In the Green

And the Winner is...

Who was it who said that government energy policy shouldn't be based on 'picking winners'?

I can't remember - but it presumably wasn't the same person who decided that the UK should encourage clean coal technology and carbon capture and storage (CCS) by means of the CCS demonstration competition. Yes, one lucky winner could get the chance to demonstrate to the world the viability of capturing CO2 emissions from a power plant and storing them offshore.

The Government is offering to fund up to 100% of the capital cost of the carbon capture, transport and storage of the winning entry - offer subject to status, and of course, terms and conditions apply. Most controversial of these T&Cs is the decision, announced in October 2007, that the winning entry must use post-combustion CCS technology. According to the Independent, Guardian and UK CCS Association, this announcement was a serious blow to developers, notably Centrica, who had already spent good time and money crafting their CCS projects based on pre-combustion CCS technologies.

So what's the difference? Well, as far as I can tell, in the case of pre-combustion it's more expensive to make the electricity (if it's coal you have to gasify it and then burn the gas) but it's cheaper to extract the CO2 (because there's a higher concentration of carbon and oxygen in the gas). Here's a big IEA report on the subject - other literature is available.

The UK government's big plan seems to be that backing post-combustion is the best way to set up UK industry as carbon missionaries retrofitting CCS to nasty polluting plants in China and India. It's a strategy that's essentially picking winners on two counts: firstly that global retrofitting is the undisputed way forward for international environmental policy and secondly that post-combustion dominates pre-combustion. Seems a bit risky to me.

Is Globe-Trotting CCS Retrofit the Way Forward?

According to IEA reports like this one, fitting CCS to inefficient power plants generally isn't a good idea - the equivalent of installing a micro wind turbine instead of switching to energy-saving light bulbs. E.ON's Ratcliffe plant has a thermal efficiency of around 38%. A new supercritical boiler could increase that to about 45% - but then adding post-combustion capture brings it back down to 35%. This is because a solvent absorbs the CO2, but then you need to use lots of heat to release the CO2 from the solvent afterwards - and this means that you end up having to use more fossil fuel per KWh of electricity generated. The big IEA report has a nice Text Box explaining that choosing to apply CCS to an inefficient (35%) vs. modern (50%) plant, you could end up increasing fossil fuel use by 77% per KWh compared to 44%.

Is Post-combustion CCS the Indisputed Champion?

According to the same big IEA report, electricity costs from a standard coal plant (post-combustion CCS) and IGCC plant (gasification & pre-combustion CCS) are about the same. But the additional fuel required by the CCS add-on is 39% in the post-combustion case and 22% in the IGCC case. Moreover, in the case of post-combustion, there's a greater increase in the cost of electricity production as a result of installing CCS. In other words, standard coal combustion is cheaper than gasification, but once you start pricing carbon properly the costs converge - making it harder to pick a winner. But then you could tell that already from the fact that Centrica et al. had chosen pre-combustion .

So bottom line? It's not that the government always has to be totally technologically-neutral - we've seen feed-in tariffs for renewables in Germany and Scandinavia work quite well. But this is more like fixing the race than picking the winner. We could end up backing the wrong horse, or flogging a dead horse, then we'd have to shut the stable door after the horse...

What am I supposed to say?

The Bali talks are over, and because the Christmas season wouldn't be the same without a pantomime, they produced the drama to beat them all. And of course, the media lapped it up like flies on the proverbial shit. We had various countries (primarily Americans and Canadians) holding out on explicit emissions limits for 2020, compromise by the Europeans, boos from the audience, a teary speech by the Executive Secretary, and finally cheers as the Americans "capitulated". The press and TV news reported that the American U-turn had brought the agreement back from the brink, as if we were headed into a bold new direction on climate change. Yeah right.

As Monbiot laments in today's Guardian (well worth a read), we have made no progress in the international climate sphere. Of course, the general public have such short memories, the diplomats and media were happy to report the drama from Bali as if it was a remarkable breakthrough. Remember kids, plus ça change, plus c'est la même chose...

