Monday, December 22, 2008

"Trade and the Environment" Obama style

Whenever I hear US government officials talking about how trade deals must not be allowed to harm the environment it is clear all they are really talking about are new and ingenious trade barriers.

Now Obama seems to be jumping on this particular bandwagon. To be fair, the environment comes a poor second to the "workers". Another excuse for higher rather than lower trade barriers.

Historically, recessions tend to lead to greater protectionist policies which exacerbates the recession. It appears history is destined to repeat itself.

Trade Deals Must Protect Environment: Obama [PlanetArk]

WASHINGTON - The United States will insist on strong protections for the environment and for workers in future trade deals, President-elect Barack Obama said on Friday as he introduced his nominee to be chief U.S. trade negotiator.

Former Dallas Mayor Ron Kirk "will help make sure that any agreement I sign as president protects the rights of all workers, promotes the interests of all Americans, strengthens American businesses, and preserves the planet we all share," Obama said at a news conference in Chicago.

The focus on what Kirk described as a "values-driven" trade agenda could complicate efforts to complete the 7-year-old Doha round of world trade talks.

Many developing countries are suspicious of efforts to include binding labor and environmental provisions in trade pacts because they believe they could be used as an excuse by rich countries to block imports.

Obama has promised one of his first acts as president would be to call the president of Mexico and prime minister of Canada to begin negotiations to "fix NAFTA" by adding stronger labor and environmental provisions.

Although Kirk is little known in global trade circles, Obama said Kirk's experience as a big city mayor from 1994 to 2001 prepared him to be U.S. trade representative.

"Ron helped steer one of the largest economies. He's seen the promise of trade, but also its pitfalls, and he knows there is nothing inconsistent about standing up for free trade and standing up for American workers," Obama said.

Obama opposes a free trade deal the Bush administration negotiated with Colombia on grounds that the staunch U.S. ally has not done enough to reduce murders of trade unionists.

He also wants to renegotiate a Bush administration trade deal with South Korea. Obama has said the pact would open the U.S. market to more South Korean cars without sufficiently opening that country's market to more U.S. auto exports.


Thursday, December 18, 2008

Apoplectic apocalyptic greenies go ga-ga down under

It would appear that Miranda Devine of the Sydney Morning Herald has little time for climate change activists.

The use of the phrase "apoplectic apocalyptic greenies threw shoes" was enough to justify a blog post. Other terms of endearment include:

"Australia's screeching environmental banshees" and

"...more crazed greenies" and

"...fundamentalist zealots of the climate change movement"

If Miranda represents public opinion in Australia is it any wonder that they did not sign up to the Kyoto protocol. The irony of course is that Australia will be one of the countries worst hit by climate change.

Miranda concludes with the pithy sentence:

"Even if we reduced our emissions by 100 per cent, as the crazies want us to, our sacrifice would be meaningless."


Greenies go ga-ga over emissions [Sydney Morning Herald]

APOPLECTIC apocalyptic greenies threw shoes at an effigy of Kevin Rudd, broke into a woodchip mill in Tasmania and threatened to move to Europe as part of an orchestrated dummy spit against the Prime Minister's emissions scheme announced this week.

The tantrums from Australia's screeching environmental banshees have barely abated since the Government revealed its plan to cut Australia's greenhouse gas emissions from between 5 and 15 per cent by 2020, an amount deemed too small by green groups.

"It's a decision to see the Great Barrier Reef die before our very eyes," said Greens Senator Christine Milne.

Rudd must be rubbing his hands with glee as the more crazed greenies give him the appearance of being a safe pair of hands on climate change - doing just enough to placate green-aware citizens but not enough to wreck the economy.

But his scheme is a more radical proposal than any other country has adopted.

Professor Bob Carter, a James Cook University geologist, described it yesterday as "the worst single piece of legislation to be tabled in the Parliament since Federation".

"It is a non-solution to a non-problem," he said. "If ever there were a bill that justifies a conscience vote, then this must be it, for it wittingly intends to reduce the living standards of all Australians."


Wednesday, December 17, 2008

"The Incredible Journey of Oil" - video

Excellent video that depicts the history of oil. I am posting this so I know where to find it later - it may be rubbish but the man at Greenfyre likes it.

Students looking at my non-renewables part of the course may find in interesting.

Videobreak: Crude - The Incredible Journey of Oil [The Way Things Break]

H/T Greenfyres

Tuesday, December 16, 2008

Neoclassical versus Ecological economics (again)

The debate continues between the two schools of thought. This article is of interest to those who care about this debate. The MSc in Environmental Economics and Natural Resources at the University of Birmingham is strongly rooted in the Neoclassical economics camp for those interested.

MSc Environmental and Natural Resource Economics

One observation is that this paper was submitted to Ecological Economics in September 2005 and revised in August 2008. That reminds me, I have an EE paper to referee (as usual).

A matter of opinion—How ecological and neoclassical environmental economists and think about sustainability and economics - Lydia Illgea and Reimund Schwarze

The differing paradigms of ecological and neoclassical environmental economics have been described in various articles and books and are also embedded in different professional associations. However, we cannot take for granted that the paradigm debates described in the literature are actually mirrored in exactly the same way in the perceptions and opinions of researchers looking at sustainability from an economic perspective. This paper presents empirical results from a German case study on how economists and others involved in sustainability research from different schools of thought think about the issues of sustainability and economics, how they group around these issues, how they feel about the current scientific divide, and what they expect to be future topics of sustainability research.

We analyze the data using cluster analysis. Based on a literature survey, we generated forty sustainability economics-related statements and asked 196 sustainability researchers about their degree of agreement or disagreement with these statements. In evaluating our survey results, we discuss to what extent the clusters that we identified do—or do not—represent the two schools of thought of ecological and neoclassical environmental economics. We also propose some fields of research that can help to bridge the gaps amongst sustainability economics researchers while clearly marking others that are more suitable for a scientific ‘competition of ideas’. Key results of the study are: We identify two primary scientific clusters, one clearly confirming the existence of the ecological-economics school of thought, and the other largely capturing the neoclassical environmental view. Yet, there are some surprising exceptions: Both schools of thought share a conceptual definition of sustainability that is integrative in considering ecological, societal and economic dimensions (‘three pillar concept’) and is geared at preserving the development potentials of society. We also find a shared critique of ‘pure economic growth’ strategies in our sample. These shared opinions may provide bridging concepts between the schools of thought. Also both clusters agree with respect to a wide range of future fields of sustainability economics research. Yet, the research agenda of the ecological-economics cluster contains a large number of additional topics, primarily related to social, distributional and evolutionary aspects of sustainable development. Strong divides between the clusters that seem to be more suitable for a scientific competition of ideas are primarily related to the question of how to achieve sustainability, including appropriate environmental policies.


