winter, but that ice tends to be thin and that's the problem," he said. "You set yourself up for a world of hurt in summer. The ice that is there is also thinner than it was before and thinner ice simply takes less energy to melt out the next summer."
With less of the Arctic sea covered in ice in winter, and with the existing ice thinner and more fragile than before, "you've got a double whammy going on," Serreze said.
This more perishable thin ice is prone to early melting, and when it does, the heat-reflecting light-colored sea ice is replaced by heat-absorbing dark-colored ocean water, which accelerates spring and summer melting in the Arctic.
This winter, there were unusually warm December temperatures in the Arctic due to a weather pattern known as the Arctic oscillation, so ice grew more slowly than normal.
In January, that pattern shifted to produce cooler Arctic temperatures. The ice extent -- the area the ice covers -- was below normal over much of the Atlantic sector, including the Barents Sea, part of the East Greenland Sea and in the Davis Strait.
There was above-average ice extent on the Pacific side of the Bering Sea, the National Snow and Ice Data Center reported.
The last three years -- 2007, 2008 and 2009 -- had the lowest level of ice extent since satellite records began in 1979.
(Editing by Mohammad Zargham)

Topsoil could vanish in 60 years, says study
Fertile soil eroding faster than it can be replaced

Tom Young, BusinessGreen04 Feb 2010

Fertile soil is being lost faster than it can be replenished making it much harder to grow crops around the world, according to a study by the University of Sydney.

The study, reported in The Daily Telegraph, claims bad soil mismanagement, climate change and rising populations are leading to a decline in suitable farming soil.

An estimated 75 billion tonnes of soil is lost annually with more than 80 per cent of the world's farming land "moderately or severely eroded", the report found.

Soil is being lost in China 57 times faster than it can be replaced through natural processes, in Europe 17 times faster and in America 10 times faster.

The study said all suitable farming soil could vanish within 60 years if quick action was not taken, leading to a global food crisis.

John Crawford, professor of Sustainable Agriculture at the University of Sydney, who presented the study, said:

"It could be as little as 60 years and that is a scary figure because it is not obvious that we have time to reverse decline and still meet future demands for food," according to The Daily Telegraph.

Over-ploughing is one of the chief culprits because it leaves topsoil open to erosion by wind and rain.

David Motgomery, author of Dirt: The Erosion of Civilizations, advocates a wholesale change in farming practices to "no-till agriculture" , currently used by about five per cent of the world's farmers.

This method leaves crop stubble in the field to be mixed with the top layer of the soil and means less ploughing is needed.

But such methods can lead to lower thresholds, making it harder to feed the world's population.

Last year food prices rocketed as wheat stocks dropped to a 30-year low and countries started to bulk buy.

Call for 'Robin Hood tax' on banking transactions

Call for 'Robin Hood tax' on banking transactions
By James Thompson
Wednesday, 10 February 2010
The clamour for a global tax on banking transactions gathered pace last night, as further evidence emerged of investment-bank returning to bumper profits.
A coalition of charities, unions and aid agencies have called on the UK's political parties to support a global "Robin Hood tax" on financial transactions that could raise up to £250bn every year to fight poverty, protect public services and tackle climate change.
It came as the Swiss banking giant UBS delivered its first quarterly profit since the financial crisis emerged and the Australian investment bank Macquarie said it was on track to deliver full-year profits of more than A$1bn (£558m).
The Robin Hood tax campaign is supported by 50 organisations including Oxfam, the TUC, Barnardo's, ActionAid and the Salvation Army.
The campaign will be launched today with an online promotional film written by Richard Curtis, the writer of Four Weddings and a Funeral, and starring Bill Nighy.
Yesterday, the campaign beamed an image with the words "Be part of the world's greatest bank job" on to the Bank of England in London. The tax would apply only to transactions between financial institutions, such as for shares and derivatives.
Barbara Stocking, the chief executive of Oxfam, said: "A tiny tax on banks would make a massive difference to the millions of ordinary people around the globe forced into extreme poverty by the economic crisis."
The UK campaign – which today wrote a letter to this country's political parties – is part of an international movement which has been gaining momentum. The UK, German and French leaders, Gordon Brown, Angela Merkel and Nicolas Sarkozy, have all spoken out in recent months in support of some form of transaction tax.
The financial heavyweights who are backing the tax include the Financial Services Authority's Lord Turner, George Soros, Warren Buffett and Sir Philip Hampton, the chairman of Royal Bank of Scotland. While different rates of tax would apply to different types of transactions, the campaign says they could start at 5p for every £1,000 traded.
In a sign of the good times returning to investment banking, UBS yesterday reported net profits of Sfr1.2bn (£718m) in the final quarter of 2009, compared with a loss of Sfr564m in the previous quarter. Macquarie said its net profits for the six months to 31 March would be in line with its first half's A$479m, but this was below analyst expectations.