What do we really have? Basically, an agreement to negotiate. The BBC do a nice little list here. It includes the statement, "deep cuts in global emissions will be required to achieve the ultimate objective", but no specific target ranges for 2020 to negotiate over in the next two years. The agreement does not specify particular undertakings of either developed or developing countries.

As a researcher and someone who cares about the environment, what am I supposed to say? I'm optimistic that we have the technologies, institutions, know-how, and time to mitigate climate change. But the international politics have not changed for 10 years, and the pantomime chugs along. Everyone sticks to their positions, and the rest of the Western politicians and press offers up the diplomatic niceties because they're expected to.

Which brings me to something that Simon sent me - the Center for Economic Performance (the other CEP) blog at LSE notes that trade betting site Intrade are offering contracts for the climate negotiations. You can place bets on 2025 emissions cuts that are agreed upon by the US, Europe, and others under the current set of negotiations. I think this is a neat idea, and will be interesting to follow if the market is liquid enough. Right now there's little activity going on - which is really the problem with stuff like this. I do notice one weakness, which is that the agreement does not have to be ratified - only signed. I can understand why they made that compromise, but it could skew the market a bit. The US, after all, signed the Kyoto Protocol - but the Senate rejected ratification.

Rainforest-friendly Fish Fingers

Large supermarket chain Sainsbury's is switching to certified sustainable palm oil in its own-brand products. Good news - although as I interpret the statement, I'm not sure if they've actually promised to use exclusively RSPO-certified palm oil by any specific point in time.

The first product to switch will be Sainsbury's fish fingers. How far into post-modern absurdity have we come? We shouldn't be surprised that processed food contains all sorts of ingredients (truly the very model of a biorefinery). But, in a Marxian sort of way, there's something comical about a world where Sainsbury's marketing people don't feel the need to elaborate on the seemingly incongruous 'fish-and-forest' nature of the product, blithely assuming that consumers are totally comfortable with the notion that food has become a faceless combination of seemingly random inputs.

Anyway, I'm still waiting on the 3-course meal in capsule form that we were promised in the 1950s.

The Big Smoke

I have a pretty good view of London from my flat - so when I work from home (on days like today), I have plenty to gaze at. Looking out the window today, however, there is little to look at beyond a heavy white smoke. You don't see it when you are at the ground level, so it's only from my apartment window that I get a real sense of how bad (or good) air quality is in London. These last two days have been pretty bad.

The smoke starts white in the morning, but by the evening turns a hazy brown - photochemical smog, if I remember my air quality science correctly. On days like this, I look up a cool website: London Air, which is run by King's College. Right now, my area (Camden) is rated at 'Moderate', meaning that it currently exceeds daily average goals set by EU Directives, but would only affect particularly sensitive people. When the sensors go red, asthmatics are supposed to stay indoors.

It's a neat website, and the ratings are updated regularly. You can also download weekly and monthly trends. I don't base my plans around it, but it's fun to check out once and a while.

Petition for binding cuts in Bali aimed at USA, Japan and Canada

The actions of US, Japanese and Canadian negotiators are undermining binding cuts being included in the Bali roadmap. Quite rightly, this has been condemned by many and will annoy the European Union. Avaaz - a grass roots NGO - has responded by starting a petition to be presented at the conference and to appear as a full page ad in the Asian Financial Times. In 12 hours over 30000 have already signed. If you wish to add your support to it, follow this link sign the petition.

Shell Out

There is not that much to be said about this story, except that it should not go unnoticed, but I'll continue a little anyway. Shell has ditched most of its solar power operations this week, following the sell-of of its solar production business last year, saying that it was not making enough money. BP has quietly invested in tar sands, an area that appears central to Shell's strategy for the future.

