Feeds:
Posts
Comments

Archive for the ‘Carbon Market’ Category

DAVID TOW, Future Planet, January 16, 2010

By 2015 India and China will both have outstripped the US in energy consumption by a large margin. Cap and Trade carbon markets will have been established by major developed economies, including India and China, as the most effective way to limit carbon emissions and encourage investment in renewable energy, reforestation projects etc.

There will have been a significant shift by consumers and industry to renewable energy technologies- around 25%, powered primarily by the new generation adaptive wind and solar energy mega-plants, combined with the rapid depletion of the most easily accessible oil fields. Coal and gas will continue to play a major role at around 60% useage, with clean coal and gas technologies still very expensive. Nuclear technology will remain static at 10% and hydro at 5%.

Most new vehicles and local transport systems will utilise advanced battery or hydrogen electric power technology, which will continue to improve energy density outputs.

Efficiency and recycling savings of the order of 30% on today’s levels will be available from the application of smart adaptive technologies in power grids, communication, distribution and transport networks, manufacturing plants and consumer households. This will be particularly critical for the sustainability of cities across the planet. Cities will also play a critical role in not only supporting the energy needs of at least 60% of the planet’s population through solar, wind, water and waste energy capture but will feed excess capacity to the major power grids, providing a constant re-balancing of energy supply across the world.

By 2025 a global Cap and Trade regime will be mandatory and operational worldwide. Current oil sources will be largely exhausted but the remaining new fields will be exploited in the Arctic, Antarctic and deep ocean locations.  Renewable energy will account for 40% of useage, including baseload power generation. Solar and wind power will dominate in the form of huge desert solar and coastal and inland wind farms; but all alternate forms- wave, geothermal, secondary biomass, algael etc will begin to play a significant role.

Safer helium-cooled and fast breeder fourth generation modular nuclear power reactors will replace many of the older water-cooled and risk-prone plants, eventually  accounting for around 15% of energy production; with significant advances in the storage of existing waste in stable ceramic materials.

By 2035 global warming will reach a critical threshold with energy useage tripling from levels in 2015, despite conservation and efficiency advances. Renewables will account for 60% of the world’s power supply, nuclear 15% and fossils 25%. Technologies to convert CO2 to hydocarbon fuel together with more efficient recycling and sequestration, will allow coal and gas to continue to play a significant role.

By 2045-50 renewables will be at 75-80% levels, nuclear 12% and clean fossil fuels 10-15%. The first Hydrogen and Helium3 pilot fusion energy plants will be commissioned, with large-scale generators expected to come on stream in the latter part of the century, eventually reducing carbon emissions to close to zero.

However the above advances will still be insufficient to prevent the runaway effects of global warming. These long-term impacts will raise temperatures well beyond the additional two-three degrees centigrade critical limit.

Despite reduction in emissions by up to 85%, irreversible and chaotic feedback impacts on the global biosphere will be apparent. These will be triggered by massive releases of methane from permafrost and ocean deposits, fresh water flows from melting ice causing disruptions to ocean currents and weather patterns.

These will affect populations beyond the levels of ferocity of the recent Arctic freeze, causing chaos in the northern hemisphere and reaching into India and China and the droughts and heat waves of Africa, the Middle East and Australia.

The cycle of extreme weather events and rising oceans that threaten to destroy many major coastal cities will continue to increase, compounded by major loss of ecosystems, biodiversity and food capacity. This will force a major rethink of the management of energy and climate change as global catastrophe threatens.

Increasingly desperate measures will be canvassed and tested, including the design of major geo-engineering projects aimed at reducing the amount of sunlight reaching earth and reversal of the acidity of the oceans. These massive infrastructure projects would have potentially enormous ripple-on effects on all social, industrial and economic systems. They are eventually assessed to be largely ineffective, unpredictable and unsustainable.

As forecasts confirm that carbon levels in the atmosphere will remain high for the next 1,000 years, regardless of mitigating measures, priorities shift urgently to the need to minimise risk to life on a global scale, while protecting civilisation’s core infrastructure, social, knowledge and cultural assets.

Preserving the surviving natural ecosystem environment and the critical infrastructure of the built environment, particularly the Internet and Web, will now be vital. The sustainability of human life on planet Earth, in the face of overwhelming catastrophe, will be dependent to a critical degree on the power of the intelligent Web 4.0, combining human and artificial intelligence to manage food, water, energy and human resources.

Only the enormous problem-solving capacity of this human-engineered entity, will be capable of ensuring the continuing survival of civilisation as we know it.

