The Committee on Climate Change released its latest report today highlighting the devastating impact the economic recession has had on carbon trading schemes and investment for low carbon technologies. The report emphasises the vast investment needed in efficiency through green housing, power and transport in Britain, to service the goal of meeting the commitments in the Climate Change Act.

The Committee has called for ‘dramatic improvements’ in efficiencies across the economy, suggesting that more ‘forceful’ policies may be required to increase annual cuts in emissions by four-fold.

The Committee also recommends

- The introduction of 1.7m electric cars, with 3.9m drivers trained in fuel-efficient techniques, by 2020

- Building 8,000 new wind turbines, alongside four new coal power stations fitted with carbon capture technology and three new nuclear power plants, to slash emissions from the power sector by 50% by 2020.

The Government’s largest proposed clean coal plant to be fitted with CCS was shelved by E.ON last week, also reportedly as a result of the recession. However, the announced delay in the Kingsnorth project, which had become the focus of protests against climate change, heavily targeted by climate camp activists and the media; leaves politicians wondering how they might fill the expected energy supply gap in 2016.

The recession has also had a significant impact on the world’s emissions trading schemes – expected to be pivotal in driving market signals for low carbon investment. The drop in energy consumption, which led to the shelving of the Kingsnorth project in the UK, has also led to a drop in emissions in Europe, resulting in a surplus of carbon credits in the EU ETS. It is feared that this might result in a carbon price of just €20 a tonne in 2020, rather than the €50 a tonne used for its previous analysis.

The Committee has suggested that options to strengthen the carbon price, including the government underwriting a minimum price or intervening in the electricity market, should be “seriously considered”. On Friday, a report from Ofgem suggesting domestic energy bills could rise 14-60% by 2020 was seen by energy industry experts as an acceptance that the market-driven system has failed and the government needs to be more interventionist.

So the recession has played its role in dampening the prospects of the low carbon investment opportunities, and strong leadership will be essential to deliver the ‘radical’ and ‘dramatic’ improvements that the Committee has demanded. With Ed Milliband’s small budget, and uncertainties over changes in government next year, the UK needs to dig deep to create green opportunities that rescue the nation from the dire straits, courtesy of the economic recession.

Last week, Ontario announced new plans to offer rebates on the purchase of electric cars purchased after July 1^st 2010. The long term aim of the Ontario government is to have 1 in 20 cars by 2020 electric, as part of a move to encourage greener transport policies. The law would allow rebates of “$4,000 and $10,00” for hybrid and plug in electric cars – making the vehicle prices closer to normal car prices of around $30,000.

The move is the latest by Ontario Premier Dalton McGuinty, who continues to lead his state on a remarkable path towards a more sustainable state, making Ontario a leader among states and provinces in North America. The move fits into a broader pattern of environmental legislation with an economic underpinning. One of Ontario’s most far-reaching laws included the “right to connect”, legislation that means any renewable energy supplier has to be hooked up to the main grid, in a push to encourage decentralised renewable energy growth in the state. Ontario does not see this simply as an environmental objective, with state legislators, aiming to push their province to the forefront of renewable technology in research and supply as the world slowly turns towards low carbon future. The latest push is not without some direct self-interest, as Ontario owns 3.9% of General motors, with it’s Chevy Volt due to come onto the market in 2010.

In keeping with their broader attempt to create a more holistic sustainable approach, the law also allows for electric cars to use High occupancy vehicle lanes even if only one person is driving in them. The report behind the new law also suggested an expansion of electric car provisions across the state. How effective the scheme will be naturally depends on Canada’s wider economic fortunes; nevertheless its the cumulative impact of Onatario’s legislation that makes the province a leader in environmental legislation.

Regardless of how quick the uptake is, the move is hardly without a rational basis, with Toyota set to prepare for mass production of the Prius in 2012, Honda and Nissan also in production of the electric car, it may not be unreasonable to suggest a tipping point in the electric car market. If the opportunity of a new market was not enough perhaps the more sinister implications of oil-shocks, may motivate those buying at the pump to save money by investing in ever more fuel-efficient vehicles. In either case, Ontario’s early provisions of plug-in stations will once again have put its citizens in a strong position to capitalise on changing markets through incremental legislation towards a sustainable state.

