October 2002

Rises in Precipitation not due to Greenhouse Gases

Two new studies suggest that the increases in storminess and rainfall that have been measured in the U.S. may be due to causes other than anthropogenic greenhouse gas emissions. One study in the October 24 issue of Nature looks at natural variability in the northeastern United States and finds that storminess in that region varies over regular cycles.

The study took core samples from 13 small lakes in Vermont and eastern New York with steep surrounding hillslopes, deep water and inflowing streams with sandy deltas. These characteristics allowed the researchers to get a high resolution data set. What they found was that the “frequency of storm related floods in the northeastern United States has varied in regular cycles during the past 13,000 years (13 kyr), with a characteristic period of about 3 kyr.” During that period there were four peaks in storm frequency; 2,600 years, 5,800 years, 9,100 years and 11,900 year ago.

These findings are supported by other independent records from the North Atlantic. In particular, data from central Greenland ice cores correspond very well with the New England data. What this suggests, according to the study, is “control of both by large-scale atmospheric circulation patterns,” which in turn correlates “with the characteristic patterns of sea level pressure associated with the Arctic Oscillation.”

The study argues that, “The existence of natural variability in storminess confounds reliable detection of anthropogenic effects.” It also notes that, “During the past ~600 yr, New England storminess appears to have been increasing naturally,” and that if this pattern continues it “would continue to increase for the next ~900 yr.” It concludes, “Because climate synopses compiled from instrumental records cannot distinguish underlying natural increases in storminess from anthropogenic effects, detected increases in contemporary storminess may not be a reliable indicator of human-induced climate change.”

Another study in the Journal of Applied Meteorology does find an anthropogenic component to increased rainfall, but not due to greenhouse gases, but rather due to urbanization. Using satellite data, the researchers found that rainfall rates are enhanced 20 to 40 miles downwind from city centers. Compared to upwind areas, rainfall rates were between 48 and 116 percent greater. The cause is greater heat generated from cities compared to natural landscapes. The rising warm air contributes to thunderstorm development, which then releases its moisture downwind. These two studies may well account for the increased precipitation in the United States over the last century.

Apparent increase in Antarctic Icebergs due to Better Detection

A new study in the current issue of EOS Transactions, a publication of the American Geophysical Union, says that there has been no increase in the number of large Antarctic icebergs as has been reported. “The dramatic increase in the number of large icebergs as recorded by the National Ice Center database does not represent a climatic change,” said Brigham Young University electrical engineering professor David Long. “Our reanalysis suggests that the number of icebergs remained roughly constant from 1978 to the late 1990s.”

Long and his student assistants developed a computer processing technique to increase the sharpness of the images collected from NASA satellites. The satellites employed a “scatterometer” that was used to measure wind speed and direction by bouncing radar beams off the ocean floor. The resolution of the images wasnt good enough to detect icebergs. Longs innovation makes it possible to determine accurately the number of icebergs.

“Dr. Longs analysis shows that the increase is only an apparent increase, and that it is premature to think of any connection between this kind of iceberg (growth) and global warming,” said Douglas MacAyeal, a University of Chicago glaciologist who tracks icebergs. “His research, particularly his amazing ability to detect and track icebergs, is really the best method,” to determine iceberg activity.

COP-8 Declaration under Fire

A draft “Delhi Declaration on Climate Change,” which is to be adopted at the Eighth Conference of the Parties to the UN Framework Convention on Climate Change (COP-8) currently underway, is being attacked by both the European Union and the G-77 and China. The declaration was rejected by the EU as “disappointing, unacceptable, and biased.”

“We find the declaration concentrated on adaptation and not on the mitigation of greenhouse gases,” said Thomas Becker, an EU spokesman. “There is no mention of the Kyoto Protocol in the declaration.” The EU also objects to the attempt to link global warming to sustainable development. “To link these issues completely will not be wise from a negotiation point of view,” said Becker. “We are not at all pleased with trying to start such a trend” (BNA Daily Environment Report, October 29, 2002).

The EUs objection to the linkage is probably due to the U.S.s ability to redefine sustainable development in terms of poverty eradication and economic development, which are not compatible with Kyotos objectives. Indeed, the draft recognizes, “that poverty eradication, changing consumption and production patterns, and protecting and managing the natural resource base for economic and social development are overarching objectives of, and essential requirements for, sustainable development.”

