Politics

Energy Departments Proposal Omits Transferable Credits; Is COP-9 the Beginning of the End for Kyoto?; Russian Emissions Rising R

by William Yeatman on December 2, 2003

in Kyoto Negotiations, Politics

Energy Departments Proposal Omits Transferable Credits

On November 26, the Department of Energy unveiled its long-awaited proposals to enhance the Voluntary Reporting of Greenhouse Gases Program, established under Section 1605 (b) of the 1992 Energy Policy Act. In a major surprise, the proposed enhancements do not include awarding transferable credits for voluntary reductions in greenhouse gas emissions.

President George W. Bush directed the Energy Department in his February 14, 2002 speech on climate policy to make the voluntary registry more accurate, reliable, and verifiable. All signs suggested that DOE intended to include transferable credits in its package. DOE does propose that company executives be required to attest to the accuracy of claimed emissions reductions. Also, reductions cannot be claimed when caused by production declines.

The lack of any crediting scheme in DOEs proposal is a major victory for friends of affordable energy, said Marlo Lewis, senior fellow at the Competitive Enterprise Institute. Lewis assembled a coalition of non-profit groups, including many members of the Cooler Heads Coalition, in opposition to any crediting program.

Lewis and his coalition questioned whether DOE had legal authority to award credits for emissions reductions and argued that early-action credits would create the institutional framework and lobbying incentives for Kyoto-style cap-and-trade policies.

The proposals are available online at http://www.pi.energy.gov/enhancingGHGregistry/proposedguidelines/generalguidelines.html . There is a sixty-day public comment period and a stakeholder workshop in January. Comments may be sent to 1605bgeneralguidelines@hq.doe.gov .

Is COP-9 the Beginning of the End for Kyoto?

The ninth Conference of the Parties (COP-9) to the United Nations Framework Convention on Climate Change opened in Milan, Italy on December 1 amid increasing doubts that the Kyoto Protocol will ever go into force.

While the usual array of hundreds of meetings, events, and sideshows will be offered, the private talks between government ministers and UNFCCC officials are likely to be largely about how to keep the process (of moving the world toward an energy-rationing regime) going without the protocol.

Both the United States and Russia threw cold water on the hopes of Kyoto s supporters as COP-9 began. From Moscow , Reuters reported on December 2 that President Vladimir Putins top economic adviser, Andrei Illarionov, said, Of course, in its current form, this protocol cannot be ratified. It’s impossible to undertake responsibilities that place serious limits on the country’s growth.

In a Financial Times op-ed (Dec. 1), U. S. Under Secretary of State for Global Affairs, Paula Dobriansky, wrote, ( Kyoto is) an unrealistic and ever-tightening regulatory straitjacket, curtailing energy consumption.

On the other hand, sources have told Cooler Heads that the European Union and Japan are putting strong pressure on Russian President Vladimir Putin to ratify the protocol and thereby bring it into force.

Several leading alarmist officials and NGOs have already made suggestions about what to do when and if Kyoto collapses (see the third story in Economics section for one example). The ideas put forward so far cover a wide range, which suggests that it might take some time agree on future steps. COP-9 continues until December 12, with government ministers scheduled to arrive on December 10.

US Official Rejects Any New Kyoto-Style Treaty

Dr. Harlan Watson, senior climate negotiator at the State Department, told journalists in Paris on November 14 that the United States would not back any new proposal to curb greenhouse gas emissions if it resembled the Kyoto Protocol.

Its going to be very difficult for the United States to get back to a Kyoto-type (agreement) because it has a rigid target and timetable agreement (for emissions cuts), Watson was reported as saying by Agence France Presse. He continued, For the foreseeable future, anyway, the United States would not be particularly pleased with the Kyoto framework. We think that there are basic difficulties, [and] there are also some operational difficulties.

The United States is on course to exceed 1990 emissions levels by 30 percent by 2012. Under the Kyoto agreement, it would have had to reduce emissions to 7 percent below 1990 levels.

Russian Emissions Rising Rapidly

According to an article in Canada s National Post (Nov. 13), Russian carbon dioxide emissions may be much higher than anticipated.

Part of the reason given by Russian officials for putting off ratification of the Kyoto Protocol was the projection that meeting President Putins target of doubling GDP by 2010 would entail exceeding the countrys Kyoto targets by that date. According to the Post, Russian emissions may be greater even than those projections.

The paper quotes Alexander Nakhutin of the Institute of Global Climate and Ecology as finding that, since 1999, Russian greenhouse gas emissions have ballooned by as much as 13 percent annually.

It goes on, If Nakhutin’s projections are correct-and he is one of only a very few researchers with access to the best Russian industrial data-by the time the Kyoto treaty is due to be implemented in 2008, Russian carbon emissions will be 6 percent greater than they were in 1990, or 30 percent higher than originally envisioned.

Kyoto s plans for Russia require Russian emissions in 2008 to be 20 percent below 1990 levels. The entire edifice of carbon trading is based on this assumption. Can it work without Russia ? That’s the key question, Stephane Willems, a Russian greenhouse gas inventory specialist with the International Energy Agency in Paris , told the Post.

The article also quoted Richard Baron, a carbon-trading specialist with the OECD in Paris , who said that, If Russia’s emissions are not well below 1990 levels in 2008, the all-important carbon market will at the very least suffer a radical change in expectations.

The story also reveals how Nakhutins work may have contributed to Russia s seeming about-face on the Kyoto issue: According to Nakhutin, when Kremlin officials reviewing the case for Russian ratification got wind of his findings, they expressed worry, and demanded details. We have a full-scale carbon emission inventory underway right now, he says. The government wants this information for a decision on whether or not to ratify Kyoto .