Nearly a year after India’s climate change plan was revealed, Indian cities are waking up to incorporating climate change action into their policies. The capital, Delhi, has recently unveiled its own climate change action plan that incorporates six out of eight of the nation’s CC missions.  Parts of this initiative are a number of transport related projects. Delhi plans to convert 10,000 of the city’s buses to CNG (compressed natural gas) and create a public transport fund that would be funded partly through revenues from tax. Delhi already has an Air Ambience Fund that is funded by a fee on diesel. Another project is introducing a congestion charge much like the one London has in place.

In the past, Delhi has succeeded to a fair extent at incorporating environmental action into their transport and developmental projects. The Delhi Metro earned praise for being environmentally friendly but other cities haven’t fared as well. The Bangalore City Metro has turned into a full blown confrontation between citizens and environmentalists who decry the excessive felling of trees versus the metro bureaucrats at the other end.

Nevertheless, some other cities are encouraging environmental programs. Pune, in the west of the country has launched a 10,000,000 Rupee (1 Crore) environmental awareness scheme and the JNNURM scheme is funding (among other urban revival and environmental projects all over the country) waste management projects in Kanpur.

Apart from the large metropoles, it’s clear that environmental initiatives need to move towards the smaller cities as well. These are cities that are rapidly growing and developing and urgently need to integrate environmentalism into their plans before its too late. It is here that environmentalism has to filter down beyond the large cities to the smaller, regional urban conglomerations. It’s here that illegal mining causes damage, its in the smaller states far from the country’s economic or political hubs that the effects of climate change are perhaps being silently felt. The Financial Times recently examined the impact of the Tata Nano on the Indian market.  It turns out that in order for the car to succeed, it will have to target the smaller towns (“tier II and tier III towns”). The article points out that “By bringing down the cost of ownership to less than three times that of a two-wheeler, it captures the aspirational, but cost sensitive market in tier II and III towns.” But there’s hope, environmentalism is slowly becoming part of the developmental agenda. Surat, a town in Gujarat is creating a green construction code which the municipality hopes will encourage more green buildings. And as part of the Sustainable Urban Transport Project, people in smaller fast developing towns are getting together to debate the environmental benefits or hazards of developmental projects in their area.

The transport sector once again takes centre stage, as the European Environment Agency criticizes the green credentials of motor vehicles, freight transport and rail networks. Highlighting the need to shift investments in the current economic climate to more sustainable and energy efficient modes, Professor Jacqueline McGlade, EEA executive director, added that

“…trends in transport are pointing in the wrong direction and will continue to contribute to air pollution, rising emissions of greenhouse gas and many negative environmental impacts.”

Jaguar Land Rover has just received a £330m bailout from the European Investment Bank to safeguard its 15,000 jobs an make investments in low emission technologies. The loan, the repayment of which will be guaranteed by the British government, is for a research and development project on reducing emissions. Jaguar Land Rover has been seeking Government assistance for some time and has recently put its workforce on a four-day week to avoid job losses.

The UK government received renewed pleas for an industry bailout from the motoring industry this week. Lobby groups are hoping April’s budget will include a ‘scrappage scheme’ – where car owners are given a financial incentive of about £2,000 to swap their old vehicle for a new greener model.

Whilst no decision has been announced, it is believed the scheme, which increased sales by 40% in March, attracting half a million buyers when it was introduced in Germany; is being taken seriously by MPs.  Statistics showed yesterday that sales of cars in the UK have dropped almost a third year on year. However, environmental campaigners highlight that the transport sector has been slow to introduce more environmental vehicles, and said that the money could be better used to fund sustainable transport solutions. There was also a fear that funds could be diverted from existing budgets set aside by the government for investment in green technologies, such as the £400m earmarked in the pre-budget report for an “environmental transformation fund”, which supports the development of new low-carbon energy and energy efficiency technologies in the UK.

