In the Green

Money where your mouth is

The claim global warming has ended has been du jour recently - particularly because of the recent cold winter. Never mind that the the temperature trend is still up.

As finance blogger Barry Ritzholz comments, "If the above long term chart was a stock, would you short it?". (Graph from here.)

Anyway, a recent Nature article by a German research group makes the projection that global warming will take a pause for the next few years - that the periods 2000-2010 and 2005-2015 will be slightly cooler than the 2004-2014.

In response, the guys at RealClimate have said are willing to put up money against these predictions:

If the average temperature 2000-2010 (their first forecast) really turns out to be lower or equal to the average temperature 1994-2004 (*), we will pay them € 2500. If it turns out to be warmer, they pay us € 2500. This bet will be decided by the end of 2010.

We offer the same for their second forecast: If 2005-2015 (*) turns out to be colder or equal compared to 1994-2004 (*), we will pay them € 2500 – if it turns out to be warmer, they pay us the same. The basis for the temperature comparison will be the HadCRUT3 global mean surface temperature data set used by the authors in their paper.

William Connolley has already offered a bet that the Germans won't take it. Blogger Tamino points out one reason:

They’d be suckers to take your bet, especially the first part. The Nov.1994 - Oct.2004 average for HadCRUT3v is 0.3594, the average from Nov.2000 to the present is 0.4246. This means that for them to win the 2000-2010 part, the average temperature from now to Oct.2010 would have to drop to 0.1722. ‘Tain’t likely.

Let's see if the second part goes through...

Connecting news

Two news. The first is about surge in power sector construction cost. The other is about the lobbying efforts of an increasing number of people for the introduction of feed-in-tariffs in the UK.
This two news do not seem really connected. In my mind they are, a bit; simply considering that if the cost of conventional power sources is increasing then the relative cost of renewables might become not so high as before. So, we might need to update all those studies around (also used by governement to make decisions on energy policy) that compare  cost of different power technologies, taking into account not just the increase in fuel cost (i.e. the variable cost), but also increases in initial capital cost. I guess it would take some time, as in reality a robust estimation of generation costs is quite time consuming and subject to many uncertainty and discretion. But, who knows, in few years we might get interesting results.. and different energy policy approaches toward renewables.
well, not sure I succeeded in connnecting..but still, I think they are two interesting news/messages!

Fish in a barrel

Jeb Bush, Former Governor of Florida and brother of President G.W. Bush, this week unsurprisingly declared himself a skeptic of anthropogenic climate change. From the article:

Former Florida Gov. Jeb Bush says he is "light green" on the environment and is skeptical that humans are causing global warming. "I don't think our policies should be based on emotion; they should be based on sound science," he said.

Rather than reducing oil consumption, Bush said the United States should focus on "energy security" - reducing dependence on oil imported from hostile or politically unstable countries by encouraging alternative fuels.

While we can all agree that policies should be based on science, his comments sound like many of the other climate skeptics floating around.

His comment that policy shouldn't be based on emotion is almost comical given his track record. This is a man who relies on an imaginary friend for support:

"Chang is a mystical warrior. Chang is somebody who believes in conservative principles, believes in entrepreneurial capitalism, believes in moral values that underpin a free society."

"I rely on Chang with great regularity in my public life. He has been by my side and sometimes I let him down. But Chang, this mystical warrior, has never let me down."

This is someone who thinks leaders need not separate politics and religion:

"I don't think you can separate your personal faith from your public actions, and I don't think you need to. I think transparent, openly expressing your faith is a good thing."

"Jesus was my best political advisor."

This, of course, runs in the family: GW Bush famously revealed that God told him to invade Iraq - in spite of the faulty intelligence.

As for the science - I suggest he start by reading the well-established consensus offered by the IPCC 4AR. It's rather telling that when a skeptic scientific conference is organized (admittedly, a rather kooky one), the have a hard time finding more than a handful of actual scientists to participate, and the presentations keep descending into diatribes against Al Gore and liberals. So, which side's being emotional?

Yawn.

EU to scrap biofuel targets?

Apropos this week's RTFO and Jeremie's post on it, this in The Guardian Weekend:

The European commission is backing away from its insistence on imposing a compulsory 10% quota of biofuels in all petrol and diesel by 2020, a central plank of its programme to lead the world in combating climate change.

The 10% target is "binding" under the proposed legislation. But pressed by its scientific advisers, UN authorities, leaders in Europe, non-government organisations and environmental lobbies, the commission is engaged in a rethink.