 The draft also talks about technological advancement and transfers, capacity building, economic diversification, and strengthening of institutions, things that the U.S. insisted should be the focus of the World Summit on Sustainable Development (WSSD) in Johannesburg. It also states, “Policies and measures to protect the climate system against human-induced change should be appropriate for the specific conditions of each Party and should be integrated with national development programs, taking into account that economic development is essential for adopting measures to address climate change.”

The G-77 and China also expressed disappointment in the document and demanded that it contain a call “to urge ratification of the Kyoto Protocol by all parties that have not done so.” The declaration should also name Africa as the region suffering the most from climate change (Outlook India, October 29, 2002).

What will Canada do next?

Canada cant seem to make up its mind on what to do about Kyoto. On October 24, the federal government released a plan that would require major reductions in carbon dioxide emissions and a 20 percent reduction in energy use by individual Canadians. The plan would reduce emissions by 180 megatons, but fall short of the Kyoto target by 60 megatons. The government hopes this shortfall can be accounted for through a variety of other measures, including claiming credits for natural gas and hydroelectric exports to the U.S.

The plan has met with significant opposition from the provincial governments and industry. On October 28, energy and environment ministers from Canadas 10 provinces and three territories, gathered at a one-day meeting in Nova Scotia, rejected the federal governments plan to implement Kyoto. “All of the provinces have agreed that the federal plan is inadequate, and now we have a new plan to develop a national plan,” said Lorne Taylor, Albertas environment minister. “We have a provincially led process, instead of a federally led process, and thats the way it should have been in the first place.”

The provinces have come up with their own 12-point approach to address climate change. It calls for “full and informed” input from all Canadians, a plan that ensures that no province will bear an unreasonable share of the burden and that respects provincial and territorial jurisdiction. It also says that all “real emissions reductions since 1990 should be recognized, that all credits for forest and agricultural sinks go to the province or territory that owns them, that the plan maintain the competitiveness of Canadian industry, that the federal government should continue to demand credit for “clean energy” exports to the U.S., and that the plan should include incentives to encourage the use of energy sources that emit less carbon (BNA Daily Environment Report, October 29, 2002).

Canadian Prime Minister Jean Chrtien has rejected requests from the provinces to meet with them and to delay Kyoto ratification. “My intention as long as something unusual doesnt happen is that we will ratify Kyoto before Christmas,” he told reporters. I think some people only have one goal in mind, and that is to postpone and postpone. It is not what we said to Canadians in the Speech from the Throne. We made a clear commitment that there would be ratification before Christmas.” Chrtien added that he wont be meeting with the premiers and territorial leaders until next year (Toronto Globe and Mail, October 30, 2002).

On the international front, it appears that Canada has backed away from its request to be allowed to count natural gas and hydroelectricity exports to the U.S. towards its Kyoto target. Instead, it is asking for an assessment of the role of trade in less greenhouse gas intensive energy sources in meeting Kyotos objectives. If the new proposal is accepted, Canada would not object to having the old proposal dropped from the agenda.

Russia: Will it or wont it Ratify Kyoto?

Russia has sent mixed signals on whether it will ratify the Kyoto Protocol. At the World Summit on Sustainable Development (WSSD) in Johannesburg, Russia stated that it really had no economic interest in ratifying the protocol, but then reversed that statement a short time later and said that it would ratify by November.

Now Russia says that it could be as long as a year before it ratifies Kyoto. The protocol has been sent to various ministries for an assessment, said Nikolai N. Pomoshnikov, an official with Russias Ministry of Foreign Affair. Ratification would require amending various domestic laws, which would take three months to a year.

Pomoshnikov also said that “long-term impacts [of global warming] are still not clear and so there is a need to understand the implications of climate change.” To that end Russia has announced that it will hold a World Conference on Climate Change in Moscow in Fall 2003 (Outlook India, October 26, 2002).

Another Southwestern state is making a big splash in the renewable energy market. New Mexicos largest utility company, Public Service Company of New Mexico (PNM), announced on October 22 that it will team up with Florida-based FPL Energy to build the nations third-largest wind generation facility.

