Proponents of Carbon-Capture-and-Storage (CCS) have long hailed the technology as the silver bullet that will enable the world to both fight climate change and keep using coal reserves. In Germany, the debate about the merits and pitfalls of this approach has once again surfaced. It highlights three key problems with using CCS to solve the climate crisis. Ordered from least to most damaging to the proponents of CCS, they can be summarised as: 1) The technological challenges in bringing the technology to large-scale applicability and the amount of money needed to reach this point. 2) The economic uncertainties over the competitiveness of CCS-generated energy vis-a-vis other forms of energy. 3) The opportunity costs of investing in CCS given the proven potential and fast growth rates of other renewable energy sources.

1) The technological challenges in bringing the technology to large-scale applicability and the amount of money needed to reach this point.

To deploy CCS technologies to a degree necessary to substantially reduce CO² emissions from coal-based energy generation will require not the creation of an infrastructure similar in scale and technological complexity to that of the oil- and gas-supply. Furthermore, it will require sustained investments by governments and energy producers in fitting and possibly retro-fitting existing plants. This combination of the costliness of the infrastructure necessary and the technological challenges involved means that the technology will be deployed too late, when the peak of coal-based energy production has already been reached, argues Richard Heinberg, from the Post Carbon Institute.

2) The economic uncertainties over the competitiveness of CCS-generated energy vis-a-vis other forms of energy

Caused in part by uncertainties about the costs and feasibility of CCS, in part by uncertainties about future supplies and cost changes of other renewables, there is considerable uncertainty about the economic prospects of CCS-generated energy. Richard Heinberg argues that deploying CCS will lead to strong increases in electricity prices, because a) CCS will be deployed after coal production has peaked, and b) because the technology lowers the efficiency of energy production.

Long-term considerations aside, in Germany doubts about the economics of CCS have appeared from unusual quarters. Johannes Lambertz, head of RWE Power, stated that with increasing construction costs and the potential costs for CCS the economic case for constructing coal-fired power stations was hard if to make.

3) The opportunity costs of investing in CCS given the proven potential and fast growth rates of other renewable energy sources.

While the points made above merely express scepticism about the chances of successfully fighting climate change using CCS technology, they don’t seem to justify to not at least try (we should try everything, after all, if we take climate change seriously). But this misses the crucial point of the case against CCS – opportunity costs: The cost of an alternative that must be forgone in order to pursue a certain action. The question is, would investment in other forms of renewable energy or measures not make more out of public and private investment?

Axel Berg, deputy energy spokesman of the SPD-Fraktion, is one making this argument. He argues that while using CCS sustains an outdated mode of energy creation based on large utilities running large power plants, the technology cannot easily be exported, especially not to developing countries, and shift attention away from policies focusing on energy efficiency measures and new renewables technologies, the only sustainable solutions to climate change.

Overall, the debate around CCS will continue, and it is likely that it will play at least some part in policies addressing climate change. But there are serious problems linked with its use – it is not the silver bullet.

Sigmar Gabriel (left) and Jean-Louis Borloo point towards more flexibility in achieving CO2 target levels globally.

This week France and Germany suggested that rich nations should collectively guarantee deep cuts in GHG by 2020. That stance is nothing new. But the flexibility suggested on the pathway to such collective cuts certainly is a huge step forward in attitudes regarding climate change negotiations.

The Paris meeting held this past week is one of three gatherings of 17 key nations (among them, China, France, Germany, India, Russia, and the USA) in the climate change debate, just ahead of a pivotal UN climate change summit in Copenhagen this December. These 17 nations, which met in Paris, emit 80 percent of the world GHGs, mainly from burning fossil fuels.

As December approaches, French Environment Minister, Jean-Louis Borloo, recognized on the first day of the conference, “there can be more flexibility among us.” He said that France and Germany see no reason why developing nations can not collectively sign up to cut emissions by 25-40% below 1990 levels by 2020. Borloo went on to say that a collective goal would undercut criticism by newly industrialized countries, like China and India, over inaction by developed nations. German Environment Minister, Sigmar Gabriel, added, “the longer it takes for industrialized nations to have a common position, the longer we will have to wait until China and India move [on climate change].”