"The target is now secondary," said a commission official, adding that high standards of "sustainability" being drafted for biofuels sourcing and manufacture would make it impossible for the target to be met.

A commission source indicated that the EU executive would not object if European governments ordered a U-turn [on their own targets].

Auto emissions targets

France and Germany are close to resolving their dispute over EU auto emissions targets that could see a softening of the proposed regulations. "The talks are making progress," business daily Handelsblatt cited a source close to the talks as saying. "A deal should be possible by the end of April , see Document details.

The European Union wants to impose a carbon emissions limit of 120 grammes per kilometre on all new EU cars by 2012, but Handelsblatt said that this may be pushed back to 2015 and that fines on emissions over this limit may be lowered.
Please take a minute to sign the car petition through  Greenpeace. 

Bush to announce climate action

Don't expect much beyond the business as usual, I'm afraid. Check out DeSmogBlog for updates on this.

Is it green, or does it just feel green?

The environment is an emotion-laden topic for many - unsurprising, given that it surrounds us, gives us life, and can awe us with its beauty. This lends itself to instances of environmental extremism, such as those who call for the dismantling of our economic system to return to more "natural" ways of living. This, thankfully is only a small part of the green community - although I was once called an "eco-terrorist" on another blog so perhaps it's all relative.

However, a more prevalent emotional response towards environmental policy solutions is the tendency to lean towards things that feel green, rather than judging them on criteria of whether they are green. There are many examples of this, but it is very appropriate that the RTFO came into force yesterday in face of mounting criticism of the dubious environmental credentials and equity concerns over biofuels. Biofuels? Bad? How can they be - they're made of plants! And plants are green!

I saw another great example of this on a Channel 4 or BBC news story about a school that had gone eco. The students were showing the camera crew their low-flush toilets and desk made out of recycled mobile phones. At the end, one of the students said (to the effect of), "it's makes us feel good because we know we're saving the planet".

It's not that I have a problem with people feeling good about environmentally friendly, it's that it often distracts us from real and useful activities, in face of clear and present environmental problems such as air and water degradation and climate change. When I look around, it is obvious that we as a society are constantly making ourselves feel green for the express purpose of avoiding real environmental improvements - particularly related to carbon reduction. And with the effects of climate change likely to manifest in the future, it's easy to keep procrastinating.

In the case of the eco school, why did we not hear about how the students had gone home and installed better insulation, lowered their thermostats and decided to make better transport and consumption choices? For all we know the staff ripped out their perfectly good existing toilets and tables just so they could replace them with these eco-toilets and tables. It is of course arguable that the important thing is getting the green message to kids. But in my mind, this should be done with real examples.

The issue of distraction links back nicely to a very interesting article which inspired this post, which I found via the ever omnipotent BoingBoing.

Written by Bruce Schneier, a security expert, the article reflects on the issue of feeling safe vs. being safe when it comes to (for example) airport or home security, and makes points that can easily be applied to environmental policy:

If we make security trade-offs based on the feeling of security rather than the reality, we choose security that makes us feel more secure over security that actually makes us more secure.

The key here is whether we notice. The feeling and reality of security tend to converge when we take notice, and diverge when we don't. People notice when 1) there are enough positive and negative examples to draw a conclusion, and 2) there isn't too much emotion clouding the issue.

Designing environmental policy faces the same difficults that Schneier highlights for security: trade-offs, uncertainty, and cognitive biases. His conclusion is also relevant:

Unfortunately, there's no obvious antidote. Information is important. We can't understand security unless we understand it. But that's not enough: Few of us really understand cancer, yet we regularly make security decisions based on its risk. What we do is accept that there are experts who understand the risks of cancer, and trust them to make the security trade-offs for us.

We're never going to stop making security trade-offs based on the feeling of security, and we're never going to completely prevent those with specific agendas from trying to take care of us. But the more we know, the better trade-offs we'll make.

RTFO: day zero, infinite challenge

The Renewable Transport Fuel Obligation is coming into force today and applies to companies supplying more than 450,000 litres of fossil fuel a year across the duty point into the UK market. From now on, fuel suppliers are supposed to include 2.5% (by volume) of biofuels in their fuels. This target is supposed to increase to 5% by volume by 2010.
I say "supposed to" because the UK is doing pretty poorly in terms of biofuel sales. The sales only amounted to 0.45% by volume in 2006 and even if they nearly doubled in the first 5 months of 2007, I'd be really surprised if they exceeded 2% today.  With this delay, it will also be very difficult to reach the 5% target by 2010.
Considering that the European targets are 5.75% by energy content by 2010 (which is about 7% by volume), anyone can see that whatever happens the UK biofuels sales will fall well below the 2010 European targets!