The project, known as the New Mexico Wind Energy Center, will be located in Quay and De Baca counties 20 miles northeast of Fort Sumner. It will cost $200 million dollars and will include 136 wind turbines that will reach 240 feet into the sky. The turbines will be the tallest structures in the state and will sprawl across 9,600 acres.

It is estimated that the 204-MW plant will provide electricity for about 94,000 average-sized New Mexico homes, or about 4 percent of PNMs total power production. PNM readily admits, however, that wind is an intermittent energy source and that the project will not provide a steady source of electricity. In fact, the facility will operate mostly during the spring months when wind conditions are optimal, or about 30 percent of the time.

“The scale of this project will put New Mexico on the map as one of the nations leading producers of renewable energy,” said PNM Chairman, President and CEO Jeff Sterba. “As renewable technology continues to improve, and costs come down, it is clearer than ever that smart business decisions and environmental stewardship can successfully coexist. PNM is thrilled to play a role in making renewable energy an everyday reality in New Mexico.”

Despite Sterbas rosy outlook, the project will rely on a “green tariff,” a small monthly premium paid by participating customers, to cover its costs. It is still unknown how much the wind-generated electricity will cost New Mexicans. Charles Bensinger of the Coalition for Clean and Affordable Energy joined Sterba at the press conference to praise PNM and to encourage New Mexicans to participate in the project. “PNM has really challenged us to put our money where our mouth is,” said Bensinger. “We want to make that 200 megawatts go really fast.”

With the November publication of a paper in the English scientific journal, Energy and Environment, Steven McIntyre and Ross McKitrick have called into question one of the most highly publicized scientific papers supporting global warming alarmism. Mann, Bradley, and Hughes used proxy data sets to construct a climate history of the Northern Hemisphere for the past millennium. They concluded that mean temperatures had been relatively stable from 1000 until 1900, but had increased dramatically in the twentieth century. This result was summarized in a graph resembling a hockey stick.

The Third Assessment Report of the United Nations Intergovernmental Panel on Climate Change featured the hockey-stick graph and concluded that, “It is likely that the rate and duration of the warming of the 20th century is larger than any other time during the last 1,000 years. The 1990s are likely to have been the warmest decade of the millennium in the Northern Hemisphere, and 1998 is likely to have been the warmest year.”

In “Corrections to the Mann et al (1998) Proxy Data Base and Northern Hemisphere Average Temperature Series”, McIntyre and McKitrick have gone back to the original data sets used to produce the hockey stick. They found numerous errors in collating and handling the data. After correcting for these errors, they find that the data sets used by Mann et al. yield a graph in which the values in the early fifteenth century are higher than those in the late twentieth. McIntyre and McKitrick will discuss the errors and their corrections in non-technical terms in their Cooler Heads briefing.

A lively debate between the two sets of authors has broken out on the internet. The ongoing controversy may be accessed at http://www.uoguelph.ca/~rmckitri/research/trc.html.

Steven McIntyre has worked in the minerals industry for 30 years, the last 16 as an officer or director of several small public mineral exploration companies. He holds a B. Sc. degree in pure mathematics from the University of Toronto and a further degree from Oxford University. His long experience in statistical analysis has taught him the importance of the careful handling and examination of data and his education has provided the necessary tools. Mr. McIntyre is not currently an officer, director, or employee of any listed public company. His research on climate topics has not been supported by any company, but has been carried out entirely for personal interest.

Ross McKitrick received his Ph. D. from the University of British Columbia and is now an Associate Professor of Economics at the University of Guelph in Ontario. He is also a Senior Fellow of the Fraser Institute in Vancouver, B.C. He specializes in the application of economic analysis to environmental policy design and climate change. Dr. McKitrick is the author (with Christopher Essex) of Taken by Storm: the Troubled Science, Policy, and Politics of Global Warming (Key Porter Books, 2002), which won Canadas Donner Book Prize in 2002. He has published scholarly articles in the Journal of Environmental Economics and Management, Economic Modeling, the Canadian Journal of Economics, Environmental and Resource Economics, Economics Bulletin, and other journals, as well as commentaries in newspapers and magazines. He has made invited academic presentations in Canada, the U. S., and Europe, as well as professional briefings to the Canadian Parliamentary Finance Committee.