As a result, the article concludes, Nakhutin’s results won’t be in for a while yet, but even so, enthusiasm for Kyoto in the Kremlin is fading fast.

CEI Drops Junk Science Lawsuit after White House Acknowledgement; Chinese Emissions Skyrocket; India Rejects Emissions Restricti

by William Yeatman on November 11, 2003

in Politics

CEI Drops Junk Science Lawsuit after White House Acknowledgement

The White House Office of Science and Technology Policy (OSTP) has acknowledged that the National Assessment on Climate Change was not “subjected to OSTP’s Information Quality Act guidelines.” This statement now appears prominently on the document posted on the U. S. Global Change Research Program’s web site (http://www.usgcrp.gov/usgcrp/nacc/).

As a result of this admission, the Competitive Enterprise Institute withdrew its complaint in federal court that the National Assessment did not meet the minimal scientific standards required by the Federal Data Quality Act.

“The record shows that the Clinton White House pressured bureaucrats to rush out an incomplete and inaccurate report despite protests from government scientists,” said Christopher C. Horner, legal counsel and senior fellow at CEI. “The government also subsequently confirmed that the two climate models selected for the National Assessment are ‘outliers’ chosen to guarantee extreme results and are incapable of replicating even past climate trends.”

CEI argued in its complaint that the National Assessment violates legal requirements of objectivity and utility by employing computer models proven unreliable and by incorrectly revising climate history to portray the climate of the 20th century as unusual.

Members of the National Assessment Synthesis Team reacted strongly to the admission, with 30 people involved in its creation signing a letter to James Mahoney of the Office of Climate Change Science Program protesting the admission. The letter asserted, “We would suggest that the additional statement in bold is misleading and incorrect in at least two very important ways. First, OSTP’s guidelines did not exist or apply at the time that the National Assessment report was prepared.

“Second, and more important, the statement implies that the National Assessment Report was not properly reviewed and would not meet the OSTP guidelines; this is misleading at best and most likely false in the view of any independent review of the situation. We request that you eliminate the new phrase.”

The letter does not address the issue of how the two models that passed through the four layers of review outlined in the letter failed to predict the climate any better than tables of random numbers.

Chinese Emissions Skyrocket

Contrary to an earlier claim by the New York Times that China was reducing its coal production and consumption, the newspaper reported on October 22 that, “China’s rapid economic growth is producing a surge in emissions of greenhouse gases that threatens international efforts to curb global warming, as Chinese power plants burn ever more coal while car sales soar.”

The previous assumption had been based on Chinese official statistics. These have now been revised to confirm “what energy industry executives had suspected: that coal use has actually been climbing faster in China than practically anywhere else in the world.”

The paper quoted the International Energy Agency in Paris as estimating that, “The increase in greenhouse gas emissions from 2000 to 2030 in China alone will nearly equal the increase in the entire industrialized world.”

The article points out that China has begun to import coal from Australia and has also become the world’s fastest growing importer of oil. The nation has also become “the world’s largest market for television sets and one of the largest for many other electrical appliances.” The story points out that China is the world’s fastest-growing market for cars, with sales increasing by 73 percent this year alone.

China, as a developing nation, is exempt from the Kyoto protocol. Chinese officials have made it clear that, while they would like to see the protocol adopted, they will accept no restrictions on Chinese emissions now or in 50 years’ time.

India Rejects Emissions Restrictions

Indian Deputy Prime Minister L.K. Advani told a climate change conference in New Delhi that India would accept no restrictions on its emissions of greenhouse gases.

The Times of India reported (Nov. 11), “India on Monday categorically said no to the introduction of fresh commitments for developing nations under the UN convention on climate change. It demanded early operationalisation of special climate change fund and fund for least developed countries.” Mr. Advani stated, “The existing equilibrium of commitments and differentiation between developed and developing nations has to be maintained.”

The New York Times article mentioned in the story above points out that, while China will account for 18 percent of the growth in new car sales by 2012, India will account for 9 percent, just 2 percent less than the United States. India’s demand for energy use is expected to grow by 8-10 percent annually over the next decade.

Senate Defeats Lieberman-McCain Bill to Cap Greenhouse Gas Emissions; Attorneys General Appeal EPA Decision on CO2; Reactions to

by William Yeatman on October 29, 2003

in Kyoto Negotiations, Politics, Science

Senate Defeats Lieberman-McCain Bill to Cap Greenhouse Gas Emissions

The U.S. Senate defeated a scaled-down version of Senators Joseph Lieberman (D-Conn.) and John McCains (R-Az.) Climate Stewardship Act, S. 139, on October 30 by a vote of 55 to 43. Forty-five Republicans and ten Democrats voted against the measure. Thirty-seven Democrats were joined by six Republicans in favor.

The Democrats voting against were: Baucus, Breaux, Byrd, Conrad, Dorgan, Landrieu, Levin, Lincoln, Miller, and Pryor. Republicans voting for were: Chafee, Collins, Gregg, Lugar, McCain, and Snowe. Democrats Edwards and Ben Nelson missed the vote.

Lieberman and McCain gained some additional support for their cap-and-trade bill by making special deals for some sectors of the energy economy and by offering only the phase one target of cutting emissions to 2000 levels by 2010. The obvious hypocrisy of this ploy became apparent during the floor debate. The initial emissions cap will do nothing to address the alleged potential problem of global warming, so further, much more expensive reductions would be necessary. S. 139 would create the structure and incentives necessary to make those further reductions. This goal is made explicit in the section on “Ensuring Target Adequacy,” which would require the Under Secretary of Commerce to review the emissions reduction targets in relation to the aim of stabilizing greenhouse gas levels at a safe level.

