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“Clean Power Act” Up for Senate Committee Vote

by William Yeatman on June 25, 2002

in Politics

The U.S. Senates Environment and Public Works Committee is scheduled to mark up and vote June 27 on the Clean Power Act (S. 556) proposed by its chairman, Senator James Jeffords (I-Vt.). If enacted, the Kyoto-style policies in the most recent version of the bill would have serious adverse impacts on the reliability and affordability of the nations electricity supply.

The bill would be very costly according to estimates by the U.S. Energy Information Administration. The caps on emissions of sulfur dioxide, nitrous oxides, mercury and carbon dioxide would increase residential energy costs by 17 percent and household energy costs by 25 percent by 2010. By 2020, the cumulative cost of S. 556 to energy producers would rise to $177 billion, and eliminate 48 percent of coal-fired electricity production. It would also reduce real GDP by $100 billion the year the caps go into effect.

The full economic impacts are actually much worse, because EIA did not analyze all of the bill’s onerous restrictions, including some Chairman Jeffords added in recent weeks. For example, a provision in the most recent version lowers the specified emission caps by the number of tons collectively emitted by small producers (less than 15 megawatts capacity).

The bill requires coal-fired power plants 40 years and older to install the latest pollution control technology to reduce sulfur dioxide and nitrous oxide emissions. Edison Electric Institute argues that this requirement would affect 74 percent of coal-fired capacity by 2013 and 83 percent by 2018. This could be virtual death sentence for large portions of U.S. generating capacity. Indeed, a similar rule in California is forcing the retirement of 1,400 megawatts of generating capacity, a loss the state can ill-afford.

The higher electricity prices resulting from S. 556 would fall most heavily on poor people and retirees on fixed incomes. At a hearing on the bill earlier this month, J. Thomas Mullen, president of Catholic Charities Health and Human Services in Cleveland, testified that the bill would literally force retirees or working mothers to have to decide between eating and heating. “These are not choices any senior citizen, child, or for that matter, person in America should make,” said Mullen.

In the latest re-write, Jeffords attempts to deflect that argument by awarding 64 percent of the tradable emission allowances to “trustees” who will provide assistance to the affected households. The idea is that utilities would have to buy the allowances from residential electricity consumers, thereby offsetting the adverse affects on consumers.

But this is just smoke and mirrors according to Marlo Lewis, a senior fellow at the Competitive Enterprise Institute. “Where, after all, does Senator Jeffords think utilities are going to get the money to buy emission credits from consumers after spending billions on technology controls and conversions from coal to natural gas?” he asks. “From their consumers, of course.”

Is Kyoto a Walk in the Park?; Warm Winter was Good for the Economy

by William Yeatman on June 25, 2002

in Blog

Is Kyoto a Walk in the Park?

A new “study” of the costs of the Kyoto Protocol is getting attention even before its publication. Written by Christian Azar, a professor of sustainable industrial metabolism with the Department of Physical Resource Theory at Goteborg University, and Stephen Schneider of the Department of Biological Sciences at Stanford University, the analysis will appear in a forthcoming issue of Ecological Economics.

The article is an amazing bit of linguistic jujitsu. Recall that Bjorn Lomborg, author of the Skeptical Environmentalist, argued in his book that the tremendous costs of implementing Kyoto would result in no benefit. It would only delay the advent of predicted global warming from 2100 to 2106, so that the costs of global warming wouldnt be prevented, but delayed.

Azar and Schneider turn that argument on its head. They argue that without action to stop global warming the world will be ten times richer in 2100 than it is now and people on average will be five times richer. Implementing Kyoto, however, would only delay that date by two years. “To be 10 times as rich by 2100 versus 2102 would hardly be noticed,” Schneider told the New Scientist (June 15, 2002). And meeting the Kyoto target would mean that industrialized countries “get 20 percent richer by June 2010 rather than by January 2010.”

The argument is absurd on its face. It isnt the people who will be alive in 2100 that will be harmed by Kyoto, but the people who are alive today. Indeed, it makes no sense for those who are alive now to distribute income to increase the welfare of relatively more wealthy people who will be living 100 years from now. Moreover, if one takes seriously the Energy Information Administrations cost estimates, the Kyoto Protocols affect on GDP will be three times as large as the loss to GDP experienced during the Great Depression.

Ironically, Lomborg was chastised for doing work outside his area of expertise, yet neither Schneider nor Azar are economists and are obviously over their heads when it comes to doing economic analysis. One may ask how they managed to get a paper published in a peer reviewed economic journal if it isnt any good. It turns out that Ecological Economics is a bottom-rung economics journal that is largely a vehicle for leftist economic analysis. Oh, and by the way, Azar is on the journals editorial board.