Alternative Energy Newsclips for 10 February 2010: Feed-in tariff cuts coming in Germany, but when? Alternative energy pricing is crucial to its adoption, and IBM develops efficient thin-film solar cells

Consumer Energy Information: A Call to Action
December 15, 2009
Copenhagen, Denmark
"If you cannot measure it, you cannot improve it."
-- Lord Kelvin
Google, GE, The Climate Group, and NRDC, supported by a broad group of companies and
organizations, call on governments across the world to provide citizens access to real-time information on
home energy use. Studies show that simply giving people this information can result in energy savings of
up to 15%. And with straightforward additional steps we can capture even greater savings. The bottom
line: We can't solve climate change if people are in the dark about how they use energy in their own
Call to Action
Citizens need better access to information about how they use energy – and they need the tools to use
less. Studies show that when people have access to direct feedback on their home energy use, they save
up to 15% based on simple behavioral changes such as turning off lights and switching off devices that
are always on even when they're "off."[1] Changing light bulbs, replacing inefficient appliances, and
weatherizing homes lead to even greater savings. And as we add computer chips to everything from
thermostats to washing machines, we increasingly enable consumers to better manage their energy use.
By empowering citizens with information and tools for managing energy, governments and businesses
around the world can harness the power of hundreds of millions of people to fight climate change – and
save consumers hundreds of billions of dollars in the process. Specifically, countries should ensure their
citizens have access to basic information such as:
Real-time or near real-time home energy consumption
Pricing and pricing plans
Carbon intensity, including source and carbon content of electricity
This information can be delivered to citizens with technologies that exist today and can be rapidly
deployed. To get there, countries can provide incentives for energy monitoring equipment and set rules
for consumer access to information. They can also enact stronger energy efficiency standards, as well as
provide financial incentives and smarter energy pricing plans.
If all households in developed countries achieved a 15% energy savings by 2020, it would mean about a
470 MtCO2 equiv. reduction in greenhouse gas emissions. This is equivalent to:
About 10 Denmarks or 100 Copenhagens;[2]
Taking more than 200 million cars off the road in the EU;[3]
Shutting down 124 large coal power plants;[4] or
2 to 4 times more than the total estimated reductions in CO2 emissions from the first phase
of the EU Emissions Trading System between 2005 and 2007.[5]
By providing people with real-time home energy information we can make a major down payment on
tackling climate change while saving money and creating exciting new industries -- and jobs.
Google Inc.
The Climate Group
Alliance to Save Energy
Center for American Progress
Demand Response and Smart Grid Coalition
Digital Energy Solutions Campaign
Energy Future Coalition
Kleiner Perkins Caufield & Byers
US Green Building Council
[1] See e.g., Sarah Darby, Univ. of Oxford, The Effectiveness of Feedback on Energy Consumption (Apr 2006)
[2] Based on IEA data and Denmark and Copenhagen population statistics
[3] Based on European Commission estimates at
[4] Based on EIA data
[5] Ellerman, D. and Buchner, B. (2008). "Over- Allocation Or Abatement? A Preliminary Analysis of the EU ETS Based on the 2005–06
Emissions Data." Environmental and Resource Economics, 41, 2

Germany Aims To Delay Solar Incentive Cuts: Sources
Date: 01-Feb-10
 Markus Wacket

Germany Aims To Delay Solar Incentive Cuts: Sources Photo: Fabrizio Bensch
A general view shows the Lieberose solar farm, which is the world's second biggest solar power plant and Germany's biggest, with an area of 162 hectares (equivalent to more than 210 football fields) in Turnow-Preilack.
Photo: Fabrizio Bensch