Senator McCain warned repeatedly that they would be bringing the bill back to the floor again and again. However, immediately after the vote, Senator James Inhofe (R-Ok.), who led the opposition to the bill, moved that S. 139 be referred back to the Environment and Public Works Committee, which he chairs. S. 139 was discharged from the committee to the floor as part of the unanimous consent agreement to pass the energy bill in July. It lacks the votes to be voted out of committee

Attorneys General Appeal EPA Decision on CO2

An article in Environmental Science and Technology (Oct. 13), the journal of the American Chemical Society, suggests that a global treaty focusing on intercontinental air pollution could be a better approach to controlling climate change than the Kyoto Protocol. The researchers claim that, by cooperating to reduce pollutants like ozone and aerosols, countries could address their own regional health concerns, keep their downwind neighbors happy and reduce the threat of global warming in the process.

The study, from researchers at Columbia, Harvard and Princeton universities, acknowledges a need to regulate carbon dioxide emissions, but proposes that a treaty dealing with air pollutants, like ozone and aerosols, could be a better first step because it unites the interests of all countries concerned. As aerosols and ozone contribute to large-scale climate problems, the researchers argue, the implications of controlling them go beyond air pollution into the realm of climate change.

The researchers suggest a treaty based loosely on the 1979 Convention on Long-Range Transboundary Air Pollution (LRTAP), which initially addressed acid rain deposition in Europe through voluntary participation. The convention has since been amended to cover a broad range of pollutants, and participants include countries from Western and Eastern Europe as well as the United States and Canada.

Expanding such a treaty to include Asia would give the United States even more incentive to participate, the researchers claim, since westerly winds spread pollution from that part of the world to North America. (Eurekalert, Oct. 15)

Reaction to Russia

Russian President Vladimir Putins decision to put off ratification of the Kyoto Protocol has led to a variety of confused reactions from the climate change industry and their backers.

IPCC Chairman Rajendra Pachauri was only able to assert, “I don’t think a negative decision on Kyoto would be in Russia’s interest overall.” He went on to say: “Russia is a large country with a rich history and has ambitions to emerge once again as a global power. It cannot, therefore, gain in standing politically if it does not join hands with other countries in doing what is required to mitigate the emissions of greenhouse gases.” (Reuters, Oct. 17).

EU ministers responded by merely restating their position as held before the Moscow conference. The environment ministers of Britain, France and Germany issued a joint statement concluding, “Climate change is a real problem. Over the last few years, we have begun to experience more extreme climatic phenomena. This summer, parts of Europe faced an exceptional heat wave and drought that caused deaths and illness among older age groups, heat stress to livestock, forest fires, and damage to crops.”

They went on, “The scientific community has gathered convincing evidence that most of the warming observed over the last 50 years is attributable to human activities. Extreme events, such as heat waves or heavy precipitation, will be more frequent, more intense. What we experienced this summer is effectively an illustration of what we are likely to see more frequently in the not too distant future. The international community needs to act with determination to deal with this problem. . . There is no credible alternative to [Kyoto] on the table. We call upon Russia to ratify the Kyoto Protocol.” (BBC News Online, Oct. 23).

The David Suzuki Foundation in Canada alleged that Putin was being “leaned on” by President Bush and could not have come up with his decision independently (http://www.davidsuzu ki.org/files/Climate/Ontario/Oct03Russia.pdf).

The World Wildlife Federations representative in Moscow, meanwhile, concluded that the current position was irrelevant: “But the Kyoto accord is a win-win proposition for Russia. One can expect the government and legislature to move ahead with ratification next summer, when the elections are over and they can return to considering Russia’s long-term interests.” (International Herald Tribune, Oct 28).

Moscow Conference Casts Doubt over Kyoto’s Future; Schwarzenegger’s Campaign Cheers Environmentalists

by William Yeatman on October 20, 2003

in Kyoto Negotiations, Politics, Science

Moscow Conference Casts Doubt over Kyoto’s Future

The United Nations’ World Climate Change Conference, which concluded in Moscow on October 3, ended without reaching a consensus on the issue. A senior economic adviser to President Putin stated that he found the answers from the scientific organizers to his detailed questions over climate change science (which for the most part simply quoted from the IPCC’s Third Assessment Report issued two years ago) were unconvincing. When the debate was opened up to the floor on the final day, conference chairman Bert Bolin was forced to admit that nine out of 10 questions from the floor questioned the “consensus” on anthropogenic climate change.

After the conference, Russian advisers were at pains to stress that their skepticism towards Kyoto was based on genuine misgivings over the treaty’s scientific basis and the effects of climate change on Russia rather than simply a negotiating tactic to extract more concessions from the west. An unnamed source told Reuters Oct. 14, “I do not know how clearly what [the senior adviser] said was translated, but judging by the commentaries that appeared the words were interpreted as brinkmanship…. This is not a game, it is a very serious question…about the theory that (the protocol) is based on, and a number of other questions such as the economic issue.”

At time of writing, there has been little official reaction to the conference’s outcome from Kyoto-supporting governments or environmental lobby groups. Annie Petsonk of Environmental Defense, who attended the conference, alleged to Greenwire (Oct. 15) that, “Scientists and economists who spoke in favor of Kyoto often found their microphones cut off and were not allowed to speak until the last day of the conference.”

However, sources suggest that high-level officials preparing for the UNFCC’s ninth Conference of the Parties in Milan in December are bowing to the inevitable. BNA’s Daily Environment Report reported (Oct. 10) that, “For the first time since its drafting, official discussions will include the possibility of combating climate change without the Kyoto Protocol, although talks will focus more on other issues that include the use and transfer of new technologies, capacity building in developing countries, and sustainable development.”