Read Full Post »

MARGOT ROOSEVELT, The Los Angeles Times, June 1, 2009

47075213Silvery light flickers through the redwood canopy of the Van Eck forest down to a fragrant carpet of needles and thimbleberry brush. A brook splashes along polished stones, through thickets of ferns. How lush. How lovely. How lucrative.

This 2,200-acre spread in Humboldt County does well by doing good. For the last four years, Van Eck’s foresters restricted logging, allowing trees to do what trees do: absorb carbon dioxide from the atmosphere. The conservation foundation that oversees the forest then calculated that carbon bonus and sold it for $2 million to individuals and companies trying to offset some 185,000 metric tons of their greenhouse gas emissions.

“Forests can be managed like a long-term carbon bank,” said Laurie Wayburn, president of the Pacific Forest Trust, a San Francisco-based nonprofit that oversees Van Eck. Selling offsets, she said, is like “writing checks on the account.”

In the struggle over how to address climate change nationally and globally, forests play a major role. “Cap-and-trade” programs set limits on greenhouse gases and allow industries to trade emissions permits among themselves. And they can include provisions for offsetting heat-trapping pollution by investing in woodlands.

Offsets are poised for explosive growth. In the next two years, California is expected to roll out a statewide carbon market that may be expanded to other Western states. Nationally, climate legislation approved by a key congressional committee last week would allow U.S. industries to use offsets worth up to 2 billion metric tons of carbon dioxide, part of which could come from forest projects here and abroad.

A new climate treaty scheduled to be signed in Copenhagen in December may allow industrial countries to offset emissions with forest-saving projects in Brazil, Indonesia and other developing nations. Ripe for fraud? But the carbon commodity business is controversial. Critics fear that poorly regulated offsets could hand a get-out-of-jail-free card to heavy polluters. Should a coal-fired power plant in Nevada avoid slashing carbon dioxide emissions by paying to preserve trees in Oregon? Is this a complex trading scheme ripe for fraud?

To create trustworthy offsets, California’s Air Resources Board two years ago set up the nation’s first government-sponsored system to quantify and verify carbon. Those rules are being rewritten for possible use by other states. “Companies having a hard time meeting their carbon emission limits may want to invest in forestry as a way to cut costs,” said Mary D. Nichols, the board’s chairwoman. “We have hundreds of thousands of acres of forests that can play a role in helping us to prevent global warming.”

Forests are central to Earth’s climate because, like oceans, they are a carbon “sink.” Through photosynthesis, trees absorb carbon dioxide, the principal greenhouse gas that is heating the planet’s atmosphere. Allowing trees to grow larger before logging increases the carbon stored in a forest. So do widening the forested buffers along streams and clearing out underbrush to allow more space for trees. Reforesting areas abandoned to brush or destroyed by wildfire would also greatly boost carbon stock.

“California leads the world with regard to the role of forests in combating climate change,” said Chris Kelly, California director for the Conservation Fund, a Virginia-based nonprofit that has sold offsets from Mendocino County preserves. “I just had an inquiry from a Canadian buyer who’s expecting Canada to move in the direction set by California.”

But so far, big timber operators, including Sierra Pacific Industries and Green Diamond Resource Co., have yet to enroll in California’s offsets program. Current standards require owners to agree to a permanent conservation easement, a legal agreement that would guarantee carbon-storage measures in perpetuity. Companies have found that too onerous, and as a result only a handful of woodlands have registered, mainly those managed by conservation groups.

For the last 18 months, members of a task force of environmentalists, timber operators and state officials have been locked in contentious negotiations to revise the rules. The new draft, to go before the Air Resources Board next month, substitutes a 100-year contract for the easement, thus allowing development after a century. It also clarifies rules for companies to quantify and verify carbon. At least one environmental group is uncomfortable with the changes. “By removing the easement, you leave the system open to gaming,” said Brian Nowicki, a forest specialist with the Center for Biological Diversity. “The timber industry wants ‘business as usual’ practices, like clear-cutting, to qualify for carbon credit.”

But groups represented on the task force, including the Environmental Defense Fund, the Nature Conservancy and Pacific Forest Trust, say that century-long contracts and strict accounting rules will guarantee that offsets will be granted only if additional carbon is stored above and beyond conventional forest practices. David Bischel, president of the California Forestry Assn., the industry trade group, said he expects more landowners to sign up but cautions, “It is an opportunity in its infancy: When you add up the numbers, it is not a huge source of revenue.” ‘This is a win-win’

Read Full Post »

MendoCoastCurrent, December 14, 2008

kevinruddAustralian Prime Minister Kevin Rudd called for a “solar revolution” on Sunday as he unveiled plans to bring forward a A$500 million (US$329 million) fund promoting renewable energy in a bid to stimulate the economy.