"carbon leakage" in action

What is carbon leakage and is the threat real? Industry certainly like to posture but is the highly capital intensive steel industry really that mobile?

This is an interesting area. It turns out that most "industry" will given help in obtaining permits so the impact will be lessened. Companies always want to play the "jobs" card as it pulls at voters and politicians heart strings.

The article includes some interesting facts and figures.

Corus: 'We will quit EU to avoid carbon regime' [Independent]

Philippe Varin, the chief executive of Corus, is threatening to shift the steelmaker's European operations to China unless regulations governing carbon emissions are overhauled.

Mr Varin warned that politicians had to help fund new clean-energy technologies or face the prospect of Corus quitting the UK and Europe.

Corus employs around 25,000 workers in the UK and is in negotiations with unions over pay in an effort to curb large redundancies.

"If we are forced to buy CO2 credits on the market without a system to improve our production process, then we will not produce steel in Europe," said Mr Varin, who is also chairman of the World Steel Association's Climate Change Policy Group. "To cut carbon emissions of steel production, we need breakthrough technology, but this is extremely expensive, costing €200m to €300m to upgrade a one million ton production plant."

Varin, who spoke exclusively to the 'IoS' at the UN Climate Change conference in Poznan, said: "There is no way for us to fund this and pay penalties for our CO2 emissions. This would wipe out all of our profits and put us at a competitive disadvantage with manufacturers in nations which are not subject to carbon caps.

"The only way forward is through improved technology, but this costs money and a carbon tax is not the answer, because manufacturers will just move the growth to other countries. Not only will that kill European industry, but we will produce twice as much CO2."

Estimates suggest that every ton of steel produced in China, where factories are older and less efficient, creates twice as many emissions as in Europe. "Our customers will still need steel, so they will have to import from China or another developing nation and then you have the added CO2 associated with shipping," Mr Varin said.

The steel industry, which accounts for 4 per cent of global emissions, was seeking to replace current carbon abatement schemes established under the 1997 Kyoto Protocol, with a "sectoral agreement", he said. Such a system would give manufacturers free carbon allowances up to an industry-set benchmark and encourage technology transfer between East and West.

Steelmakers also want emissions reduction credits for deploying new technologies such as carbon capture and storage, which is currently excluded from the Carbon Development Mechanism.

Mr Varin's suggestion of a sectoral agreement process for carbon credits was criticised by environmental campaigners. A Greenpeace spokesman said: "Replacing emissions caps with a sectoral approach would mean the end of the Kyoto principles and would be disastrous for the price of carbon."

EU leaders meeting in Poznan agreed to reduce greenhouse gas emissions by 20 per cent by 2020.

In a statement issued by Corus on Sunday a spokesman said: "It is not the case that European carbon regulations are leading Corus to consider physically transferring any of its European production plants assets to locations outside Europe."


The "opponent" and Swedish PhD examinations

Apologies for a lack of recent posts - I have just returned from being an "opponent" for a PhD in Lulea, Sweden. The Swedish PhD examination system is unique and has considerable merits over the UK system that can leave candidates with a feeling of anti-climax after the small 3 person viva voce. This is certainly not the case with the Swedish theatrical approach to the event.

See HERE for details on what the system entails.

The dissertation was called "The Economics of Power Generation and Climate Policy" by Fredrick Pettersson. I am sure it is available somewhere online.

I can certainly recommend visiting the capital of Swedish Lapland. A beautiful and hospitable place. The post examination party certainly lived up to expectations. My ability to catch a flight home in the morning with little ill effect is testimony to the quality of the government supplied beverages. The event was still going strong when I eventually retired around 3am (after a 6.30 start). My thanks to all attendees.

For those interested you can see some photographs of Lulea HERE.

Another observation is that it takes a lot longer to de-ice a plane than a car windscreen although on the last day the temperature was a positively balmy zero.


Cool on the "Cooling on Global Warming"

A recent WallStreet Journal article written by the climate sceptic Benny Peisner (of CCnet fame) explains why the world is cooling on the problem of global warming.

It is interesting that the WSJ should have taken this article which indirectly supports the US "do nothing" approach.

This article demonstrates the role that "spin" plays in newspaper articles. The reason I talk about spin is because the article is factually correct. It is the style of writing that is less palatable.

This one paragraph to be undermines his arguments and should have been left out. With this one, albeit factual paragraph, his inability to put this in context is rather sad.

Perhaps even more important is the growing realization that the warming trend of the late 20th century has, for the last 10 years or so, essentially come to a temporary halt. The data collected by international meteorological offices confirm this. This most peculiar fact is rarely mentioned in policy debates, but it certainly provides decision makers with a vital respite to reconsider their climate policy options.

Otherwise the article raises some important points that need to be discussed not least by economists. This is a good summary of recent events and the issues are of concern and the level of subsidies is something that needs more attention.

Cooling on Global Warming [WSJ]

Participants at last week's United Nations climate conference in Poznan, Poland, were taken aback by a world seemingly turned upside-down. The traditional villains and heroes of the international climate narrative, the wicked U.S. and the noble European Union, had unexpectedly swapped roles. For once, it was the EU that was criticized for backpedalling on its CO2 targets while Europe's climate nemesis, the U.S., found itself commended for electing an environmental champion as president.

The wrangle over the EU's controversial climate package at a separate summit in Brussels wrong-footed the world's green bureaucracy. The EU climate deal was diluted beyond recognition. Instead of standing by plans to cut CO2 emissions by 20% below 1990 levels by 2020, the actual reductions might be as trivial as 4% if all exemptions are factored in.

The Brussels summit symbolizes a turning point. The watered-down climate deal epitomizes the onset of a cooling period in Europe's hitherto overheated climate debate. It may lead eventually to the complete abandonment of the unilateral climate agenda that has shaped Europe's green philosophy for nearly 20 years.

The reasons for the changing political atmosphere in Europe are manifold. First, the global economic crisis has demoted green policies nearer to the bottom of the political agenda. Saving the economy and creating jobs take priority now.

Second, disillusionment with the failed Kyoto Protocol has turned utopian thinking into sobriety. After all, most of the Kyoto signatories failed to reduce their CO2 emissions during the last 10 years. There are also growing doubts about the long-term viability of the EU's Emissions Trading Scheme. The price of carbon credits has collapsed as a result of the financial crisis. The drop in demand and the recession are likely to depress carbon prices for years to come. As a result, the effectiveness of the extremely volatile scheme is increasingly questioned.

Third, a number of countries have experienced a political backlash over their renewable energy schemes. Tens of billions of euros of taxpayers' money have been pumped into projects that depend on endless government handouts. Each of the 35,000 solar jobs in Germany, for instance, is subsidized to the tune of €130,000. According to estimates by the Rhine-Westphalia Institute for Economic Research, green subsidies will cost German electricity consumers nearly €27 billion in the next two years.

