BusinessGreen Blog

There is no option left - we need a moratorium on biofuel

Fri, 29 Jan 2010 16:08:21 GMT

Grab your coast apocalypse watchers, it is time for another trip down the rabbit hole. The subject of today's journey into the nth dimension of anti-logic: biofuels, or more specifically the government's Renewable Transport Fuel Obligation (RTFO).

Fans of that special form of gallows humour (is there any other kind anymore?) known as the law of unintended consequences will recognise the RTFO as the legislation which originally imposed a target that five per cent of UK fuels come from biofuels by 2010/11.

It was at that point that scientists and environmental groups pointed out that far from helping to reduce carbon emissions many biofuels were directly or indirectly responsible for increasing emissions by driving demand for agricultural land and as a result accelerating deforestation.

After commissioning its own independent review the government accepted these risks did indeed exist, but with billions of pounds of investments already made to help meet the RTFO target it decided it could not put the RTFO on hold until the issue of biofuels' carbon impact was resolved.

Instead it opted for a classic fudge, delaying the five per cent target until 2013/14, launching the independent Renewable Fuels Agency (RFA) to monitor the industry's performance, and rolling out new sustainability criteria that biofuel producers will eventually have to comply with in order to ensure they are not using carbon intensive energy crops grown on formerly forested land.

Yesterday, the RFA released its first annual report on biofuel producer's performance against the new beefed up RTFO. The verdict? Not good.

The government set three targets for biofuel producers to meet: that biofuels must deliver carbon savings of 40 per cent; that data on the origins of their biofuels must be provided in 50 per cent of cases; and that 30 per cent of biofuels must meet sustainability criteria.

The RFA reported that UK biofuels delivered carbon savings of 46 per cent against conventional fuels and that it received complete data for 64 per cent of biofuels, but it also revealed the target on sustainability was missed with only 20 per cent of biofuels qualifying as sustainable.

On the face of it this is already a pretty poor performance. Four fifths of biofuels used in the UK last year failed to meet the guidelines the government had designed to eradicate related deforestation and protect biodiversity. But dig into the figures and it gets worse, a lot worse.

The RFA report admits the stated carbon savings of 46 per cent are, if not quite meaningless, then not far short. The report states: "In 2008/09, 42 per cent of previous land-use was reported as "unknown", this was due to a lack of verifiable evidence gathered from supply chains. Emissions from any unknown land-use change are not taken into account in the carbon savings figure above and it is possible that some fraction of the unknown land-use change may have caused a significant release of stored carbon." In other words, "we do not know for sure these biofuels delivered an overall reduction in carbon emissions".

But this is just the tip of the iceberg, the gaps in the data provided by biofuel producers go on and on. For one per cent of biofuels the RFA was not even informed which feedstock was used to make the fuel, while the country of origin for 19 per cent of biofuels was unknown. You did read that right, in almost a fifth of cases the company importing or selling the biofuel in the UK had no idea where it came from.

Moreover, as previously mentioned 42 per cent of biofuels were produced using feedstocks grown on land where there is no information on what that land was previously used for - meaning there was no way of determining if the biofuel had been directly responsible for a huge release of carbon emissions through deforestation. And for 70 per cent of biofuels there was incomplete information on its performance against sustainability criteria.

In short, the UK is using biofuels in large quantities, despite the fact it has no way of knowing whether it is helping to alleviate global warming or making it worse. It is as if we decided to tackle obesity by forcing people to stop eating crisps and start eating flapjacks, but neglected to check if the flapjacks had fewer calories.

The RFA insists its monitoring is very much a work in progress and that it is making rapid progress. It argues that biofuel producers know they will soon face mandatory rules governing sustainability and are moving fast to improve their supplies of biofuels, adding that it is entirely feasible that a workable system can be developed that ensures we only use sustainable biofuels that deliver net reductions in carbon emissions.

But is it? Supply chains are notoriously difficult to monitor and it seems highly unlikely a system of auditing and inspection can ever prove where imported biofuels have come from and how they have been produced. Companies have proven time and time again that they can't or won't effectively tackle sweat-shop manufactured products, while regulators have similarly proven they can't track the illegal import and export of waste on any meaningful scale.

Moreover, there is no way that even an effective auditing system can ensure that sustainably produced biofuels do not indirectly contribute to deforestation somewhere along the line. The vast majority of land used for biofuels could be used food. If it is being used for biofuels and demand for food rises then farmers have to look elsewhere for land.

The scariest thing is that the RFA's chairman Professor Ed Gallagher is right, the RFA's report represents the "first time anywhere in the world that collated and verified information about the quantity of biofuels supplied, their direct effects and their sustainability has been published". The UK is doing far, far better than most and we still have no real handle on the carbon impact of our growing demand for biofuels.

The only type of biofuels that can deliver a guaranteed reduction in emissions are produced at a local level and use feedstocks made from waste or plants that have categorically been grown on land that is not and can not be used for food production.

Biofuel producers will rant and rave about the investments already made and the fact that stalling the market now will slow the development of those genuinely sustainable second generation biofuels. But for the vast majority of biofuels used today the environmental risks are simply too high and the data too incomplete. We need a moratorium on all biofuels that lack rock solid guarantees that they have been produced in a sustainable manner. Currently, that means almost all biofuels. Failure to impose such a ban could simply mean increasing carbon emissions in the name of cutting them - and, unintended consequence of not, that can't be good.

Why Bill Gates is just plain wrong on climate change

Thu, 21 Jan 2010 17:20:52 GMT

It probably won't bother him all that much, after all you don't get to be one of the world's richest men without ruffling a few feathers, but Bill Gates critique of climate change policy for the Huffington Post looks set to stir up a whole hornets' nest of criticism.