Warm Winter was Good for the Economy

This last winter was unusually warm in the United States, something that Kyoto advocates have pointed out frequently. It turns out, however, that rather than a gloomy portent, the warmer weather was a godsend, according to a study by Stanley Changnon, chief emeritus of the Illinois State Water Survey, and his son David Changnon, a professor of geography at the University of Illinois at Urbana-Champaign.

“The unseasonably warm, dry and sunny winter led to profound effects on the nations economy at critical times,” said the senior Changnon. “Several economists reported that the weather was a major factor in keeping the United States from falling into a major recession.”

The study, commissioned by the National Oceanic and Atmospheric Administration, asked the Changnons to assess the economic impacts of the warm winter. What they found was that it leads to an estimated $21 billion in benefits due to lower heating costs, lower snow-removal costs, and increased construction. Makers of snow-removal equipment and winter clothing and segments of the tourism industry lost about $0.5 billion, however.

“The warm and dry weather allowed record-setting levels of home construction,” said Changnon. “Housing starts jumped 6.3 percent in January to a seasonally adjusted rate of 1.68 million units the highest level in two years and in February, housing starts reached their highest level since 1949.” This added “an additional $2.1 billion income to the industry.”

“The lack of severe storms also reduced property losses by $3.8 billion, which was a boon to homeowners and the insurance industry,” Changnon said. “Only one weather related catastrophe occurred a major ice storm from Oklahoma to Ohio which caused losses of $265 million. Reduced losses from a lack of snowmelt floods amounted to an additional savings of $1.3 billion for the industry and the government.”

“The more direct impacts of last winter include the costs of heating, reductions in transportation delays, lower highway maintenance costs, and reduced insurance losses,” Changnon said. “The more indirect impacts include retail sales, home sales and tourism.”

Lomborg Speaks About Global Warming

by William Yeatman on June 22, 2002

in Kyoto Negotiations, Politics, Science

At a briefing in Capital Hill on October 5 Danish statistician Bjorn Lomborg, once a member of Greenpeace, argued that predictions of the world heading for ruin are wrong. In 1997 he set out to challenge acclaimed economist Julian Simon who refuted environmentalist claims that the world was running out of resources. Lomborg discovered that the data on a whole supported Simon. “The Skeptical Environmentalist,” Lomborg’s new book is a composite of graphs, charts and statistics that factually show the earth’s environment is steadily improving.

His book asserts among other things that the global warming issue is overblown. In short he attests, “Things are getting better.” In his presentation, Lomborg said that global warming is a real issue, but suggested that the prime danger is the Kyoto Treaty, which he cites as a grand waste of money. He said, “Essentially Kyoto will do very little to change global warming. On the other hand Kyoto will be very expensive. It will cost anywhere from $150-350 billion a year, and that’s a lot of money when compared to the total global aid of $50 billion a year. Basically, just for one year of Kyoto, we could give clean drinking water and sanitation to every person on earth. This would avoid 2 million deaths a year, and assist half a billion people from not getting seriously ill each year.”

Environmentalists tend to be ecologically pessimistic about the future. Veterans of the environmental movement such as Paul Ehrlich of Stanford University and Lester Brown of the Worldwatch Institute have formed a litany of fears. These fears include depletion of natural resources, ever-growing population, extinction of species and pollution of the planet’s air and water. However, Lomborg’s approach is decidedly different. He says, “We must remove our myths about an imminent doomsday and remember we do not have to act in total desperation. Essential information is necessary to making the best possible decisions. Statistics tell you how the world is. Resources have become even more abundant and things are likely to progress in the future.”

The briefing was sponsored by the Cooler Heads Coalition, made up of 23 non-profit organizations that work on global warming issues.

U. S. Out of Kyoto For a Decade At Least; California Assembly Delays CO2 Vote; Canada Finding Reasons Not to Ratify; Campaign E

by William Yeatman on May 17, 2002

in Politics

U. S. Out of Kyoto For a Decade At Least

There is no chance that the United States will get back into the Kyoto Protocol before 2012, according to Dr. Harlan Watson, the U. S. State Departments senior climate negotiator. The Times of London (May 14, 2002) reported comments made by Watson while in London for talks with British officials.

“We have set 2012 as the date to take stock and if theres going to be a review of policy that is the time to do it,” he said. “We are not going to be part of the Kyoto Protocol for the foreseeable future and the 2005 review is not something we intend on being actively engaged in.”