But the British government still says it is leading the way in that it is imposing carbon and sustainability reporting on biofuels (the whole point of the RTFO and its genuine originality).
Although the idea is absolutely brilliant (making sure biofuels are produced in a sustainable manner), those who are still confident in the good will of the Department of Transport are going to be very disappointed.

First of all, the target for the biofuels GHG (greenhouse gas) emission savings are 40% for this year, 45% for 2009 and 50% for 2010 but this doesn't take into account the GHG emissions from displacement (i.e. the relocation of the displaced crops on new lands, which leads to indirect land use change- including deforestation today - and might make biofuels net emitters of GHG), and the calculation methodology is quite generous with co-products allocation (which artificially makes the savings higher).

Secondly, the target percentage of feedstock meeting qualifying environmental standards is only 30% for this year (the target is 80% for 2010); the chosen qualifying standards are not necessarily very stringent and the standards themselves are vague enough for the environment to be degraded but the biofuel to be certified.

But most of all, the obligation is only to report. It is ok to say "dunno" and this will make your biofuel a certified one. It looks quite easy to have "renewable and sustainable" biofuels with such a scheme in place.

Unfortunately, this is only the reported part of biofuels in this scheme. With hunger riots all around the world and increasing food prices, the food versus fuel debate cannot be avoided.

Of course, biofuels are not the only cause for the rise in food prices, the main reasons being the increase in fossil fuel prices (upon which conventional agriculture is heavily dependent), the sudden increase in meat consumption in China and India (where more and more people can afford buying more meat and dairy products, that have more embedded cereals than their previous diets), and the recent poor yields in key areas (e.g. droughts in Australia and Ukraine).

But even Gordon Brown acknowledged (last week) that biofuels development is aggravating the rise in food prices in a letter to the Japanese PM.

For these reasons, the RFA (Renewable Fuel Agency - in charge of implementing the RTFO) started a review on the indirect effects of biofuels. Who knows what the conclusions will be and how they will affect the current biofuel policy. But this could totally challenge the current trends in biofuels production.

But beyond biofuels, this context could be the chance for poor countries to switch from an agriculture focused on export crops (to supply our coffee, cocoa, etc.) to a food-producing agriculture that would make them gain more food sovereignty (which would make them less vulnerable to the world market fluctuations). Rather than wasting money on GMOs and their hypothetic benefits, it is also time to work on how to sustainably increase yields of agriculture in these countries. In a word, time to rethink agriculture in holistic way!

Marketed greenwash...

The cynic in me can't help chuckle at NPower's new advert for greenwash, er, I mean green electricity. It features a woman pouring green paint around the house, bringing to mind the term for PR-driven green appeasement. [As for their actual product, it looks like they buy renewable electricity to make up your consumption at the end of each month.]

Peak Oil Debunked, or at least clarified

A big thank you to Steven Stoft of EU Energy Policy Blog for deflating part of the hype surrounding the peak oil idea, and putting my economist's mind at ease after years of looking at energy data and wondering if I'd misunderstood some basic concepts.

The peak oil theory basically says that, having grown for years, global oil supply will begin its inexorable decline. Meanwhile rising incomes around the world ensure that demand continues to rise. At some point, supply fails to meet demand and potentially societal chaos results.

Without commenting on the geological validity of peak oil, or indeed the desirability of a reduction in oil consumption, there's something about this that doesn't add up. The idea that 'demand' is a physical quantity that slopes upwards through time on a chart is highly misleading. Unless there is interference in the market (such as rationing) supply will always equal demand. This means as oil becomes scarce, the price will rise and the quantity demanded will fall, due to the price rise.

I think the IEA is at least partly to blame for this since it publishes global oil demand data on a regular basis where 'demand' consists of the quantity of oil consumed + net stock change in a given year. The economist's understanding of demand, as a relationship between price and consumers' willingness to pay with no particular quantity implied at all, is completely different.

So the market will sort itself out. This doesn't necessarily mean that the market will reach a price/quantity point that is particularly comfortable for the world economy and populous, but the implied doom of saying 'pretty soon supply will not be able to meet demand' is surely over the top.

Right, back to work...