Previously:

1997: Shell renewables launched
1999: BP sells of tar sands operations
2000: BP goes beyond petroleum
2001: Shell Solar's chief Chief Operating Officer says: " "We believe that solar power is going to be one of the fastest growing primary sources of energy," and promptly starts to develop a low-cost mass production method.
2005: Shell says that renewables "need the capital investment...of a world-scale business. That is the only way renewables will  become big enough to make a difference."
2006: Shell divests its solar production facilities in favour of a memorandum of understanding with Saint Gobain to produce Thin Film panels.
2007: Lord Oxburgh, former Shell Chairman predicts $150 per barrel and says "oil majors must invest more heavily in developing viable alternatives to oil and gas".
2007: Shell sign pre-Bali Communique on climate change, explaining that: "The cost of inaction far out weighs the cost of taking action now."
etc. etc. etc.

It's no surprise that BP and Shell are consistently going where the proven money is, and ditching less profitable operations, whlst saying big things about environmental commitments. It's no surprise that their investments in renewable have been operated like investment funds, shedding ventures once the initial rapid growth has slowed. It's no surprise that  all their little efforts have been trumpeted more than their core business activities to generate some impressive greenwash.

It's interesting that BP took so long to move into tar sands, but this might be explained by its frustrations in Russia (which came later than Shell's) and its traditionally higher long-term oil price estimates. Then again, not that interesting.

The thing about this story is that it's so revealing about the profitability of renewables investments in the current climate. It also appears to reveal the conviction of the majors that they will not have to worry too much about climate legistlation spoiling their oil tar fun for years to come. This is desparately disappointing for everyone who knows that we need the big guys to see renewables as part of their core business in the near future. A switch is needed away from renewables being a peripheral part of the portfolio to be bought and sold as necessary to meet short term goals.

I hope that Shell get what they have asked for in Bali -  a truly "ambitious, international and comprehensive legally-binding United Nations agreement to reduce greenhouse gas emissions [to] provide business with the certainty it needs to scale up global investment in low-carbon technologies”.

(just to dampen this final note of optimism, maybe someone would like to post about all the red lines the US are doodling on the draft text in Bali)

The UK renewable energy targets for 2020: all talk and no action once again?

Every household in Britain could be powered by off-shore wind farms. This is what John Hutton, secretary of State for Business, Enterprise and Regulatory Reform told on BBC1 Politics show on Sunday. This would help achieve the 20% renewable energy target for 2020.
As a reminder, only 2% of UK total energy use currently comes from renewable sources (and it does not necessarily mean that these 2% are sustainable!).

I am very sceptical that this will happen.
First off all, let's not forget that the Labour is not very keen to commit the UK into a binding target for 2020. What's more, off-shore wind farms are very costly. Unless they can benefit from subsidies or British people suddenly become very environmentally-aware, I don't see how off-shore wind can develop that much.

I recently attended a conference entitled "Countdown to 2010 - Meeting the UK's 10% renewable power generation target". Gaynor Hartnell - Deputy Director of the Renewable Energy Association - reminded the audience that the UK still hasn't achieved the 2000 target! And all speakers agreed that the UK will never reach the 10% renewable energy target by 2010. It is just too late.

There are many reasons why renewable energies do not progress very fast. Primarily, little is done to reduce energy demand; therefore, energy consumption keeps rising every year and renewable energy generation needs to rise at least as much for its share to keep up. Secondly, most renewable energy projects are renewable electricity projects based on on-shore wind farms, which are very difficult to put in place (due to lengthy procedures, hostility from local communities...). There are plenty other economic, political and social hurdles on the way of renewable energy.

By revealing plans that are so much focussed on off-shore wind, the UK government is playing a very deceptive game in that it looks unwilling to make people more empowered and aware. As a matter of fact, off-shore wind farms are far from inhabitants so that the projects are not too long to put in place. Therefore, off-shore looks like a good and easy option for a government.
What's more, off-shore wind farms are a form of centralised energy generation. That's why to me, they cannot give households a real free will in terms of energy choice and they do not incentivise energy sobriety. If Gordon Brown really wants so many carbon neutral houses to be built, why doesn't he encourage more decentralised generation?

So far, renewable targets in the UK were just words and proved to be a total failure in their implementation. Has the UK missed the train?