When asked if that means that U.S. ratification of the Kyoto Protocol has been ruled out for the next decade, Watson responded, “That is correct that there is no chance before 2012. In order for any treaty to be ratified, it needs 67 votes in the Senate, and Kyoto is thus an unratifiable treaty. Theres no way that the U.S. could participate, even if the President sent it up again.” This remains true in Watsons judgment even if a Democrat were elected president in 2004 or 2008.

On a related note, Undersecretary of State Paula Dobriansky responded on May 15 to an April 8 letter from Christopher Horner, the Cooler Heads Coalitions counsel. Horners letter laid out the case for the U. S. government to remove its signature from the Kyoto Protocol. Dobriansky responded that, “President Bush and this administration have made clear on numerous occasions that the Kyoto Protocol is fatally flawed and that the United States will not participate in it.” She did not address the inconsistency between un-signing the Rome treaty creating the International Criminal Court and keeping the U. S. signature on Kyoto.

California Assembly Delays CO2 Vote

The California Assembly has postponed a vote on a bill that would regulate greenhouse gas emissions from automobiles. The bill, AB 1058, would require the California Air Resources Board (CARB) to formulate rules to achieve the “maximum feasible and cost-effective” emissions reductions. If passed into law, the bill would go into effect in 2006 and apply to the 2009 model year.

The Assembly originally passed AB 1058 earlier this year, but must now approve minor Senate changes before it can be sent to Governor Davis. The reported reason the vote has been postponed is that bill supporters arent certain that they have the votes (Greenwire, May 15, 2002). In the last few weeks, the Alliance of Automobile Manufacturers has mounted a large-scale campaign against the measure, including radio and newspaper advertising. The United Auto Workers union has now also come out strongly against it.

According to the San Jose Mercury News (May 14, 2002), Assemblyman Joe Canciamilla (D) originally voted for the bill out of courtesy to its sponsor, Assemblywoman Fran Pavley (D), but is now having second thoughts. He fears that the bill would give CARB too much power. “There is a certain amount of disagreement as to the science and what we can do,” Canciamilla said. “I am wondering now if [the bill] is something that makes sense.”

Canada Finding Reasons Not to Ratify

The Canadian government has just released “A Discussion Paper on Canadas Contribution to Addressing Climate Change.” The paper first sets out the problem: “Business-as-usual projections would see Canadas GHG emissions rise to approximately 809 MT [megatons] by 2010. Canadas Kyoto target is 571 MT by 2010, creating a “gap” of about 240 MT that must be addressed.”

The cost of meeting that target, according to the discussion paper, would be between zero and two percent of GDP by 2010. Instead of growing 31 percent by 2010, GDP would only grow by 29 percent at worst. “The AMG [Analysis and Modelling Group] estimates indicate that, unless policies are well designed, the impact could be uneven across provinces and territories. This is particularly true for the provinces of Alberta, Saskatchewan and Newfoundland.”

The paper offers several options for meeting Canadas Kyoto target, such as a domestic emissions trading program, more specific measures targeted at consumers or particular sectors of the economy, or government purchases of international permits.

Campaign ExxonMobil Warns of “Tobacco Suits”

A new report released by Campaign ExxonMobil, the group responsible for bringing shareholder resolutions to harass the company for its position on global warming, says that the company is risking shareholder value by opposing global warming regulation. ExxonMobil called the analysis “ridiculous.”

The most interesting part of the report is a side bar which threatens that ExxonMobil and other corporations that do not get behind efforts to ration energy will find themselves being hauled into court. “It is highly likely that serious damage will occur as a result of climate change,” says the report. “The aggrieved parties are likely to seek compensation from those who (sic) they regard as responsible.”

The report continues, “While ExxonMobil is no stranger to billion dollar lawsuits, climate change actions could swamp even those seen in the tobacco industry. The potential value at risk here could easily exceed $100 billion, especially as annual losses from climate change could significantly exceed that figure.

“Even if ExxonMobil escapes liability, it could be dragged into interminable lawsuits, at considerable expense and loss of management time. One estimate is that Philip Morris spent as much as $700 million on lawyers in the 1990s.” The report, by Mark Mansley, head of Claros Consulting, can be downloaded at www.campaignexxonmobil.org.

Greenpeace released another attack on ExxonMobil just in time for the international week of protest against the oil giant, which culminates on May 18 with boycotts and demonstrations at Esso stations throughout Britain. Denial and Deception: A Chronicle of ExxonMobils Efforts to Corrupt the Debate on Global Warming may be downloaded at http://www.greenpeaceusa.org/climate/pdfs/exxon_denial.pdf.

