Davos - Big Oil

The folks gathered at Davos don't think that a cap and trade bill will be passed in the US in the next six months (and the odds of it being passed in the run-up to the mid-term elections are non-existant.)

As world leaders gather to discuss economic problems during the Davos talks, energy execs are calling for a new peak in oil production, and others cite bleak hope for any global climate deal.

Davos, a Swiss ski resort, is the location of the World Economic Forum, which runs through Jan. 31.

At a dinner on alternative energy, about 100 were in attendance, and when asked to raise their hands if they thought a U.S. climate bill would pass Congress before June, no one raised their hand, reports Foreign Policy. About 60 of those in attendance were Americans.

That view is contradicted by Duke Energy CEO Jim Rogers, who said that he still expects cap and trade to take shape in the U.S., reports Reuters. Rogers said that the Democrats’ loss of a seat in Massachusetts was far from the death-knell, that instead a stronger, more bipartisan approach to climate legislation may emerge.

Tony Hayward, CEO of BP, said that there is a “supply challenge” for the oil industry that will necessitate an extra 15 million barrels of oil a day over the coming 20 years, reports the Telegraph. The world currently is producing about 84 million barrels a day. While demand for oil is fading in the U.S. and Europe, it is rising rapidly in Asia.

Hayward said that natural gas extracted from shale or methane reserves is a “game changer” in the U.S. energy market... [environmentalleader.com]

The Carbon Debate

Well, things are moving along, with or without Congress. You know it's real when the SEC gets involved.

The ultimate fate of carbon policies may be up in the air. But utilities and industrial enterprises are still under pressure to report their climate-related activities to investors.

The U.S. Securities and Exchange Commission has voted 3-2 along party lines to force companies to consider their potential exposure to climate change when it comes to filing their financial statements. While the position is one that the Obama administration has advocated, its genesis formed a few years earlier as investor and environmental groups joined hands to petition the body for uniform rules.

"The transition to a carbon-constrained economy is underway, and public access to material information concerning the risks and opportunities that companies face, and their means of addressing those risks and opportunities, is vital to investors," writes the California Public Employees' Retirement System.

The group, which asked the SEC more than two years ago for guidance, says that disclosure should include corporate policies and governance structures related to climate change as well as a tabulation of the registrant's current and forecasted greenhouse gas emissions. As such, investors need to know what the potential financial risks may be along with any climate change-associated litigation. [energycentral.com]

Why won't Obama go?

Perhaps Obama is wavering on going to Copenhagen for the climate talks so that he doesn't further alienate the Republicans he wants support from on the Health Care issue. Thoughts?

For the past two years, 192 countries have participated in talks on the pressing issue of climate change, which will culminate in the Copenhagen summit next month. So far, more than 40 heads of state have agreed to attend, to act as negotiators and more importantly to demonstrate a firm commitment to ambitious targets. The growing list includes Angela Merkel, Gordon Brown, Nicolas Sarkozy, and Luiz Inacio Lula da Silva.

But the RSVPs seem lost in the mail for the leaders of the countries considered to be the lynchpins of the deal -- China, the United States, and India. Hu Jintao, Barack Obama, and Manmohan Singh haven't committed yet -- and they should. This summer, Obama indicated he would not attend because Congress has not yet passed climate change legislation. He's since waffled a bit, saying he would if his appearance would close the deal. It's weak tea, and those calling for him to attend include Al Gore and Brazil's da Silva, who used his weekly radio address to implore Obama and Hu to make the trip.

It is less likely that Hu or Singh will attend. Their developing countries have been good negotiators, but reticent to commit to ambitious targets. (China recently called for keeping the Kyoto protocol instead.) If Obama commits, though, they would be a lot more willing -- and that should be reason for the U.S. leader to consider heading across the pond.

In other climate news, the International Energy Agency released its full World Energy Outlook yesterday. One choice doomsday passage:

For every year that passes, the window for action on emissions over a given period becomes narrower -- and the costs of transforming the energy sector increase. We calculate that each year of delay before moving onto the emissions path consistent with a 2°C temperature increase would add approximately $500 billion to the global incremental investment cost...A delay of just a few years would probably render that goal completely out of reach.

Deforestation slowing in Brazil

The number of acres cut in the Amazon this year are the lowest since the government started tracking it in 1988. If you want to take a cynical view, though, it is for the same reason the US has had a major reduction in green house gas emissions in the past year: macro-economic forces. This news is also a bit like unemployment in the US: it's getting worse more slowly.

