Thursday, May 24, 2012

Perpectives on Risk

Today's post is a short one, as I am in transit to my new home at Wake Forest.  But this recent post by David Vogel on RegBlog offers interesting food for thought.   His new book, the Politics of Precaution, considered why precautionary approaches to regulation have shifted:  while the US used to take this approach, today the EU is the leader in precautionary regulation. I wonder whether he addresses the argument that precaution depends on one's perspective.  That is, addressing one type of risk often moves other types of risks to the forefront.  One thing is for certain:  I'm putting the book on my summer reading list. 

- Emily Meazell

May 24, 2012 in Books, EU, International, US | Permalink | Comments (0) | TrackBack (0)

Monday, February 20, 2012

Is the European Union (EU) gently shifting energy law and policy and shaping the future of a climate treaty?

The European Union is steadfast in its commitment to reduce emissions by reducing reliance on traditional fossil fuels. To date it has taken several measures, each of which promises to change the paradigm of energy policy and politics. I have highlighted some recent actions below.

1. An EU law, the legality of which has been confirmed by the Advocate General, imposes a carbon tax on aviation, including international airlines, as part of EU’s Emissions Trading Scheme (EU ETS). China has retaliated by introducing legislation banning airlines from imposing a carbon tax. Several countries, including the United States, reportedly, support China’s position and may follow suit in introducing their own measures against the airline tax.

2. EU’s proposed sanctions against Iran. In response, Iran has suspended export of crude to French and United Kingdom and has threatened to suspend supply to several other European nations. It is simultaneously negotiating a contract to increase export of crude to China, as reported here. According to reports, France and the United Kingdom are not concerned. Not only do they claim to have sufficient reserves, but also the two countries recently inked a new civil nuclear energy pact as part of their energy cooperation efforts.

3. Another proposed action aims to include tar sands oil within EU’s Fuel Quality Directive (FQD), which was passed by the EU as part of its climate and energy strategy in 2008 and which requires suppliers of oil and gas fuel to the transport sector to reduce their emissions by 10% by 2020, as explained here. Based on a report that the extraction from tar sands is highly polluting because of high CO2 emissions, the European Commission has voted to include oil from the tar sands in the FQD. Even though Canada does not import oil to the EU, it fears that the inclusion can have indirect repercussions on its tar sands industry, as reported here. Pending vote by individual European nations, Canada is reportedly threatening to file a complaint before the World Trade Organization if the tar sand oil is included in the FQD.

 Despite objections from different groups, EU’s measures may eventually have a larger impact on the energy landscape. In its attempt to help create a robust carbon market, it may eventually provide much desired incentive to invest in emissions reduction measure. That is, of course, unless nations who are not Party to the Kyoto Protocol or who have withdrawn from the next commitment period, notably China and Canada respectively, cooperate. Either way, it is worth watching Europe maneuver the energy market and the response of countries affected. What is emerging is a patchwork of subtle legal challenges that can nevertheless change the landscape of global energy production, supply, and consumption, as well as the future prospects of negotiating a meaningful climate treaty.

~~Deepa Badrinarayana

February 20, 2012 in Agriculture, Air Quality, Asia, Climate Change, Current Affairs, Economics, Energy, EU, International, Law, North America, US | Permalink | Comments (0) | TrackBack (0)

Monday, September 14, 2009

The Changing Shape of the World Economy

World economy Take a look at this chart available at Visualizing Economics  You can also click the image to see it in a pop-up window.  It shows China, India, Russia and Brazil with rapidly growing GDPs between now and 2050.

September 14, 2009 in Asia, Current Affairs, Economics, EU, International, North America, South America, US | Permalink | Comments (1) | TrackBack (0)

Wednesday, September 9, 2009

Are Speculators Driving Up Oil Prices?

The Economist published an article Data Diving discussing new data that allows closer analysis of whether speculators are responsible for driving up oil prices.  The short answer according to the speculators is probably not.  And, even if they were, in the Economist's opinion, the critical importance of liquidity overwhelms any effect on higher prices.

The regulatory question is whether the Commodity Futures Trading Commission should limit the positions that speculators such as banks, hedge funds, and others take on oil because of the harmful influence that speculators have on the market.

... whether speculation has really been responsible for spiking prices is a controversial issue. In 2008 the Commodity Futures Trading Commission (CFTC) issued a report dismissing the role of speculators in last year’s startling run-up in prices. But banks, hedge funds and others who bet on oil (without a use for the stuff itself) still face limits on the positions they can take, if Gary Gensler, the new CFTC head, can show that their influence in markets does harm.

New disaggregated data show more clearly the role of speculators in the market:

On September 4th the CFTC added more evidence to the debate by releasing what it said were more transparent data on market positions. Before this month, the CFTC simply classified traders as “commercial” or “non-commercial” in its weekly report on the overall long and short positions in the market. Now it has started to disaggregate them further, into producers and buyers, swap dealers and “managed money”. The third category includes hedge funds.

The new data indicate that speculators (swap dealers and managed money) were long on oil in the week to September 1st, with managed money holding a net long position by more than a 2-to-1 ratio. Those actually involved in the oil business (producers and users) held positions that were net short by similar ratios.  And the swap dealers and managed-money players are bigger in the market, both in terms of the contracts they hold and their own sheer numbers.

So, the speculators constitute the largest amount of the market and they take dramatically opposite positions in the market as compared with producers and users.  Still, the speculators' analysts discount the ability of speculators to affect the market.  I'm not market savvy enough to understand the speculators' analysis proffered by the Economist so would someone out there explain how this tells us that speculators are not influencing the market?

But analysts at Barclays Capital note that long swaps accounted for just 6.4% of total futures and options contracts, not enough to drive prices up on their own. Physical traders held more of the outstanding long positions (10.3%) and held even more short positions. This one set of numbers, in other words, does little to prove that speculators are overriding market fundamentals to drive prices. New quarterly data also released by the CFTC show that money flows to exchange-traded funds (ETFs) in commodities failed to correlate strongly with last year’s price surge.

Maybe some more numbers will help us sort this out (in favor of the speculators):

There are more disclosures to come. The CFTC says it will soon release the newly disaggregated data going back three years. If those numbers, like the quarterly ETF data, are equally unconvincing on the role of speculation, the case for limiting positions will be weakened.

And the Economists' speculator-friendly bottom line:

And a strong counter-argument remains: that speculators provide crucial liquidity. Even if they also have some effect on prices, taking them out of the game could well do more harm than good. It is tempting to look for scapegoats when high prices hurt consumers. But the real culprits for oil-price volatility may be much more familiar: supply, demand and global instability.