Perhaps even more important is the growing realization that the warming trend of the late 20th century has, for the last 10 years or so, essentially come to a temporary halt. The data collected by international meteorological offices confirm this. This most peculiar fact is rarely mentioned in policy debates, but it certainly provides decision makers with a vital respite to reconsider their climate policy options.

Above all, Europe's politicians have recognized that green taxes have turned into liabilities that may undermine economic stability and their chances of re-election. As German radio Deutsche Welle put it last week: "With the recession tightening its grip on the German economy, [Chancellor Angela] Merkel is betting that job reassurance is more important to the average worker than being a pioneer in tackling climate change."

Nowhere has the fundamental change of the political landscape been more pronounced and less expected than in Germany. For more than 20 years, Europe's economic powerhouse has been the major bastion of green politics.

In the 1990s, Angela Merkel steered and implemented Europe's Kyoto policy as Germany's first environment minister. Now serving as chancellor, she was hailed as Europe's climate savior after playing host to last year's G-8 summit in Heiligendamm. Only 18 months later, however, she no longer wears a halo. As a result of a concerted campaign by Germany's heavy industry, as well as growing opposition from within her Christian Democratic party, Mrs. Merkel has been forced to abandon her green principles and image.

The deepening economic crisis seems to transform the mood of the German public. Next year's general election looms large, and voters right now are worried about the economy and jobs, and not green issues. In early December, more than 10,000 angry metal workers and trade unionists -- most of them from Germany -- protested outside the European Parliament in Brussels against the EU's climate policy, which they fear will increase unemployment.

For many international observers, the ease with which Mrs. Merkel overturned her celebrated climate policy has come as a shock. But she was almost the last member of her Christian Democratic party willing to accept that a change in strategy was necessary given the immense costs of the EU's original climate plans. In fact, her party demanded that Mrs. Merkel veto the climate package if German industry did not receive an exemption from the Emissions Trading Scheme's auctioning of carbon credits. The exemption was duly granted.

Perhaps the most critical factor for Mrs. Merkel's almost unchallenged about-face is the vanishing strength of the Social Democratic Party, whose members were once among the most forceful climate alarmists. Mrs. Merkel's junior coalition partner has lost much of its support in recent years. And amid growing fears of a deepening recession, there are also signs of a split within the party on climate and energy issues.

At the forefront of the left-wing opposition to the EU's climate policy has been EU Industry Commissioner G√ľnter Verheugen. The German Social Democrat has been arguing throughout the year that the climate targets should only be accepted if "truly cost-effective solutions" could be found. Other prominent dissenters in his party include Hubertus Schmoldt, the head of the mining, chemical and energy industrial union, who has recently called for a two-year postponement of the climate package.

In part as a result of German -- as well as Italian and Polish -- objections, Europe's climate package did not survive in its original form. The inclusion of a revision clause, pushed by Italy, is particularly significant as it makes the EU's climate targets conditional on the outcome of international climate talks. If the U.N.'s Copenhagen conference in 2009 fails to seal a post-Kyoto deal, it is as good as certain that some of the EU's targets will be further cut. By linking its decisions to those of the rest of the world, Europe has begun to act as a more rational player on the stage of international climate diplomacy.

Instead of yielding to the siren calls of climate alarmists, European governments would be well advised to focus their attention on developing pragmatic policies capable of safeguarding their industries, labor forces and environment at the same time.


The Great Economist Carbon Offset Debate

From the inbox:

The Economist is currently running a new debate on the usefulness or otherwise of carbon offsets.

Personally, I am highly sceptical. 55% agree with me on the question although I could be convinced otherwise - I had better start reading.

"This house believes that carbon offsets undermine the effort to tackle climate change."

Are carbon offsets a convenient loophole or a real way to reduce emissions?

The Economist announces an online debate that is underway on the effectiveness of carbon offsets. The proposition for this debate is: "This house believes that carbon offsets undermine the effort to tackle climate change."

The debate began on December 4th and runs to December 16th 2008. Michael Wara, Assistant Professor at Stanford Law School, and Henry Derwent, President and CEO, International Emissions Trading Association, are contesting the proposition. Readers are encouraged to participate in the conversation, contribute opinions and cast a vote for or against the proposition. The winner will be decided by popular vote on Tuesday December 16th. The opportunity for readers to submit comments will be open until January 2.

Carbon offsets are a sort of currency--a financial instrument which represents a reduction in emissions and can be bought and sold. They play an increasingly important part in official and voluntary programmes to cut emissions. But they are also increasingly controversial. "Are carbon offsets essential to our efforts to tackle global warming, or do they undermine those efforts? Join us as we debate this crucial issue," says Emma Duncan, debate moderator, deputy editor and chief climate change writer of The Economist.

Arguing for the Proposition: Michael Wara, Assistant Professor at Stanford Law School

An expert on environmental law and policy, Michael Wara’s research focuses on climate policy and regulation, both domestically and internationally. Professor Wara’s current scholarship addresses the performance of the emerging global market for greenhouse gases and mechanisms for reducing emissions, especially in developing countries.
Professor Wara joined Stanford Law in 2007 as a research fellow in environmental law and as a lecturer in law. Previously, he was an associate in Holland & Knight's Government Practice Group, where his practice focused on climate change, land use and environmental law. The results of his scientific research have been published in premier scientific journals, including Science and Nature.
Professor Wara is also a faculty fellow at the Program in Energy and Sustainable Development in Stanford’s Freeman Spogli Institute for International Studies.

Arguing for the Opposition: Henry Derwent, President and CEO, International Emissions Trading Association.

Henry Derwent became the President and CEO of the International Emissions Trading Association (IETA) in February 2008. Previously, as international climate change director for the British government, he oversaw the UK’s role in the international negotiations, in the G8 (especially as the prime minister's special climate change representative during the UK G8 Presidency in 2005) and in other forums.
Mr Derwent has been closely associated with the development of greenhouse-gas trading in the UK and Europe from its earliest days. His responsibilities in the UK’s Department of the Environment covered all aspects of climate change and sustainable energy in the UK, as well as air quality and industrial pollution control, chemicals, biotechnology and genetic modification, the nuclear industry and radioactivity.

Throughout the course of the two-week debate, expert Guest Participants have been lending colourful commentary to the lively discussion, including:

- Fred Krupp, President, Environmental Defense Fund
- Mark Trexler, Director, Global Consulting Services, EcoSecurities
- Kevin Smith, Researcher with Carbon Trade Watch
- Carl Pope, Executive Director, Sierra Club
- William Tyndall, Managing Director, Natsource Asset Management, LLC
- Anja Kollmuss and Michael Lazarus, Scientists at Stockholm Environment Institute

The Economist Debate Series is an open community forum – no paid subscription is necessary and anyone can participate. This debate is sponsored by Intel.