Speaking just a day before a key announcement on Australia’s greenhouse gas emissions targets, Rudd said the fund’s timescale would be brought forward from the original six-year plan to the next 18 months.

“It’s good for jobs. It’s good for stimulus. It’s good for acting on climate change,” Rudd said of the move. “It’s time for Australia to begin a solar revolution, a renewable energy revolution and we’ve got to fund it for the future.”

Rudd made the announcement at the Queensland town of Windorah, where a new solar energy plant is expected to produce around 360,000 kilowatt hours of electricity per year and provide the town’s daytime power needs.

The prime minister said A$100 million would be released by June 30 next year, with the remaining A$400 million to be released in the following 12 months.

The only condition, he said in an accompanying statement, was “availability of suitable demonstration projects.” Guidelines would be released early in 2009, the statement said.

The Renewable Energy Fund, which also includes work on biofuels development and geothermal drilling, was set up to help cut the cost of developing technologies that might play a key role in energy supply and security over the next few decades.

The fund was an election commitment by the ruling Labor party in last year’s election, in which Rudd defeated conservative predecessor John Howard. During the campaign Rudd set a target that 20% of Australia’s energy should be from renewable sources by 2020.

A key ‘white paper’ policy document is due on Monday setting out Australia’s official targets for emissions cuts and plans for carbon trading. Australia is widely expected to adopt a target of a 10% cut from 2000 levels by 2020.

Although Rudd has been applauded by environmentalists for his decision for Australia to join the Kyoto protocol, they also say Canberra’s actions on reducing greenhouse gas emissions have so far been inadequate.

(A$1=US$0.66)

Read Full Post »

MARGOT ROOSEVELT, The Los Angeles Times, December 12, 2008

california_mapCalifornia regulators adopted the nation’s first comprehensive plan to slash greenhouse gases on December 11th and characterized it as a model for President-elect Barack Obama, who has pledged an aggressive national and international effort to combat global warming.

The ambitious blueprint by the world’s eighth-largest economy would cut the state’s emissions by 15% from today’s level over the next 12 years, bringing them down to 1990 levels.

Approved by the state’s Air Resources Board in a unanimous vote, the 134 page plan lays out targets for virtually every sector of the economy, including automobiles, refineries, buildings and landfills. It would require a third of California’s electricity to come from solar energy, wind farms and other renewable sources — far more than any state currently requires.

Gov. Arnold Schwarzenegger, who has been a vigorous advocate of the plan, vowed that it would “unleash the full force of California’s innovation and technology for a healthier planet.”

Businesses, however, are sharply divided.

Automakers oppose California’s pending crackdown on carbon dioxide emissions from cars, a regulation that more than a dozen states have pledged to adopt. Manufacturers want regulators to lower the cost of complying, saying it will lead to billions of dollars in higher electricity costs.

“This plan is an economic train wreck waiting to happen,” James Duran of the California Hispanic Chambers of Commerce told the board, saying that it would cause financial hardship to minority-owned companies.

But Bob Epstein, a Silicon Valley entrepreneur, led a coalition of energy, technology and Hollywood executives, including Google Chief Executive Eric Schmidt, in endorsing the plan as a spur to the state’s lagging economy.

Investors have poured $2.5 billion into California cleantech companies in the first nine months of the year, up from $1.8 billion for all of 2007, he said, a level that eclipsed the software industry.

“This plan is a clear signal to investors to invest in California,” Epstein said.

Schwarzenegger, a sharp critic of President Bush’s opposition to climate legislation, said, “When you look at today’s depressed economy, green tech is one of the few bright spots out there.”

California’s plan will be “a road map for the rest of the nation,” he predicted.

After an aborted attempt last spring, Congress is expected to renew its efforts to craft climate legislation next year. Many of the elements in contention are addressed in California’s blueprint, including a cap and trade program that would allow industries to reduce emissions more cheaply.

In 18 months of public hearings and workshops, hundreds of people testified and more than 43,000 comments were submitted. More than 250,000 copies of the plan have been viewed or downloaded from the air board’s website in the last two months.

The state’s blueprint will be implemented over the next two years through industry specific regulations. Republican legislators have called on Schwarzenegger to delay the plan, citing the dire state of California’s economy and criticism of the air board’s economic models.