Russia Wants to Burn More Coal

Russian President Vladimir Putin wants his country to make greater use of its coal reserves, which are estimated at 3 trillion tons. But this would make it difficult for Russia to meet its Kyoto target, not to mention that it would eat up all of its available “hot air” emissions credits that many countries are counting on to meet their own targets.

The Kyoto Protocol cannot come into effect unless either the U.S. or Russia ratifies the treaty. Since the U.S. has already said it wont ratify, it is up to Russia to win the day. At the World Summit on Sustainable Development in Johannesburg, Russian Prime Minister Mikhail Kasyanov said that “ratification will take place in the very near future.” But Putins call for exploiting coal puts this commitment into doubt yet again.

Environmentalists are not pleased. “By preparing to burn more coal for its energy needs, Russia aims to free more natural gas for lucrative exports to Western markets,” said Natalia Olefirenko, climate programs coordinator with Greenpeace Russia. “It is a flawed approach, and it amounts to a sell-out of the Russian environment because growing use of coal is likely to adversely affect the countrys ecological balance and cause acid rain” (Asia Times, October 3, 2002).

EU to Miss Kyoto Target

The International Energy Agencys Chief Economist, Fatih Birol, said that the European Union will not be able to meet its Kyoto targets even with new policies to promote the use of renewable energy.

Even if the EU were able to increase the share of renewable energy to produce electricity to 30 percent by 2030, it would still fall short of Kyoto. “Fossil fuels will still dominate,” said Fatih. “Even with these alternative policies [on renewables] we dont reach the Kyoto targets.”

In a business as usual scenario, the EUs emissions of carbon dioxide would rise to 3,146 million tons in 2010 and to 3,829 by 2030, compared to the 1990 baseline of 3,080 tons. With the above-mentioned renewable policies, emission would only be 4.9 percent less than the business as usual scenario in 2010, but still higher than the 1990 baseline. In 2030, emissions would be 19 percent less than business as usual, but still higher overall (Reuters, October 2, 2002).

EU to Chase the Hydrogen Holy Grail

The European Union has announced that it will initiate a major investment project to develop hydrogen power. According to European Commission President Romano Prodi, this effort will be just as important to Europe as the space program was for the United States in the 1960s, but “We expect an [even] better technological fallout,” he said.

The EU plans to spend $2.09 billion from 2003 to 2006 on hydrogen-related renewable energy development. Apparently the EU sees this as a hydrogen race with the U.S. Earlier this year the Bush administration launched the Freedom Car project, a fuel cell research effort, and has asked Congress to provide $150 million in funding.

But there is little reason to believe that such efforts will yield dividends. As noted by the Wall Street Journal (October 16, 2002), “Meanwhile, for all the hope surrounding hydrogen, it is still years, if not decades, away from making significant inroads into the power and transport markets, which currently account for most of the worlds oil and gas use.” Hydrogen is much more expensive than traditional fuels and would require massive infrastructure investments.

What the Journal fails to mention is that hydrogen is not an energy source, but merely a way to store and transport energy. That is due to the fact that there are no free standing sources of hydrogen. It must be extracted from water or other sources, which requires energy. It then must be re-oxidized to extract the energy. Energy is lost throughout the process, so that when all is said and done, less energy is produced than was used to get the hydrogen in the first place. The only way to overcome that is to circumvent the laws of thermodynamics.

Solar Power Plant Not So Impressive

Arizona Public Service Co. has begun construction on what will become one of the largest solar power plants in the world and could supply electricity for up to 3,000 homes. Solar power advocates are “oohing” and “aahing” over the power plant, but even this solar power behemoth is not that impressive.

Herb Hayden, director of APSs solar energy program, acknowledges that the biggest obstacle for solar power is that it costs twice as much as electricity produced from conventional fuels, but he thinks the project will break even. APS had been able to cover most of its costs on other solar projects by selling the power at a premium through its Solar Partners Program. Participating customersabout 3,000pay a monthly premium (read donation) for 15-kilowatt-hour blocks of renewable power. “It doesnt cover the costs, but it shows the product has value,” Hayden said.