Wednesday, December 10, 2008

Straight Outta Poznan

Too many stories and too little time. PlanetArk shows the way. I am afraid you will have to cut and paste the link to read further. There are many stories worth pointlessly commenting on but they shall have to wait.

Poland has never had it so good.


East Africa Set For Geothermal Power Expansion: U.N.

Climate Fight Begins At Home, Insulation Firm Says

Carbon Trade In U.N. Climate Spotlight

Germany, Poland See EU Summit Compromise On Climate

Climate Talks To Fail Without Tough CO2 Goals: U.N.

Industry, Investors Urge Strong U.N. Climate Deal

Solar Panel Glut Expected In 2009: Suntech

U.N. Climate Adaptation Fund Running Out Of Cash

Ambitions For 2009 U.N. Climate Pact Fade In Poznan

Everyone Could Get CO2 Permits: China study

Women Demand Bigger Say In U.N. Climate Talks

U.N. Says Climate Change May Uproot 6 Million Annually



As I prepare to fly to northern Sweden for a PhD viva I am mentally preparing for the -15 temperatures by looking at pictures of snowflakes.

There are individual pictures of each snowflake at the link HERE.

They do not all look like the snowflakes one makes at school out of paper plates and some are surprisingly but impressively dull.


Poznan - the place where the earth was doomed?

Is the world really drinking in the last chance saloon? The Independent seem to think so. The current negotiations in Poznan are of global importance. It is worth following events closely.

A new global deal will be very hard to thrash out for reasons we have discussed at length in this blog. I remain pessimistic (a natural reaction for an economist). The financial crisis and deepening global recession (which I naturally believe will will get a lot worse and be deeper and longer than governments and individuals expect) will not help. Developed and developing countries have more immediate worries.

I expect, naturally, that we will see significant temperature rises and the associated catastrophes. Time to button down the hatches.

Climate change: A battle for the planet [Independent]

Summing up what many scientists, environmentalists and politicians now think about the threat of climate change is simple: the world is drinking in the last chance saloon.

Time is still available to tackle the warming of the atmosphere, which every government (including that of George Bush) today accepts is real, and being caused by human actions. But the window of opportunity is rapidly closing, and the last chance for the world to act in concert to bring the process under control is clearly visible: it is the UN Climate Conference in Copenhagen scheduled for December 2009.

The international community will meet to try to agree a new global deal to cut rising emissions of greenhouse gases – the waste gases from industry and transport, principally carbon dioxide, which are retaining the sun's heat in the atmosphere and causing temperatures to rise.

But, if such a deal is not achieved in Denmark, many observers feel it will be too late subsequently to stop climate change causing devastating problems for the world in general and human society in particular, from the widespread failure of agriculture to the swamping of low-lying countries by sea-level rise.

This week, in the Polish industrial city of Poznan, a dress rehearsal for Copenhagen is taking place. Diplomats and officials from every member state of the United Nations have come together to shape the outline of next December's agreement – or at least, to try. For it would be difficult enough to get 150-plus delegations, each with its own domestic pressures and national interests, to agree on the colour of an orange, never mind what, if it is successfully negotiated, will probably be the most complex treaty the world has seen.

Who is to do what? That's the simple, but fantastically difficult question at the heart of everything. Most of the excess CO2 (above normal historical levels) currently in the atmosphere was put there by the rich developed countries such as the US, Britain, Germany and Japan, in the two centuries since industrialisation began, and particularly in the years since the end of the Second World War when economic growth shot forward so dramatically. But developing countries such as China, India, Indonesia and Brazil are rapidly catching up, and it is probable that China, for example, with its exploding economy growing at 10 per cent a year, has overtaken the US to become the largest CO2 emitter in the world.

So who is more to blame? How are we to balance what is known in the jargon as the burden-sharing? How are we to divide up the pain? (For cutting carbon emissions out of your economy is costly and may restrict your economic growth.) Can China cut less CO2 than the US, even if it is emitting more? Will the US even be willing to make cuts under those circumstances?

The first world climate treaty, the Kyoto protocol, signed in 1997, recognised that nations had "common but differentiated" responsibilities and so it committed the industrialised countries, including Britain and the rest of the European Union, the US and Japan, to making fairly modest reductions in their CO2 by 2010, while the developing countries, led by China, began to monitor their emissions, but were not obliged to cut them. But Kyoto ran aground. Never mind that few nations (Britain being a rare exception) will meet their modest Kyoto targets. George Bush withdrew the US in 2001 and robbed it of its significance; without the world's biggest polluter involved, Kyoto ceased to mean anything.

What is to be negotiated at Copenhagen is a successor treaty to Kyoto, and it is clear what that must involve, if it is to succeed. Firstly, all the major industrialised countries, including America, must agree a programme of deep cuts in their emissions. They have to lead the way.

Secondly, the developing countries, led by China, have to do something in terms of reducing their emissions; they cannot simply continue with business as usual.

Thirdly, there will have to be new flows of funds from the rich nations to the developing countries, to help them take action, both to cut their emissions, and to protect themselves againstthe effects of climate change which will be unavoidable, such as sea-level rise.

And fourthly, there may have to be a special agreement to protect the world's forests, which lock up a vast amount of the Earth's carbon.

If such a deal is eventually done, it will be close to the wire; it will be behind closed doors in Denmark, brokered at the last minute between pragmatic and powerful people. The original Kyoto agreement was reached in this way, in the early hours of the morning. An important player was Al Gore, who was then the US Vice-President (and who has since gone on to become, with his film An Inconvenient Truth, the world's single most influential voice on climate change). Another was Britain's John Prescott, who then combined the jobs of Deputy Prime Minister and Environment Secretary – Kyoto was probably his finest hour. Perhaps the key player was the Argentine Raul Estrada, chairman of the central negotiating committee, who rescued the talks when they seemed on the brink of collapse.

Such figures will be necessary in Copenhagen. One of them will almost certainly have to be Chinese. But, towering above them all is one new figure: Barack Obama. The President-elect has already made it clear he sees tackling global warming as a priority, and he will reverse George Bush's obstructionism and fully re-engage with the talks. The election of Mr Obama was like an electric shock: it changed the dynamic and meant a deal was possible; if the US were to take a leading role, it would mean it was very possible. Britain's new Energy and Climate Change Secretary, Ed Miliband, who is taking part in the Poznan talks this week, wants a leading role for Britain, although the UK position, of course, is part of the position of the EU.

