Environment vs. Economy

There has been a lot of discussion in recent months about the impact of environmental regulation on the economy. It strikes me as odd that efforts to improve the environment are seen as a potential drag on the economy when in reality there isn't a strong causal link between the two. In fact, it's worth noting that prior to the financial crisis, the UK managed to reduce its greenhouse gas (GHG) emissions by roughly 17% while its economy grew by 45% since 1990.

Climate Change and Clean Energy

Global food prices have broken yet another record. February prices were 2.2% higher than January, the previous all-time high. February's high was well above the 2008 average when food prices led to riots and hording. Much of this has to do with climate related events - floods in Pakistan and wildfires in Russia. Add to this the recent rise in the price of US oil, which is currently hovering at around $100 a barrel while global prices are closer to the $120 range.

So is now a good time to talk about climate change and clean energy? Unfortunately, a number of people want to avoid the conversation. In doing so we expose ourselves to ever increasing levels of risk and greater instability, both in markets and in countries. The transition to low carbon is happening but not at the scale necessary to meet the challenge. We have to ramp up our efforts if we hope to minimize some of the impacts we're already seeing.

Innovation Nation

I haven't posted since late last year so here's quick recap of 2010: economy in the doldrums; tied with 2005 as the hottest year on record; was also the wettest year on record (which is awkward on a number of levels); the last decade was the hottest on record (with the previous two decades coming in second and third respectively). All and all, not the kind of streak you want to be on.

So what's a possible solution that meets the trifecta of economic recovery, energy security, and climate stability? There's no easy, straightforward answer but a critical element, and one that needs to be ramped up quickly, is the need to embrace a clean energy future. In doing so, you have the opportunity to design new technologies, enable new markets, and most importantly, create new jobs. And it all comes with the additional benefits of a cleaner environment and more secure sources of energy.

Total aside, anyone who can find a poetry blog from 2001 called "Someplace Nice" gets a cookie.

Knowing is Half the Battle

"Knowing is half the battle". GI Joe was right 20 years ago when I sat watching the show every afternoon after school. And believe it or not, the Joes are right today.

I'm a big fan of the website Skeptical Science, which is a great reference for those who want to learn more about climate change. The site has now released The Scientific Guide to Global Warming Skepticism. Highly recommend reading. Duke and the rest of the Joes would be proud.

The Power of One

The challenges posed by climate change are enormous. We have to make a global effort to fundamentally change how we produce and consume energy. But too many people focus on the cost and scale, arguing that significantly reducing emissions will destroy our economy, without fully understanding the long-term benefit to our environment.

Let's take a step back. Don't get distracted by solely focusing on what everyone around the world has to do in order to avoid the risks of global warming. Instead, focus on what you or your family can do to reduce your energy bill and save some cash. Check out the Maryland Energy Administration for some useful hints.

Now, consider the cumulative effect of lots of individuals taking these small steps to reduce our energy and water use, and save money. I know - revolutionary.

Elections, Climate Change, and Energy

This is an excellent post by Andy Revkin on the implications of the mid-term elections on climate change and energy. Check out the "heat ladder" link toward the end. It's an article from 2007 which still resonates today. The more things change, the more things stay the same.

More Evidence of Change

The impacts of climate change are taking place right now, not in some far flung future. There is a lot being done to reduce greenhouse gas (GHG) emissions and increase the use of low carbon energy around the world, but more is needed to meet the scale of the challenge.

Climate Change - A Threat to Prosperity and Security

The UK Foreign Secretary gave a speech last week at the Council for Foreign Relations focused entirely on climate change.

Some of the key extracts from the speech -

· “Climate change is perhaps the twenty-first century’s biggest foreign policy challenge along with such challenges as preventing the spread of nuclear weapons. A world which is failing to respond to climate change is one in which the values embodied in the UN will not be met. It is a world in which competition and conflict will win over collaboration.”

· "You cannot have food, water, or energy security without climate security. They are interconnected and inseparable."

· "We must all take responsibility for this threat. We must take robust action. But we must also be clear-headed about the difficulties of reaching agreement and not lose heart when the going gets tough."

· "We need to shift investment urgently from high carbon business as usual to the low carbon economy – this means building an essentially decarbonised global economy by mid century…To drive that shift in investment from low to high carbon we need a global climate change deal under the UN."