The power plant, which will eventually produce 5.5 MW of electricity, will occupy 50 acres near the airport in Prescott, Ariz. By comparison, a small-to-midsize natural gas power plant that produces 250 MW of electricity occupies only a few acres. To equal that output using solar technology would require the use of about 2,300 acres.

APS currently has seven other solar power projects which produces a total of 1.7 MW of electricity and has committed to spending $12 million a year on solar power through 2004. A large part of the cost will be covered by surcharges on electricity bills, from 35 cents per month for residential customers to $39 per month for industrial customers. The surcharge raises about $20 million per year.

Hayden may be forgiven his somewhat misguided optimism since his company has little choice in the matter. The Arizona Corporation Commission approved in 2000 the Environmental Portfolio Standard, which forces investor-owned utilities to generate at least 1 percent of the electricity they sell from renewables. APS must generate 25 MW of electricity from renewable resources. They might as well smile about it.

The Meaning of Global Warming Claims

On September 30, Richard S. Lindzen, the Alfred P. Sloan professor of meteorology at MIT, gave a presentation “On the Meaning of Global Warming Claims” at a congressional briefing sponsored by the Cooler Heads Coalition. Lindzen is one of the leading critics of the claim that increasing atmospheric levels of greenhouse gases have “ominous implications” for mankind or the environment.

He began the presentation with a quick climate history of the last one hundred years and what that history means within the context of this debate. The warming during this period, said Lindzen, is concentrated in two periods, 1919-1940 and 1976-1986. The Earth cooled between these warming periods, and since 1986 there has been no significant warming.

A doubling of atmospheric concentrations of carbon dioxide, according to model predictions, would increase the temperature by about 1.5 to 4.5 degrees Celsius. We are already more than halfway towards a doubling of carbon dioxide, which has increased from about 280 parts per million to about 370 ppm. If all the warming in the past century was due to manmade carbon dioxide emissions, said Lindzen, it would mean that the climate is not very sensitive to changes in greenhouse gases and that pronounced warming is unlikely.

Lindzen argued that, “If most current climate models, which predict about 4 degrees C warming for a doubling of CO2, are correct, then man has accounted for 3 – 4 times the observed warming over the past century with some unknown processes of unprecedented magnitude canceling the difference. Predictions for the future assume that these unknown processes will disappear.”

The real problem in the global warming debate, Lindzen said, isnt so much the disagreement between scientists. Indeed, “There really is relatively little disagreement among scientists on a number of basic aspects of this issue.” The problem has to do with how the basic facts are communicated to the public. Scientists who insist on pointing out the “profound disconnect between scientific meaning of common statements and the public interpretation,” are marginalized as “skeptics.”

Rather than trying to solve this communication problem, many scientists, as well as environmental advocacy groups and politicians, have decided it would be easier to exploit it and have become quite adept at doing so. Lindzen argued that probably the best example of how a statement can mean different things to scientists and the public is from the Intergovernmental Panel of Climate Changes Second Assessment Report. It stated, “The balance of evidence suggests a discernible human influence on global climate.” To a scientist this statement does not imply that there is a problem, yet it was the “smoking gun” for Kyoto.

Lindzen also presented examples of where the scientific consensus is actually the opposite of what is presented in public. It has often been claimed that global warming will lead to increased storminess in the extratropics, but in fact, theory and observational evidence does not support this claim and there is general agreement on this in the scientific community.

Finally, Lindzen noted that although many environmental advocates and politicians claim that Kyoto would “solve” global warming, scientists agree that, “Complete adherence to Kyoto will have no significant impact on climate, regardless of what one believes about climate sensitivity.”

Land Cover Changes Contribute to Climate Change

A NASA funded study, appearing in the August 2002 issue of Philosophical Transactions of the Royal Society of London, has found that land use changes may be at least as important as greenhouse gas emissions in accounting for climate change. Growing urban areas, deforestation and reforestation, agriculture and irrigation can have strong influences on regional temperatures, precipitation and large-scale atmospheric circulation.

Different land surfaces have different effects on how the Suns energy is distributed back to the atmosphere. Changes in land cover can significantly affect temperature and other climate variables. “Our work suggests that the impacts of human-caused landcover changes on climate are at least as important, and quite possibly more important than those of carbon dioxide,” said Roger Pielke, Sr., an atmospheric scientist at Colorado State University, and lead author of the study. “Through landcover changes over the last 300 years, we may have already altered the climate more than would occur associated with the radiative effect of a doubling of carbon dioxide” (www.sciencedaily.com, October 2, 2002).