September 9, 2009 in Africa, Asia, Australia, Climate Change, Current Affairs, Economics, Energy, EU, Governance/Management, International, Law, Legislation, North America, Social Science, South America, Sustainability, US | Permalink | Comments (0) | TrackBack (0)

Thursday, September 3, 2009

World Council of Churches Statement on Eco-Justice and Ecological Debt

Many of us attempt to bring ethical perspectives to bear on issues raised by our classes in addition to ecological and economic perspectives.  Although it may be a bit late for those of you who have already started class, here is the most recent statement by the World Council of Churches on eco-justice and ecological debt.  In a related, but fascinating, note, the WCC as part of its current  programme work on poverty, wealth and ecology is attempting to articulate a consumption and greed line -- in addition to the more typical poverty line.  This would provide practical spiritual guidance on when, in Christian terms, too much is too much.  Check it out!!!


WCC Statement on eco-justice and ecological debt

02.09.09

The World Council of Churches (WCC) Central Committee adopted a "Statement on eco-justice and ecological debt" on Wednesday, 2 Sept. The statement proposes that Christians have a deep moral obligation to promote ecological justice by addressing our debts to peoples most affected by ecological destruction and to the earth itself. The statement addresses ecological debt and includes hard economic calculations as well as biblical, spiritual, cultural and social dimensions of indebtedness.

 The statement identifies the current unprecedented ecological crises as being created by humans, caused especially by the agro-industrial-economic complex and the culture of the North, characterized by the consumerist lifestyle and the view of development as commensurate with exploitation of the earth's so-called "natural resources". Churches are being called upon to oppose with their prophetic voices such labeling of the holy creation as mere "natural resources".

 The statement points out that it is a debt owed primarily by industrialized countries in the North to countries of the South on account of historical and current resource-plundering, environmental degradation and the dumping of greenhouse gases and toxic wastes.

In its call for action the statement urges WCC member churches to intervene with their governments to drastically reduce greenhouse gas emissions and to adopt a fair and binding deal at the UN climate conference in Copenhagen in December 2009, in order to bring the CO2 levels down to less than 350 parts per million (ppm).

 Additionally the statement calls upon the international community to ensure the transfer of financial resources to countries of the south to refrain from oil drilling in fragile environments. Further on, the statement demands the cancellation of the illegitimate financial debts of the southern countries, especially for the poorest nations as part of social and ecological compensation.

In a 31 August hearing on "ecological debt" during the WCC Central Committee meeting in Geneva, Dr Maria Sumire Conde from the Quechua community of Peru shared some ways that the global South has been victimized by greed und unfair use of its resources. In the case of Peru, Sumire said mining has had particularly devastating effects, such as relocation, illness, polluted water,and decreasing biodiversity.

 The concept of ecological debt has been shaped to measure the real cost that policies of expansion and globalization have had on developing nations, a debt that some say industrialized nations should repay. Dr Joan Martinez Alier, a professor at the Universidad Autònoma de Barcelona in Spain, said climate change, unequal trade, "bio-piracy", exports of toxic waste and other factors have added to the imbalance, which he called "a kind of war against people around the world, a kind of aggression."

 Martinez went on saying: "I know these are strong words, but this is true." He beseeched those present, at the very least not to increase the existing ecological debt any further.

 The WCC president from Latin America, Rev. Dr Ofelia Ortega of Cuba, said ecological debt was a spiritual issue, not just a moral one. "The Bible is an ecological treatise" from beginning to end, Ortega said. She described care for creation as an "axis" that runs through the word of God. "Our pastoral work in our churches must be radically ecological," she said.

 Full text of the statement

 More on the 31 August hearing on ecological debt

 WCC countdown to climate justice

WCC programme work on poverty, wealth and ecology

More information on the 26 August - 2 September 2009 Central Committee meeting

 

September 3, 2009 in Africa, Agriculture, Air Quality, Asia, Australia, Biodiversity, Climate Change, Current Affairs, Economics, Energy, EU, Forests/Timber, Governance/Management, International, Land Use, Law, Legislation, Mining, North America, Religion, South America, Sustainability, US, Water Quality, Water Resources | Permalink | Comments (0) | TrackBack (0)

Thursday, July 30, 2009

Good news: world fisheries could avoid collapse by using new management tools in both developed and developing countries

Planet Ark reported that Dr. Boris Worm of Dalhousie University and colleagues are publishing a paper in Science that suggests world fisheries may avoid a total global collapse by using proven management tools in both the developed countries and the developing countries.  This is notable because Dr. Worm had predicted total global collapse of fish and seafood populations by 2048.  But, the effort will require rebuilding 63 percent of fish stocks worldwide and applying proven management tools not only to the ecosystems primarily affected by developed countries, but also those primarily affected by developing countries.   These management tools include: restrictions on gear like nets so that smaller, younger fish can escape; limits on the total allowable catch; closing some areas to fishing; certifying fisheries as sustainable; offering shares of the total allowable catch to each person who fishes in a specified area. Researchers indicated that fishing limits must be set well below the maximum sustainable yield, which is the highest number of fish that can be caught in an area without hurting the species' ability to reproduce. Maximum sustainable yield should be an absolute upper limit, rather than a target that is frequently exceeded.

Worm's optimism was provisional, because the current research only looked at about one-quarter of the world's marine ecosystems, mostly in the developed world where data is plentiful and management can be more readily monitored and enforced. Of the 10 major ecosystems studied, scientists found five marine areas had cut the average percentage of fish they take, relative to estimates of the total number of fish. Two other ecosystems were never overexploited, leaving three areas overexploited. The fisheries in the study were the Iceland Shelf, Northeast U.S. Shelf, North Sea, Newfoundland-Labrador Shelf, Celtic-Biscay Shelf, Baltic Sea, Southern Australia Shelf, Eastern Bering Sea, California Current, and New Zealand Shelf. 

Strict fisheries management in the developing world has put increasing pressure on fisheries controlled by developing countries, particularly African countries that struggle to provide food for their populations.  To deploy effective fisheries management globally will require addressing the management capacity and governance problems of developing countries and reducing the poverty that makes effective management and governance so difficult.

July 30, 2009 in Africa, Biodiversity, Climate Change, Current Affairs, Economics, EU, Governance/Management, International, Law, North America, Physical Science, Sustainability | Permalink | TrackBack (0)

Thursday, April 30, 2009

Swine Flu spreads worldwide -- at least 32 nations have suspected cases, 11 nations have 257 (+ at least 13 not yet reported) confirmed cases with 8 confirmed deaths

Swine Flu World Map

Thursday, April 30th regular AM Update

WHO Update 6 added the Netherlands to the list of countries, with one confirmed case.  The cases from Costa Rica and Peru have not yet been reported to WHO.  The additional New Zealand cases have not yet been reported to WHO.  WHO's Canadian count has jumped from 13 to 19.  WHO's UK count has increased from 5 to 8.  The total count of confirmed cases reported to WHO is now 257.


Thursday, April 30th early AM Update

There's so much to take in that the PM update has become an early AM update.

WHO has not published another update on international reported, confirmed cases. Based on news reports, confirmed cases include  Austria (1), Canada (13), Germany (3), Israel (2), New Zealand (14), Spain (10), the United Kingdom (5), Costa Rica (2) and Peru(1).  In both New Zealand and Spain, there are large numbers of suspected cases that have not yet been confirmed. 