In this French-German “suggestion” flexibility became a sort of framework as the Paris conference progressed throughout the week. For example, countries, like the USA, which have said that they cannot reach such steep goals by 2020, could contribute to a collective pact in different ways, such as financing development of green technologies. Borloo praised the pace in reaching agreement over a “green-fund” of approximately 100 Billion USD per year to help developing countries limit pollution and develop adaptation plans for unavoidable climate change.

Even though the spirit remained positive throughout the conference, there was some criticism of how certain countries are dealing with the issue of climate change. Notably, U.N. Secretary-General, Ban Ki-Moon, said that he wanted Washington to do more. The Obama administration has suggested a 14-15 percent reduction in GHG emissions from 2005 levels by 2020. Legislation now facing the U.S. Congress would reduce these emissions by 20 percent by 2020.

A main focus of the Copenhagen Climate Congress this past March was to bring consensus to the concentration levels of CO2 at which the world must stabilize in the coming years. During the Paris Conference, Barolo did not talk much about whether progress had been made on the critical issue of the size of GHG emission cuts that scientists say are vital to reducing climate change impacts. But, the idea that change, no matter the level of political flexibility required, must take place.

“The world’s destiny will probably be at stake in Copenhagen,” Borloo said. “Copenhagen is not a retrograde vision; it’s not the start of negative [economic] growth, but a new start for strong, sustainable, sober carbon development.”

We will see how attitudes progress during the next meeting in June in Mexico.

International impetus on climate change not replicated domestically

International Success…

On the international stage, Indonesia can claim with some justification that it is leading the way in advancing the climate change agenda. In the last month alone, Indonesia has been active in:

• Putting the role of oceans on the climate change map as well as signing the Coral Triangle Initiative (discussed in last week’s blog);
• Releasing the world’s first REDD rules on how tradable carbon credits will be generated, detailing where REDD projects can take place and who can do them. Although questions have been raised as to how the carbon credit revenue will be shared between the project developers and the government, these rules are nevertheless a milestone in making the REDD scheme a reality;
• Linking any future REDD scheme with a concerted effort to address illegal logging, going as far to suggest that illegal logging could undermine REDD.

… Domestic Gloom

On the domestic front, however, concern is growing that Indonesia is not so committed. As pointed out by this blogger, even though the Presidential elections are next month, climate change is conspicuous by its absence from the election campaign. This is despite the dangers faced from rising sea levels and increased incidents of forest fires (which have already started and are projected to worsen significantly this year). Furthermore, the current economic crisis has resulted in a budget deficit totalling US$13.47 billion. Plans are afoot, however, to plug this gap with loans that are expressly allocated to climate change. As Basah Hernowo, the Bappenas director of forestry and water resource conservation says while the French and Japanese have agreed to give additional loans of $100 million, on top of the $500 million already agreed, towards reduction measures, “the government will use the money to cover the budget deficit”. And the reason given? “The loans for climate change issues have cheaper interest rates compared to other loans”.

This is extremely disturbing and raises the question of what the donor countries will do, especially as there is a monitoring mechanism in place to ensure that the money is spent on climate change projects. It also brings a more negative spin on the international achievements listed above: it suggests that internationally Indonesia is pushing the climate change agenda in order to secure more revenue for the general budget. While it could be argued that it is up to Indonesia to decide what it spends its budget on, one would expect enlightened self-interest to make climate change a top domestic priority. The signs so far however are not promising.

Uploaded on November 1, 2007 by Stuck in Customs

Canada, has announced that it is beginning to formulate its own Cap and Trade system this week, to continue the trend of North American policy convergence on Climate Change issues.

Fresh off the press (from Treehugger),it has been reported that what many Environmental proponents have long hoped for In Canada, could soon become a reality as serious federal policy is being formulated. Here’s the scoop:

“Canada has just announced that it will likely follow suit and move towards carbon cutting measures of its own. … And what’s more, Canada has said the two trading systems could later be linked”

More from Bloomberg, Canadian Environmental Minister Jim Prentice noted:

“We’re watching very closely what the U.S. is doing,” Prentice said. “We’re working on the broad-brush issues at the moment.” He declined to say when Canada might implement its own carbon-trading system . . . “There are still some continental issues that need to be worked out, but I’m in Washington regularly” to follow the issue.”