A new report, The State of Green Investing 2009, by Progressive Investor, a green investment newsletter, has increased confidence in green investments, backed by positive signs from the stock market. The US report adds that the green industry is “at the nexus of stimulus support by governments around the world”.

© EMBARQ

The transport sector in Mexico contributes 18 percent of national CO2 emissions. According to estimations by EMBARQ, transport emissions (other than CO2) are responsible for 4,000 premature deaths and 2.5 million lost work days per year in Mexico City. In other words, transport should be and is a high priority for policy makers of Mexico’s cities – let’s take a look at where it is and where it should be going, at the example of Mexico City:

Who are the culprits?
The Microbuses substitute for the insufficient public transport system are in public opinion often the scapegoats for everything: congestion, risks to safety (due to reckless driving) and air pollution. Leaving particles and other contaminants dangerous to human health aside and focusing just on GHGs, a single Microbus indeed emits almost five times more than a passenger car. BUT we have to consider that a Microbus transports on average about 15 times more people! Thus considering the efficiency of transporting people (or per capita emissions) even the older and more inefficient Microbuses are more efficient than passenger cars.

Congruently, according to a report of Mexico City’s local Ministry of Transport (SETRAVI), private vehicles are responsible for about 50% of GHG emissions while only transporting 20% of the population. And their numbers are growing steadily replacing higher capacity (and thus more efficient) transport options.

What is being done?
It is not that the Government of Mexico City is turning a blind eye on this: a number of projects are being pursued such as the Metrobús, Mexico City’s Bus Rapid Transit System that opened its first line in 2005 the second in 2008, and is planning to install another eight lines covering 243 kilometres by 2012; the extension of the Metro; the Suburban Train; and a zero emissions corridor. These projects are all valuable but as they currently stand a drop in the ocean if they are not pursued more holistically not only through  technological fixes but creating the economic incentives to leave the car at home.

In this respect, it is important to note that SETRAVI although recognizing the problem that the growth in private cars poses, discursively places the main focus on replacing obsolete, dangerous and badly managed Microbuses to provide an equitable transport system for those who cannot afford cars. This of course is laudable and has to be pursued, but even that will not work if the growing congestion and contamination from private cars is not solved.

Lost opportunities
Significantly, the above mentioned efforts are undermined by a number of contradicting policy ideas and lost opportunities: first of all, Mexico City’s (in)famous project “Hoy no Circula” that prohibits cars to circulate on specified days according to license plate endings has failed in that it addresses the symptom not the actual root problem and with increasing incomes people have bought and registered additional cars that allow them to drive continuously.
Second, government is currently considering to abolishing the vehicle tax (most likely to boost the crisis shaken car industry) which will facilitate the entry of even more cars.
Third, due to the North American Free Trade Agreement (NAFTA)

, Mexico is about to open its borders for the import of used cars from the United States, which is expected to increase the average age (and thus decrease fuel efficiency) of cars in circulation (currently about ten years) by another five to ten years.
Fourth, although transport systems like the Metrobús do create incentives to leave the car at home and switch to the public transport, ultimately, it is geared towards providing a better public transport system to previous Microbus passengers: due to the absence of parking facilities at Metrobús stations, getting to the nearest Metrobús station requires taking a Microbus, a taxi or walk potentially a long distance, – unthinkable for a car owner.
To do Mexico’s efforts justice: Mexico’s air pollution has supposedly improved but the current motorization rates are creating new problems that need to be addressed comprehensively.

What could be done better?
Just to give an indication of some basic things that could be done better:
First, develop not just public transport facilities but consider the preference of vehicle owners to arrive comfortably and safely at the nearest station by for example providing parking facilities (e.g. a Park and Ride System).
Second, charge those who pollute: in other words, those who can afford to drive big and less efficient cars (a quick and dirty regression of price range of new cars bought and their fuel efficiency based on data from INEGI shows that fuel efficiency decreases with increasing vehicle prices). Rather than abolishing the vehicle tax, introduce a charge according to fuel efficiency, and number of vehicles a person or household owns. The tax receipts should be clearly destined to support public transport projects.
Third, apart from taxes, create additional incentives: from lanes reserved for vehicles with more than two passengers to congestion charges, a range of innovative ideas have been applied around the world that could and should be tried and tested in the case of Mexico City. It will be only a matter of time until drastic action is necessary to prevent the city from choking – starting now to introduce these drastic measures step-by-step might be politically more feasible.