The Greenpeace “report” contains some astonishing claims, of which we quote only one: “It was recently reported that Exxon and Mobil spent approximately $1 billion financing the GCC [Global Climate Coalition], though accurate figures may never be known.” A footnote cites an article in the April 5 Guardian newspaper by environment correspondent Paul Brown. Browns article offers no source or evidence for the figure and refers to the GCC as the Climate Change Convention.

IPCC to Study Regional Impacts; Urban Heat Island Effects in Australia

by William Yeatman on May 17, 2002

in Science

IPCC to Study Regional Impacts

The new Chairman of the United Nations Intergovernmental Panel on Climate Change, Rajendra Pachauri, who is currently working to set the agenda for the panels fourth assessment report (FAR), said that the IPCC will “place more emphasis on regional assessments of climate change, and on its socio-economic impact,” according to the May 9 issue of Nature.

As an example of the kind of work the IPCC needs to do, Pachauri pointed out the melting ice on the Himalayas. “Five hundred million people depend on these glaciers for their water supply,” he said. “What kind of response do we have? To take an extreme example, we could move highly water-intensive industry out of that region. If you have 20 or 30 years to do that you are not going to cause major disruption.”

Pachauri is aiming at having the FAR finished in time to influence negotiations scheduled to begin in 2005 to set new greenhouse gas emission targets for 2013 and beyond. The report may have an assessment of the state of greenhouse reduction technology and carbon sequestration.

According to Nature, Pachauri is also “launching a $500,000 feasibility study on an advisory mechanism to inform governments and international bodies on the scientific issues facing global agriculture, including the implications of genetically modified crops.”

The focus on regional impacts is likely to be highly controversial. Due to lack of computing power, computer models have difficulty dealing with regional scale climate variables. The IPCCs own Third Assessment Report included an entire chapter in its science report assessing the regional climate information from climate models. It concludes that a “coherent picture of regional climate change via available regionalization techniques cannot yet be drawn (Climate Change 2001: The Scientific Basis pg. 623).”

Urban Heat Island Effects in Australia

A study appearing in the Australian Meteorological Magazine (50: 2001) found that even very small towns can exhibit detectable urban heat islands. The studys authors studied the urban heat island effects of several Australian cities with populations from 1,000 to 3,000,000 people.

The authors noted that the heat islands of Australian cities tended to be smaller and to increase at a slower rate with population than similarly sized cities in Europe and North America. As noted by CO2 Science Magazine (www.co2science.com), “The regression lines of all three continents essentially converged in the vicinity of a population of 1,000 people, however, where the mean urban-rural temperature difference was approximately 2.2 0.2 degrees C.”

In other words small towns are likely to have urban heat islands that raise temperature about the same amount as the amount of global warming since the Little Ice Age. According to CO2 Science, “With such small aggregations of people having such a dramatic impact on air temperature, it is ludicrous to believe that on top of the natural warming experienced by the earth in recovering from the Little Ice Age we can confidently discern an even more subtle increase in background temperature caused by concomitant increases in greenhouse gas concentrations.”

Rethinking Kyoto

by William Yeatman on May 14, 2002

in Blog

Rethinking Kyoto

An article in Foreign Affairs (May/June 2002) by Thomas C. Schelling, Distinguished Professor of Economics and Public Affairs at the University of Maryland, argues that it is time to rethink the Kyoto Protocol.

When President Bush rejected Kyoto, he did so for three reasons, according to Schelling. First, the developing countries have made it clear that they have no intention of participating in Kyoto. Second, there are still large uncertainties in the science and extent of the impacts. Third, he has expressed a preference for voluntary measures over mandatory regulation.

Schelling argues that the developing countries have the most to lose from global warming due to their higher dependence on agriculture. “Constrained by poverty and technological backwardness, their ability to adapt to climate change is limited,” writes Schelling. “The best way for developing countries to mitigate global warming, therefore, is through economic growth.” Calling on developing countries to participate is a waste of time.

Regarding the scientific uncertainties, Schelling writes that “what is least uncertain is that climate change is real and likely to be serious.” Here, Schelling merely takes the IPCCs Summary for Policymakers at face value. More importantly, “A huge uncertainty that will make any lasting regime impossible for many decades to come, however, is how much carbon dioxide can safely be emitted over the coming century.”