Fears were also expressed by city and county officials who said the plan’s effort to force land use changes infringes on local powers. Environmentalists want more ambitious strategies to curb the sprawl that has led to a rapid increase in driving, and thus in greenhouse gases.

Worldwide, emissions of planet warming gases, which are mainly formed by burning fossil fuels, have been growing far more rapidly than scientists had predicted. California is expected to experience severe damage from climate change by mid-century, including water shortages from a shrinking snowpack, increased wildfires, rising ocean levels and pollution aggravating heat waves.

Given the state’s fast growing population and sprawling suburban development, its emissions are on track to increase by 30% over 1990 levels by 2020. The new blueprint would slash the state’s carbon footprint over the next 12 years by a total of 174 million metric tons of greenhouse gas emissions — the equivalent of 4 metric tons for every resident.

Despite the reach of the state’s effort, it would barely make a dent in global warming: The state’s emissions account for about 1.5% of the world’s emissions. Nonetheless, air board Chairwoman Mary Nichols said California’s leadership has spurred other states to move ahead. “We are filling a vacuum left by inaction at the federal level,” she said.

More than two dozen states have committed to capping emissions since California passed its landmark 2006 global warming law, the trigger for this action by the Air Resources Board.

California has joined with four Canadian provinces and seven western states to form a regional cap and trade program. Under the program, the states would set a total allowable amount of emissions — as California did in its blueprint. Utilities and other large industries would be required to obtain allowances to cover their emissions. If companies cut emissions more than required, they can sell their extra emission reductions to firms that are not able to meet their targets.

A cap and trade system has been adopted in Europe, where it was initially fraught with logistical problems and afforded windfall profits to many industries. California’s system, which would apply to industries responsible for 85% of its emissions, is the most controversial aspect of its plan.

Groups representing low income residents of polluted urban areas testified that allowing industries to trade in emissions would lead to dirtier plants in their neighborhoods. Under California’s plan, industries would also be allowed to buy “offsets” — emission reductions from projects in other states, or possibly foreign nations, to avoid making their own reductions.

However, the board assuaged many environmentalists Thursday when it pledged that it would gradually move toward a system to auction 100% of greenhouse gas permits, rather than give the permits away for free, as was initially the case in Europe.

Bernadette del Chiaro, an energy analyst for Environment California, predicted the auctions could bring in $1 billion at the outset and up to $340 million per year by 2020.

“This is huge,” she said. “Revenue from polluters would be used to transit to a green economy.”

Read Full Post »

LAURA MANDARO, MarketWatch, June 26, 2008

SAN FRANCISCO – California released a draft plan on Thursday to reduce the state’s projected greenhouse gas emissions by nearly one-third, in part by creating a cap and trade program that could serve as a blueprint for a national carbon emissions market.

The 77-page “climate change draft scoping plan” lays out the framework for California to meet the goals of a 2006 law signed by Gov. Arnold Schwarzenegger that requires the state to slash its greenhouse gas emissions to 1990 levels by 2020.

This target means electric utilities, industrial users, fuel refiners such as Chevron Corp. and ConocoPhillips and builders will have to lower their combined output of carbon dioxide by one-tenth from today’s levels and 30% from projected 2020 emissions of the gas thought to contribute to global warming.

The success of California’s efforts to scale back greenhouse gas emissions using a mix of regulations and market mechanisms could provide a roadmap for a national standard, largely thanks to the state’s size and the aggressive goals it has set.

“It certainly paves the way,” said Milo Sjardin, head of the North American division of New Carbon Finance, a carbon emissions research and analysis firm. “Any federal program may take some of California’s experience on board,” he said.

The California plan also seeks to expand the amount of electricity utilities such as PG&E Corp. and Edison International generate from renewable resources to 33% by 2020. Today, just 12% of the state’s electricity comes from wind, solar, geothermal and other renewable sources.

Cap and trade to launch in 2012

The nation’s most populous state says it will achieve these ambitious goals by putting in place strict limits on greenhouse gas emissions, caps that give users of fossil fuel a financial incentive to put in place heavier pollution controls.

A key part of this plan is the establishment of a market to allow companies to trade their carbon allowances with companies from neighboring Western states and Canadian provinces that are producing less than their allowed emissions — or that engage in an activity, such as planting trees, that lowers emissions.

The head of the panel charged with implementing the state’s global warming law said board members are using as a model the cap-and-trade program established by the U.S. government to restrict emissions that cause acid rain, which was part of the 1990 Clean Air Act.

“When industry knew they had to come under a cap, they came up with measures that were much cheaper than anyone thought,” said Mary Nichols, chairman of the California Air Resources Board. “Having a cap out there spurs the innovation,” she said in a conference call with reporters.