Transport Ministers from 21 major countries met in Tokyo last week to discuss the establishment of a global trading scheme for emissions from aviation. The ministers expressed their support for the International Civil Aviation Organisation’s (ICAO) efforts to take action on the growing contribution of the airline industry to the stock of greenhouse gases in the atmosphere.

A global agreement on airline emissions would be an attractive prospect: it fits much more comfortably with the intercontinental, international nature of air travel. National or regional approaches are open to accusations of unfairness and even illegality from the airline industry. They are also more complex to implement because they have to find a way of dealing consistently with flights that depart from or arrive in countries not covered by the scheme.

Despite the limitations of regional initiatives, the EU has moved to bring airlines into its emissions trading scheme from 2012 onwards. The legislation – a new Directive amending the Directive that originally created the EU ETS – was approved last year.

Emissions from the EU in 2006 by sector. Click to open larger version in a new window. Source: Climatico.

The chart on the right shows the EU’s CO₂ emissions by sector. Emissions from aviation are shown by the red segment on the bar showing CO₂ emissions from transport¹. At first glance, it seems that emissions from airplanes are negligible, and indeed the airline industry contributes only around 3% of all European greenhouse gas emissions today. This is much less than emissions from road transport, and a small fraction of the emissions from the energy, manufacturing and construction sectors currently included in the EU ETS.

While the size of emissions from airplanes is currently fairly small, it has attracted attention because it is growing so quickly. During the period 2006-2020, emissions from air travel are forecast to more than double . The EU will be trying to reduce its emissions by 20% or possibly even 30% during the same period, so a 3% contribution today might translate into a figure closer to 8% by 2020.

As well as seeking to curb its own contribution to climate change, the EU may also be hoping to lead the way for the rest of the world by bringing aviation into a cap-and-trade system. The ICAO’s discussions are in relatively early stages, and it is unclear if and when it will reach an agreement over global emissions from the industry. Following the ICAO’s meeting last week, it was reported that the President of the ICAO’s Council believes that the EU’s approach might form a starting point for a worldwide emissions trading scheme for airplanes.

¹ Planes contribute other greenhouse gases besides CO₂, so strictily speaking looking at CO_­2­ alone gives only a rough indication of the scale of GHG emissions from aviation.

On a recent trip to India, I was amazed at the rapid speed to which the Indian populous have taken to the roads.  In major urban cities of Bangalore and Chennai, traffic jams composed of auto rickshaws, overloaded buses, motorcyclists, and small-sized cars struggle to get from point A to B quickly, efficiently, and safely. 

Mixed Messages

The development of the affordable Tata Nano, said to be available by March 2009, is projected to make car ownership accessible to millions in India.  Rising ownership of automobiles on the roads is a double edged sword for India.  While it signifies a progressive and robust economy it challenges India’s stance on its commitment to climate change concerns by perpetuating rising demand for fuel and increasing CO2 levels.  A large amount of money has been invested into the construction of roads and highway systems to link urban and rural economies and support the booming economy.  The “Golden Quadrilateral” highway project linking India’s megalopolis’: Delhi, Mumbai, Chennai, and Kolkata- carries a Rs. 220,000 crores (approx. US$45 billion) investment price tag. 

As India begins to push forward with its National Action Plan on Climate Change the lack of a strategic plan to address the transportation sector seems counter-productive to India’s overall aim. 

Contrastingly, in the private sector and local scales action seems to be more evident.  the Society of Indian Automobile Manufacturers (SIAM) placed concerted efforts to promote voluntary fuel standards in 2008 alongside government collaboration.  Recently, Maruti Suzuki automakers received recognition as the first automaker to label its cars with fuel efficiency standards.  At local and regional levels, promoting energy efficient transportation systems has been one approach to tangibly address transport sector issues though lack national-level integration.  In Delhi, the Bus Rapid Transit (BRT) opened in 2008, as a response to growing concerns over Delhi’s air pollution and traffic congestion.  However, since its opening, the BRT has encountered numerous snags such as massive traffic jams due to failure in enforcing bus-only lanes and underestimation of traffic volumes.