Schwarzenegger’s Campaign Cheers Environmentalists

According to Greenwire (Oct. 15), California Governor-elect Arnold Schwarzenegger’s “policy agenda reads like an environmentalist’s wish list.” He has set a target of reducing “air pollution by up to 50 percent, through incentives for clean fuel usage, and build hydrogen car fueling stations along California highways. The governor-elect also supports the state’s renewable portfolio standard (RPS), which would require that 20 percent of the state’s power come from solar and wind power by 2017.”

In addition, he has promised to defend the state’s greenhouse gas legislation against legal challenges, saying, “California’s landmark legislation to cut greenhouse gases is now law, and I will work to implement it and to win the expected challenges in court along the way.”

Schwarzenegger’s campaign was not wholly attractive to the environmental lobby, which reacted badly to his suggestion that he might want to close down the state’s environmental protection agency as part of his campaign against government bureaucracy. However, Terry Tamminen, an unpaid adviser to Schwarzenegger on environmental issues, and executive director of Environment Now, told Greenwire that he hoped the new Governor would be able to work more closely with the White House than Gov. Davis did on issues like global warming and air pollution, saying, “As a Republican governor, Arnold is much more likely to be able to work with the Bush administration to resolve differences…. California could persuade the federal government to take another look at those policies.”

Deal on Energy Bill “Close”

Progress on the energy bill conference stalled over recent weeks, but Republican conference leaders are now confident they are ‘close’ to a deal on the outstanding disagreements over electricity, tax, and MTBE issues. Those disagreements are over whether merchant power generators should have to pay for transmission upgrades and issues surrounding liability protection for and a federal ban on the fuel additive MTBE. Sources suggest that one of the issues (it is not known which one) has been sent to the offices of Senate Majority Leader Bill Frist (R.-Tenn.) and House Speaker Dennis Hastert (R.-Ill.) to try to reach some resolution. The package of tax incentives has not been finished, either. The conferees have agree to drop the Senate’ bill’s three climate titles and the 10% renewable porfolio standard for electric utilities. There is confusion over whether the provisions for oil exploration in the Arctic National Wildlife Refuge and for an inventory of oil and gas resources in the outer continental shelf have been dropped. Sen. Joseph Liebermen (D.-Conn.) had issued a press release congratulating Republican conference leaders for removing the provisions, but retracted his statement when no announcement was forthcoming.

Collusion Charges “Absurd”

Following an allegation by the Attorneys General of Connecticut and Maine that the Competitive Enterprise Institute (CEI), a member of the Cooler Heads Coalition, had colluded with administration officials to sue the Environmental Protection Agency under the Federal Data Quality Act over its dissemination of the junk-science based Climate Action Report 2002, Sen. Joe Lieberman (D.-Conn.) has written to the White House asking officials to release to him any documents relating to the alleged collusion.

CEI rejected the charge as preposterous. “This started as a suit against a Clinton administration global warming report,” CEI President Fred L. Smith, Jr. said in a press release. “The accusations of collusion are absurd and just an attempt to divert attention from the real issue-that junk science is being used as the basis for climate change reports, which could lead to policies that cost Americans hundreds of billions of dollars with little, if any, benefit.”

CEI’s legal action began against the Climate Action Report’s predecessor, the National Assessment on Climate Change, in October 2000.

Energy Conference Steers Clear of Climate Change So Far; Russia Unlikely to Ratify Kyoto This Year Despite EU Bribes

by William Yeatman on September 16, 2003

in Politics

Energy Conference Steers Clear of Climate Change So Far

House and Senate conferees working to produce a comprehensive energy bill have made some progress in various areas. So far they have released draft language on the subjects of hydrogen, clean coal technology, the Alaska natural gas pipeline, energy efficiency and personnel. No mention has yet been made of any climate change provisions.

On hydrogen, the joint conference chairmen, Sen. Pete Domenici (R-N.M.) and Rep. Billy Tauzin (R-La.), said that the “provisions include the full range of research, development and deployment actions required to advance the nation toward significant use of hydrogen as soon as possible.” The language does not mandate specific goals for utilization of hydrogen-powered vehicles by specific dates, as was required in the Senate bill. Instead, it sets a broad target that hydrogen-powered vehicles should make “significant inroads” into the market by 2020. The draft language sets aside $2.15 billion for the purpose by 2008, less than the Senate bill, but more than the House bill.

According to Greenwire (Sept. 10), “Conference leaders have expressed a desire to expedite the work of the conference committee by using as many of last year’s agreements as possible before working on the more controversial issues such as those dealing with electricity policy and market structure, climate change, oil and gas exploration in the Arctic National Wildlife Refuge, renewable portfolio standards, taxes, ethanol mandates and hydropower reform.” CAFE standards are not regarded as controversial because the House and Senate bills treat the issue in similar fashion.

