By Orville Schell

As world representatives conclude their quest in Copenhagen for ways to slow global warming, something needs to be done to kick-start the discussion into a more concrete and collaborative phase. Otherwise, the UN conference will have failed to turn what so far has been a latter-day Tower of Babel on climate change into a more focused and hopeful multilateral discussion.

An already-existing feeling of global disarray was only heightened last month at the Asia-Pacific Economic Cooperation summit in Singapore when, thanks to the U.S. Senate’s obstructionism, President Obama was forced to acknowledge that the world would not be able to reach a binding climate agreement in Copenhagen. The feeling of paralysis was compounded by the manner in which the “developed world” (especially the U.S.) and the “developing world” (most notably China, India, and Brazil) had fallen into a dysfunctional state of wrangling over who was responsible for the historical burden of CO2 emissions still in our atmosphere and who should assume what proportional role for reducing them in the future. Forward motion, much less accord, on a post-Kyoto agreement seemed far from assured.

Amid all the prevaricating and confusion, two things, at least, had become clear:

First, not all the alarmed scientists, concerned NGOers, born-again disciples of “greenness” and earnest officials in the world would ever be able to solve the climate change challenge on their own.

And second, until businesses could see a clearer way to make money reducing carbon emissions, there would be no meaningful solution.

In short, it had become increasingly evident that, unless the world could find new ways to catalyze the marketplace into action, we were figuratively — and literally — cooked!

So, is there anything that can be done quickly to help prod the marketplace into action, even before the UN’s Copenhagen conference ends?

The most promising new action plan I have recently encountered calls for the establishment of several new kinds of so-called quick-start funds for low-carbon development. Such funds are crucial because of an inescapable reality: Any attempt to bring about a more rapid transition to a low-carbon economy in developing countries quickly and inevitably runs into the unresolved question of finance.

Quick-start funds are being supported by the World Economic Forum’s Task Force on Low Carbon Prosperity, which has systematically applied itself to working on strategies for just such funding. (I am a member of the task force.) At a recent meeting in Dubai, members of the forum’s Global Agenda Council on Climate Change recognized the urgency to “design, launch, and test these new forms of public-private clean energy investment models.” The group called on wealthy nations to establish a new public/private consortium to help the developing world both reduce its carbon emissions and adapt to the effects of climate change by supporting a group of quick-start funds. These funds would draw from both public and private investment sources to create more workable alternatives to government aid handouts.

How would such funds work?

The “First Loss Equity Quick-Start Fund,” for instance, would be a for-profit fund run by managers seeking to attract private institutional investors to projects in the developing world. Modest government backing would encourage the funds to take on some of the risk that potential investors often face when considering clean energy projects in poorer countries. The fund would focus on the myriad worthy — and potentially profitable — low-carbon projects that now languish in the global pipeline. Such projects would include energy efficiency initiatives, development of renewable energy, smart energy distribution, and so-called REDD programs (Reducing Emissions from Deforestation and Forest Degradation) that pay countries not to clear their forests. Without some government support for a quick-start fund, uncertain policies often make conditions too risky for investors to move forward.

Research by the UN Environmental Program has indicated that $1 of public finance could remove a sufficient amount of risk to bring in up to $13 of private finance, in the form of equity and debt. Thus, a very modest allocation of public money — say $5 billion from a consortium of developed countries — could potentially catalyze $50 billion, or more, from private international investment funds. Governments would, in effect, back such funds with so-called “first loss” public capital that would diminish risk for other private investors.

If agreed on and announced in Copenhagen, the creation of quick-start funds would serve as a powerful and salutary symbolic gesture. It would represent exactly the kind of action that countries like India and China have long been seeking from the developed world — namely, concrete demonstrations of willingness to help poorer countries meet the challenges of global warming. Indeed, it is difficult to imagine China and India making maximum efforts to remedy climate change without such demonstrations. Moreover, if such a fund could be quickly established, it would be an ideal vessel through which President Obama could — at very low public cost — express his own commitment at Copenhagen to doing something concrete to help the developed world play a more constructive role in solving this complex global problem.

The developing world has been vociferous in its demands for such signs of U.S. leadership. These demands are not as unreasonable as they may seem to many Americans at first blush. Although China is, indeed, now the largest annual emitter of CO2 in the world, its per capita emissions are still less than one-quarter those for the average American. Moreover, even with its far larger population, China’s aggregate historical emissions are still less than one-third those of the U.S. (The statistical disparity for India is even greater.) It was precisely in recognition of this reality that the 1997 Kyoto Protocol — which the U.S. did not finally sign — explicitly stated that developing and developed countries had “common but differentiated” responsibilities for climate change and then called on wealthier nations to help poorer countries curb their emissions.