As Treehugger goes on to note, this could even reinforce efforts in the US, as legislators can now see a wider scope for a Cap and Trade system and if the systems were integrated it would allay to some extent fears that the US would be jeopardising its economic competitiveness.

The idea of a Northern American integrated Carbon Market might at once seem radical but in fact follows a well trodden path of economic policy convergence between these two countries that has been pursued for over two decades. The first agreement in 1988, the Canada-United States Free Trade Agreement, marked the beginning of the end of protectionist fears between two countries who already shared strong economic links. The treaty was soon replaced by the far-reaching NAFTA act, signed in 1994. Despite considerable anxiety about further economic integration, NAFTA created further standardisation of trading and worker movement, including the first such major economic deal which included a developing country in Mexico.

While NAFTA further opened up the North American continent in many respects it reflected pre-existing trade relations with Canada being the US’s largest trading partner. The integration of the continent and perhaps the lack of a linguistic barrier with Canada has also been reflected in contemporary policy, especially with regards to Climate Change. This shouldn’t be surprising the two countries share strong economic ties over resources that directly impact on Climate Change such as their energy markets. The most notable example of Climate policy convergence is in the WCI, which includes most of the major Canadian states as well as several US states including its founder, California. Notably the majority of observer states to the WCI are from Mexico (6 in total), underlining North America as a platform for policy convergence.

The convergence does not stop at state level. Federal policy on the environment has been a recurrent theme in recent years. Canada has three reasons for this: Firstly, given the integration of the two countries economically, a change in one would precipitate a change in the latter anyway, so they may as well follow suite, the example can be seen when Canada recently announced it will standardise its fuel standards with the US, reflecting the overlap of the two countries’ automobile markets. Secondly, and because of the first, any undue burden Canada on its economy, could directly reduce its competitive in some areas with the US. Finally, Prime Minister Harper, long reluctant to pursue Climate Change policy, could follow the US under President Bush, safe in the knowledge that Canada would then have to do very little.

While no one expected the status quo to stay the same after the 2008 election, with both Presidential candidates supporting action against Climate Change, and a widely tipped increase in the Democrats’ control of congress, few could have expected the Obama administration and congress to move so quickly on Climate Change. Although many of the measures have received individual criticism for a lack of strength, consider that since coming to power: the US has funded billion to green projects through the stimulus, seen a Cap and Trade bill, unthinkable under Bush, emerge out of the House energy committee and a fuel standard passed, 4 years earlier than expected aim for standards far higher than expected, and that has just been the first 4 months. 

In reality, what we’ve seen is a paradigm shift in the US that has seen the Climate Change debate move from its existence to debating its solution, from an “economic burden” to an essential tool for recovery through millions of green jobs and from a fringe liberal idea, to one that is central the US’ geo-political security

The pace of change has left the Harper government playing catch up, when before even its meagre efforts could make it seem like the leader in North America. Prentice’s latest statement underlines two factors; that Canada cannot afford to be left behind on the green market (something most major Canadian states have long recognised), nor isolated internationally as the US sets a positive tone for UN discussions later this year.

A Canadian Cap and Trade has obvious benefits, in that it would link in with the current state systems, such as those proposed by Quebec and Ontario, as well as bringing in to play albeit with concessions, heavy polluting states such as Alberta. Bringing in states such as Alberta is critical, to re-aligning polluting industry with Climate goals. The simple fact is that as long as carbon has a price, even if heavily polluting developments such as tar-sands continue, investment in cleaner technology for them will become a necessity. Furthermore, Cap and Trade on a federal level create a stable investment climate for renewable technology whose value can only rise as carbon prices increase.

The same can be said of a North American wide system. By creating a single market, it effectively allows pooled investment in renewable technology regardless of the geography. This makes eminent sense in North America, as in Europe, where crucially energy resources are already shared across the border and set to expand further.

A further strength of the system is that once initiated, it would be difficult to alter it, as it would be shared across two political systems, while this can work both ways a crucial element of Climate Change policy has to be that it can be sustained across political changes. Canada has seen such turbulence, when the former liberal government ratified Kyoto, only for the Harper government to declare that ratification was invalid because it was undertaken prior to Harper’s own government.