Russia Unlikely to Ratify Kyoto This Year Despite EU Bribes

The European Commission has allocated EUR2 million ($2.3 million) to Russia to support the Kyoto Protocol program. Jorge Moreira da Silva, permanent European Parliament Rapporteur on Climate Change, announced that Russian ratification of the Kyoto Protocol would lead to large investments from European companies, desperate to buy credits to enable them to continue operating without having to cut their emissions levels. Deputies of the Russian Parliament, however, have indicated that they will not be ratifying the protocol soon, despite statements from the environment ministry that they would do so. The parliamentarians seem to have sided more with Russia’s economics ministry, saying that Moscow needs to approach the issue gradually after examining its impact on the Russian economy. In a statement, deputies from parliamentary committees dealing with ecological and economic issues said, “It is necessary to examine the whole problem of Kyoto ratification, not just in its ecological aspect, but also studying the economic interests of the country.” (Russiajournal.com, gateway2russia.com)

EPA Refuses to Label CO2 a Pollutant; Pressure Grows for Separate Electricity Bill

by William Yeatman on September 2, 2003

in Politics

EPA Refuses to Label CO2 a Pollutant

Attempts by environmental groups to circumvent Congressional authority and achieve their goals through the back door were set back on August 28, when the Environmental Protection Agency turned down requests to regulate emissions of carbon dioxide and other greenhouse gases. The environmentalists hoped that EPA would use the Clean Air Act, which allows it to regulate substances if they are could be reasonably expected to harm human welfare. The Act lists “climate” as an area of human welfare.

Jeffrey R. Holmstead, the assistant administrator who oversees air programs, said that the act “does give us authority to do research on climate change, not to issue regulation … Where there is a major public policy issue, Congress needs to decide.” The general counsel, Robert E. Fabricant, issued a memorandum that said, “E.P.A. cannot assert jurisdiction to regulate in this area.”

The EPA had been asked to declare the life-sustaining gas detrimental to human welfare by a coalition of environmental groups and two north-eastern states that filed petitions under the Act. Fabricant based his reasoning on the 2000 Supreme Court decision, Food and Drug Administration v. Brown & Williamson Tobacco, which said the F.D.A. could not try to regulate tobacco as a “drug” and cigarettes as a “device.”

Holmstead clarified, “The Supreme Court said where there is a major public policy decision to be made, an agency can’t just go out and use a broadly worded statute to deal with that.” Fabricant added, “It is clear that an administrative agency properly awaits congressional direction on a fundamental policy issue such as global climate change, instead of searching for an existing statute that was not designed or enacted to deal with that issue.” (New York Times, Aug. 28)

Pressure Grows for Separate Electricity Bill

Following the reaction to the August blackouts, senior Congressional Democrats led by House Energy and Commerce Committee ranking member John Dingell (D-Mich.) are pushing for the energy bill conference to strip out electricity reliability provisions into a separate electricity bill. The idea is reported to be gaining favor among Senate Democrats, who are considering adding electric reliability provisions as a rider to the Labor, Health and Human Services and Education appropriations bill currently being debated on the Senate floor.

Dingell has said his reliability proposal will address three issues: the reliability of the transmission system, the reliability of generating supply, and the adequacy of mechanical, human and electronic controls on the system. He told Greenwire (Sept. 3) that the particulars of his bill would be similar to the reliability language in the existing energy legislation, and that he might be able to accommodate other issues within the bill in order to get it through Congress. “But I can’t tell you what those are,” Dingell added. “In a poker game, I never show my hole card.”

Congressional Republicans have so far resisted the calls, stating that the issue is better dealt with as part of a comprehensive energy bill. Senate Energy Committee chairman Pete Domenici (R.-N.M.) has so far sent “mixed signals” as to his preferred route for ensuring electricity reliability according to a Schwab analyst quoted by Greenwire.

Blackouts Mean Uncertainty for Energy Bill; Canada Launches Kyoto Plan

by William Yeatman on August 19, 2003

in Politics

Blackouts Mean Uncertainty for Energy Bill

The massive power outage that affected much of the northeastern United States and Canada on August 14 and 15 has created significant uncertainty over the prospects for the Energy Bill scheduled to be discussed in conference when Congress resumes sitting.

According to CNBC (Aug. 19), “Congressional leaders say the final version will have three elements aimed at preventing future blackouts: Mandatory reliability standards, investment incentives and reform of transmission siting rules.” President Bush has been quoted as saying, “One thing is for certain – they will have mandatory reliability standards in the energy bill. What that means is that the companies will have to have strong reliability measures in place. Otherwise, there will be consequences for them.”

With the President lobbying strongly for reliability mandates and a bill to sign as soon as possible, congressional leaders have targeted a vote by the end of September. It remains to be seen how far defenders of provisions on such matters as fuel efficiency standards and global warming will be prepared to engage in brinkmanship in order to push their demands.

Canada Launches Kyoto Plan

On August 12, the Canadian government announced a program totaling one billion Canadian dollars aimed at securing Canadian compliance with the Kyoto Protocol. The package includes: $100 million to expand Canada’s ethanol production (roughly double what had been expected), a $45 million public awareness program, and $131.4 million to encourage consumers to choose more energy-efficient vehicles and appliances, and to adopt other energy-saving practices in their daily lives. $302.9 million will be used to help business and industry cut emissions with existing technology and $250 million to help them develop new technology, while $320.7 million will go to partnerships with provinces, territories and aboriginal communities, which will be asked to propose emissions-cutting ideas that fit their priorities.

Consumers will be eligible to apply for rebates to improve home energy efficiency. The average rebate is expected to total around $1,000.

The package is expected to reduce Canadian greenhouse gas emissions by 20,000 tons. Under the Kyoto terms, Canada’s target is a reduction of 240,000 tons by 2010. (CTV, Aug. 18)

Senate Ready to Debate Climate Amendments to Energy Bill; Europe Falling for Russian Bait?; Environmentalists for Enron

by William Yeatman on July 22, 2003

in Politics

Senate Ready to Debate Climate Amendments to Energy Bill

Senate Majority Leader Bill Frist (R-Tenn.) has scheduled all next week for floor debate on S. 14, the comprehensive energy bill. While he has suggested that the Senate will not go home for the August recess until the bill is voted out, some Senate Democrats have hinted that they intend to keep the debate going until next year by offering amendment after amendment.