Therein lies a difficulty, as this week the EU is trying to finalise its own energy and climate package – with some difficulty. This aims ambitiously at member states providing 20 per cent of their energy requirements from renewable sources by 2020, and cutting 20 per cent of EU carbon emissions by the same date, if no global climate deal is achieved at Copenhagen – and 30 per cent if a global deal is achieved. Some member countries, principally Poland, Italy and the Czech Republic, are unhappy with this, and it is possible that European heads of government (including Gordon Brown), who will try to complete the deal tomorrow and on Friday, may have to secure their adhesion by watering it down.

This possibility worries environmentalists and other observers in Poznan, who were hoping that if the EU set a forceful example, a very positive statement about the way forward to Copenhagen might be agreed by the end of the week. Another worry is that the Obama effect is not yet being felt: remember that it remains the Bush administration until the new president is inaugurated on 20 January. It is possible that the Poznan declaration may not be as positive as many would like.

But what cannot be disregarded is the pressure of the science, which gets more ominous. "The world desperately needs an effective equitable global deal to be secured in Copenhagen next year, and Poznan fires the starting gun on that process," said Robin Oakley, head of climate and energy for Greenpeace UK. "At the moment, we are heading for something like four degrees of temperature rise, which would be catastrophic," said Ed Matthew, head of climate change for Friends of the Earth. "We are running out of time."


Tuesday, December 09, 2008

Water Wars: China and India square up

In a world of uncertainty and increasing temperatures it is almost certain that military conflict will erupt over the one commodity that really matters. Not gold or oil but water.

From an environmental economics perspective the externalities of river diversion are all too clear. Those downstream of a river are at the mercy of those upstream.

When the upstream country is China and the downstream country is India it is not hard to see tensions in the region rising.

There are a number of telling quotes:

Chinese Prime Minister Wen Jiabao has said that water scarcity threatened the very "survival of the Chinese nation".


Increasing consumption of water, rapid industrialization and pollution have rendered the waters of many of China's rivers unusable.

So what is the story. Read on:

India quakes over China's water plan [Asia Timess]

BANGALORE - Even as India and China are yet to resolve their decades-old territorial dispute, another conflict is looming. China's diversion of the waters of a river originating in Tibet to its water-scarce areas could leave India's northeast parched. This is expected to trigger new tensions in the already difficult relations between the two Asian giants.

Prime Minister Manmohan Singh is reported during his recent Beijing visit to have raised the issue of international rivers flowing out of Tibet. Chinese Prime Minister Wen Jiabao has said that water scarcity threatened the very "survival of the Chinese nation".

The river in question is the Brahmaputra, which begins in southwestern Tibet where it is known as the Yalong Tsangpo River. It flows eastwards through southern Tibet for a distance of about 1,600 kilometers and at its easternmost point makes a spectacular U-turn, known as the Shuomatan Point, or the “Great Bend”. This is just before the river enters India, where it is joined by two other major rivers; from this point of confluence it is known as the Brahmaputra. It then snakes into Bangladesh, where it is joined by the Ganges River to create the world's largest delta before emptying into the Bay of Bengal.

It is at the Great Bend that China plans to divert water, in addition to its hydroelectric power project that is expected to generate 40,000 megawatts of power. The diversion of the waters is part of a larger hydro-engineering project, the South-North water diversion scheme, which involves three man-made rivers carrying water from the icy Tibetan plateau to the arid north.

This water diversion scheme will draw from the waters of the Yalong, Dadu and Jinsha rivers, which rise in the Tibetan plateau, and channel them to the Yellow River. The aim of the project is to provide water for human use, including farming and industry in China's water-scarce areas in the north and northwest. This water diversion project involves three diversion routes - the eastern, central and western routes. The diversion of the Yalong Tsangpo at the Great Bend is the western route of the project - the most technologically challenging and controversial of the three routes.

For Beijing, the argument in favor of the water diversion project is simple. More than a quarter of China is classified as desert. Its north and northwest areas are water scarce. Increasing consumption of water, rapid industrialization and pollution have rendered the waters of many of China's rivers unusable. Besides, sections of the Yellow River run dry. In contrast, rivers that rise in the Tibetan plateau's glaciers have much water. Once completed, the water diversion scheme is expected to transfer over 40 billion cubic meters of water annually to China's water scarce areas, relieving China's thirst to a significant extent.

It is true the Tibetan plateau is a source of much water. It is Asia's principal watershed and the source of 10 of its major rivers, including the Yalong Tsangpo/Brahmaputra, the Sutlej and the Indus. China, India, Bangladesh, Nepal, Pakistan, Thailand, Myanmar, Laos, Cambodia and Vietnam, indeed 47% of the world's population, are dependent on water rising in the Tibetan plateau.

But while rivers with sources in the icy Tibetan plateau are rich in water, critics of the water diversion project say they are not inexhaustible, as Chinese officials claim. The Tibetan plateau is ice-covered but it is an arid desert with very little rainfall. The source of much of its water bodies and rivers is glaciers, which are melting due to global warming. If, alongside the impact of rising temperatures on glaciers, China diverts water from its natural course, Tibet will be a water-scarce region in a few decades. Critics also point to the environmental and ecological destruction it is likely to cause.

The water diversion project at the Great Bend spells disaster not only for the Tibetan plateau but also for the lower riparian countries - India and Bangladesh. These countries view the project with some concern as it represents a direct threat to the lives and livelihoods of millions of people living downstream.

With the Yalong Tsangpo's waters being diverted, the amount of water in the Brahmaputra will fall significantly, affecting India's northeast and Bangladesh. It will severely impact agriculture and fishing there as the salinity of water will increase, as will silting in the downstream area.

A shortage of water in the Ganges has already affected the lives and livelihoods of millions in Bangladesh, pushing them to migrate to India, especially to its northeast. This migration of Bangladeshis has changed the demographic composition of vast tracts in the northeast (especially in Assam) and triggered serious ethnic conflicts there. A shortage of water in the Brahmaputra will accentuate these problems to dangerous levels.

There is concern too that with the water diversion project taking off, China will acquire great power and leverage over India, worsening tensions between these two countries.


It seems that India can only watch helplessly as China steams ahead with its water diversion ambitions.


India and climate change - why emission limits for developing countries will not work

In this blog we have often gone through the arguments for why the West should not and cannot preach to the newly developing countries on emission limits.

The Indian position and the fundamental problem with coming to a new multinational agreement is summarised in this recent Guardian article.

This single quote gets to the very heart of the problem. It is hard to disagree.

"In India I need to give electricity for lightbulbs to half a billion. In the west you want to drive your Mercedes as fast as you want. We have 'survival' emissions, you have lifestyle emissions.

It is difficult to argue against any of the points raised in this article. The West needs to take the lead that much is clear. China could justifiably repeat all the points below.