BERLIN - German Environment Minister Norbert Roettgen wants to delay some of the proposed cuts for solar power incentives, government sources told Reuters on Friday, a move that is unlikely to alter the gloomy outlook for the industry.
Roettgen's proposed 15-percent cuts in solar power incentives for roof-mounted systems is to be implemented from May 1 rather than April 1, the sources said.
Initial news about the cuts had sent global solar stocks tumbling, given that Germany accounts for about half the world's photovoltaic production.
Solar power companies, which have counted on generous German incentives to fuel their growth, have protested against Roettgen's proposed cuts.
SolarWorld, the country's biggest solar company by sales, and Q-Cells, one of the world's largest maker of solar cells, have said such cuts would be too steep, too fast and will kill jobs.
Roettgen has also faced criticism from within his own party, with regional leaders urging him to delay or water down his proposed 15-percent cut in the incentives that utilities are obligated by law to pay producers of solar power.
"This looks like a political compromise and is unlikely to take pressure off the domestic producers of modules and cells. Four weeks is nowhere near enough. It would have to be one quarter at least and even then it would only help project developers' wholesalers," said LBBW analyst Wolfgang Seeliger.
Roof installation of solar cells and modules are traditionally weak in the first quarter due to the cold weather and given the icy winter in Germany, this year is unlikely to be any different.
The government sources also told Reuters that further cuts after 2011 could be steeper than Roettgen is now planning.
If there are more than 3,500 megawatts of solar power capacity added within one year, the cuts would sink 3.5 percent in the following year instead of 2.5 percent now planned.
A spokeswoman for the Environment Ministry declined to comment on the Reuters report. She said members of parliament were now discussing Roettgen's proposal.
The sources also said the proposal to push back the 15-percent cut by one month had been agreed in consultation with leaders of Chancellor Angela Merkel's Christian Democrats and their Bavarian sister party, the Christian Social Union.
The government sources said Roettgen was still seeking backing from junior coalition partners the Free Democrats to cut the incentives, known as feed-in tariffs (FIT), that have helped make Germany a world leader in solar power.
The sources said the plans to reform the Renewable Energy Act (EEG) will be discussed in a cabinet meeting in two weeks.
(Additional reporting by Christoph Steitz in Frankfurt; writing by Erik Kirschbaum and Christoph Steitz; Editing by Rupert Winchester)

IBM's New Thin-film Solar Cell is 40% More Efficient
Posted By Environmental Leader On February 10, 2010 @ 8:52 am In Products & PlanningSolar Energy | No Comments
SOLARCELLPHOTO_1A new solar cell under development from IBM boasts an efficiency of 9.6 percent, which is 40 percent higher than previous incarnations.

IBM touts the new thin-film photovoltaic solar cell as a "world record" for its type.

The thin-film photovoltaic technology (see image) is comprised of copper, tin, zinc, sulfur and/or selenium, according to IBM. Because these elements are earth-abundant, this type of solar cell could see wide production.

Other commercial thin-film solar cells have achieved 11 percent efficiency or more, but those incorporated costly compounds such as copper indium gallium selenide or cadmium telluride.

IBM chose to pursue a cell that used cheaper materials. The higher efficiency relates to the quality of the absorber layers achieved in the reported devices, said David Mitzi, Manager, Photovoltaic Science and Technology, IBM Research.

"One potential impact on the film quality relates to the solvent we are using," Mitzi said. "Hydrazine is able to stabilize metal chalcogenide anions in solution."

Because hydrazine is weakly coordinating and decomposes readily into nitrogen, hydrogen and ammonia, there are no impurities (e.g., oxygen, carbon or chlorine) left in the film that can impede the performance of the device, he said.

So far, the new thin-film solar has not been demonstrated in live situations, said Mitzi, team leader of the IBM Research group that developed the cell.

"This is a very young project, at less than nine months, and is still at a very early stage of development."

IBM says it does not intend to manufacture the solar cells, but will instead license the technology.

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Price Ultimate Driver Of Greener Energy Use: GE
Date: 10-Feb-10
 Kylie MacLellan

Price Ultimate Driver Of Greener Energy Use: GE Photo: David Becker
A sign points out ''Water-Smart'' features in a model home, including more efficient appliances and low-flow fixtures, in Las Vegas, Nevada February 10, 2009.
Photo: David Becker

LONDON - Pricing systems that encourage households to use energy more efficiently are the best way to help consumers to protect the environment, a senior General Electric Co executive said on Tuesday.
Bob Gilligan, GE's vice president of transmission and distribution, said the development of appliances that adjust their own energy use in response to signals from utility companies would be a key step in achieving this.
"As consumers ... we speak from our heart, we express concern about the environment but we respond from our wallet," he told a conference on the future of cities at Chatham House, the London think-tank.
"If we really want to drive consumer behavior we have to have pricing mechanisms that encourage us to change."
Gilligan said investment in a smarter energy infrastructure was important in ensuring a more sustainable future.
Last year the British government said smart meters, which provide real-time information to consumers about energy use, would be installed in all British homes by 2020.
Smart meters are seen as the first step toward creating "smart grids," where consumers can adjust electricity use to benefit from cheaper energy at times of low demand and reduce consumption at peak times.
GE are working to develop household appliances which would go one step further and adjust their own usage, Gilligan said.
Refrigerators, for example, could reduce their energy use by about 25 percent during times of peak demand though changes such as adjusting the timing of their automatic defrost.
"We are developing devices for the home that will take a pricing signal, that will go into an eco mode and help the consumer save money when electric costs are at the peak."
The right regulatory framework would also need to be established to encourage utility companies to want to reduce demand, he added, decoupling the incentive to deliver more from the incentive to be efficient.
(Editing by James Jukwey)