Energy Bill Gets New Life

As the Congress neared adjournment this week, the energy bill appeared to be dead as House and Senate conferees continued to disagree on major outstanding issues. The decision today to hold a lame duck session after the November elections means that congressional staffers can continue to try to put together a deal, which could then be voted out and sent to the president in late November or December.

As with most conference committees on major bills, there have been many rumors about the negotiations but little certain information. The three climate titles, which the House conferees voted overwhelmingly to reject, are reportedly back in the mix at least in some form. Indications are that the Bush administration has been pushing for a bill and have let it be known that they could accept several major anti-energy provisions, including the Renewable Portfolio Standard for electric utilities.

U.S. Climate Negotiator Downplays Kyotos Trade Implications

Dr. Harlan Watson, the U.S. senior climate negotiator, said in Brussels on October 9 that it is possible that the U.S. could face trade disputes due to its unwillingness to ratify the Kyoto Protocol, but that such challenges were unlikely to succeed. Environmental activists have already filed suit against the Overseas Private Investment

Corporation and the Export-Import Bank, U.S. government agencies which environmentalists allege are responsible for global warming induced damages. They also support a challenge against the U.S. in the World Trade Organization.

But Watson said that he doesnt think that a country could successfully use trade rules to challenge the U.S. position on the Kyoto Protocol. “We do not believe that, based on what came out of Doha (the 2001 agreement to launch a new round of WTO talks), it will be a problem, but it wont prevent perhaps action being undertaken at some point,” said Watson. “We do not believe we can be penalized for not entering a treaty regime that we have not agreed to” (Reuters, October 10, 2002).

Justice Department Opposes California Emissions Law

On October 9, the U.S. Department of Justice weighed in on the side of the auto manufacturers in opposing a California requirement that 10 percent of motor vehicles sold in the state, for the model years 2003 to 2008, must achieve zero emissions. According to DOJs filing to the federal court of appeals in San Francisco, Californias zero-emission mandate encroaches on federal authority.

“The Energy Policy and Conservation Act provides that when a federal fuel-economy standard is in effect, a state or a political subdivision of a state may not adopt or enforce a law or regulation related to fuel-economy standards,” argued the Justice Department.

California claims that there is an exception within the federal Clean Air Act that allows it to set its own fuel-economy standards, but Justice said that Congress never authorized the states to enact their own regulations.

With the date of implementation rapidly approaching, General Motors Corp., Daimler Chrysler Corp. and several California auto dealers won a preliminary injunction to delay the mandate for two years. This lawsuit is not related to the California law passed earlier this year that limits vehicle emissions of carbon dioxide (Associated Press, October 9, 2002).

Center Urges Mandatory Emissions Trading

A new report released by the Center for European Policy Studies Task Force on Emissions Trading and the New EU Climate Change Policy concludes that an EU emissions trading scheme will only be successful if it is mandatory, and that certain industrial sectors should not be excluded.

In a voluntary scheme, member states or companies would determine whether or not they would accept the targets and engage in trading, which would mean that those with low abatement costs would have little incentive to participate in a market with higher abatement costs. This would lead to a market with many sellers and few buyers. “A trading scheme based on on-going voluntary participation is not likely to work,” says the report. “Such a scheme would lead to a market with an imbalance between sellers and buyers, thereby restricting the liquidity and, more generally, the efficiency of the market.”

The report supports the controversial European Commission proposal that insists on a mandatory system, even though many of the EU member countries want a voluntary system. Denmark, which currently holds the rotating EU presidency, hopes to complete an agreement on an emissions trading scheme by October 17 when the Council of Environment Ministers meets in Luxembourg. But disagreements over whether the scheme should be voluntary or mandatory is a major obstacle to reaching an agreement. The United Kingdom and Germany are the most vocal nations calling for a voluntary scheme.

If a voluntary scheme is adopted, says the report, it should be “combined with incentives for companies or sectors to join as early as possible. Such incentives could [include] the initial method of allocation, the coverage of greenhouse gases, the choice of baseline year, sector coverage, price caps on the cost of allowances, banking into the Kyoto Protocols first commitment period (2009-2012).”