The problem for India is that it is one of the countries that will be hit hardest by climate change so sitting back and doing nothing is not really an option. This is a game of chicken with potentially very serious consequences.

India won't accept emissions limits, says climate envoy [Guardian]

India is not a "major emitter" of greenhouse gases and will not volunteer to take on responsibilities that would see it accept legally binding limits, the country's special envoy on climate change has told the Guardian.

Shyam Saran, India's top negotiator at the UN climate conference which begins in Poznan today, said capping the country's emissions would threaten the country's growth and prevent it from alleviating "energy poverty" which sees 500 million people live in darkness.

"In India I need to give electricity for lightbulbs to half a billion. In the west you want to drive your Mercedes as fast as you want. We have 'survival' emissions, you have lifestyle emissions.

"You cannot put them on the same basis. I am trying to give a minimal commercial energy service. Whereas you are not prepared to give up any part of your affluent lifestyle or give up consumption patterns."

The diplomat, who was appointed earlier this year after successfully negotiating a key nuclear deal with Washington, said that Barack Obama's election in the United States was a "hopeful sign" and that the president-elect had already written to the Indian prime minister saying that he wants to work with India on climate change.

Saran said the US position in recent years had been one where the negotiators will not accept "any kind of restraint".

He said: "The US says in talks that until 2025 they will not accept any emissions reduction target … They are willing to accept a vague political target by 2050 but nothing in the interim.

"The current position is that. That may undergo a change [with Barack Obama] but we will wait and see."

India also had concerns that the global financial crisis will see climate change fall off the political agenda – and expressed surprise at the ease at which money has been found to cope with the slowdown.

"What we are saying is that if in a compelling crisis governments are able to find the resources amounting to hundreds of billion of dollars then what about climate change?

"So you able to mobilise hundreds of billions of dollars to deal with an economic crisis bust not able to mobilise part of that to meet a planetary crisis?"

The Indian government has repeatedly pointed out that developed countries promised under United Nations Framework Convention on Climate Change adopted in 1992 in Rio de Janeiro that poor countries would get cash and know-how to deal with climate change. Yet little has arrived.

"The commitment was to transfer technology and commitment to transfer adequate financial resources. It is not charity. It is not overseas development assistance. It is a a legal commitment to climate change. Since 1992 what is the record on the technology transfer and capital? Nothing."

Instead the Indian government suspects that rich nations have been using "trade threats" to withhold such funds and technology.

"What the west is saying is open up your markets and give us a congenial investment climate and capital and technology with come in. My government will not commit on these terms. These are simply trade threats."

Saran also pointed out that rich nations had failed to meet their own targets made under the Kyoto protocol – and instead are attempting to scapegoat China and India.

"[Developed nations] have not met their targets. Emissions have increased not decreased. Then [developed nations] say there is something wrong with this agreement and the problem is not us. You India and China, you really are the problem. This simply is not true."

Saran said that calls for "extra" commitments for countries like India ignore the fact that their per capita emissions - around one tonne - are much lower than those in developed economies. An equal emissions entitlement per person is, in his view, the minimum requirement for fairness.

"You have a little more than 20 tonnes per capita of carbon dixoide in the US … most of the Europeans have 10 to 12 and even China has little more than six tonnes. By no stretch of the imagination could India be included as a major emitter."

The Indian prime minister, Manmohan Singh, has said that India would be willing to undertake to keep its per capita emissions below those of industrialised countries, thus giving the latter a strong incentive to reduce their emissions as quickly as possible.

"India is willing to accept a limitation but giving you a challenge. It is you that needs to be ambitious. Not tomorrow. Not the day after. It is about long-term convergence to lower per capita levels."

India is already being affected by climate change. The frequency of catastrophic weather events such as flash flooding, say Indian meteorologists, is increasing. Clouds of brown soot cover the skies above the Indian Ocean for months each year.

Agricultural scientists in the subcontinent note rising temperatures caused wheat yields to drop by 10% in recent years. Saran says the cost for mitigation and adaptation already tops $20bn (£13bn).

"We estimate about 2%-2.5% of India's GDP already being spent [because of climate change] for which we are not responsible. That cost will only increase.

"Because even if tomorrow go for zero emissions climate change will continue to take place. Not because of current emission but because of cumulative emissions of 200 years."


Brave New Climate blog

An excellent "climate change" blog to check out:
"Getting to grips with the brave new world of future climate"

Recent posts include:

Managing catastrophic climate risk - the six step plan

The smokescreen of outdated emissions reduction targets

Response to a wine industry climate change skeptic

The articles are infrequent but of high quality (with pictures).


Monday, December 08, 2008

Why Brazil rejected offset money from the rich to save the Amazon

To answer the question I raised in the previous post on "why did Brazil reject the idea of developed country money to prevent deforestation" here is the answer courtesy of PlanetArk.

The arguments appear sound. The fear that the lure of billions of dollars of easy money would lead to an Amazon land grab are well made and undoubtedly correct. The fears of indigenous people are very real. Brazil appears to have taken the correct stance politically but whether the environment will suffer as a consequence of this decision will not be known for some time.

Rich, Poor In Dispute Over Rainforest Cash [PlanetArk]

POZNAN - Brazil ruled out on Thursday letting rich countries offset their greenhouse gas emissions by helping to save the Amazon rain forest, an idea under active discussion by the European Union.

Indigenous peoples attending United Nations-led climate talks in Poznan protested that they had no chance of seeing such carbon cash, and appealed instead for money first to root out corruption and cement their land rights.

The global carbon market works by putting a cap on greenhouse gases in rich countries. They can exceed these targets, but only if they pay for corresponding emissions cuts in the developing world, in a system called carbon offsetting.

EU member states debated on Thursday widening that scheme to allow "forest offsetting" -- letting countries and companies compensate for excess carbon emissions by funding tropical forest conservation.

"The EU is discussing this right now," said Brice Lalonde, representing France, holder of the EU Presidency, in December 1-12 talks in Poland, meant to push for agreement on a new climate treaty by the end of next year to replace the Kyoto Protocol.

A French draft paper seen by Reuters on Wednesday suggested the bloc could allow forest offsetting as an way to help some companies meet carbon obligations more cheaply during a recession. That would mark a reversal of proposals by the EU's executive Commission in October.

Worldwide, an area of forest greater than the size of Greece is lost every year, contributing to about a fifth of the global greenhouse gas emissions blamed for global warming.

Last week Brazil said the rate of Amazon deforestation increased in the year to July for the first time in four years.

But the country would block the use of offsets for forest protection under a new climate treaty, Brazil's representatives told Reuters on Thursday, explaining that would absolve rich countries from cutting their own emissions.