Wednesday, April 29th AM Update

WHO has announced reported confirmed cases in 9 nations; a total of 148 reported confirmed cases; in addition to US and Mexico, confirmed cases include  Austria (1), Canada (13), Germany (3), Israel (2), New Zealand (3), Spain (4) and the United Kingdom (5). The US has reported 91 confirmed cases and 1 death, currently providing a case/fatality ratio of just over 1%.  Mexico has reported 26 confirmed cases and seven deaths.   That would be a case/fatality ratio over 25%, however, the vast bulk of Mexican cases and deaths have not yet been reported and confirmed.  Assuming the number of suspected cases (2517 with 159 suspected deaths) turn out to be accurately identified, this provides a case/fatality ratio of 6+%.  That is about 3 times as deadly as the 1918 Spanish flu pandemic, which killed 20- 40 million people.  Fortunately, we have large quantities of anti-viral drugs and have been planning for this event for several years now, so deaths should be extremely limited.


Tuesday April 28th update (PM):

According to AP, the confirmed Canadian cases now number 13, rather than six. AP report Both Spain and Israel now have 2 confirmed cases according to WHO, with WHO reporting 2 confirmed New Zealand cases and 2 confirmed UK cases, rather than the 3 NZ cases previously reported..

Denmark, Columbia, Czech Republic, Australia, and Russia have joined the list of countries with suspected cases.


Tuesday April 28th update (AM):

Israel and New Zealand have confirmed cases.  Switzerland added to suspected case list .Washington Post link  The Washington Post has a nice map, but it only tracks North American cases. WP map  The New York Times has a global map showing both confirmed and suspected cases.  NYT graphic  However, both of the maps are lagging behind -- the NYT didn't pick up the 3 confirmed New Zealand cases or the suspected cases in the EU.


Monday April 27th Update

New Zealand news link

There have been six lab-confirmed cases of mild swine flu in Canada and one in Spain, which became the first country in Europe to confirm a case after a man who returned from a trip to Mexico last week was found to have the virus. Spain has 26 suspected cases under observation and a New Zealand teacher and a dozen students who recently travelled to Mexico are being treated as likely mild cases  Countries including Australia, France, Germany, Norway, Sweden, Israel, Guatemala, Costa Rica and South Korea are all testing suspected cases of the flu. In the first confirmed cases in Britain, Scotland's health minister says two people tested positive for swine flu.

The Scottish cases bring the number of nations with confirmed cases to five and the number of nations with suspected cases to 14.

April 30, 2009 in Australia, EU, Governance/Management, International, North America, Physical Science, Science, Travel, US | Permalink | TrackBack (0)

Wednesday, April 29, 2009

How this virus developed and why it may be a killer

The Mexican swine flu virus is a swine influenza A/H1N1 virus hybridized (mixed) with human and bird viruses.  We have some immunity to human flu and to some strains of swine influenza A/H1N1;  We don't have immunity to bird flu, which is why that virus is so virulent - with a kill ratio of almost 50% -- and why so much pandemic planning and preparedness focused on bird flu.

New Scientist reports:

This type of virus emerged in the US in 1998 and has since become endemic on hog farms across North America. Equipped with a suite of pig, bird and human genes, it was also evolving rapidly.  Flu infects many animals, including waterfowl, pigs and humans. Birds and people rarely catch flu viruses adapted to another host, but they can pass flu to pigs, which also have their own strains.If a pig catches two kinds of flu at once it can act as a mixing vessel, and hybrids can emerge with genes from both viruses. This is what happened in the US in 1998. Until then, American pigs had regular winter flu, much like people, caused by a mutated virus from the great human pandemic of 1918, which killed pigs as well as at least 50 million people worldwide. This virus was a member of the H1N1 family - with H and N being the virus's surface proteins haemagglutinin and neuraminidase.  Over decades, H1N1 evolved in pigs into a mild, purely swine flu, and became genetically fairly stable. In 1976, there was an outbreak of swine H1N1 in people at a military camp [Fort Dix] in New Jersey, with one death. The virus did not spread efficiently, though, and soon fizzled out.

But in 1998, says Richard Webby of St Jude's Children's Research Hospital in Memphis, Tennessee, swine H1N1 hybridised with human and bird viruses, resulting in "triple reassortants" that surfaced in Minnesota, Iowa and Texas. The viruses initially had human surface proteins and swine internal proteins, with the exception of three genes that make RNA polymerase, the crucial enzyme the virus uses to replicate in its host. Two were from bird flu and one from human flu. Researchers believe that the bird polymerase allows the virus to replicate faster than those with the human or swine versions, making it more virulent.

By 1999, these viruses comprised the dominant flu strain in North American pigs and, unlike the swine virus they replaced, they were actively evolving. There are many versions with different pig or human surface proteins, including one, like the Mexican flu spreading now, with H1 and N1 from the original swine virus. All these viruses still contained the same "cassette" of internal genes, including the avian and human polymerase genes, reports Amy Vincent of the US Department of Agriculture (USDA) in Ames, Iowa (Advances in Virus Research, vol 72, p 127). "They are why the swine versions of this virus easily outcompete those that don't have them," says Webby.

But the viruses have been actively switching surface proteins to evade the pigs' immunity. There are now so many kinds of pig flu that it is no longer seasonal. One in five US pig producers actually makes their own vaccines, says Vincent, as the vaccine industry cannot keep up with the changes. This rapid evolution posed the "potential for pandemic influenza emergence in North America", Vincent said last year. Webby, too, warned in 2004 that pigs in the US are "an increasingly important reservoir of viruses with human pandemic potential". One in five US pig workers has been found to have antibodies to swine flu, showing they have been infected, but most people have no immunity to these viruses.

The virus's rapid evolution created the potential for a pandemic to emerge in North America.  Our immune response to flu, which makes the difference between mild and potentially lethal disease, is mainly to the H surface protein. The Mexican virus carries the swine version, so the antibodies we carry to human H1N1 viruses will not recognise it. That's why the CDC warned last year that swine H1N1 would "represent a pandemic threat" if it started circulating in humans. The avian polymerase genes are especially worrying, as similar genes are what make H5N1 bird flu lethal in mammals and what made the 1918 human pandemic virus so lethal in people. "We can't yet tell what impact they will have on pathogenicity in humans," says Webby. It appears the threat has now resulted in the Mexican flu. "The triple reassortant in pigs seems to be the precursor," Robert Webster, also at St Jude's, told New Scientist.

While researchers focused on livestock problems could see the threat developing, it is not one that medical researchers focused on human flu viruses seemed to have been aware of. "It was confusing when we looked up the gene sequences in the database," says Wendy Barclay of Imperial College London, who has been studying swine flu from the recent US cases. "The polymerase gene sequences are bird and human, yet they were reported in viruses from pigs."