The need to up-scale local action

In essence, the messages emerging in this arena are jumbled to both Indian citizens and international on-lookers.  While there is a recognition and support within government sectors in advocating a restructuring of India’s transportation systems, there is still a gap in implementing policies.  As Economic Times columnist Jaideep Mishra suggests, the Indian Government can benefit from focusing many of its broadly defined policy plans to project polices that are coordinated with each other alongside clear, definable objectives.  In particular, a plan and policy to integrate transport sector projects with climate change objectives can move India’s National Action Plan on Climate Change forward.

The reality is that India must promote energy security and environmental safeguards, while empowering a growing population that desires continued development progress in economic and social goals and the transportation sector is a critical juncture in which these goals are placed next to each other needing to be reconciled.

The concept of “vehicle-to-grid” (V2G) links two of the most critical factors of modern society – transport and electric power; both of which will need to undergo technological transitions to more renewable sources in order to achieve oil independence, increase energy security (reducing risk of shocks), and improvements in our natural environment in response to global climate change.

(Source: www.global-greenhouse-warming.com)

Electric vehicles (EVs), such as plug-in hybrid or battery electric cars, would use and also potentially supply power to the national grid, as grid-connected batteries would charge during low-demand hours and discharge when power is needed. The V2G concept could assist the transportation system by reducing petroleum use, strengthening the economy, enhancing national security, reducing strain on petroleum infrastructure, and improving the natural environment.

In order to operate in a V2G configuration there are 3 key components, namely,

 A power connection to the electricity grid

1.     A power connection to the electricity grid

2.     A communication device to allows the grid operators access to the vehicle’s battery, and

3.     Precision metering on board the vehicle to track energy flows

This two-way communication between the national grid and the vehicle presents an opportunity for more effective energy and resource management, and allows owners of EVs to earn money by selling power back to the grid during peak demand periods. EVs have the opportunity to become not only vehicles, but mobile, self-contained resources that can manage power flow and displace the need for electric utility infrastructure. V2G vehicles can reduce the lifetime cost of EVs, making them more attractive, and if V2G increases the market share of EVs, the benefits of EV use also increase. Whilst the benefits of EVs are clear, particularly in terms of running costs as electricity remains cheaper than petroleum (for equivalent distances travelled), the prospect of selling power back to the national grid could generate an additional revenue stream for owners of these vehicles in a V2G system. The batteries in electric vehicles could store electricity produced by wind turbines and other renewable sources, for example, and provide the power back to the grid when needed.

The concept may also spur efficiency gains in the electricity industry. Electricity infrastructure has been designed to meet the highest expected demand for electricity, which means that during the hours of off-peak use, enough energy is produced (and could be utilised to) power the nation’s EVs, without burdening the national grid too much to increase supply, as long as charging is targeted at off-peak times through a tariff system.

As a result, the V2G concept could provide a new demand and therefore extra revenues for electricity companies for a similar level of production. This will be especially the case at night when electricity is under-utilised during periods of low demand. As most electric cars will be plugged-in during the night for charging, the V2G link to the batteries within electric cars provides additional storage capacity for the grid (reducing the need to build extra power plants). However, there a number of social and technical barriers that require government support before any benefits can be realised.

The Toyota Prius has been the biggest sales success for electric vehicles (Source:www.greenmonk.net)

V2G may also effectively utilise fluctuating power generated from renewable sources such as wind turbines. However, as most wind turbines produce most of their electricity at night, just when EVs would need to be recharged, a V2G strategy presents an energy storage technology, which could be part of a flexible energy system that better utilises fluctuating renewable energy sources. This would support the development and integration of such renewable sources of electricity (wind power, solar photovoltaics and others) into the grid, without the need for spinning reserves and load management. The cars could supplement existing large-scale pumped hydroelectric and compressed air energy storage systems, which have proven effective for enhancing the value of renewable-energy technologies to date.