The report admits that any emissions trading scheme is likely to have “considerable distribution effects on the controlled sources, consumers and governments, i.e. there are likely to be winners and losers.” The EU should attempt to “strike a reasonable balance between the different interests,” but there is no perfect solution.

One of the major benefits of an emissions trading scheme, according to the report, is that it allows participants to reach their targets at least cost. Moreover, the resulting carbon price would create “long-term predictability for business, which is a crucial element allowing efficient investment decisions in carbon-reduction technologies and techniques.” This is not clear, however. Many economists have pointed out that when the supply of emission credits (or any other commodity) is fixed, prices are very sensitive to changes in market conditions leading to large fluctuations in price, thereby decreasing predictability.

The reports executive summary is available at http://www.ceps.be/Pubs/2002/Executive%20Summaries/GHGEmissTrad.pdf.

More Trouble for Emissions Trading Schemes

The U.S. Environmental Protection Agency has released a report which heavily criticizes the open-market emissions-trading programs that are being run in three States: New Jersey, New Hampshire and Michigan. This follows on the heels of an announcement by New Jersey Governor James McGreevey (D) that New Jersey will discontinue its emissions trading program.

The report was conducted in response to a request by two environmental groups, Public Employees for Environmental Responsibility and the New Jersey Chapter of the Sierra Club. What it found was that there are serious problems with the programs and that they need to be fine tuned before the EPA will allow an expansion of state-specific, voluntary, open-market trading programs.

Open-market trading (OMT) programs are different than cap-and-trade programs in that they are voluntary, have no expressly defined cap, allow trading between various types and sources of pollutants, and allow credits to be generated through past emission reduction efforts to meet current requirements. Cap-and-trade programs, on the other hand, have a defined emissions cap for a specified group of participants that are required to reduce emissions.

The report evaluates the programs in New Jersey and Michigan because they are the only states with extensive programs. It finds that there are several factors that adversely affect the ability of the programs to reach emission reduction goals. “Foremost among these factors,” says the report, “were the lack of safeguards, use of data of uncertain quality, and limited regulatory agency oversight of trading activities. Many sources have opted not to participate, and problems in one state (New Jersey) have become so significant that it has announced its intention to terminate the program.”

Two of the most important missing safeguards, according to the report, are the lack of public comment on proposed trades, and an acceptance of shutdown credits in Michigan. In fact, 23 percent of Michigans total OMT credits and 80 percent of its volatile organic compound emissions credits were shutdown credits. This shouldnt be allowed, says to the report, because companies may be able receive credits by shutting down in one state and resuming operations in another.

The program also failed to use reliable emissions data. “Our reviews of 84 randomly selected trades in Michigan and New Jersey disclosed that no EPA- or State-approved quantification protocols were used to calculate credits,” bringing into question the validity of the credits. Moreover, the data used to measure emissions was of poor quality.

Finally, there was insufficient enforcement and oversight on the part of EPA, which led to questionable trades. For example, the EPA alleged that a New Jersey utility, PSEG, had violated clean air requirements when it failed to obtain permits for modifications on two power plants, which would have established lower compliance levels.

With lower compliance levels, PSEG would not have been able to claim as many emission reduction credits as it did. In a settlement with the EPA, PSEG agreed to retire 18,600 tons of emissions credits worth $16 million, which represented 90 percent of the tradable credits in New Jersey. Another New Jersey utility, Conectiv, used “cooler, off-season ozone credits to meet warmer, more polluted, ozone season requirements.”

EPA recommends that federal regulation be developed for OMT programs, that shutdown credits be disallowed, that states be required to use EPA- or state-approved quantification protocols, and that OMT programs use a “risk-based targeting approach for federal and state compliance assurance, enforcement and oversight of OMT trades.”

Canadian Government Hides Cost of Kyoto

In a presentation to two Cabinet committees on September 24, the Canadian government expunged figures showing the estimated costs of compliance with the Kyoto Protocol. Indeed, Cabinet ministers have been told by the Prime Ministers office to avoid references to a Kyoto implementation plan, according to the National Post (September 25, 2002).