· "Many say that Copenhagen failed because of process. The diplomats and the politicians had created a negotiation that was too difficult and too complex. This misses the point. International treaties are an outcome – not an input – of political bargains. If you have made the political commitment to deliver, you can make the process work to deliver"

· "That is why the coalition to which I belong has committed itself to being the greenest government ever in the UK; and why with others in Europe we are calling on the EU to commit to a 30% cut in emissions by 2020 without waiting for the rest of the world to act."

· "But we will not succeed if we act alone. We must aim for a framework that is global and binding. It needs to be global because climate change affects everyone. Only a response that allows everyone a voice will generate a sense of common purpose and legitimacy."

· "There is no global consensus on what climate change puts at risk, geopolitically and for the global economy, and thus on the scale and urgency of the response we need. We must build a global consensus if we are to guarantee our citizens security and prosperity. That is a job for foreign policy."

· "We have a shared vision to meet the millennium development goals. But in a world without action on climate change, that vision will remain a dream. The effort of the last ten years will be wasted."

· "Climate change is one of the gravest threats to our security and prosperity. Unless we take robust and timely action to deal with it, no country will be immune to its effects. However difficult it might seem now, a global deal under the UN is the only response to this threat which will create the necessary confidence to drive a low carbon transition. We must be undaunted by the scale of the challenge. We must continue to strive for agreement. We must not accept that because there is no consensus on a way forward now that there will never be one. And to change the debate, we must imaginatively deploy all of the foreign policy assets in our armory until we have shaped that global consensus."

· "We have to get this right. If we do, we can still shape our world. If we do not, our world will determine our destiny."

OECD - US Economic Report

Nothing like curling up with a report from the Organisation for Economic Co-operation and Development (OECD) to ease any insomnia you might suffer from. To be fair the report is actually a great resource for US facts/figures, though I'm not sure about its claim that the US is accountable for only 15% of global emissions. This is far lower than the ~20% figure I've seen in the past (and ~22% for China). You can read the summary here.

A few highlights:

* The climate section of the report is framed in the context of reducing Americans' exposure to risk. It also identifies the corollary benefits of taking action - cleaner air, improved health conditions, enhanced energy/national security due to a reduction in foreign oil imports

* The report makes a very strong case for putting a price on carbon - least cost option, driver of RD&D, etc., and argues that the EPA is a less cost effective tool and unlikely to deliver the necessary emissions reductions

* It calls for passage of US climate legislation but: i) opposes the removal of provisions which do not take the indirect land use effect of bio-fuels into account (i.e., food shortages, increased prices, etc.); ii) opposes the inclusion of BTAs (border tax adjustments), also known as BAMs (Border Adjustment Mechanisms) in US parlance; and iii) suggests limiting offsets so revenues raised can be used as a deficit reduction tool.

I'm not sure what impact the report will have on the US debate, if any. But it's interesting to note that an organization set up to counterbalance OPEC is calling on the US to reduce its emissions and put a greater emphasis on investment in low carbon technology.

Carbon Tax vs. Cap and Trade

I came across this recent op-ed in the Houston Chronicle whose authors argue for a carbon tax which increases over time. I'm a strong supporter of a price on carbon but I'm not convinced about the efficacy of a tax for a few reasons. First, I think its a hard sell these days. Cap and trade has a difficult enough time getting traction in a down economy, I can't imagine a hard tax getting through. Secondly, I don't think it'll be as straight forward as proponents suggest. Anyone who has ever done their own taxes knows how complex they can be.

Most importantly, I don't think a carbon tax offers the same environmental certainty you get from a cap and trade program, in which the cap tightens over time. Not only does a "cap" ensure the emissions reductions necessary to avoid dangerous climate change, the "trade" allows for greater flexibility in the market place enabling business (that's right, business) to make the appropriate choice in meeting its targets. But it's also important to remember that cap and trade is one element of a wider suite of options needed to deal with the challenge.

Cap and Trade - A Bipartisan Success Story

I came across this excellent article recently on the history of cap and trade in the US. It's over a year old but that only effects a few aspects of the piece. It provides a great overview of how cap and trade became one of the most successful environmental programs in history under the George H.W. Bush Administration. Stunningly, it was a bipartisan effort. I know, consider your mind blown. So for those who doubt the efficacy of such a program this is a gentle reminder that it can be done, it can be successful, and it won't ruin the economy.