USA Energy Bill

The USA House have just approved the energy bill which now goes to Senate. The bill includes a set of policies favouring clean technologies and repealing oil and gas subsidies. Among them tax credits, Renewable Energy Portfolio Standard (RPS) and the controversial Energy Independence and Security Act which increases fuel economy standard to 35 miles per gallon by 2020. Of course the White house promises a veto and some republicans are lobbying against it.

 Here just a couple of “highlights” from this article, which also provides an encouraging review of the set of policies that the bill would entail:

- “This specific program is one of the provisions that has produced a White house veto threat.” (referring to The Energy Independence and Security Act)

- “Senator Pete Domenici (R-NM) has vowed to filibuster this bill unless the oil and gas incentives are not touched and the Renewable Energy Portfolio Standard (RPS) is dropped.”

 So the message seems to be:
Yes, let’s help clean technology industry, it’s good, it’s a growing industry, it’s becoming more and more a profitable investment*, and by the way, it’s clean. BUT don’t try to touch oil and gas industry and electricity utilities! And if you need the money to finance clean technology incentives? Not our problem, look somewhere else, maybe a cut to health or education spending? Don’t know, it was just an idea..

 Ah, and this is one of the reactions to House’s approval:

 "This bill is a failure on the most basic points: it fails to drive down prices at the gas pumps; it fails to lower home-heating bills; and, it fails to reduce our reliance on foreign crude oil." — Rep. Dave Camp, R-Midland.

* also look at chapter 2 of this Renewable Global Status report

Good Health to Trade

Continuing my obsession with unleashing the power of international trade for environmental good, or something like that, here are a couple of stories that have cropped up recently:

American Biodiesel: not giving it away, but selling at a price that's practically giving it away

The European Biodiesel Board (EBB) this week announced that they're going to lodge an official complaint to the European Commission about the dumping of US-produced biodiesel on the European market. EBB is the association of European biodiesel producers, so it's clearly their job to promote European biodiesel over imported alternatives. However, they usually do a good job of selling the global environmental benefits of policies that would benefit their members - having called in the past for certification of all imported biomass (not just that used for fuel) and the application of GHG-related policy measures to fossil fuels and biofuels alike (see here and here).

This time their complaint is based on the subsidy that allows US biodiesel producers to claim $300 / tonne produced even if the end-product is sold to Europe rather than consumed domestically. Let's see, if producing UK biodiesel costs  $791 / tonne, then the subsidy makes US biodiesel for export viable even at a production cost of $1,090 - wow. And once it arrives in the EU it can take advantage of the $446/tonne UK fuel duty discount for biofuels, or the equivalent but more generous measures that apply in other Member States.

So what happens now is that EBB has to draft an anti-dumping complaint (click here to try it yourself) and the EC could launch an investigation, lasting up to 9 months, and instigate anti-dumping measures. Let's hope the European biodiesel industry lasts that long.

EU calls for Abolition of Tariffs on Old Rope

Last week, the EC's Trade section issued a statement calling for the reduction or abolition of tariffs and other barriers to trade in environmental goods and services as part of ongoing negotiations under the Doha Development Agenda. This isn't quite the reduction in tariffs on the cleanest products, and restriction on imports with high embodied pollution that I'm guessing most of us want to see. Most of the products targeted for tariff reduction are of the Type A variety - goods that provide direct environmental services, combatting problems such as climate change and local environmental pollution. The statement omits most of the obvious Type B environmental goods - those that provide an environmentally-benign alternative to popular consumer goods (such as the best biofuels that provide demonstrable benefits compared to fossil and non-fossil alternatives). In particular, the 150+ 'environmental goods' singled out in the joint communication by the EU & several other states mostly refer to equipment that either directly combats pollution or represents a state-of-the-art efficienct improvement compared to older like-products (e.g. electricity meters or components of wind, geothermal or solar facilities).  Curiously though, Type B products are represented in the form of textile fibres and twine made of jute - on the grounds that they have environmental benefits compared to the synthetic alternative. Not bad - we're still waiting for a sustainability-based differential tariff on biofuels though, or other goods that could be either great or terrible for environment depending on how they're made.