So where did the Mexican virus originate? The Veratect Corporation based in Kirkland, Washington, monitors world press and government reports to provide early disease warnings for clients, including the CDC. Their first inkling of the disease was a 2 April report of a surge in respiratory disease in a town called La Gloria, east of Mexico City, which resulted in the deaths of three young children. Only on 16 April - after Easter week, when millions of Mexicans travel to visit relatives - reports surfaced elsewhere in the country.

Local reports in La Gloria blamed pig farms in nearby Perote owned by Granjas Carroll, a subsidiary of US hog giant Smithfield Foods. The farms produce nearly a million pigs a year. Smithfield Foods, in a statement, insists there are "no clinical signs or symptoms" of swine flu in its pigs or workers in Mexico. That is unsurprising, as the company says it "routinely administers influenza virus vaccination to swine herds and conducts monthly tests for the presence of swine influenza." The company would not tell New Scientist any more about recent tests. USDA researchers say that while vaccination keeps pigs from getting sick, it does not block infection or shedding of the virus.

All the evidence suggests that swine flu was a disaster waiting to happen. But it got little research attention, perhaps because it caused mild infections in people which didn't spread. Now one swine flu virus has stopped being so well-behaved.

This leads us to the policy question: why should humans keep pigs?  Like other meat, pigs consume an extraordinary amount of resources to provide nutrition.  Maybe the ancient Israelites had an insight that we have lacked -- there may be more wisdom in the Torah and its laws than we knew.  Perhaps it is time, or past time, for our eating habits to evolve lest an even more virulent strain of swine flu develop.  Assuming that this pandemic passes without too many deaths, we may need to rethink whether it is good to keep large quantities of pigs.  For now, the virulent bird flu does not seem easily communicable.  Let's keep it that way. 

April 29, 2009 in Agriculture, Asia, Australia, Biodiversity, Current Affairs, Economics, EU, Food and Drink, Governance/Management, International, North America, Religion, Sustainability, US | Permalink | TrackBack (0)

Thursday, April 2, 2009

Water News from Water Advocates

New Congressional Legislation: Strong support for drinking water and
sanitation continues on Capitol Hill, where legislation introduced in
the Senate would put the U.S. in the lead among governments in
responding to the Millennium Development Goals for water and sanitation.
Companion legislation is expected soon in the House. Titled "The Senator
Paul Simon Water for the World Act of 2009" (S624), the bipartisan bill
introduced by Senators Durbin, Corker and Murray on March 17 seeks to
reach 100 million people with safe water and sanitation by 2015 and to
strengthen the capacity of USAID and the State Department to carry out
the landmark Senator Paul Simon Water for the Poor Act of 2005.

USAID: Dozens of USAID missions, notably in Sub-Saharan Africa and
Southeast Asia, are gearing up to utilize increased appropriations to
implement the Senator Paul Simon Water for the Poor Act, after years of
lacking the tools to help extend safe, sustainable water, sanitation and
hygiene. USAID this past month announced a number of initiatives
including: new strategic partnerships to extend water and sanitation
access to the urban poor in Africa and the Middle East (with
International Water Association), new multilateral revolving funds (in
the Philippines), new collaborations (with Rotary International) and a
new USAID Water Site http://tinyurl.com/newUSAIDwater.

Appropriations: Through the recently passed Omnibus legislation,
Congress appropriated $300 million for Fiscal Year 2009, for "water and
sanitation supply projects pursuant to the Senator Paul Simon Water for
the Poor Act of 2005." As with last year's appropriations, forty percent
of the funds are targeted for Sub-Saharan Africa. Priority will remain
on drinking water and sanitation in the countries of greatest need.
Report language suggests increased hiring of Mission staff with
expertise in water and sanitation. It also recommends that $20 million
of the appropriation be available to USAID's Global Development Alliance
to increase its partnerships for water and sanitation, particularly with
NGOs.

In Fiscal Year 2010, a broad spectrum of U.S. nonprofit organizations,
corporations and religious organizations are urging $500 million to
implement the Senator Paul Simon Water for the Poor Act, as part of an
overall increase of foreign development assistance, a level also called
for by InterAction and the "Transition to Green" Report.

For more water news, visit Drink Water for Life.


April 2, 2009 in Africa, Asia, Economics, EU, Governance/Management, International, Law, Legislation, North America, Physical Science, Science, South America, Sustainability, US, Water Quality, Water Resources | Permalink | Comments (0) | TrackBack (0)

Monday, March 2, 2009

The New Subsistence Society

Sometimes its a good idea to stand back and contemplate the universe.  Today's early news that the Dow Jones Industrial Index took another header because of AIG's $60+ billion loss prompts me to do that. 
Dow_3209
What is the vector of our society?  What will it look like after all the dust has settled?  It is not just the financial crisis that prompts me to contemplate this.  Although the phrase is over-used, we are in the midst of a perfect storm -- a global economy that creates and distributes goods and services through the internet, computerized machines and cheap labor virtual collapse of the financial system, the advent of peak oil, and the climate crisis.  How will all of these things cumulatively affect our future?

We've lived with the first problem for decades now -- what do people do as they  become less and less important to production of goods and services.  The science fiction of our times: what happens when people and their primary asset, labor, becomes virtually superfluous.  Certainly countries with high labor costs relative to Asia and South America already are beginning to experience the problem.  Computerized machines can plant, water, and harvest the fields; robots can make the cars and prefabricated housing; department stores, bank branches, car dealers, even retail grocery stores can be replaced by internet marketing; 100 law professors lecturing to law students and 1000 college professors lecturing to college students is more than enough -- creating the prospect of a British or continental education system, with those professors raised to unseemly heights and the remainder left to do the grunge work of tutors; even more radically, 100 K-12 teachers can teach a nation of students with computer graded exams, if we believe that convergent answers are the goal of education; priests and ministers can be replaced by TV showmen and megachurch performers. 

So what do the other 6.95 billion of us do?  Now, we consume.  Voraciously.  If we don't, then the basics can be provided by a very few and the rest of us become unwanted baggage.  A non-consumer is a drag on the system.  We depend on the velocity of money, excess consumption, and inefficiency to provide each of us with a job and to maintain the current economy.

And what happens when money moves at a crawl, when people stop consuming, when production becomes life-threatening to the planet, and when a key resource for production, oil, reaches the point of no return???  The answer is a new subsistence economy.  A new world where a few are need to produce, a few more can consume, and the remainder have no economic role and are left to subsist as best they can.

Admittedly, it will be subsistence at a higher level -- through the internet, computerization, and technology, each of us will have the capacity to do things for ourselves that are beyond the imagination of today's impoverished subsistence farmers.  But, relative to those who own all of the means of production, a few entertainers (be they basketball players, lecturers, moviestars, or mega-church leaders), and a few laborers (building the machines, computers, the information infrastructure and doing basic and applied research), we will all be poor.  Perhaps only relatively and perhaps only in material terms.  But poor, living at a subsistence level, consuming food from our own gardens, building our own houses, wearing clothes for function not fashion, educating our own children through the internet, capturing essential power through distributed energy, and buying very little of goods that are bound to be too expensive for most -- probably just computers.  It won't necessarily be bad.  Perhaps we can refocus on relationships, family, community, art, music, literature, and life, rather than define ourselves in terms of our job and our things.  Perhaps we can refocus on spirituality instead of materialism. Who knows?  Maybe the new society won't be such a bad thing after all -- at least if we insist that the few who have the privilege of production have a responsibility to share the wealth with the many.