California’s cap and trade program, set for launch in 2012, will also present national companies with a second set of standards with which to comply. A group of Northeastern states is planning to launch a smaller cap and trade program next year.

The addition of another set of regulations “puts increasing pressure on the federal government to put something in place to level the playing field,” said New Carbon Finance’s Sjardin.

Sens. Joseph Lieberman, an independent from Connecticut and John Warner, a Republican from Virginia, last year introduced a national climate bill – which the Senate tabled in June — designed to cut greenhouse-gas emissions by 70% by 2050.

Both major-party presumptive presidential candidates, Republican Sen. John McCain and Democratic Sen. Barack Obama have said they support a national standard for carbon emissions.

Development of a U.S. carbon-trading market is following the rapid growth of the now $50 billion carbon-trading market in Europe, where corporations have been trading emissions-reductions credits as part of meeting the Kyoto Protocol. California’s market will likely start at a much smaller level. New Carbon Finance’s Sjardin estimates it could reach $10 billion by 2015.

If the entire country were to incorporate such a program, the size of the market could hit $1 trillion by 2020, he says.

Bringing to fruition California’s plan, let alone a national version, faces stumbling blocks.

In the state’s Senate, the Republican caucus is pushing for a delay of certain parts of the 2006 bill it says make it too expensive for businesses in a time of economic duress.

Nonetheless, the state’s largest utilities are preparing for the state to push through the caps, which will cover 85% of California’s greenhouse gas emissions.

San Francisco-based utility PG&E says 13% of its power comes from renewable energy sources. By 2012, that level should reach about 22%, said Keely Wachs, a spokesman for the utility, which serves 15 million customers in Northern and Central California.

Read Full Post »

GLOBE-NET NEWS, June 3, 2008

A new analysis by Carnegie Mellon University researchers provides the clearest picture yet of the possible short-term effects of placing a price for carbon dioxide (CO2) emissions. The research suggests that even a modest price would almost immediately result in up to 10% reductions in emission levels by prompting changes in both power company investments and consumer behavior.

Simulating the impact of a price on CO2 emissions from the existing fleet of U.S. power plants using marginal costs for generators and hourly electricity load data from 2006, the researchers considered the short-term effects on electricity price and demand even before any new, more efficient generation facilities could be built.

They identified that a price as low as $35 per metric ton of CO2 would likely cause a reduction of consumer electricity use, as well as a change by grid operators in the order in which generators are economically dispatched, depending on their emissions levels and marginal fuel prices.

The study authors note “The price of delivered electricity will rise if generators have to pay for carbon dioxide emissions through an implicit or explicit mechanism. There are two main effects that a substantial price on CO2 emissions would have in the short run (before the generation fleet changes significantly). ”

  • First, consumers would react to increased price by buying less, described by their price elasticity of demand.
  • Second, a price on CO2 emissions would change the order in which existing generators are economically dispatched, depending on their carbon dioxide emissions and marginal fuel prices.

Both the price increase and dispatch changes depend on the mix of generation technologies and fuels in the region available for dispatch, although the consumer response to higher prices is the dominant effect.

While a 10% reduction in emissions could result, the actual level of emission reduction is dependent upon the availability of alternative and less carbon-intensive power generation technologies in a particular region.

For example, facilities in the Northeast and Midwest would see a higher drop in emissions resulting from the price, while emissions in Texas – with relatively larger numbers of natural gas facilities – would be affected significantly less.

While this study predicts the impact and demand elasticity for an instantaneous price increase, the researchers believe that any price imposed will likely phased in gradually or done via a cap-and-trade system. “Any price structure for emissions would hopefully have a clear timetable that would allow utilities and consumers to make informed investment decisions,” said M. Granger Morgan, Lord Chair Professor in Engineering in the Department of Engineering and Public Policy at Carnegie Mellon.

“In addition to the changes in resource allocation by utilities, consumers would pay more attention to their energy consumption or switch to more energy efficient appliances.”

The study supports and expands on prior research about how a CO2 emissions price would spur greater investment by power generators in new, more efficient technologies. “Our findings indicate that significant reductions in CO2 can and would be observed in the near-term, even before more efficient power generation technologies are deployed on a wide scale,” said Jay Apt, associate research professor at the Tepper School of Business at Carnegie Mellon and co-author of the study.

The study, titled “Short Run Effects of a Price on Carbon Dioxide Emissions from U.S. Electric Generators,” appeared in the May 1st issue of Environmental Science & Technology.

Read Full Post »