I can only see the move to federal and hopefully regional Cap and Trade policy as a net positive. If it goes ahead, and I suspect in the medium term it will, then we will have two regional blocs integrating Climate Change policy, the EU and the US. Not only could this set a trend for other regional blocs (and if in Climate Change why not in other areas) but it also paves the way in the long term for inter-regional integration of Carbon markets, given how much simpler policy alignment would be if regions are already integrated. I’m getting ahead of myself, but one can’t help but feel positive that at the start of the 21st century, it is a promising that a global problem is beginning to be met by global solutions.

In a state not short of green ideas, British Columbia once again looks forward to displaying its green credentials but this time on the international stage. The Vancouver 2010 winter Olympic organisers aim to make the 2010 Winter Olympics a showcase of the state and city’s progress in embracing sustainable eco-values.

Historically, Olympics have not necessarily focused on a legacy being the event itself, as recently as the 2004 Athens 2004, where not even the facilities appeared to stay in use afterwards, giving the impression the Olympics was little more than one-use disposable event, use and discard.

Fortunately, organisers have moved towards demanding that the Olympic events are geared towards the long-term benefit of their host city. One of London 2012′s key arguments was its potential to rejuvenate the East end of London, with new transport links, jobs housing and business opportunities. All of this is well and good, except the Olympic games themselves still have smash and grab air to them, fans from across the world come, at large expense, stay in facilities often that fall into disrepair after and leave a trail of environmental destruction in their wake. Vancouver aims to tackle this head on, although the Winter Olympics is much smaller in scale than a summer Olympics, nevertheless British Columbia’s most populous city aims to develop and display its green credentials by creating a sustainable model.

Efforts are numerous, an expansion of the mass transit SkyTrain system, first developed for the world trade fair, will form a centre piece of the project.  The buildings, are a showcase of green development, dual flash toilets (who said green wasn’t glamorous), rain harvesting roofs, and even a site-wide compost. Buildings to house athletes are expected to receive the US green building council’s LEED gold certificate (the highest possible) and not surprising given they will have green roofs of plants to act as insulators in winter and cool temperatures in the summer.

Yet perhaps the boldest innovation comes in the area of recycling, often overlooked by environmentalists because of its truly unglamorous image, recycling can potentially make savings in carbon cycle, not merely the manufacturing but the shipping of the products is all saved. Macleans has the story:

“diverting 85 per cent of all its solid waste from landfills, starting this fall through next May. That’s no small challenge. The diversion rate in Toronto, where residents fill green bins with food scraps, blue boxes with other recyclables, and pay for what they throw away, is 44 per cent. In the environmentally conscious metro Vancouver area, the rate is 52 per cent. Halifax, which has been running its green bin program for a decade, is only now getting close to its 60 per cent target.”

Whether the ambitious targets for companies working on the 2010 games is more debateable:

“To date, the only corporate sponsor that has unveiled a fully formed waste-reduction plan is Coca-Cola. The beverage giant is vowing to collect 100 per cent of the containers it distributes at the Olympics”

Yet, whether or not the goals are fully realised,   the shift towards sustainability in events which symbolised the disposable culture is a welcome one, putting increasing responsibility on organisers to reduce environmental impact and creating a culture among corporate providers, such as Coca-Cola bodes well not just for future events but in raising expectations in the public sphere of what to expect from governments and business alike in a more environmentally conscious age.

There has been a huge amount of coverage of conferences so far this year, the G20 foremost among them. There was another conference that took place last week that was important to anyone interested in climate change policy but you would be forgiven for missing it. The Western press, in a fit of parochialism, ignored a meeting that could have far-reaching consequences for climate change policy, namely the World Ocean Conference held in Manado, Indonesia (read my previous post about the lead-up to the conference here).