A draft of the climate amendment that Senator Jeff Bingaman (D-N.M.) plans to offer has been floating around. It looks a lot like Titles X, XI, and XIII passed by the Senate in the 107th Congress as part of Senator Daschle’s energy bill. Bingaman has removed or modified several controversial provisions. For example, the draft drops sense of the Congress findings on climate change.

The provisions regarding the registry of greenhouse gas emissions make several important changes to the Brownback-Corzine amendment in last year’s bill. Bingaman’s draft amendment would allow the president to choose the lead agency for managing the registry. Most unusually, it would direct that a not-for-profit organization be given a contract to design and operate the registry database and designate independent groups to verify and audit emissions reports. It would also set up complex procedures for certifying reported emissions reductions, again using and provides civil penalties of up to $25,000 per day for non-compliance.

The possible amendment to require a Renewable Portfolio Standard (RPS) for electric utilities has been further analyzed by the Department of Energy’s Energy Information Administration. In May, EIA reported that the proposed 10% RPS would have a cumulative probable cost of $4.9 billion by 2030. That was using assumptions specified by Senator Bingaman. Using more realistic assumptions specified by Senator Pete Domenici (R-N.M.), chairman of the Energy and Natural Resources Committee, EIA finds that the likely costs could range from approximately $36 billion upwards to well over $100 billion. The EIA’s supplementary analysis may be found at http://tonto.eia.doe.gov/FTPROOT/service/supplement.pdf.

Europe Falling for Russian Bait?

Speculating as to why Russia’s supposed enthusiasm for ratifying the Kyoto Protocol appears to have stalled, the Wall Street Journal editorialized July 17, “Russia’s change of heart over Kyoto seems mostly motivated by its wallet. Countries can sell ‘credits’ for carbon dioxide emissions allowed under the protocol but not used, to other countries who need higher levels of emissions than the protocol allows them. This potentially puts Russia in the money, because Kyoto’s calculations were based on 1990 levels, and since then-following the collapse of the Soviet Union-Russia’s levels have decreased by 36%. Russia reportedly wants guarantees from Europe and Japan that its credits will be snapped up, netting the Kremlin tens of billions of dollars. Holding Kyoto hostage may also be a ploy to secure concessions from Europe on Russia’s languishing World Trade Organization membership bid, or over the status of Kaliningrad.”

Europe already seems to be falling for the Russian ploy. EU Environment Commissioner Margot Wallstrom, speaking in Italy on the weekend of July 19, suggested that Europe would be happy to give Russia all kinds of help. According to the Independent of London (July 21), she “stressed that Russia would gain economically from ratification, arguing that Western countries would invest in Russian emission-cutting technology. EU countries could ‘demonstrate that we are also interested in providing them with clean technology,’ she said.”

The Wall Street Journal may have foreseen the outcome. It concluded its editorial, “Assuming Moscow’s ploy works, while the Kremlin is laughing all the way to the bank, Europe’s taxpayers will be scratching their heads wondering what happened after Kyoto’s provisions kick in, hitting European growth and raising costs in industries dependent on carbon dioxide. Maybe it’s time for Europe to have its own second thoughts.”

Environmentalists for Enron

The Coalition for Environmentally Responsible Economies, or CERES, which numbers among its members the AFL-CIO, Environmental Defense, and the Presbyterian Church, has issued a report criticizing American oil, energy and automotive industries for failing to follow its good corporate governance guidelines. Specifically, it objects to their failure to disclose possible financial risks associated with climate change and their unwillingness to enter into a ‘voluntary’ emissions trading scheme.

The report complains that American petroleum companies are devoting virtually all their development efforts to increased oil and gas exploration, while European competitors are investing in renewable energy technologies. They complain that American auto manufacturers are “depending on sales of big sport utility vehicles that get low gas mileage as their main profit center,” while Japanese competitors have taken the lead in introducing gasoline-electric hybrid vehicles. And they allege that American electric utilities are “investing heavily in refurbishing old, coal-fired power plants,” while regulators’ activities “argue in favor of” replacing these plants with new, lower-carbon-emitting facilities.

CERES argues that these strategies amount to significant risks that should be disclosed to shareholders. They call on CEOs to appoint and listen to Chief Environmental Officers, to “include a statement on material risks and opportunities posed by climate change in the company’s securities filings” and to participate in an external voluntary greenhouse gas emissions trading program. They claim that this represents a governance challenge that responsible stewards must rise to, intimating that Enron-like corporate scandals await if they do not.

They neglect to mention that Enron was the leading promoter of a greenhouse gas emissions trading program, arguing that it would do more to promote Enron’s business than any other regulation. (See http://ceres.org)

Climate Research Plan Hits the Streets

The Climate Change Science Program’s strategic research plan is scheduled to be released by Commerce Secretary Don Evans and Energy Secretary Spencer Abraham at a press conference on July 24. The report will be available at www.climatescience.gov.

An interagency team led by NOAA’s James Mahoney developed the plan over the past year through an exhaustive process of consultation, comment, and review. A pre-release summary lists five major goals of future federally-funded climate research:

Goal 1: Improve knowledge of the Earth’s past and present climate and environment, including its natural variability, and improve understanding of the causes of observed variability and change.

Goal 2: Improve quantification of the forces bringing about changes in the Earth’s climate and related systems.

Goal 3: Reduce uncertainty in projections of how the Earth’s climate and related systems may change in the future.

Goal 4: Understand the sensitivity and adaptability of different natural and managed ecosystems and human systems to climate and related global changes.