Action in spite of Uncertainty

This is an excellent piece from the Financial Times about the uncertainty surrounding climate change. It goes to great lengths to spotlight areas of agreement and areas where the evidence is less clear (e.g., it's pretty much a given that we'll experience a 1.5C rise in temps, but not so clear cut on 4C).

If you don't have time to read the whole article, skip to the last paragraph:

Meanwhile, concentrations of airborne carbon increase year on year. Once carbon is in the atmosphere, it can stay there for a century, continuing its warming effect. The problem is that if action is delayed until these areas of uncertainty are resolved, the world may find it is too late.

I've written about this before. The whole point of dealing with climate change is to manage our exposure to risk despite the uncertainty.

First Solar in China

Interesting Washington Post article on China highlighting the challenge of US businesses operating there. Doesn't mean we should now embrace the Homer Simpson philosophy of "never try" but it does reflect the need for greater, sustained engagement with the largest energy consumer and greenhouse gas (GHG) emitter in the world.

Economist article on climate impacts

This is a solid, if slightly wonky, article from the Economist. If you don't want to get bogged down in "Rossby waves" (not to be confused with Cosby waves) then just remember this:

Episodes of heavy rain and snowfall are now more common around the world than they were 50 years ago, according to the IPCC’s 2007 review of the literature, which is to be expected in a warming world; warmer air can carry more water, and so more can be released when the conditions are right. Reflecting this trend, the Indian monsoon — which in terms of absolute levels of rainfall changed little over the 20th century—has been seeing more of its rainfall in extreme events than it used to. No one of those extreme events can be laid at the door of worldwide climate change; nor can the Russian heatwave. The pattern of increases, though, fits expectations—and those expectations see things getting worse.

So while you can't directly pinpoint one particular event to climate change, you can look at current trends which are cause for serious concern.

Let there be light!

This is a great piece on the growth in the UK's solar industry. Key takeaway:

The growth in jobs is attributable as much to the nature of the Government scheme as it is the size—offering predictable, guaranteed long-term support for the industry, rather than the more sporadic offers of short-term grants and tax breaks that have been so common across the Globe.

It's all about long-term certainty. Otherwise you have peaks and valleys for renewable energy development. And not to sound like a broken record here, but these policies create jobs, jobs, and more jobs.

Could use a little wind out here

While the chances of comprehensive climate change and energy legislation seem less and less likely, it's nice to see some good news coming out of the states. This is an interesting piece on the largest US wind farm to date. Home grown energy that reduces greenhouse gas (GHG) emissions, provides a clean, safe, and secure source of energy, and creates thousands of jobs. Dare I say it's a win-wind?

The Links

This isn't about golf, it's about global warming. The warning signs are right in front of us. I wrote earlier about Greenland's melting glaciers. Now take a look at this excellent article from Andrew Revkin of the NY Times spotlighting the links between the heatwaves in Russia and the mind boggling floods in Pakistan.

Canary in the Moulin?

This is a fascinating, but fairly long, report from the Daily Mail's science editor (a self-described climate skeptic as you will read). It focuses on the research being conducted by British scientists in Greenland who are studying the dramatic increase in summer melt waters over the past decade.

Aside from his play-by-play of what's happening in Greenland, he writes the following:

For many people, what I am looking at is the beginning of the end; the first concrete sign that the stability upon which our civilisation depends is about to crumble into an overheated future.

The key message is "the stability upon which our civilisation depends is about to crumble." Some people will argue that the earth has gone through climate shifts in the past and therefore this one is nothing to worry about. But that is misguided to say the least. Our world's population and economy have grown at remarkable rates based on a generally stable and livable environment. Climate change directly threatens that stability and therefore threatens our economic prosperity and national security.

The Clean Economy Race

So regular GreenMachine readers, you'll have pretty much guessed by now where I sit on climate change and clean energy policy. And I've stressed away the months as the chances of comprehensive legislation have whittled away to almost nil. I've come to accept that these things happen. But I found it especially interesting that Congress is doing this while China is doing this. It makes you wonder who is going to win the 21st Century economic race?

More melting leads to more drilling

Greenhouse gas (GHG) emissions from burning fossil fuels is leading to global warming. Global warming is leading to a melting Arctic. A melting Arctic is leading to more fossil fuels. The circle of life.