Quick-start funds should not be confused with foreign assistance or even with efforts such as the $10 billion Copenhagen Launch Fund recently proposed by British Prime Minister Gordon Brown. This effort, subsequently endorsed by presidents Obama and Sarkozy, is also aimed at providing multilateral government support for small countries. But the truth is that there will never be enough government foreign aid to enable developing countries to both mitigate and adapt to climate change in any meaningful way.

It was hardly surprising, then, that upon arriving in Copenhagen, Su Wei — one of China’s most senior officials at the UN climate talks — described the proposed $10 billion fund as “a drop in the ocean.” He went on to accuse developed nations of seeking to avoid the commitments they had agreed to in the Kyoto Protocols.

If the industrialized nations are unable to pour enough money into the developing world to spur a transition to a low-carbon economy, they can still catalyze the marketplace by enacting smart policies.

So why not launch a quick-start fund now, while thousands of delegates are still gathered in Copenhagen and groping for answers in what has been a discouragingly inchoate process? Since there will be no solution to climate change without the full participation of China and India, and since both have expressed repeated dissatisfaction at the West’s response to their urgent need to keep their economies growing while also meeting climate change obligations, this is the time to demonstrate that we in the developed world are, in fact, willing to shoulder our fair share of the global responsibility.

Reprinted with permission from Yale Environment 360

By Roger Greenway

The US already has years of experience with Cap and Trade. A sulfur dioxide (SO2) Cap and Trade program has proven an effective control strategy to lower SO2 emissions.

It provides elements of market incentives and provides flexibility to facilities that emit large quantities of the pollutant in several ways. One of the most important ways is that it permits older facilities which may need to operate for a limited number of years to purchase "emissions credits" to continue operating without installing un-economic emissions controls by purchasing credits. The credits are created by other sources which control their emissions MORE than required under regulations. There is also an overall reduction in the program to benefit the environment so we are not just transferring emission from one plant to another.

A reflection of the effectiveness is that the U.S. Environmental Protection Agency announced that power plants across the country decreased emissions of SO2, a precursor to acid rain, to 7.6 million tons in 2008. Emissions from sources in the Acid Rain Program fell by 52 percent compared with 1990 levels and are already below the statutory annual emission cap of 8.95 million tons set for compliance in 2010.

In a new report, EPA highlights progress made in reducing SO2 emissions under the Acid Rain Program. Key achievements of the program include:

All 3,572 electric generating units subject to the program's SO2 requirements held enough allowances to cover their SO2 emissions, resulting in 100 percent compliance in 2008; The U.S. Environmental Protection Agency announced today that power plants across the country decreased emissions of sulfur dioxide (SO2), a precursor to acid rain, to 7.6 million tons in 2008. Emissions from sources in the Acid Rain Program fell by 52 percent compared with 1990 levels and are already below the statutory annual emission cap of 8.95 million tons set for compliance in 2010.

In a new report, EPA highlights progress made in reducing SO2 emissions under the Acid Rain Program. Key achievements of the program include:

All 3,572 electric generating units subject to the program’s SO2 requirements held enough allowances to cover their SO2 emissions, resulting in 100 percent compliance in 2008; Emission reductions under the Acid Rain Program have led to improvements in air quality with significant benefits to human health; and Sensitive water bodies in the east are showing signs of recovery from acidification.

The Acid Rain Program was established under the 1990 Clean Air Act Amendments and requires major emission reductions of SO2 and nitrogen oxides (NOx) from the electric power industry. The program sets a permanent cap on the total amount of SO2 that may be emitted by electric generating units in the United States, and includes provisions for trading and banking allowances. The program is phased in, with a final 2010 SO2 cap set at 8.95 million tons, a level of about one-half of the emissions from the power sector in 1980.

Emission reductions under the Acid Rain Program have led to improvements in air quality with significant benefits to human health; and Sensitive water bodies in the east are showing signs of recovery from acidification.

The Acid Rain Program was established under the 1990 Clean Air Act Amendments and requires major emission reductions of SO2 and NOx from the electric power industry. The program sets a permanent cap on the total amount of SO2 that may be emitted by electric generating units in the United States, and includes provisions for trading and banking allowances. The program is phased in, with a final 2010 SO2 cap set at 8.95 million tons, a level of about one-half of the emissions from the power sector in 1980.

For more information: http://yosemite.epa.gov/opa/admpress.nsf/0/BDF208410089B5C185257689005E2577

Reprinted with permission from Environmental News Network

By Timothy B. Hurst

After a busy day in Copenhagen saw U.S. Energy Secretary Steven Chu launch a $350 million clean energy technology transfer program, a consortium of solar industry trade groups released a report indicating that solar photovoltaics could provide up to 12 percent of Europe’s electricity and the combination of PV, concentrated solar power and solar thermal could deliver 15 percent of electricity in the U.S. by 2020.