March 2, 2009 in Africa, Agriculture, Air Quality, Asia, Australia, Biodiversity, Cases, Climate Change, Constitutional Law, Economics, Energy, Environmental Assessment, EU, Forests/Timber, Governance/Management, International, Land Use, Law, Legislation, Mining, North America, Physical Science, Social Science, South America, Sustainability, Toxic and Hazardous Substances, US, Water Quality, Water Resources | Permalink | TrackBack (0)

Wednesday, February 25, 2009

President Obama's "State of the Union" Speech

The White House has published the "Remarks of President Barack Obama -- Address to Joint Session of Congress" as prepared for delivery on Tuesday, February 24th, 2009. White House link   The President called for Congress to send him a cap and trade bill to address climate change and stressed investments in clean energy as the path to America's future.  What a difference from last year!

As the President says about the long term investments that are absolutely critical to our economic future:

It begins with energy.

We know the country that harnesses the power of clean, renewable energy will lead the 21st century.  And yet, it is China that has launched the largest effort in history to make their economy energy efficient.  We invented solar technology, but we’ve fallen behind countries like Germany and Japan in producing it.  New plug-in hybrids roll off our assembly lines, but they will run on batteries made in Korea.

Well I do not accept a future where the jobs and industries of tomorrow take root beyond our borders – and I know you don’t either. It is time for America to lead again.

Thanks to our recovery plan, we will double this nation’s supply of renewable energy in the next three years.  We have also made the largest investment in basic research funding in American history – an investment that will spur not only new discoveries in energy, but breakthroughs in medicine, science, and technology.

We will soon lay down thousands of miles of power lines that can carry new energy to cities and towns across this country.  And we will put Americans to work making our homes and buildings more efficient so that we can save billions of dollars on our energy bills.

But to truly transform our economy, protect our security, and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy.  So I ask this Congress to send me legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America.  And to support that innovation, we will invest fifteen billion dollars a year to develop technologies like wind power and solar power; advanced biofuels, clean coal, and more fuel-efficient cars and trucks built right here in America.

As for our auto industry, everyone recognizes that years of bad decision-making and a global recession have pushed our automakers to the brink.  We should not, and will not, protect them from their own bad practices.  But we are committed to the goal of a re-tooled, re-imagined auto industry that can compete and win.  Millions of jobs depend on it.  Scores of communities depend on it.  And I believe the nation that invented the automobile cannot walk away from it.

None of this will come without cost, nor will it be easy.  But this is America.  We don’t do what’s easy.  We do what is necessary to move this country forward.

Continue reading

February 25, 2009 in Africa, Agriculture, Air Quality, Asia, Australia, Biodiversity, Cases, Climate Change, Constitutional Law, Economics, Energy, Environmental Assessment, EU, Forests/Timber, Governance/Management, International, Land Use, Law, Legislation, Mining, North America, Physical Science, Social Science, South America, Sustainability, Toxic and Hazardous Substances, US, Water Quality, Water Resources | Permalink | TrackBack (0)

National Environmental Law Moot Court Competition

Congratulations to all of the participants in the National Environmental Law Moot Court Competition held at Pace University during the last few days.  Roughly 70 law schools participated in the competition, which featured a difficult and oft-times confusing problem about salvage of a Spanish shipwreck.  The law covered by the problem included admiralty law, administrative law, international law such as the UNESCO treaty and the Law of the Sea, the National Marine Sanctuaries Act, the Endangered Species Act, the Clean Water Act, the Rivers and Harbors Act, the Outer Continental Shelf Lands Act, and for good measure, the Submerged Military Craft Act.  Just typing that list makes me tired!

The learning is in participating, but the honors for Best Briefs go to University of Houston, Georgetown, and University of California at Davis, with Houston winning overall Best Brief.  The Best Oralist Honor goes to Louisiana State University.  The final round of the competition featured Lewis & Clark law school, University of Utah, and Louisiana State. Lewis & Clark prevailed, winning the overall competition for the 2d time in a row.  If I recall correctly, that may be the first back to back win.  Congratulations to everyone!

The students of Pace University deserve special mention for sacrificing their ability to compete and for running a flawless competition.  More details can be found at the NELMCC site.

February 25, 2009 in Africa, Agriculture, Air Quality, Asia, Australia, Biodiversity, Cases, Climate Change, Constitutional Law, Economics, Energy, Environmental Assessment, EU, Forests/Timber, Governance/Management, International, Land Use, Law, Legislation, Mining, North America, Physical Science, Social Science, South America, Sustainability, Toxic and Hazardous Substances, US, Water Quality, Water Resources | Permalink | TrackBack (0)

Sunday, February 1, 2009

Chartering Sustainable Transnational Corporations

This link connects to a paper I just posted on SSRN.  I presented the paper at the 6th Colloquium of the IUCN International Academy of Environmental Law in Mexico City in November 2008.  I am submitting a short version of the paper for possible publication in a book incorporating papers presented at the conference on the theme of Alleviating Poverty and Environmental Protection.  And I am preparing a more complete and elaborate version for possible law review publication.  I would deeply appreciate your comments on the subject of how we ensure that transnational corporations act in a sustainable manner and the obstacles or concerns with the approach I suggest.  SSRN link

Abstract:    
Using a recent innovative Oregon sustainable corporation law as a springboard, this article argues for requiring all transnational corporations to be chartered as sustainable corporations. Given the far-reaching effects of their operations and their uniquely powerful role, the global wealth that has been accumulated in these organizations must be fundamentally redirected toward creating a sustainable world. As a privilege of doing transnational business, transnational corporations should be required to incorporate environmental and social responsibility into their corporate charters-the document that sets forth the prime mission of the corporation and its directors, essentially baking sustainability into the corporate DNA of transnational corporations.

To be both effective and to harness the entrepreneurial creativity of these organizations, the sustainable corporation charter must be implemented per provisions that require transnational corporations to develop corporate sustainability strategies in accordance with the guidance provided by the implementing provisions. The implementing provisions should also require that the transnational corporations monitor and report in a standardized manner compliance with the corporate sustainability strategy, with sustainability-related laws, and with nonbinding environmental, labor, human rights, corruption, and other sustainability-related standards.

The sustainable corporation charter requirement should be imposed as a matter of international law, through an international convention and administered by an international commission. The requirements should be directly applicable to transnational corporations as a condition of doing transnational business. The commission should be authorized to take enforcement action directly against the corporation. In addition, both home and host nations to transnational corporations should agree to compel the corporations - either incorporated in that nation or doing business in that nation-to comply with the sustainable corporation charter requirement as a condition of doing any business. Nations that fail to join the international convention, or that fail to enforce the international convention, should be subject to mandatory trade and other economic sanctions by all signatories to the international agreement.