Schelling concludes that the weakness of Kyoto is its focus on the short term. “But any reasonable trajectory of emissions in the future ought to show a rise for some decades and a rapid decline later in the century.” There are several reasons for this according to Schelling. For one, the technology needed to reduce fossil-fuel consumption significantly is not yet developed. And prematurely scrapping equipment already in use is expensive and wasteful.

Emissions trading is unworkable in practice, according to Schelling. “The problem with the trading regimes is that initial quotas are negotiated to reflect what each nation can reasonably be expected to reduce. Any country that is tempted to sell part of an emissions quota will realize that the regime is continually subject to renegotiation, so selling any excess is tantamount to admitting it got a generous allotment the last time around. It then sets itself up for stiffer negotiation next time.”

Schelling further ridicules the Kyoto plan to let Russia sell its hot air as nothing more than a bribe masquerading as an emissions-trading scheme. “The purpose is to bribe the recipient into ratifying a treaty and providing governments a cheap way to buy out of emissions commitments, with the pretense that it serves to reduce emissions in accordance with the principle of competitive advantage.”

Instead of Kyoto, Schelling recommends a system similar to NATO where countries share burdens and contribute resources voluntarily. He also recommends that the way to deal with developing countries is through financial contributions to help them reduce greenhouse gas emissions.

Bad Data Hurts Model Performance

by William Yeatman on April 30, 2002

in Science

An article appearing in the April 19 issue of Science looks at how accurately climate models are able to reproduce current and past climate. What the authors conclude is that the models do a decent job of simulating the observed data, but that the data itself may not be that good.

“We can now test how well climate models simulate century-scale variations in the observed climate record,” say the authors, Thomas Smith, Thomas Karl and Richard Reynolds, at the National Climatic Data Center. “There have been numerous intercomparisons of various climate model simulations of 20th-century climate, based on the best available estimates of the climate forcing.”

It is assumed that these simulations closely reproduce observed climate variability, but, “This assumption mustbe viewed with caution,” say the authors. “Observational errors, sampling errors, and time-dependent biases degrade the climate record.” Although researchers have attempted to remove these errors, there are still problems.

The authors compare the errors in the computer models with the errors in the observed temperature record of worldwide sea surface temperatures (SSTs) which stretch back to the 19th century. To illustrate model errors the authors run three separate computer simulations with identical forcings, but starting at different initial conditions. By doing this they were able to “estimate the magnitude of the uncertainty introduced by a chaotic climate system.”

For the observed temperature record the authors calculated the uncertainty by comparing the range of SSTs derived from different observational errors, sampling errors and time-dependent bias adjustments. “The errors in analyzed SSTs,” say the authors, “are comparable to the uncertainty estimate associated with climate chaos over much of the 20th century.”

They conclude, “Todays models are thus within the observed uncertainty of the observations, at least with respect to the global SST record. This does not imply that the model simulations are perfect; rather, it indicates that more attention must be given to improving the records of past climate and ensuring that future climate records have little or no time-dependent biases.

“It is unsettling that the uncertainty related to treatment of the data is increasing in recent decades in the most-sampled oceans. This points to the importance of developing a global observing system that not only has good spatial coverage, but more importantly, strictly adheres to guidelines and principles articulated by the U.S. National Academy of Sciences.”

Etc.

  • In an April 21 editorial in the New York Times, former Vice President Al Gore called Dr. Rajendra Pachauri, the new chairman of the United Nations Intergovernmental Panel on Climate Change, a “lets drag our feet candidate who is known for his virulent anti-American statements.”

Dr. Pachauri responded in a letter to the editor in the May 1 New York Times, stating, “Mr. Gores derogatory statements about me reflect a deep disappointment at my election as chairman of the [IPCC], with 76 votes for me against 49 for his protg, Dr. Robert T. Watson.

“In a 1999 speech, Mr. Gore, referring to my commitment, vision and dedication, said; Pachy is the one person in the world who could bring us all here. He is known all over the community of concerned men and women as someone with the intellect and the heart.

“In Earth in the Balance, Mr. Gore acknowledged me among the other scientists who have been helpful in giving me advice during the writing of this book.

“Would the real Al Gore stand up? Does what he says today hold no value tomorrow?”

Announcements

  • The Cooler Heads Coalition together with the Science and Environmental Policy Project and Frontiers of Freedom will hold a briefing on “Whatever Happened to Global Warming?” on Monday, May 13, from Noon to 2 PM in Room B-339 of the Rayburn House Office Building. Speakers will include John Daly, who runs the highly regarded Still Waiting for Greenhouse web site in Australia, and climate scientists from Europe and North America. Lunch will be served. Attendance is free of charge, but reservations are required. Please contact Ericka Joyner of CEI at (202) 331-1010, ext. 267, or e-mail her at ejoyner@cei.org. Include your name, affiliation, and phone number.