"Brazil has always been against offsets in forestry," said Sergio Serra, Brazil's ambassador for climate change.

That poured cold water on hopes from most other tropical forested countries, seeking money for protecting their forests under a new climate treaty. Advocates include Indonesia, Mexico and India, analysts say.

Brazil supported instead a public funding approach, building for example on a $1 billion pledge from Norway this year to a new Amazon Fund, aimed at improving conservation and the enforcement of laws against deforestation.

A delegate from Equatorial Guinea said the two approaches could be combined. "It should be open both for those who want to raise public money and for those who want to go to the (carbon) market. But it has to have the market aspect," Deogracias Ikaka Nzamio told Reuters.

Some indigenous peoples groups oppose a carbon market approach until their tenure rights are made secure, fearing the lure of billions of dollars may trigger a land grab instead.

"Papua New Guineans depend on the land, the forests provide basic necessities, food, traditional medicines, clean water, ancestral ties, everything for them," said Kenn Mondiai, from Papua New Guniea's Eco-Forestry Forum.

The behavior of logging companies had lowered expectations of benefits from the private sector, he told reporters in Poznan. They were supposed to supply infrastructure in forested areas under the terms of concessions, but had not done so.

"There's no hospitals, the roads are poorly built, the bridges are made from logs, the schools are not in place, we haven't seen any benefits on the ground," Mondiai said.


ETS and developing countries

I am currently reading a PhD thesis on "The Economics of Power Generation and Climate Policy" and one chapter concerns the use of Joint Implementation (JI) policy (as part of the Kyoto agreement). This allows a country to finance emission reductions in another country where the marginal costs of reducing pollution are significantly lower.

The European Parliament today issued a warning on the use of carbon offsets.

One question that arises - why did Brazil rule out developed countries paying to prevent the destruction of the Amazon rain forest?

I agree with Hassi's argument that buying abroad prevents the modernisation of domestic industry but this does not mean the scheme is not the most efficient in terms of reducing global emissions.

Euro Parliament Warns On Carbon Offsets [PlanetArk]

BRUSSELS - European nations must scale back their hopes of reaching carbon reduction goals cheaply by paying for easy cuts in the developing world, a leading negotiator in EU climate talks said on Friday.

The global carbon market works by putting a cap on greenhouse gases in rich countries. They can exceed these targets, but only if they pay for corresponding emissions cuts -- known as offsets -- in the developing world.

"It's a dangerous illusion that our emissions reductions can be mainly based on CDMs (offsets) while we continue with business as usual here," said Finland's Satu Hassi, a leading European Parliament negotiator in talks with member states.

The European Parliament shares decision-making with the EU council of ministers on climate change issues.

"This adds to the arguments of those that want to diminish the EU's policy -- they'll say that Europe is about nice words and no real action."

She warned Europe risked buying up all the easiest emissions cuts, leaving developing countries with a harder and more costly task when they come around to making their own reductions.


Hassi's warning coincided with talks toward an international climate deal in Poznan, Poland, at which developing nations also warned of the dangers of offsetting.

Brazil ruled out on Thursday letting rich countries offset their greenhouse gas emissions by helping to save the Amazon rainforest, an idea under active discussion by the European Union and supported by some tropical nations.

Hassi also said that by paying for emissions cuts abroad, European nations would be losing the chance to modernize their own industries and create jobs at home.

"My guess is that rational governments will realize that for their own economies it is better to do emissions reduction investments at home," she told Reuters.

Hassi is leading negotiations on the "effort sharing" legislation -- one of five pillars to EU proposals to cut carbon dioxide emissions by a fifth by 2020.

The legislation covers around 55 percent of European CO2 emissions in areas not covered by the EU's flagship emissions trading scheme, such as transport, heating and agriculture.

But talks have become blocked because EU nations want to achieve about 70 percent of their cuts through offsets, way above the 50 percent limit demanded by parliament.

European nations also refuse to accept parliament's demands for a tough compliance mechanism to penalize countries that break their emissions limits.

Time is short, with less than a week before EU climate ministers meet in Brussels to try and clinch a final EU deal.

"I want to make this deal happen, but I'm not ready to make just any deal," Hassi said. "Success is not just measured by the closure of negotiations. It is also about what it does for the climate."


PhD Workshop in Environmental and Natural Resource Economics 2008

At the University of Birmingham we recently held a workshop on Environmental and Natural Resource Economics for some of the best PhD students in the UK studying environmental economic issues.

I always learn a lot from hearing papers in different areas. Environmental economics has the habit of being interesting even when the topic is something I know nothing about.

The workshop included the following papers.

Tuesday 2nd December

2.00 Tom Murray (Birmingham) Do Geographical Variations in Climate Influence Happiness?
2.45 Edward Manderson (Nottingham) Partial International Emission Trading

4.00 Yun Ham (Birmingham) Convergence in Recycling Rates: A Spatial Econometric Analysis
4.45 Paul Metcalfe (LSE) An Assessment of the Non-Market Benefits of the EU Water Framework Directive for Households in England and Wales
5.30 Venetia Hargreaves-Allen (LSE) Raising Funds for Marine Protected Areas using Visitor and Non-Visitor Values: A Case Study from Belize

Wednesday 3rd December

9.00 Neil Odham (Stirling) Estimating the Contribution of Renewables to our Future Energy Mix using Two Factor Learning Curves: A Modified Approach utilising Patent Counts as an Output Based Measure of Knowledge Stock
9.45 Katrina Mullan (Cambridge) Determinants of Participation in Payment for Ecosystem Services Programmes: Evidence from China

11.00 Charlene Watson (LSE) Forest Carbon and Market Potential in the Bale Mountains National Park, Ethiopia
11.45 Alvaro Calzadilla (Hamburg) Water Scarcity and the Impact of Improved Irrigation Management: A CGE Analysis


Chemical job losses due to ETS - Ratcliffe warns

More column inches devoted to the "climate change legislation costs jobs" fear. It is not surprising that lobby groups and individuals with financial stakes in the sectors affected by the EU's Emissions Trading Scheme (ETS) will try to leverage the press and public opinion in their favour.

Last week it was German steel workers, this week it is UK chemical bosses. With the workers, unions and employers all lined up against climate change regulation it will need some tough politicians to see this through.

One could argue that the weakening of the German position on this is as a direct result of political maneuvering ahead of next years election.

The term "carbon leakage" is gaining currency. The idea that "hundreds of thousands" of jobs will be lost appears to be over doing it a little but headlines need big numbers.

It is indeed a "feverish and last ditch effort" by the chemicals industry to maintain their high profit margins. It is likely that the chemical industry will fall into the "competitive" sector and hence be protected if the German suggest is taken up (see previous post on this blog).