We can no longer allow transnational corporations to aggregate the bulk of societal wealth and then operate in an environmentally and socially irresponsible manner. The proposals in this article are one step toward turning transnational corporations into sustainable corporations.

Keywords: transnational corporations, corporate charters, multi-national corporations, sustainability, environmental, international convention, environmental assessment, voluntary compliance, environmental standards, alien tort, corporate social responsibility, human rights, international law, enforcement

February 1, 2009 in Africa, Agriculture, Air Quality, Asia, Australia, Biodiversity, Climate Change, Economics, Energy, Environmental Assessment, EU, Forests/Timber, Governance/Management, International, Land Use, Law, Legislation, Mining, North America, South America, Sustainability, Toxic and Hazardous Substances, US, Water Quality, Water Resources | Permalink | Comments (2) | TrackBack (0)

Friday, January 23, 2009

Let Clean Water Flow

Here's my church's video to launch our 2009 Drink Water for Life lenten challenge.  If you benefit from the work I do on this blog, please, please, please......take the challenge or find another way to contribute to organizations that do community-based water projects.  Church World Service or Global Ministries are great faith-based organizations.  Water for Life and Water for People are great secular groups. Every 15 seconds, a child dies from a water borne disease like cholera or dysentery from lack of clean water and sanitation.  Together, we can change this.  Village by village. 

Let Clean Water Flow 

January 23, 2009 in Africa, Agriculture, Air Quality, Asia, Australia, Biodiversity, Cases, Climate Change, Constitutional Law, Economics, Energy, Environmental Assessment, EU, Forests/Timber, Governance/Management, International, Land Use, Law, Legislation, Mining, North America, Physical Science, Social Science, South America, Sustainability, Toxic and Hazardous Substances, US, Water Quality, Water Resources | Permalink | Comments (0) | TrackBack (0)

Tuesday, January 20, 2009

Most of the green team confirmed today: Jackson, Sutley, and Clinton remain

E & E News reported:

The Senate unanimously confirmed seven of President Barack Obama's Cabinet picks today, including Agriculture Secretary Tom Vilsack, Energy Secretary Steven Chu and Interior Secretary Ken Salazar, but postponed debate on his nominees to lead the State Department, U.S. EPA and White House Council on Environmental Quality...In a post-inauguration session, the Senate quickly approved Chu, Salazar, Vilsack, Education Secretary Arne Duncan, Homeland Security Secretary Janet Napolitano, Veterans Affairs Secretary Eric Shinseki and Office of Management and Budget Director Peter Orszag.

Senate Majority Leader Harry Reid (D-Nev.) also scheduled a 3 p.m. roll call vote for tomorrow on Sen. Hillary Rodham Clinton (D-N.Y.), Obama's nominee to be secretary of the State Department.... The Senate did not take up two other Obama nominations: Lisa Jackson to be the next EPA administrator and Nancy Sutley to be the chairwoman of the White House CEQ. Both nominees did not face significant scrutiny during their confirmation hearings last week, leaving several Senate Republican and Democratic leadership aides today searching for answers about who was holding up the two Obama environmental picks....Andrew Wheeler, Republican staff director for the Senate Environment and Public Works Committee, said ranking member James Inhofe (R-Okla.) supports both nominees and isn't sure who raised the objection to Jackson and Sutley's confirmations, though he said the objection to Sutley being confirmed today was because her position is not Cabinet-level.

January 20, 2009 in Africa, Agriculture, Air Quality, Asia, Australia, Biodiversity, Cases, Climate Change, Constitutional Law, Economics, Energy, Environmental Assessment, EU, Forests/Timber, Governance/Management, International, Land Use, Law, Legislation, Mining, North America, South America, Sustainability, Toxic and Hazardous Substances, US, Water Quality, Water Resources | Permalink | TrackBack (0)

Visitors from Mozambique and Inaugural Awe

Today I had the pleasure as Director of our law school's Certificate Program in Law and Government to host two visitors from Mozambique through the International Leadership Visitor Program funded by the State Department.  This program focuses on bringing emerging leaders from developing countries concerned with good governance to the United States, to expose them first-hand to various aspects of American governance.  Last year, we hosted 16 visitors from more than a dozen African countries.  Today's session was more informal and a bit more manageable.

Our visitors were the Governor of a northern province and the second in command of a major department within the national government.  They were interested in learning how the United States trains its graduate or advanced students in law and government.  We were able to share some aspects of our program, including attending and speaking with my first year Lawmaking Process class.  They were also fascinated by how the United States is evolving with its election of President Obama. 

The treat, of course, for me was to learn first-hand something about Mozambique, its politics and policy, and role in Africa.  Certainly, its thorough integration of woman into the power structure and into all aspects of administration is a lesson for Americans as well as other Africans.  This is beginning to happen here, witness Hillary Clinton, Nancy Pelosi, Diane Feinstein, the corps of talented Governors through the US and the league of women joining the Obama administration.  But, until a woman stands where President Obama stood today, we still lag behind virtually every developed country in the world -- and many, such as Mozambique, in the developed world.  Women took their place in the struggle for independence in Mozambique -- even on the battlefield.  They have continued to serve in Parliament and throughout government, with stature and an assured equality that American woman still lack.

Their challenge is to solidify their independence and their emerging democracy -- and to solve the problem of poverty.  There, President Obama gave them reason to hope: "To the people of poor nations, we pledge to work alongside you to make your farms flourish and let clean waters flow; to nourish starved bodies and feed hungry minds.  And to those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to suffering outside our boders; nor can we consume the world's resources without regard to effect.  For the world has changed, and we must change with it."

As you who read this blog regularly no doubt realize, these words, especially about providing clean water and reducing our consumption of resources, were music to my ears.  And perhaps to yours.

We have a President who in the midst of the raging storms of the failure of our economy and two wars, understands that "each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet."  That the work to be done includes the promise that "[w]e will harness the sun and the winds and the soil to fuel our cars and run our factories."  That "we will work tirelessly...to roll back the specter of a warming planet."

As my new friends from Mozambique realize, President Obama has not become just an American president, but he is today the most important leader of the whole world.  Not just by virtue of our relative prosperity and military power, but by virtue of our willingness to turn the page of history and to pledge to live up to our responsibilities to people seeking peace and justice and equality and means to enjoy their full measure of happiness throughout the world.

Today, my friends, let us celebrate with all of our new friends...and pledge ourselves to making this vision become a reality, in law, in policy, and in how we conduct our obscure, everyday lives.