Senate Passes “Energy” Bill Loaded with Global Warming Policies; Vehicle Emissions Bill Passes California Senate Committee; EU H

by William Yeatman on April 30, 2002

in Politics

Senate Passes “Energy” Bill Loaded with Global Warming Policies

On April 25, the Senate overwhelmingly passed comprehensive energy legislation by a vote of 88-11. Ironically, neither Senate Republicans nor Democrats seemed pleased by the end product.

The Senate bill (formerly S. 1766, then S. 517, and finally passed as H. R. 4) has little in common with either the energy bill the House passed last August or the Bush administrations energy plan released in May 2001. Instead of provisions designed to rebuild Americas energy infrastructure and provide more secure and abundant supplies of energy, the key parts of the Senate bill would raise energy prices for consumers and create countless new government programs, offices, agencies, and reports.

Many key parts of global warming bills introduced in the Senate during this Congress are included. Title XI, which in Majority Leader Tom Daschles (D-S.D.) original version provided for a mandatory registry of greenhouse gas emissions, was replaced with a complex amendment offered by Senators Jon Corzine (D-N.J.) and Sam Brownback (R-Ks.). Their amendment was accepted after an attempt led by Senators Chuck Hagel (R-Neb.) and George Voinovich (R-Ohio) to replace the mandatory registry with a voluntary one was withdrawn because it lacked majority support.

The Brownback-Corzine amendment creates a registry of emissions that would be voluntary in name only. Unless 60% of total U.S. GHG emissions are reported within five years, the registry would automatically become mandatory, although farms and feedlots would be exempt. The amendment would require the reporting of indirect as well as direct emissions, which means that automakers, soda bottlers, and brewers are likely to be forced to report emissions from their products.

Among numerous other global warming provisions, the bill re-directs the efforts of the U.S. Global Change Research Program and makes it a part of the National Oceanic and Atmospheric Administration and includes “sense of the Senate” language that supersedes the Senates 1997 Byrd-Hagel resolution.

The Senate-passed version also includes a renewable portfolio standard that requires that ten percent of electricity produced by utilities be generated from non-hydro renewable sources by 2019. Another provision designed to raise energy prices an expanded ethanol mandate that will triple the amount of ethanol required in gasoline by 2012 survived repeated attempts by Senators Dianne Feinstein (D-Calif.), Barbara Boxer (D-Calif.), Charles Schumer (D-N.Y.), and Hillary Clinton (D-N.Y.) to remove or weaken it.

The Senate and House versions of H.R. 4 now go to a conference committee, which will try to produce a compromise bill acceptable to both chambers.

Eileen Claussen, executive director of the Pew Center on Global Climate Change, a front group for corporations that hope to profit from energy rationing, was elated over the climate provisions in the bill. “This is more activity than we’ve seen on climate change in the Congress, I think, ever, which is a very positive sign,” she said (Los Angeles Times, April 26, 2002).

Vehicle Emissions Bill Passes California Senate Committee

A California Senate Committee has approved, by a vote of 8-3, AB1058, a bill to reduce greenhouse gas emissions from California automobiles. The measure has already passed the California Assembly, and will be voted on by the full Senate as early as next week.

“The bill,” according to Reuters (May 1, 2002), “would require the states Air Resources Board to adopt regulations that would achieve the maximum feasible reduction in emissions of greenhouse gases, including carbon dioxide, emitted by cars and light-duty trucks, the category that includes sport utility vehicles.” The bill originally would have required the regulations to be completed by 2005 and would take effect on January 1, 2006, but an amendment to the bill would give automakers until 2009 to comply with the new standards.

Automakers are attacking the bill, arguing that it is a “driving tax” that would severely impact sales of SUVs, which account for 47 percent of the vehicles sold in California. The bills author, Assemblywoman Fran Pavley of Woodland Hills, dismisses the auto industrys complaints. She claims that automakers will have no problem meeting the new standards, noting that Ford will be coming out with a new gas/electric hybrid SUV in the near future. “A lot of automakers have cars in the works that will offset CO2 emissions,” Pavley said.

EU Hits Rio Target, But Likely to Miss Kyoto Target

The European Union has announced that it has reached the greenhouse gas reduction target that it agreed to under the 1992 United Nations Framework Convention on Climate Change. The voluntary target was to stabilize greenhouse gas emissions at 1990 levels by 2000. The EU claims that it reduced its emissions to 3.5 percent below 1990 levels in 2000.