Coca-Cola goes green

The Coca- Cola company cut-glass bottles go green, Coca-Cola Enterprises is to launch reduce the weight of its bottles in a bid to make them more eco-friendly. The new version of the famous hourglass bottle will cut glass usage by 35,000 tonnes and carbon dioxide emission by 2,200tonnes a year. The redesign has reduced the weight of Coca-Cola, Diet-Coke and Coke Zero bottles from 263g to 210gr.

I think the Coca-Cola company should focus the following issues rather than reducing their bottle size:

• The Coca-cola is the largest beverage company in the world, and according to its own admission, the company used 283 billion liters of water in 2004.

• Any way you look at it, 283 billion liters of water is a lot of water-particularly in a world where over 1 billion people in the world cannot meet their basic water needs.

• It is enough water to meet the entire world's drinking needs for 10 days.

• The Coca-Cola company proudly boasts that it has a water use ratio of 2.7 to 1. That is, for every 2.7 liters of water (freshwater) it takes from the earth, it produces 1 liter of product. What happens to the remaining 1.7 liters (or 63%) of the water? It is used to clean bottles and machinery, and is discarded as wastewater.

• Nowhere is Coca-Cola's blatant disregard for water and communities that sustain themselves from water more evident than in India.

• Tens of thousands of people all across India are challenging Coca-Cola for its abuse of water resources. Coca-Cola bottling plants have dramatically affected both the quantity and quality of groundwater resources as a result of its operations, making access to water by communities even more difficult.

•  

• The company regularly extracts up to one million liters of water per day in some areas in India.

• Coca-Cola's water use ratio in India is 4 to 1 - that is, 75% of the freshwater it extracts is turned into wastewater. The company has indiscriminately discharged its wastewater into the surrounding fields, severely polluting the scarce remaining groundwater as well as soil.

• Thousands of farmers across India are struggling to make a living because of crop failure as a result of the water shortages created by the Coca-Cola company. 

Polar Bears

An excellent video get across an important message. Two polar bear talking about possible cause for the climate change.

Pedal powered car in Toronto

Funny video found through BoingBoing - cops pull over a car converted to run on pedal power. He's not sure what to make of it, commenting "I don't disagree with the principle of it, but...the safety factor is...unsafe". Amusingly, a bunch of what looks like cops on bikes rides past as it all happens. They avoid a ticket (and a taser), but get sent home on a tow truck.

The troops head to Bali

As you all probably know, the UNFCCC COP 13 meeting is this week in Bali. The government negotiators are there to decide (among other things) on the climate regime after the Kyoto Protocol period runs out in 2012, and the role of forestry sinks in such an agreement. As is the case with all of these meetings, they are accompanied by side-events attended by researchers and NGOs alike. And while I could by cynical about the air miles and carbon being emitted, I have been assured that each and every one of them is there out of complete necessity. <cough>

The less fortunate of us can follow the proceedings at a distant at the Earth Negotiations Bulletin website.

A key issue is the role of developing countries in a post-Kyoto regime - they were exempt from Kyoto, and the Americans don't seem to want to sign up to anything without them. But American arguments aside, it is inevitable that developing countries will take part in a climate agreement in future. How they do it in Kyoto + 1 is anyone's guess. To be honest, I'm not holding my breath for much. Certainly not something that heads us towards the goal of a peak in global annual emissions in the next decade, and reaches a 50% cut by 2050.

But regardless of what total reductions are achieved, I believe keys to bringing developing countries into future climate agreements lies in three factors: fairness criteria, a forward-looking perspective and multi-tasking. The first relates to the economic burden placed on the developing countries in a future agreement, the latter two relate to how they participate. Hoping that I don't descend into middle-management speak, this is what I mean:

The developing countries are well aware of the pathways by which the West got rich, and they are keen to emulate it - carbon intense or not. While it is highly important that they reduce carbon, when it comes to debating this point we (negotiators/bloggers/commentators) should take into account the relative wealth and relative historical contributions to global warming (nationally, and at the individual level).