January 20, 2009 in Africa, Agriculture, Air Quality, Asia, Australia, Biodiversity, Cases, Climate Change, Constitutional Law, Economics, Energy, Environmental Assessment, EU, Forests/Timber, Governance/Management, International, Land Use, Law, Legislation, Mining, North America, Physical Science, Social Science, South America, Sustainability, Toxic and Hazardous Substances, US, Water Quality, Water Resources | Permalink | Comments (0) | TrackBack (0)

Wednesday, January 14, 2009

EU Pesticide Ban advances through EU parliament

Yesterday, the European Parliament voted to ban highly toxic pesticides unless their effects can be proven to be negligible. If endorsed by 27 EU ministers, countries with similar geography and climate could decide whether farmers may use specific products. This implements an agreement negotiated in December that substantially reduced the number of substances to be banned.  December agreement

The EU will list EU-approved "active substances," excluding 22 ingredients that are classified as carcinogenic, mutagenic or toxic to reproduction. The chemical "blacklist" includes eight substances used in the manufacture of herbicides, 11 used in fungicides and three in insecticides, many of them produced by German chemical giants Bayer and BASF -- including Ioxynil, Amitrol and Iprodion.  That list will provide the basis for national EU governments to approve pesticides nationally or, via mutual recognition with 120 days, in the north, center, and south regions of the EU.  Currently, approvals apply only for individual countries and there is no deadline set for mutual recognition approvals. 

Already licensed pesticides remain available until their 10-year authorization expires, avoiding a sudden large-scale withdrawal of pesticides from the market.

EU countries will be allowed to ban a product, because of specific environment or agricultural circumstances.  Also, certain restrictions will be put on pesticide use, including banning most aerial crop-spraying, strict conditions on pesticides use near aquatic environments and drinking water supplies, and buffer zones requirements around water and protected areas along roads and railways.

January 14, 2009 in Agriculture, Air Quality, Biodiversity, Economics, EU, Governance/Management, Land Use, Legislation, Sustainability, Toxic and Hazardous Substances, Water Quality | Permalink | TrackBack (0)

Thursday, January 8, 2009

EU study shows that aerosol pollutants have been underestimated

                                                                                           

According to a recent study by Hoyle and colleagues, funded in part by the EU, levels of global secondary organic aerosol (SOA) in the Earth's atmosphere have increased by 60 per cent since pre-industrial times, suggesting that the effects of SOA have been previously underestimated. Since aerosols cool the atmosphere, this and similar studies suggest that the warming effect of CO2 and other greenhouse gases may be underestimated by current atmospheric models, including that used by the 4th Assessment Report of the International Panell on Climate Change.

                                           

SOA is made up of fine particles and droplets suspended in the atmosphere and is the product of many complex photo-chemical processes. It affects the climate by increasing the reflection of the sun's rays and so cools the Earth's surface. It also contributes to atmospheric haze, as well as having an impact on human health.

 

There has been a considerable change to the composition and magnitude of emissions from human activities since pre-industrial times. This study, partly conducted under the EU-funded EUCAARI project1, investigates changes affecting the distribution and global burden of organic aerosols since 1750. The increase is believed to be due to rises in industrial or fossil fuel emissions rather than increases in biomass burning.

 

The researchers processed meteorological data from 2004 using a computer model. They modelled SOA formation from the by-products of mainly biogenically emitted (produced by plants and animals) substances such as monoterpenes, isoprene, benzene, toluene, xylene and other volatile organic compounds.

 

The experiments also compared data from 1750 and 2004 to assess the effects of increases in ammonium sulphate aerosol. The present day global warming effects of SOA were calculated including the radiative effects of aerosols, clouds, light scattering and absorption by gases, at 40 levels of the lower to middle atmosphere.

 

Among the results were:

  • The production of SOA increased from about 43 teragrams (1 Tg = 1012 grams) a year to 69 Tg a year since pre-industrial times, leading to an increase in the global annual mean SOA burden from 0.44 Tg to 0.70 Tg, or about 60 per cent.
  • Emissions from fossil and biofuel burning contribute twice as much to the SOA increase as biomass burning emissions.
  • The increases are greatest over industrialised areas, as well as over regions with high emissions of precursor gases that will cause the formation of SOA.
  • The increase is mainly caused by emissions of primary organic aerosols (POA) from fossil fuel and biofuel burning.
  • The largest distribution increases in SOA at surface levels are in the biomass burning regions of South America, Southern Africa and South East Asia, as well as industrialised areas such as Europe and the East Coast of America.
  • Increases higher in the atmosphere were seen in the northern Hemisphere, where significant increases were found at polar latitudes, while very small increases were found at high southern latitudes.
  • Radiative forcing was much stronger over industrialised areas, in eastern Europe and on the east coast of the US. Radiative forcing (measured in watts per square meter) provides a simplified means of comparing the various factors that are believed to influence climate change.
 

As yet, very few radiative forcing estimates of SOA exist and no radiative forcing estimates were provided for SOA in the latest IPCC report. The authors believe that the radiative forcing of SOA was previously underestimated and these results may improve estimates of future climate change.

                                            

  1. EUCAARI (European Integrated project on Aerosol Cloud Climate and Air Quality Interactions) is supported by the European Commission under the Sixth Framework Programme. See: www.atm.helsinki.fi/eucaari/
                                             

Source: Hoyle, C.R., Myhre, G. , Berntsen, T.K. and Isaksen, I.S.A. (2008). Anthropogenic influence on SOA and the resulting radiative forcing. Atmospheric Chemistry and Physics Discussions. 8: 18911-18936.                                                 

                                                    Contact: c.r.hoyle@geo.uio.no                                                 

January 8, 2009 in Air Quality, Climate Change, Energy, EU, Physical Science | Permalink | TrackBack (0)

Friday, December 26, 2008

The Economist on Poznan: Fiddling with Words

The Economist summarized the December Poznan, Poland meeting as fiddling with words. Economist link Likewise, in 2007, I characterized the G8 summit in these words, "Nero became infamous for fiddling as First Century Rome burned. This month, the parties at the G8 summit followed Nero's insanely frivolous, time-wasting lead. Unfortunately, this time the whole planet is burning."   Findlaw: Smith commentary But the Economist captured the situation with a different metaphor.

IMAGINE that some huge rocky projectile, big enough to destroy most forms of life, was hurtling towards the earth, and it seemed that deep international co-operation offered the only hope of deflecting the lethal object. Presumably, the nations of the world would set aside all jealousies and ideological hangups, knowing that failure to act together meant doom for all.  At least in theory, most of the world’s governments now accept that climate change, if left unchecked, could become the equivalent of a deadly asteroid. But to judge by the latest, tortuous moves in climate-change diplomacy—at a two-week gathering in western Poland, which ended on December 13th—there is little sign of any mind-concentrating effect. To be fair to the 10,000-odd people (diplomats, UN bureaucrats, NGO types) who assembled in Poznan, a semicolon was removed. At a similar meeting in Bali a year earlier, governments had vowed to consider ways of cutting emissions from “deforestation and forest degradation in developing countries; and the role of conservation [and forest management]”. After much haggling, delegates in Poland decided to upgrade conservation by replacing the offending punctuation mark with a comma.  At this pace, it seems to hard to believe that a global deal on emissions targets (reconciling new emitters with older ones) can be reached next December at a meeting in Copenhagen, seen as a make-or-break time for UN efforts to cool the world.