Deforestation in the Brazilian Amazon dropped nearly 46 percent from August 2008 to July 2009 — the biggest annual decline in two decades, the government said Thursday.

Analysis of satellite imagery by the National Institute for Space Research shows an estimated 7,008 square kilometers (2,705 square miles) of forest were cleared during the 12-month period, the lowest rate since the government started monitoring deforestation in 1988.

"The new deforestation data represents an extraordinary and significant reduction for Brazil," President Luiz Inacio Lula da Silvasaid in a statement.

The numbers have been falling since 2004, when they reached a peak of 27,000 square kilometers (10,425 square miles) cleared in one year, according to the space research institute.

The government credited its aggressive monitoring and enforcement measures for the drop, as well as its promotion of sustainable activities in the Amazon region, an area in northern Brazil the size of the U.S. west of the Mississippi River.

But Paulo Gustavo, environmental policy director of Conservation International, said a major factor is the drop in world prices for beef, soy and other products that drive people to clear land for agriculture in the rainforest.

"The police control has improved a little, there has been success in controlling deforestation," Gustavo said. "But the main factor is the drop in commodity prices, which are the main factor in speeding up or slowing deforestation." [news.yahoo.com]

Yes, we currently subsidize fossil fuels!

This seems like a no-brainer. How did this not happen sooner?

Group of 20 leaders are close to an agreement on phasing out subsidies for fossil fuels in an effort to curb global warming, though no fixed dates have been set, reports Reuters.

Several G20 countries subsidize fuel such as coal and oil, at a cost of about $300 billion, to keep prices artificially low for consumers, which boosts both demand for hydrocarbons and emissions, reports Reuters.

Obama aide Michael Froman told Reuters that phasing out fossil fuel subsidies worldwide could cut greenhouse gases by up to 12 percent by 2050, citing estimates by the Organization for Economic Cooperation and Development and the International Energy Agency. He said United States would agree to the cuts as well.

Cap & Trade $175/household/year

The Waxman-Markey bill which would establish a carbon cap and trade system in the US is coming up for a vote fairly soon. The Congressional Budget Office estimates that it will cost on average $175 per household.

By annually reducing the supply of these permits, the cap-and-trade legislation written by House Democrats Henry Waxman of California and Ed Markey of Massachusetts would lower the limit on greenhouse gases to 17 percent less than 2005 levels by 2020, according to Bloomberg News.

The CBO analysis estimates that the legislation will cost the richest U.S. households $245 a year, and the poorest will see gains of $40 a year. [environmentalleader.com]

Is it worth it? Is it worth it if we can prevent massive global displacement? One of the front page articles in this weekend's FT, contained the following:

Estimates of the number of environmental refugees in 2050, when the global population is expected to peak at 9 billion and the planet is forecast to be in the throes of a 2°C-or-more temperature rise, vary between 50 million and 1 billion people. But the most commonly repeated number – included in Britain’s 2006 Stern Review – is between 200 and 250 million, or around 10 times the number of refugees and internally displaced persons in the world today.

Clean Coal Ad

This ad is from Al Gore's Reality Coalition. Do you think it's effective? I'm not so sure. It asserts there's no such thing as clean coal, without giving evidence. I just saw it while I was watching This Week. I may not disagree, but I feel like the ad and the accompanying website talk down to the reader/viewer, not trusting we can handle actual information.

Knowing a bit about coal-fired generation, building new coal plants that would allow older ones to be shut down would help the environment. Given that a full one half of US electricity is produced through coal and that we have a lot of coal in the ground, what is Gore's suggestion as an alternative? The US needs a short term solution to its power issue, which can not be satisfied only through alternatives.

The Return of the Clothesline

I remember as a child that my mother hung clothes out to dry outside. I remember how wonderful the sheets and towels smelled, and I noticed when we moved to the States from Switzerland, that I never saw another house with a clothes line.

I guess it wasn't illegal, but apparently in some places it is. Now, there's a movement to get those laws reversed. For example, the Province of Ontario is looking to overturn every such law in the province, on the grounds that drying your clothes outside is the environmentally sound thing to do.

Indeed, an electric clothes dryer uses about 6% of household energy, the same as a refrigerator, even though it's used much less.

And the movement is taking hold - in the UK last year, at one retailer sales of clotheslines were up 150% and clothespins were up 1000%.

So, people, hang your clothes out on the line. Not only will they smell better, but it's better for the planet.