Although the European Commission congratulated itself for the success, it also expressed concern over increases in greenhouse gas emissions between 1999 and 2000. Emissions of carbon dioxide rose by 0.5 percent while emissions of five other greenhouse gases rose by 0.3 percent.

The commission warned that under existing policies the EU would not meet the target it agreed to under the Kyoto Protocol, which is to reduce emissions to eight percent below 1990 levels by the 2008-2012 compliance period.

“All member states except for the United Kingdom project their emissions by 2010 will be above their burden-sharing target under the Kyoto Protocol,” said Commission spokeswoman Pia Ahrenkilde. “The new EEA [European Environment Agency] data confirm that in the year 2000 most member states were well above their target path to Kyoto.”

The EU has been trying to implement a Europe-wide tax on greenhouse gas emissions for ten years, the latest being a “harmonization” tax that has been under negotiation for three years. A recent agreement between the member states may clear the way for it to be in place by the end of 2002. Other measures awaiting approval by member states are an emission trading scheme, and renewable energy and energy efficiency requirements (BNA Daily Environment Report, April 30, 2002).

Wind Power Meets Air Power

Five planned offshore wind power projects in the United Kingdom have run into a difficult snag. The Ministry of Defense has decided that the projects would interfere with military flights and radar. According to the British Wind Energy Association, if the Ministry of Defense successfully blocks the wind projects, then it would have a serious impact on the countrys ability to meet its renewable energy goals.

“If they are built, the 18 sites would provide more than one percent of the U.K. electricity supply,” said BWEA communications chief Alison Hill. “The governments own legal requirement is that 10 percent of its electricity is from renewable energy by 2010. It is widely expected that wind power and offshore will provide half of that.”

BWEA claims that by applying radar-reflective paint the projects will pose no problem for the military (Reuters, April 24, 2002).

Taxes, Taxes Everywhere; Cap-and-Trade Follies; Aussie Power Bills to Include Individual Emissions

by William Yeatman on April 30, 2002

in Blog

Taxes, Taxes Everywhere

The New Zealand government has approved a new energy tax to help control greenhouse gas emissions. The tax on vehicle fuel, electricity and natural gas will cost households an average $2.25 per week starting in 2007. The tax will also raise business energy costs by nine percent. New Zealand is expected to ratify the Kyoto Protocol in August.

Several sectors of the economy have been made exempt from the tax, however. High-energy-using export industries will be exempt, but in return for the exemption they will have to take measures to reduce greenhouse gas emissions. The farm sector is also exempt from paying taxes on all agriculture-related emissions, but will be required to invest $6.7 million per year to research methods for reducing agricultural greenhouse gas emissions.

New Zealand business groups have argued that the governments plan would hurt the economy. “The risk for New Zealand is that we will achieve neither the intended climate change outcomes nor encourage others. Its more likely that our economic, trading and export competitiveness will be damaged,” said Simon Carlaw, Business New Zealand Inc.s chief executive (Reuters, April 30, 2002).

Canada is also considering a gasoline tax. It was reported in the National Post on April 19 that the federal government was considering a tax of 10 Canadian cents per liter, but the rate was denied by Canadas Environment Minister David Anderson. He did say, however, that a gas tax is an option (Reuters, April 26, 2002).

Energy taxes in Germany have raised household energy bills by seven percent over the last year. However, energy bills are still lower than they were before Germany liberalized its energy markets (Reuters, April 30, 2002).

In London, the Royal Society has announced that it will look into what further measures are necessary in order for Britain to meet its Kyoto Protocol commitments. A new carbon tax on top of the Climate Change Levy appears to be at the top of the list of likely recommendations (Reuters, April 29, 2002).

Domingo Jimenez-Beltran, the head of the European Environment Agency, told Reuters in an interview published on April 18 that the world needs a global tax on fossil fuels. “Unless you get some global taxation, it will be impossible to tackle the effects of globalization,” Jimenez-Beltran said.

Earlier, Cooler Heads (April 17, 2002) reported that the European Union is planning an EU-wide tax on aviation fuel.

Cap-and-Trade Follies

In a guest commentary for Electricity Daily (April 29, 2002), David Wojick points out some of the serious flaws behind the assumptions underlying cap-and-trade schemes to reduce emissions.

Wojick points out that “emissions allowances” are nothing more than ration coupons that can be bought and sold. The idea of cap-and-trade systems is that all else being equal, “firms with high compliance costs can buy allowances from those with lower costs. If the price is set by the cost of compliance, another big if, the total compliance cost for all firms will be lower than if every firm has to go it alone.”