Initiated by the Government of Indonesia, it brought together representatives from 80 developing and developed countries to discuss the role of the oceans in climate change. Among the topics discussed and pledges made:

• The current lack of knowledge about what role oceans can play in mitigating climate change. In this context the US announced plans to give a grant of 0,000 to Indonesia to support ocean exploration;
• To acknowledge that coastal communities are going to be adversely affected by climate change and that adaptation needs to start now. It was suggested that funding for adaptation and mitigation would go through the Global Environment Facility (GEF);
• The signing of the Coral Triangle Initiative between Indonesia, Solomon Islands, Malaysia, Timor Leste, Papua New Guinea and the Philippines to protect the coral reefs in their respective countries. The importance of coral protection should not be underestimated – the WWF estimates that around 100 million people’s livelihoods depend on these coastal environments, environments that are under threat from climate change.

Changing the rules of the game

Perhaps the most significant development from a climate change policy perspective however was the creation of a ‘roadmap’ to get the Manado Ocean Declaration (MOD) tabled in Bonn in June with a view to being incorporated into the Copenhagen negotiations. Indonesia, by taking the lead, has gained an enormous amount of prestige and by potentially adding oceans to the agenda, Indonesia stands to gain financially: not only will Indonesia gain from the REDD scheme but also by being the world’s largest archipelago, any financial deal that involves ocean as carbon sinks would benefit Indonesia enormously.

It is pleasing to see Indonesia take the lead in an issue which has been dangerously neglected. While the motivation maybe merely another source of revenue for the government of Indonesia, this conference can only be good for promoting climate change policies within Indonesia. There are a number of struggles ahead of course: it is by no means certain that the MOD will become part of the Copenhagen negotiations, and even then practical issues like the lack of scientific knowledge about the role of oceans as carbon sinks, could prevent them from becoming part of the post-Kyoto deal. Even so, this conference has helped raise awareness of this issue. Well in some places it has.

Seven years ago, Hamburg sold its municipal energy provider to the Swedish utility Vattenfall. Yesterday, in a telling example of changed thinking on energy policy, Hamburg’s Green environment minister announced the start of construction for the first (admittedly tiny) windpark operated by the city’s newly created municipal energy provider. The re-claiming of political control over energy production and supply by municipal providers, in line with developments elsewhere in Germany, highlights three issues. First, that for environmental and economic reasons political control over energy production and supply might be desirable. Second, that Green and Conservative politicians can make pragmatic policy. And third, that ‘greening’ energy supply might be a paying proposition for a city like Hamburg.

To provide more competition and therefore choice for citizens; to have an energy provider taking responsibility for fighting climate change; and to have an energy provider that operates in Hamburg, re-invests profits and represents the city’s interests; these are are the goals Anja Hajduk, Hamburg’s Green environment minister names for the creation of the new state-owned energy utility. They are to be achieved, in the medium-term, by Hamburg Energy, the new company by not only producing its own renewable energy, but also re-taking control over the heat- and gas-grids currently operated by Vattenfall and providing its customers with exclusively non-coal-non-nuclear electricity.

Hamburg Energie’s creation was first announced last autumn, at the same time as the government – legally obliged – granted Vattenfall the right to operate a coal-fired power station in the city. And while the Left party in the city characterizes the move as a cynical political ploy, it is more likely the expression of a spectacularly unspectacular Conservative-Green coalition’s pragmatic approach. Apart from announcing the creation of a municipal rival to Vattenfall, Hajduk – faced with her party’s discontent but legally obliged to grant the plant’s construction – also placed stringent regulatory limits on its size and the amount of cooling water from the river Elbe it is allowed to withdraw. And while traditionally seen as big-business friendly, Hamburg’s CDU members of government have so far gone along which a majority of the Green’s environmental policy – in striking contrast to the constant quarreling observers are used to from Red-Green coalition days.

And there is evidence that the optimism placed in renewable energy has sound economic footing. For example, in an unrelated – but not accidental move – Siemens announced the creation of a European sales and project execution headquarter in Hamburg. For northern German manufacturing, mostly rural and hurt by the demise of the ship-building industry from the 70s onwards, wind turbines have long provided a dynamic and fast-growing engine of job creation and economic growth. Siemens’ announcement, part of a wider trend of growth in renewable-energy related services in northern Germany and Denmark, show that this industry can create white-collar jobs in the city as well. The creation of Hamburg Energie is a sign that this message has been understood.