Goal 5: Explore the uses and identify the limits of evolving knowledge to manage risks and opportunities related to climate variability and change.

“A Product of the Bureaucracy”

The Competitive Enterprise Institute has received new documents from the EPA under the Freedom of Information Act relating to the EPA’s claim that it is not responsible for Climate Action Report 2002 (which President Bush disowned, claiming it was a “product of the bureaucracy”).

The EPA’s chronology states that the document was submitted to the Executive Office of the President (EOP) by the Office of Management and Budget (OMB). EPA confirmed this, then incorporated the EOP comments into the final document and prepared it for printing. EPA then asked the State Department and the White House Council on Environmental Quality (CEQ), which had earlier revised the executive summary of the document, on how to handle its public release. CEQ and the State Department decided to publish the document without publicity.

Democratic Presidential Candidates Debate Environment; Maine Governor Signs Climate Law; Russia: Kyoto Ratification Latest

by William Yeatman on July 8, 2003

in Politics

Democratic Presidential Candidates Debate Environment

The Democratic contenders for the White House focused on health issues at an environmental debate in Los Angeles hosted by the League of Conservation Voters on June 26.

Sen. John Kerry (Mass.) argued that environmental issues are tied to jobs, health, and national security. In a written statement he claimed that increasing use of renewables to 20% by 2020 would create 500,000 new jobs. He also announced that he would force the oil and gas industry to fund technology intended to put them out of business, increase fuel efficiency, and eliminate fossil fuel subsidies. Sen. Kerry has yet to comment on the Cape Cod wind farm.

Former Gov. Howard Dean (Vt.) spoke of his experience as a doctor, and linked airborn pollutants to asthma. He has written that oil is tied to national security because it is the lifeline of terrorists, but opposes drilling in ANWR and instead plans for higher CAFE standards on SUVs.

Sen. Joe Lieberman (Conn.) recommended the ratification of the Kyoto Protocol on the logic that following Europe’s lead will, “restore us as the moral leader of the world.” He also has a “Declaration of Energy Independence,” which focuses on reducing foreign oil consumption by two thirds within ten years and eliminating it completely within twenty years.

Former Senator Carol Moseley-Braun criticized the President at the debate as being in the pocket of energy lobbyists.

According to Rev. Al Sharpton, the President’s Clear Skies proposal, “is nothing but a gift to his friends in big business.” He also believes that because protecting the environment is labor intensive, pro-environmental policies will create jobs instead of eliminating them.

Other Candidates Stances

Four Democratic candidates did not appear at the debate. However, they have already all gone on record in regard to their environmental policies.

Sen. John Edwards (N.C.) blames our nation’s vulnerability to terrorism on our dependence on Mideast oil. He wants to support alternative transportation power schemes (including other technologies than fuel cells) and higher CAFE standards. He also opposes any revision to the Clean Air Act saying, “Its going to give more children asthma attacks and more seniors heart problems.”

Rep. Dick Gephardt (Mo.) accuses the White House of refusing to enforce the Clean Air Act and allowing more arsenic in drinking water. He also opposes increasing energy resources stating, “I will continue to fight against oil drilling in the Arctic National Wildlife Refuge,” instead outlining an Apollo project to free the US from Persian Gulf Oil in ten years. His plan includes one million hybrid cars by 2010 and 2.5 million fuel cell cars by 2020.

Sen. Bob Graham (Fla.) highlights his experience as governor of Florida when discussing environmental issues. He writes, “I brought more environmentally endangered lands into public ownership than any other state in the nation during that time.” He wants to increase government investment in renewable energy, including ethanol, wind, and solar.

Rep. Dennis Kucinich (Ohio) believes that technological advances in renewables have broken down old barriers to development.  He seeks to spur research and development in hydrogen, solar, wind, and ocean energy sources, and to expand public ownership and control of utilities.  In addition, he wants to initiate a Global Green Deal for renewable energy both at home and in developing countries.  On other environmental fronts, he has opposed advances in biotechnology in the food supply and claims to have thwarted nuclear waste dumping.

Maine Governor Signs Climate Law

On June 26, Maine Governor John Baldacci signed a bill into law that aims at reducing greenhouse gas emissions by 10 percent below 1990 levels by 2020. It requires Maines Department of Environmental Protection to convene a group of stakeholders, including environmentalist groups and at least 50 businesses that will agree to an emissions reduction plan by 2006. The law also includes a carbon sequestration program allowing credit for carbon taken up by vegetation. The cost of the law has not been estimated.

The new act had its origins in the 2001 compact between New England governors and premiers of Canadas eastern provinces. Its sponsor, Rep. Ted Koffman (DBar Harbor) told the Bangor Daily News that immediate action was needed for Maine to do its part in protecting the world from the effects of climate change. The Daily News outlined the dangers supposedly threatening Maine: “Here in New England, the temperature and sea level are on the rise, according to scientists. Climate models predict that much of the states famous coastline could be lost. Rising temperatures and more frequent storms will bring increased disease. Because Maine is located at an ecological boundary, a shift of just a few degrees could mean the loss of the spruce-fir forests that support the states paper industry, the famed Maine moose and even the lobster fishery.” (Bangor Daily News, June 26)

Russia: Kyoto Ratification Latest

While the members of Russias parliament, the Duma, appears broadly in favor of ratifying the Kyoto Protocol, Russian President Vladimir Putin appears less enthusiastic about the idea. There have been increased efforts by European governments to persuade Russia to ratify the document, as it cannot come into effect without ratification by either Russia or the United States.