The assumptions underlying this claim, however, “ignore the complexities of market dynamics in general, and the structure of technology in particular,” said Wojick. The simple equilibrium models used to simulate how a cap-and-trade system might work assume a marginal cost of compliance curve for each facility and add an allowance allocation mechanism. The market clearing price is then calculated and voila, everybody is in compliance at a lower cost.

“But at the facility level,” says Wojick, “the system is hugely lumpy. Existing power plants, plus any new ones, are very large, so emission control systems are also very large, both in cost and in the time it takes to build them. In extreme cases, an emission control system may cost a third as much as the plant itself, and take five years to design, buy, and build. In many cases, there is only one technology option, as far as cost and time are concerned. One either builds or does not.” There is no marginal cost curve for a given facility.

Such a system cannot be optimized even with perfect information, an assumption that makes the models workable, but does not apply in the real world. Limited information about others intentions and future changes in power demand make it impossible for firms to make rational business decisions. “The economic system described above,” says Wojick, “is likely to resemble a commodity system, because both are driven by lumpiness, lack of information, and unpredictability. The dynamics of such systems are shortage glut shortage glut, or glut first, not equilibrium.”

Aussie Power Bills to Include Individual Emissions

In hopes of convincing the households and businesses of Victoria, Australia to change their energy consumption habits, the state government has announced that it will now list individual greenhouse gas emissions on consumers electricity bills. By linking global warming to electricity use, the state believes that it can convince consumers to reduce energy use and switch to renewable energy sources.

According to Victorias Energy and Resources Minister Candy Broad, “Victoria has a large generation from brown coal which makes our electricity very greenhouse-intensive, and thats a very good reason to include this information on the bill to remind people of how they contribute to the states emissions.”

Changes in European Growing Season Due to Natural Factors; Amazon in Carbon Balance

by William Yeatman on April 16, 2002

in Science

Changes in European Growing Season Due to Natural Factors

A study in the February 2002 issue of the Journal of Climate looks for possible explanations for the advent of earlier growing seasons in Europe other than global warming, noting that there is “a strong variability in the timing of seasons in Europe, which is perceived as a signal of a global climate change.” According to the researchers, led by Paulo DOdorico with the Department of Environmental Sciences at the University of Virginia, “The study of the interannual variability of timing and length of the growing season is gaining importance because plant phenology [biological response to climatic conditions] is a sensitive indicator of climate change and has broad impacts on terrestrial ecosystems through changes in productivity and in the annual carbon and water cycles.”

The study looks at the relationship between the North Atlantic Oscillation (NAO), “a large-scale displacement of air mass between the subarctic and the subtropical regions of the North Atlantic,” and the early onset of the spring season. What they found is that “spring phenology in Europe is found to be significantly affected by the North Atlantic Oscillation.” In fact, the researchers characterize the dependence of the early spring on the phases of the NAO as “remarkable.”

Amazon in Carbon Balance

A new study in Nature (April 11, 2002) has found that the rivers and wetlands of the Amazon rainforest may emit as much carbon dioxide as the dry regions of the forest absorb. This suggests that the Amazon may be in carbon equilibrium.

The researchers, led by Jeffrey E. Richey with the School of Oceanography at the University of Washington, conclude that, “Estimates that the tropics are a net carbon sink are not consistent with recent calculations from global inverse modeling, which imply that the tropics are at least in balance with the atmosphere if not a net source.”

In other words, the Amazon may not be a net carbon sink. If true, scientists will have to search for other carbon sinks to account for large amounts of carbon dioxide emissions, both natural and anthropogenic, that do not end up in the atmosphere and are not accounted for by known carbon sinks. These findings, however, will help scientists get a better handle on mans contribution to climate change, if any.

Etc.

The National Post (April 13, 2002) has reported that, “The world’s most powerful environment ministers will ride in buses powered by natural gas and greenhouse gas credits have been exchanged to negate their environmental impact on Banff, a World Heritage Site, during meetings here this weekend.” As a result of air and car travel and hotel accommodations the ministers attending the G8 environmental summit meeting last weekend would be responsible for tons of carbon dioxide emissions.

“However, under the scrutiny of environmental organizations gathered here,” reported the National Post, “the ministers have attempted to avoid embarrassment by purchasing carbon-dioxide credits from a solar-powered housing project in South Africa that will make the gathering an emission-neutral meeting, said David Anderson, Canada’s Minister of the Environment.” The ministers also dined on organically grown food.

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