Chemicals boss warns of exodus [Times]

JIM RATCLIFFE, the reclusive billionaire behind Ineos, Britain’s largest private company, has warned Gordon Brown that hundreds of thousands of jobs will be lost if the prime minister commits Britain to tougher EU curbs on carbon emissions.

Ratcliffe issued the warning in a letter last week that was also signed by Paul Thompson, chief executive of GrowHow, the UK’s last remaining fertiliser manufacturer, and Steve Elliott, head of the Chemical Industries Association.

It is part of a feverish, last-ditch effort by the chemicals industry and other big energy users to force changes to the EU Emissions Trading Scheme (ETS) ahead of a summit of EU leaders this week in Brussels, where they are expected to sign off on a bloc-wide climate-change package.

The industry argues that the next phase of the ETS — which proposes to incorporate industries now excluded from the programme such as chemicals, cement and glassmakers from 2013 – will lead to “carbon leakage” as companies relocate to countries where they are not forced to pay to pollute.

The chemical industry employs, directly and indirectly, 600,000 people in the UK.

In its current form, the ETS will impose carbon-emissions caps on industrial polluters from 2013 and force them to pay for 100% of their permits by 2020. Ratcliffe said that doing so would be “truly horrendous” for the industry and make it uncompetitive.

Instead, he says that chemicals manufacturers should be allocated permits for free and agree on less stringent pollution caps because they compete against rivals in countries not subject to such rules.

Ratcliffe, who has been locked in crisis talks with banks after a sharp downturn in business put his company in danger of breaching covenants, said: “We believe there is a significant danger to our £60 billion industry if phase three of EU ETS becomes law in its current form.

“Chemical businesses situated throughout the UK, especially in the north of England and central Scotland, with 80% of them foreign-owned, will be ‘decimated’, putting almost 200,000 jobs at risk,” he added.

Emissions permits go for €15.49 (£13.40) per tonne, but are expected to roughly triple when phase three of the ETS begins in 2013.

The energy industry, one of the largest polluters, has already accepted that it will have to pay for 100% of its permits from 2013.

It is thought that EU leaders may have been persuaded by the industry’s arguments and will soften their stance. An increase in free allocations to polluting sectors will bring howls from environmentalists who claim that the industry is overdramatising the threat posed by the ETS.

Ed Miliband, the energy and climate change secretary who met European ministers in Poznan, Poland, for talks on climate change last week, said: “The [climate] package must retain its environmental integrity. This means a commitment to reducing our emissions by 30% following a global deal.

“It means a tough and declining cap in the ETS and an ambitious increase in the auctioning of ETS allowances. It means addressing competitiveness, but only on the basis of firm evidence of sectors at genuine risk of carbon leakage.”


Friday, December 05, 2008

Climate Change - "medium rare"?

A picture with many meanings. Great Britain looks smaller than usual when depcited as a piece of dead cow.


Greenfyre's - dubunking the climate change skeptics

I have just come across an excellent new blog by Mike Kaulbars called "Greenfyre's".

The blog appears to be dedicated to debunking climate skeptic claims that climate change is nothing to worry about. He also uses lots of pictures which is excessively time consuming but looks good when done well.

I have added this blog to my blogroll.

This post gives a flavour of the blog's direction:

Denier vs Skeptic [Greenfryer's]

In this post are numerous links to other articles on climate skeptics including a couple of video links.

For example:

Evolution & Climate Deniers: The Redux Edition

Skeptics, Contrarians, or Deniers?

Climate Change Denial: Nothing but Lies and Frauds

Environmental Skeptics Are Overwhelmingly Politicized, Study Says

There is a lot more to read on this excellent blog.


Thursday, December 04, 2008

Jobs vrs environment: Steel workers protest

It was only a matter of time before the jobs versus environment stories started appearing in the press. When jobs are at stake the environment tends to get beaten with a big stick and this recession will be no different.

The problem is that jobs = votes and job losses = lost votes and politicians are only too aware of this risk of being seen to sacrifice jobs on the alter of climate change. There is no point in arguing that "green jobs" will be created to take the place of the lost blue collar jobs. For one you can be certain it will not be the same people moving jobs so there will be losers and the losers in this case have loud voices.

We will see many more such articles in the weeks to come and I have fairly confident that such protests will have an effect. It will take strong politicians to push through green policies in the face of growing "jobs protests".

Whilst the economic impact of green policy induced jobs losses will be exceedingly small (and could be no existent) such arguments will have little impact in the press when protests and job losses make such good headlines.

European metal workers protest EU's climate policy [China view]

BRUSSELS, Dec. 2 (Xinhua) -- About 11,000 workers from the steel industry in European countries gathered on Tuesday in Brussels to protest the European Union's climate change policy which they fear might make them lose their jobs.

The European Parliament and the French Presidency of the European Union agreed Monday on details of future targets on emissions from cars, setting the target for 2020 at 95 g CO2 per kilometer.

"We don't want to lose our job," one protester said, adding that the new regulations will possibly kill the steel industry in Europe. Several protesters held a coffin to indicate that the European steel industry will die when EU's climate change plan is implemented.

Under the new regulations, from 2012 to 2018 manufacturers exceeding the carbon dioxide targets set by the regulation will have to pay fines 5 euros for the first gram of CO2, 15 euros for the second gram of CO2 and 95 euros from the fourth gram of CO2.

From 2019, car manufacturers will have to pay 95 euro for each gram exceeding the target.

The protesters, most of who come from the car industry giant Germany, marched around the European Parliament building and other EU institutions.

The protest was organized by the European Metalworkers' Federation (EMF). The federation criticized the EU's plan to cut CO2 emissions, saying it endangers production and jobs in the steel and non-ferrous metal sectors.

In a statement, the EMF said that European producers "are confronted with increasing international competition from producers who do not meet European norms."


Tuesday, December 02, 2008

Free EU permits for all. Why?

The FT today reports on the EU rethink over pollution permit allocation. In an attempt to prevent a "loss of competitiveness" the rules on permit allocation are being tweaked.

The term "carbon leakage" is an interesting new way of thinking about what would previously have been called the "pollution haven effect".

EU rethink on pollution permits [FT]

European industry appears poised to reap a more generous share of free pollution allowances than first expected after persuading policymakers that proposed legislation would impose steep costs on manufacturers and threaten jobs.

Germany led an effort to ensure that manufacturers - including those in chemicals, glass, steel and cement - receive free allocations if they are forced to compete against companies from non-European Union countries that are not subject to new regulations, according to people familiar with the talks.

Protecting such companies against the threat of so-called carbon leakage, where jobs and production leave Europe for less regulated countries, has emerged as one of the thorniest challenges for negotiators trying to agree an ambitious EU climate package before a summit of EU leaders on December 11.