The Economist went on to explain some of the background factors that influenced the events at Poznan and why it was not a totally depressing waste of time:

In the background of the Poznan meeting, there was mild optimism (and a reluctance by others to put fresh cards on the table) ahead of an expected change of stance by an Obama administration in America; resentment (among the poor and green) over the refusal of Japan and Canada to promise deeper cuts; and strong demands from China for the transfer of technology from the rich to others. In the final hours of the conference, the governments of small, sinking island nations were delighted to learn that they, and not some global body, would control a fund to help them adapt to a warming world. Their mood changed when it became known that no extra money had been set aside for this purpose.  However hard it looks to put this global jigsaw together, there were some encouraging unilateral moves, especially from Latin America. Mexico vowed to halve greenhouse emissions by 2050; Brazil said it could reverse a recent rise in deforestation and cut the rate of forest loss by 70% over the next decade; Peru said that with help it could reduce deforestation to zero.

But the economist made the case that the key to progress towards an agreement in Copenhagen is the willingness of the EU to continue to provide climate leadership.  The EU's attitude seems a bit ambivalent.  As the Economist reported,

At a summit on December 11th and 12th, the EU’s leaders eventually decided to keep their targets intact while also allowing opt-outs which may yet undermine their stated goals. President Nicolas Sarkozy, who chaired the summit, boasted of a “terrific fight” which French diplomacy had managed to finesse. Despite many concessions for heavy industry and poor newcomers to the EU, the final deal (perhaps to its credit) left everybody unhappy. European industry felt too much was being asked of it, while green groups thought industry had gained rather too many concessions.  In the background of the EU’s wrangling were some goals laid out last year in pre-recession times. By the year 2020, the EU promised three things: to cut overall greenhouse gas emissions by 20% over 1990 levels; to obtain 20% of overall EU energy from renewables like wind, waves and plant waste; and to make efficiency savings of 20% over forecast consumption.  The new EU deal kept the targets, but offered sops to countries that fear an emphasis on the “polluter pays” principle may drive up electricity costs, or push heavy industry away to places, like Asia, that in Copenhagen will oppose big emission cuts. Opt-outs were granted from plans to force large polluters to buy allowances to emit carbon at auction. Poorish ex-communist countries that rely on coal for power will be allowed to dish out up to 70% of the carbon allowances needed by power firms, for no payment, for a few years after 2013. Heavy industries that face global competition will also get up to 100% of their allowances free, at least initially, if they use the cleanest available technologies. And EU nations will be allowed to buy in credits for emissions reductions far from Europe, and count them against as much as 90% of their national reduction targets. Eurocrats say a reduced emphasis on auctioning permits won’t undermine the benefits of the package; carbon-cutting discipline still comes from the ceiling on the number of allowances issued. That cap will be cut each year after 2013: this should help to support carbon prices in the EU’s Emissions-Trading Scheme. The concessions risk prolonging some follies. For example, big power firms that now get carbon allowances free have been passing on their nominal cost to customers. Handing out free allowances may also reduce revenues available to governments for investment in greenery. Moreover, some pro-market countries fret that using climate-change policies to redistribute money within the EU will cause trouble in global talks. It will make it harder to resist China and India when they seek transfers of money in the name of “solidarity”.

The ECN had a more optimist view of the EU's action, arguing that the final package passed the political test:

The energy and climate policy package was proposed in January 2008 by the European Commission and, after some adjustments, agreed by the Member States last week during a meeting of EU government leaders. The central objectives remained in place: For the year 2020, (i) to save energy use by 20%, (ii) to increase the share of renewable energy in total energy use to 20% (compared to some 8% in 2005), and (iii) to reduce total EU greenhouse gas emissions by 20% (compared to 1990).

The main instrument to achieve the greenhouse gas reduction target is the EU-wide harmonised Emissions Trading Scheme (ETS). The most contested issue in the package was whether industries would receive their emission allowances for free or whether they would have to buy them in an auction. Currently, the allowances are given out for free, which has led to power companies charging their consumers as if they are paying a carbon price, resulting in billions of windfall profits. Auctioning of the emission allowances would solve this problem, but is politically controversial as it would lead to high costs for greenhouse gas emitting industries.

On auctioning in the ETS the following was decided:

• Starting from 2013, power companies have to buy all their emission allowances at an auction. Contrary to the original EC proposal, however, the EU government leaders agreed that for existing power generators in some (mainly East-European) countries the auctioning rate in 2013 will be at least 30% and will be progressively raised to 100% no later than 2020. This means that for instance existing coal-fired power plants in Poland still get their allowances for free, but that new power plants need to pay. In the Netherlands, all power plants will have to buy their allowances.

• For the industrial sectors under the ETS, the government leaders agreed that the auctioning rate will be set at 20% in 2013, increasing to 70% in 2020, with a view to reaching 100% in 2027. The original EC proposal included 100% auctioning in 2020 rather than 2027. Industries exposed to significant non-EU competition, however, will receive 100% of allowances free of charge up to 2020.

With regard to greenhouse gas reduction in the sectors that are not covered by the ETS, such as households and transport, which cover about 55-60% of EU emissions, the Commission proposal allowed Member States to use offset credits to meet up to two-thirds of the emission reduction and the remaining part by domestic abatement measures. The EU leaders, however, agreed to allow 11 (mainly West-European) countries – including Spain and Italy – to use additional offset credits to meet their non-ETS targets.

My bottom line from all of this is that the U.S. needs to assert serious leadership on climate change -- and the green team Obama has assembled gives every reason for hope that it will do so.  In just less than a month!

December 26, 2008 in Climate Change, Economics, Energy, EU, Forests/Timber, Governance/Management, International, Law, Legislation, South America, Sustainability, US | Permalink | TrackBack (0)

Recent Study Shows Utilities Exploited Free Allowances in EU-ETS

An ECN study analyzing the impact of the EU Emissions Trading Scheme (ETS) on electricity prices, in particular on wholesale power markets across the EU, found that a significant part of the costs of freely allocated CO2 emission allowances are passed through to power prices, resulting in higher electricity prices for consumers and additional (‘windfall’) profits for power producers. The study discusses some policy implications of the pass-through of these costs, concluding that the pass-through of CO2 costs to electricity prices is a rational, carbon-efficient policy, while the issue of windfall profits can be addressed by either taxing these profits or auctioning - rather than free allocations - of the emission allowances.  What the study didn't consider is the political impact of artificially high electricity prices to meet the modest Kyoto protocol goals in terms of the longer term political will to achieve the far deeper emission cuts necessary to prevent the impacts of global warming from being catastrophic.EU electricity price study

December 26, 2008 in Air Quality, Climate Change, Economics, Energy, EU, Governance/Management | Permalink | TrackBack (0)