This may seem like an obvious point, and is based on fairness principles that we apply to our own citizens (i.e. progressive income taxes). Not affording such fairness to developing countries in a climate regime is hypocritical and would not lend itself to their participation. Yet I constantly see the opposite comments in articles, blog discussions, and commentary. This ranges from "who cares about the UK's emissions, China builds a new power plant a week" to

China and India ... [may] suffer the largest share of world damages from climate change. These countries should therefore be motivated to ... reduce greenhouse gas emissions for their own national interest, [without] additional inducements. (link)

Both these comments fail to take into account issues of equity, relative sizes of the two countries, and how international climate agreements work.

The Kyoto Protocol was a only a first step towards reducing greenhouse gases in the long-run. It will need to be succeeded by many future agreements. Criticizing it for only reducing emissions in its 4-year compliance period is ridiculous. However, future agreements should look both at the near-term (i.e. the 5-10 years after Kyoto) and the long-term (i.e. the 20 years ahead). Not only does this put the near-term emissions reductions into perspective, but it also allows us to get away from the polarizing effect of the short Kyoto Protocol compliance period - the black and white 'in vs. out' that has created stand-offs between the Americans and the G-77. Extending the agreement horizon means the Americans can be assured that China and India participate, but affords flexibility as to when and how they participate (i.e. sectoral or intensity targets) - and develop necessary institutions for carbon trading.

Finally, it would be hard to find someone against more effective and politically feasible climate measures - which in principle is what multi-goal integrated environmental policy could achieve. Of course, this is by no means an easy task, and integrated policy could mean a million things. As some of you may know, the air quality co-benefits of climate policy are one of my research interests. Catering to domestic air quality issues could not only increase their incentive to participate, but make it cheaper to achieve their goals. But it's not as simple as quantifying the health benefits of carbon abatement - end of pipe control measures can often achieve the same results with much lower cost. Integrated policy, however, offers many possibilities: co-funding from GEF or CDM approval for pollution control measures that reduce carbon, technology transfer for clean coal and renewable technology, and credits for reducing air pollutants that affect the climate (like black carbon).

Deus ex machina

The news is recently out that Ballard, world leader in PEM fuel cell technologies, has sold off its automotive fuel cell business to Daimler and Ford.  There have been starkingly different interpretations of this end-of-the-year surprise: one one hand, the fuel cell industry see it as a timely "handover" of the know-how developed by this high-tech company in the last decade, to the automotive giants who should be now able to run the final stretch of the race for the market, which at best will not start in another decade or so. Others, like Joseph Romm, author of "The Hype about Hydrogen", see it as a public demonstration that the dream of commercialisation of hydrogen fuel cell cars as come to an end, and basically as the beginning of the bursting of a new -and dangerous- dot-com bubble.

I hope that Ballard's and other companies investments  show results for the transport sector at some stage, and I am convinced that stationary fuel cell systems do hold much potential in the mid-term.  But we are at a stage where the "technological fix" utopia is gaining momentum again, and putting scarce public R&D resources into a far-off and extremely complex transition to a hydrogen -based transport system risks becoming a comfy option for politicians which delays action on climate change when it is needed, i.e. in the next decade, well before any significant penetration of sustainable hydrogen is possible. 

Never short of ambitious titles,  Jeremy Rifkin is still feeding the image of the hydrogen panacea in a recent report (which I admit I just scanned trhough) : "A New Energy Agenda for the European Union in the 21st Century: Leading the Way to the Hydrogen Economy and a Third Industrial Revolution-The Next Phase of European Integration".  The idea that we are facing a 30 or 40 year race against climate change is more common than one might think among the hydrogen and fuel cell stakeholders and I think it does more harm than good to the future of some very sensible fuel cell applications. I hope to look into some of these in future posts...