According to the report (pdf), released today in Copenhagen by U.S.-based Solar Energy Industries Association (SEIA), the European Photovoltaic Industry Association and twenty other industry trade groups from around the world, advancements in the solar industry–ones that are ready to take place right now–would reduce CO2 emissions by nearly 1 billion tons annually and create 6.3 million jobs.

“Solar is ready today. It’s not a 2040 technology, it’s a today technology,” SEIA president Rhone Resch told reporters on a conference call from Copenhagen on Monday. “While nations negotiate details of a climate treaty, we need to be sure policies are in place so that solar can get to work now,” added Resch.

Solar growth dependent on advances in policy Solar, wind and other renewable energy industries have assembled in Copenhagen to advocate for policies that would accelerate deployment of their technologies. The 15% and 12% solar targets outlined in the report for the U.S. and E.U. respectively, are “entirely dependent on advances in policy,” said Resch. “We can be a disruptive technology, but we need policies across the globe that need to be changed.” To advance those policies, SEIA and EPIA announced the launch of SolarCOP15, a unified industry voice to make the case for solar energy as a simple, practical, and cost-effective solution to reduce carbon emissions now and into the future. Solar COP15’s s policy imperatives in Copenhagen include: the adoption of binding targets for CO2 emission reductions that entail the uptake of solar power; the establishment of technology transfer mechanisms; and a commitment to finance strategies for solar technology deployment.

The foundation for the policy recommendations needed to reach the targets are outlined in the Solar Bill of Rights, released in late October by SEIA. In essence, the solar industry would like to see a lowering of subsidies to fossil fuel industries, or a raising of subsidies for solar and other renewables; and a streamlining of the grid interconnection process in the U.S. and around the world. “We want to make solar as easy to connect to your home as it is to connect internet,” said Resch.

Resch said that there was a “tone of cautious optimism” in Copenhagen about reaching binding targets, but that even if binding targets were not agreed upon, “The presence of wind and solar here has never been larger, and it’s a very impressive sight.”

Photo: Jeff Kubina

Reprinted with permission from Earth and Industry

IFC, a member of the World Bank Group, and Standard & Poor's are launching the world's first carbon efficient index for emerging markets that is expected to mobilize more than $1 billion for carbon-efficient companies over the next three years.

"The S&P/IFC Carbon Efficient Index will encourage carbon-based competition among emerging-market companies, give carbon-efficient companies access to long-term investors, and should lead to important reductions in carbon emissions in developing countries," the organizations said in release.

The index was developed by S&P using carbon data provided by Trucost. It will allow investors to closely track the performance of the S&P/IFC Investable Emerging Markets Index, a leading emerging-market benchmark. Investors will gain exposure to emerging markets and benefit from local rates-of-return while reducing the carbon footprint of their portfolios by 24%.

Rachel Kyte, IFC Vice President for Business Advisory Services, said, "With growing pressure on investors to diversify and maintain returns by increasing exposure to emerging markets, and with more and more investors keen to demonstrate a preference for sustainability, including carbon efficient companies, IFC hopes that the launch of this index will help ensure that carbon efficiency is rewarded in the market and that best-in-class companies gain better access to capital."

IFC provided financial support to the S&P/Trucost consortium to accelerate the carbon research on emerging-market companies. It also provided technical support to help validate and refine the methodology, and it is supporting the Carbon Disclosure Project's efforts to increase their emerging-market coverage by over 500 companies. The initiative also was supported by the United Kingdom’s Department for International Development and the Global Environment Facility.

IFC is the only international financial institution focused exclusively on the private sector, the so-called "engine" of sustainable development in emerging markets. Along with IBRD, it is currently seeking a capital increase to strengthen its ability to create opportunity for the poor in developing countries-including by supporting low-carbon growth in those countries.

IFC's new investments totaled $14.5 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis.

Website: www.ifc.org

Reprinted with permission from SustainableBusiness.com

By Joe Walsh

In this space last week, I wrote a column that I thought might draw the ire of some greens for its cynical outlook on Copenhagen. Instead, it drew a fair amount of attention from readers concerned that I had glossed over the significance of “Climategate.” Like that column, this one is not about Climategate in the broader sense, but about its impact on the goings-on this week in Denmark. And, as we look back at week one of COP-15, last week’s column looks to have been borne out in that context. Join me for this more complete review of the political freeze that has taken over the warming talks.

Climategate is Good as Gone…For Now - As expected, Climategate disappeared as fast as it rose to the top of Google’s search rankings. Worldwide, media reports are focusing on the very compelling, very well-packaged stories about climate change impact and emerging technologies that were in the can as this conference approached. The email controversy may well reemerge at the conclusion of the conference; and, as I noted in comments responding to reader comments to last week’s piece, Climategate may ultimately be seen as the sort of watershed moment that was needed to reignite some passion in this debate. But, at least in the world-within-the-world at Copenhagen this week, Climategate-stoked doubt about climate change is not the issue.