Most Russian parliamentarians support the protocol, Robert Nigmatulin, chairman of a parliamentary committee that advises on ecological issues, told Reuters. He said, “I am in favour of it, and I think most deputies are in favour of it. The treaty has to be ratified by the Duma, but it is the president that will decide.”

Putin himself appears less than impressed by the protocols effectiveness, telling a group of students, “If everything that was written in the Kyoto Protocol came into effect, it would not solve the problem. (But) it is true, as my European colleagues say, that it is a step in the right direction.”

A major conference on climate change science is scheduled to take place in Moscow in the fall. Russian scientists and economists have recently expressed skepticism about whether global warming is occurring at all (see the May 28 issue). The news that this June was Moscows coldest since 1941 will not have helped make the case for climate change. Moscows normal average temperature for June is 17.5 C. This years was a mere 13. (Reuters, July 7/ Moscow Times, July 1).

NY Times Accuses White House of Censoring EPA Report; Energy Bill Update; Automakers Oppose Hydrogen Target

by William Yeatman on June 24, 2003

in Politics

NY Times Accuses White House of Censoring EPA Report

In a front-page story on June 19 and an editorial the following day, the New York Times accused the White House of partisanship and censoring science during the normal editing process of the State of the Environment report unveiled on June 23. The administration had moved to correct certain statements about the state of climate change science. In response, the EPA deleted the section on climate change entirely.

Much of the criticism centered on two issues. First, the replacement of the sentence “Climate changes has global consequences for human health and the environment,” with the statement, “The complexity of the Earth system and the interconnections among its components make it a scientific challenge to document change, diagnose its causes, and develop useful projections of how natural variability and human actions may affect the global environment in the future. Because of these complexities and the potentially profound consequences of climate change and variability, climate change has become a capstone scientific and societal issue for this generation and the next, and perhaps even beyond.” The NY Times summarized this alteration as “replacing statements about the risks of global warming with remarks that stress uncertainty.”

Secondly, the paper criticized the administration for deleting references to the National Assessment on Climate Change, a widely discredited document that relies on models that have been proven to have no better predictive power than tables of random numbers.

Jeremy Symons of the National Wildlife Foundation, was quoted as charging that “Political staff are becoming increasingly bold in forcing agency officials to endorse junk science.” This would seem to refer to the White House adding reference to the recent study by Willie Soon et al. that found worldwide evidence of extensive natural temperature variation during recorded history and beyond.

The Times pointed out that the Soon study had been “partly financed by the American Petroleum Institute,” but neglected to point out that 90 percent of the studys funding came from three government agencies the Air Force Office of Scientific Research, NASA, and the National Oceanic and Atmospheric Administration. New Yorks paper of record did not address the question of whether leaving out reference to the Soon study might have been regarded as censorship.

Energy Bill Update

Since the beginning of June, the Senate has passed eight amendments to S. 14, the comprehensive energy bill.  Two, numbers 840 and 860, were sponsored by Senators Domenici (R-N.M.) and Bingaman (D-N.M.), and re-authorized Low Income Home Energy Assistance Program (LIHEAP) funding.  Two, Bingaman no. 867 and Alexander (R-Tenn.) no. 880 were adopted to ensure the availability of natural gas and to instruct the Secretary of Energy to report on natural gas supplies and demand. 

Others included an amendment by Sen. Boxer (D-Calif.) to promote the use of cellulosic biomass ethanol from agricultural residue, and an amendment sponsored by Domenici for the elimination of methyl tertiary butyl ether (MTBE an additive used to increase oxygen in gasoline) from the fuel supply, and an amendment sponsored by Mary Landrieu (D-La.) aimed at reducing dependence on foreign oil, which passed 99-1, with Jon Kyl (R-Az.) being the lone dissenter who realized oil prices are set in a global market.

Senators Ron Wyden (D-Ore.) and John Sununu (R-N.H.) proposed an amendment to strike the provision relating to deployment of new nuclear power plants. The provision allows the government to aid in the creation of new power plants through loan guarantees and purchase agreements. Wyden and Sununu claimed that the provision amounted to $16 billion of high-risk loans. Their amendment was defeated on June 10, 48-50.

The Senate will probably take up the energy bill again some time in late July. Sen. Domenici, chairman of the Energy and Natural Resources Committee, has expressed determination to make the deals necessary in order to pass the bill before the August recess. There have also been persistent rumors that Senate Democrats intend to drag out debate until next year.

Automakers Oppose Hydrogen Target

At the Energy Efficiency Forum in Washington in mid-June, automakers claimed that Californias zero-emission vehicle (ZEV) program should be a warning to law-makers to avoid future mandates on fuel alternatives. Toyota, DaimlerChrysler and General Motors were referring to the California Air Resources Boards change in policy, switching from an electric vehicle mandate to one focusing on gas-electric hybrids and then fuel cell-powered vehicles. The failure of the electric vehicle mandate is blamed on high and rising costs and very low consumer demand.

One specific piece of legislation with which automakers disagree was Sen. Byron Dorgans (D-N.D.) bill, which would require hydrogen fuel cell vehicle accumulative sales reach 100,000 by 2010 and 2.5 million by 2020. GM and other automobile manufacturers are already trying to find ways to sell hydrogen fuel cell vehicles by lowering costs and improving performance, but are still having problems with storing the fuel.

Also at the forum, U.S. EPA Administrator Christie Whitman spoke about the Climate Leaders Program, which added 11 partners, making the total 41. The Climate Leaders Program is a voluntary initiative on climate change aimed at reducing carbon dioxide and other greenhouse gas emissions. Environmentalists are unhappy with the program, claiming that the goals are too low. (Greenwire, June 13).

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