Although as yet unofficial, an exciting new development is expected when President Obama will soon – probably later today – announces new federal rules for automobile emissions and mileage standards.

When Obama cleared the road for a federal waiver, which would have allowed California (and 13 other states which would have followed suit) to develop more stringent fuel efficiency standards, there were concerns that this will lead to a patchwork of regulations around the country. The new regulations which are about to be announced should redress these fears and bring the whole of the US up to the standards set by the Californian regulations (see fact sheet for California’s regulations, though the two set of rules use difference measurements, so complex conversions are needed to actually compare them). They will also mark the first ever limits on GHG tailpipe emissions in the United States.

Although some of the details are not completely clear, and there seems to be some confusion as to exact numbers, these rules which will take effect in 2012, will create a car and light truck fleet which is about 40% cleaner and more efficient than what we have today, by 2016. This is four years earlier than is required under current federal law, which was passed in 2007 but never enforced, as no regulations were made by the Bush administration.

This development will have wide support as it follows months of discussions with the ailing American auto industry, as well as fit in with the Waxman-Markey ACES bill which calls for a nationwide standard. Car manufacturers welcome the pending announcement in part because this will allow them to better plan for the future market, after finding themselves lagging behind Japanese and European manufacturers.

The expected announcement is naturally also supported by environmental politicians and NGOs. And as Daniel Becker, director of the Safe Climate Campaign said – “This is the single biggest step the American government has ever taken to cut greenhouse gas emissions.”

UPDATE - and now it’s official. With executives from 10 automakers by his side, and environmental leaders applauding from the audience, President Obama announced a new national fuel efficiency policy. The policy will cover model years 2012-2016, and by 2016 will require an average fuel economy standard  of 35.5 mpg (or 15km/litre. Compare this to the 35 mpg by 2020, which is what the 2007 CAFE law requires. The current average is 25 mpg). Obama mentioned that 1.8 billion barrels of oil will be saved over the lifetime of vehicles sold in the next 5 years (this is the equivalent of shutting down 194 coal plants or taking 58 million cars off the roads for a year).

This policy is a result of an unprecedented collaboration between the Department of Transportation, the Environmental Protection Agency, Amrican auto manufacturers, the United Auto Workers, environmental leaders, the State of California, and other state governments.

UPDATE #2 – more details coming through mention that the EPA will indeed regulate tailpipe emissions, which has never been done before, and that Congress does not need to aprove these standards as they will be implemented through federal rules (which – together with the strong alliance backing it up – means that this is not just a pretty statement, but is a policy able to bring real changes).

Some thoughts - one of the things mentioned again and again by the different people involved, is how much collaboration went into this. It is a unique alliance between groups representing very different interests (auto industry, state governments, environmental NGOs, etc) all “marching forward in the same direction.” as California Governor Arnold Schwarzenegger said at some point. Obama notes this as well, mentioning in his statement that “it represents not only a change in policy in Washington but the harbinger of a change in the way business is done in Washington… No longer will we accept anything less than a common effort, made in good faith, to solve our toughest problems.” As the problems facing the US are are indeed tough and deeply rooted, I only hope that this is really true, and not just wishful thinking from a man who sought to ‘reach out across the aisle’ since his first days in office (and was constantly rebuffed)

UPDATE #3 – questions have been raised about how this will affect the struggling ethanol industry which is currently trying to increase the national standard from a 10% ethanol blend (that is, ethanol constitute 10% of the blend sold at the pump) to a 15% blend. Some analysts say a tougher fuel efficiency standard might harm the industry as ethanol has a lower energy content than gasoline. However when questioned, Carol Browner the president’s assistant on energy and climate change, said she did not know the answer to that.

While sorry for the workers in a struggling industry, I can’t say that I will be sorry to see the strong ethanol lobby run into some difficulties or the industry forced to change the way it produces biofuels. Heavily subsidized corn based ethanol is not the way to produce carbon neutral fuels, nor is it beneficial to the American economy as a whole.

UPDATE #4 – The new policy resolves the conflict between the federal government and the state of California regarding fuel standards. Which means that the lawsuits connected to said conflict will now be dropped and these resources can be directed elsewhere (maybe sending more environemental lobbyists to Washington??).