US Fizzles- After months of pressure and rhetoric in US politics, marked by doomsday scenarios that would befall the world should the US not have a climate change bill on the President’s desk before Copenhagen, the US delegation arrived with the following: an EPA declaration that was inevitable and had been dramatically undersold in favor of pushing for legislation; and, a December 10 announcement by a tri-partisan (including an independent) group of Senators, which purported to “outline the basics” for a domestic climate bill that might come to the floor in the spring. In a week when the President of the United States delivered what has to be the most impassioned defense of war in the history of Nobel Peace Prize acceptances, his delegation at the climate conference tried to claim leadership in a very tricky geopolitical negotiation after having failed to clear the relatively less complex partisan, political and special interest hurdles at home.

China Sizzles, But Where’s the Steak? China is the Donald Trump of climate change action. Big promises, high-dollar investments. Big, big, big! 800 turbines in three gorges? Bring it on! Planting enough new trees to cover all of Norway? Why not! Just don’t ask them to cut emissions. First, it is not practical to do so, their growth makes it impossible. Second, they don’t have the money to pay for it (probably because it is all on loan to the US, but that is another column for another blog). And, the reports coming from state-controlled media do not offer much comfort. Long term, China looks like a promising green partner for the world. They are going to continue to develop clean energy technologies domestically and will continue to flood the global market with low-cost, Chinese-fabricated panels, blades and batteries.

Right now, the Chinese would be foolish to have fabricators sell those products to domestic buyers and capture the revenue in yuan when they could be sold overseas for more valuable dollars, Euros and pounds. Will they ever reach a tipping point where some of those items will stay in country instead of being produced exclusively for export? That tipping point appears to be approaching for jeans, TVs and other Chinese-made goods, but clean energy technology? Don’t hold your breath.

For signs of success in week two, watch the tail numbers of planes at Copenhagen Airport - It will be interesting to see who actually shows up in Copenhagen next week. We know President Obama is en route, but will the Russians, Chinese or Indians keep their dates to have heads of state make the trip to town? Probably. Will it move the needle? I doubt it.

In the end, the problem with Copenhagen cannot be solved by next week, no matter who is at the table. That problem can best be discerned in the verb tense most-often used in speeches, discussions and negotiations there: the future. For thirty-five years, the public (including skeptics) have been hearing about what WILL happen to the planet and about the technologies that WILL emerge to make clean energy affordable. The urgency has not come yet. The world is not ready. Let us hope that by the time we are, it is not too late.

Reprinted with permission from Red Green and Blue

By Timothy B. Hurst

While Danish wind energy giant Vestas Wind Systems is issuing furloughs to some 500 workers at the company’s Colorado blade plant, GE Power & Water is celebrating more positive news with the announcement of its involvement in the $1.4 billion, 338-turbine Shepherd’s Flat Wind Farm in Oregon.

Because the proposed Shepherd’s Flat wind farm is located in the Columbia River Gorge area, where cheap, abundant hydropower is hard to compete with on a cost per kWh basis, the power produced at Shepherd’s Flat will–in theory–travel nearly the length of the West Coast of the U.S. before reaching the end-users of Southern California Edison (SCE), the nation’s largest purchaser of renewable energy.

Like other investor-owned utilities in California, SCE is racing to meet the state’s renewable energy requirement of 20% by 2010 and having to look out of state for new renewable capacity. But try as they may to make the mandate, making that target is going to be unlikely, Edison CEO Ed Craver told me when I spoke with him at the company’s Electric Vehicle Technology Center in November.

“Transmission is creating the bottleneck to twenty percent by 2010, not the actual projects,” said Craver. However, those California utilities that are unable to meet the targets because of transmission bottlenecks will be eligible for a waiver until those bottlenecks are cleared, Craver added. SCE currently serves 16% of its customer load with renewables every day, well above the national average of 4%.

North American debut of GE’s 2.5-megawatt wind turbine The $1.4 billion contract awarded from independent power producer Caithness Energy to supply wind turbines and provide services for the project, marks a huge step forward for GE’s growing wind turbine division.

Should everything be approved by state regulators, the Shepherds Flat wind farm will be the first in North America to deploy GE’s 2.5xl wind turbine. The 2.5-MW builds upon the success of GE’s 1.5-MW wind turbine–the world’s most popular–which has been deployed over 12,000 times in Europe and Asia.

Economic impacts of the wind farm are nothing to be sneezed at, especially in an area that has been hit by fickle agricultural markets and a crumbling timber industry. Caithness Energy estimates that the $2 billion project will employ 400 workers during construction and 35 during operation, injecting $16 million annually into the Oregon economy. Construction will begin in 2010 and will be completed in 2012.

Image courtesy of GE

Reprinted with permission from Earth and Industry