The cost estimates were the result of a modeling exercise conducted by the government and agreed to by the Prime Ministers Office, the Privy Council Office, the Environment Department, and the Natural Resources Department. They show that compliance would result in 200,000 lost jobs and a 1.5 percent loss in GDP.

The provinces of Alberta and Ontario would experience the worst economic impacts, since each contributes about 27 percent to Canadas national greenhouse gas emissions. The cost of natural gas would also rise between 4 and 14 percent and electricity prices would rise by 2 percent by 2010. These estimates are based on greenhouse gas reductions of 170 megatons, about 70 megatons short of Canadas Kyoto target.

In a letter to the Canadian Manufacturers and Exporters, Prime Minister Jean Chrtien had promised that there would be an implementation plan and consultations before ratification. It now appears that Chrtien is reneging on that promise. The provincial energy and environment ministers are expecting to see a comprehensive plan to meet the Kyoto targets at an October 21 meeting in Halifax, but Chrtien has admitted that there isnt one.

“The development of the plan will take 12 years. Ten years. You know, it will not be in operation tomorrow,” Mr. Chrtien said. “There is a series of things that will have to be done and we will have to meet the commitment by 2012. There is a good chance that if we dont start, we will not be ready by 2012. So we have to start right now. We have a 10-year period to develop the appropriate plans to meet these international obligations that the Canadians want us to commit to. We will develop the plan. We will give the framework of the plan. But all the pieces of this plan will take 10 years to finalize.”

Lorne Taylor, Albertas environment minister isnt buying it. “Theyre either incompetent or theyre not telling Canadians the truth, because we dont have until 2012 to develop a plan,” he said. “We actually have to hit targets in 2012. Not develop a plan by 2012. I think the Prime Ministers comments just are indicative of the confusion thats reigning supreme in Ottawa right now.”

Canadas Environment Minister David Andersen sees no problem with ratifying Kyoto without an implementation plan. “Only on the second of September [when the Prime Minister announced in South Africa that Canada would ratify the treaty] did certain elements of industry take seriously the fact that ratification was a distinct possibility. They tended to think it could be avoided. Now, were having a much more constructive tone to the debate,” he said. Andersen went on to say that the government plans an advertising campaign to “indicate the costs are exaggerated and that the debate must be on a serious level.”

Melting sea ice in the Arctic is claimed to be one of the major signals that man is dangerously warming the planet. Indeed, one of the more amusing episodes of the global warming chronicles was the discovery of open water at the North Pole, which the New York Times claimed had not been seen for 50 million years. It had to retract the story, of course, because open water at the North Pole in the summer is not unusual. It is becoming less and less clear, however, whether melting Arctic sea ice is a symptom of warming temperatures or the cause.

A study in the Journal of Climate (September 2002) finds that global warming is not the cause of melting sea ice, but that melting sea ice is causing the warming. Changes in sea ice extent, it turns out, are related to the well known phenomenon known as the Arctic Oscillation (AO) index, which is a measure of atmospheric circulation in the Arctic. Much of the observed thinning in the Arctic is due to changing wind patterns that rearrange the sea ice. When the AO index is in its positive phase, sea ice thins and retreats; in its negative phase it thickens and advances. The AO is an entirely natural process for which we have measurements for the last 100 years. Its current values are about the same as they were 100 years ago.

The study concludes, “Intuitively, one might have expected the warming trends in SAT [surface air temperature] to cause the thinning of sea ice, but the results presented in this study imply inverse causality; that is, that the thinning ice has warmed SAT by increasing the heat flux from the ocean.” In other words, a change in the AO index thins the ice which exposes the warmer ocean water to the cold air and warms it. It turns out that melting Arctic sea ice is responsible for Arctic warming, not the reverse.


The Cooler Heads Coalition will hold a screening of The Climate Conflict, on October 7, from 3:15 to 4:15 p.m., in Room 385 of the Senate Russell Office Building. The Climate Conflict is an award-winning Danish documentary about the global warming debate in general and about the role of solar variability in particular. Although it has won six awards in Europe and has been shown on major networks in most European countries, no American network or station has picked it up. Our special screening will be introduced by Dr. Paal Brekke of the European Space Agency, who is also interviewed in the film.