In case you haven't seen it, Gates' central argument is that climate change policy tends to focus too much on short term targets for 2025 rather than the long term goal of cutting emissions 80 per cent by 2050, and as a result is wrongly tilted in favour of incremental improvements in energy efficiency rather than genuine game-changing low carbon innovation.

It is hardly a surprising line of argument from a man who styles himself as an innovative entrepreneur (whatever his many critics say to the contrary) and there are a few valid and interesting points hidden away in the article. But if you are going to find them you have to wade through so many glaring factual errors and irrational conclusions that it makes you wonder if his grasp on climate change policy is as weak as Microsoft's grasp of the search engine market.

Let's start at the beginning with Gates' opening assertion that "people often present two timeframes that we should have as goals for CO2 reduction - 30 per cent (off of some baseline) by 2025 and 80 per cent by 2050". Well, that sentence is wrong, wrong, and wrong.

If Gates is referring to the scientific consensus (as set out by the most recent UN-backed report from the IPCC) the recommended target for industrialised nations is for them to reduce carbon emissions by 25 to 40 per cent on 1990 levels by 2020 and 80 per cent or above by 2050. Almost all scientists are agreed that we should be aiming for the upper end of those ranges. If he is referring to the US policy debate, President Obama wants legislation passed that would cut carbon emissions 17 per cent by 2020 and 80 per cent by 2050 against a 2005 baseline.

So Gates' numbers for 2025 are just plain wrong on both counts and the parenthetical dismissal "off of some baseline" is crass in the extreme - the 14 year difference between the proposed US baseline and the 1990 baseline adopted by most other countries is central to why the international climate change negotiations have stalled. The US commitment actually equates to a cut in carbon emissions of around four per cent on 1990 levels, or a tenth of what scientists think we need.

Gates second glaring error is in his argument that we focus too much on the short term target and ignore the "key" goal of cutting emissions 80 per cent by 2050.

This is just plain daft, the real "key" target is to stop concentrations of carbon dioxide in the atmosphere from reaching a level - somewhere between 350 and 450 parts per million, depending on how much risk you want to take on - where climate change become irreversible and catastrophic.

Surely an analytical brain as sharp as Gates should realise that the total amount of carbon you pump into the atmosphere over the next 40 years is dependent not just on the scale of the cuts in emissions you deliver, but the rate at which you deliver them.

For example, a steady reduction curve will result in a much smaller amount of carbon being emitted overall than if you emit at current levels for the next 35 years and then in 2045 quickly roll out all the wonderful zero carbon technologies that will allow you to decarbonise the economy and meet the 2050 target of an 80 per cent cut in emission levels. That is why we have interim emission targets for 2020 and why they were such a critical and contentious issue at the Copenhagen Summit.

Gates flawed analysis of the 2025 and 2050 targets is then used to downplay the significance of the "modest" emission reductions that can be achieved in the short term through efficiency gains, and argue that we should instead focus on the long term innovation in power generation and transport that can deliver deep cuts in emissions by 2050.

The problem is that these "modest" emission reductions that can be achieved through energy efficiency actually equate to around a third of all emissions in most economies - and they can be delivered at low cost and at net benefit to the economy.

Moreover, reducing energy use through efficiency improvements makes the innovation of which Gates talks far easier to achieve. It stands to reason that if you want to build a decarbonised energy supply, be it through wind turbines, solar panels, fuel cells or nuclear power, it is far easier to build the necessary infrastructure if the amount of energy you need to supply is as low as possible.

"Should society spend a lot of time trying to insulate houses and telling people to turn off lights or should it spend time on accelerating innovation?" Gates asks.

The answer is both.

The tragedy of Gates flawed critique is there are some valid arguments trying to get out. There is too little focus on the huge task of genuinely decarbonising our economies and there is definitely a case for avoiding some of the technologies that promise marginal reductions in carbon emissions, but which could lock us into a path that does not curb carbon emissions far enough and fast enough. Biofuels are a prime example, as is the flirtation in some countries with natural gas as a long term alternative to coal.

Gates is also accurate in his assessment that "all the talk about renewable portfolios, efficiency, and cap-and-trade tends to obscure the specific things that need to be done". These measures are necessary to drive investment in clean technologies, but Gates is correct to imply that policy makers often get obsessed with the policy and lose sight of the actual work that needs to be done on the ground.

However, Gates suggestion that the need to increase our focus on long-term innovation means we should ridicule those advocating action to tackle the "low-hanging fruit" represented by energy efficiency is both irrational and more than a little insulting.

A cynic might suggest that Microsoft's eternal embrace with the computer hardware manufacturers who continuously upgrade their products to cope with the next version of Windows has something to do with Gates' criticism of energy efficiency measures. But whatever his motivation, the only thing worse than Gates analysis of climate change policy is the sight of a retired 55-year-old signing up to Twitter.

Time for the government to clean up its waste policy

Tue, 19 Jan 2010 12:44:01 GMT

For years now, waste has been the dirty little secret of the UK's environmental strategy.

Over the past decade the country has emerged as, if not a pioneer, then certainly a leading player in the development of a low carbon economy. The government's energy strategy may have been badly neglected in the past, but the last few years have seen the emergence of a coherent plan for developing low carbon power; our industrial and business strategy is far from perfect, but there is a realisation across all political parties that we need to develop a clean tech industry and provide a framework of legislation and incentives to encourage businesses to curb carbon emissions; and while the transport strategy remains decidedly contradictory, there is at least an understanding that greener alternatives must be sought.

And then there is waste - an area of environmental policy that the government continues to tip-toe around as if it has found itself lost in one of the grotesque landfill sites it has done so little to address.

Today, the Environmental, Food and Rural Affairs Committee of MPs pulled on the rubber gloves and attempted to rake over the mess that is the government's waste policy. It does not make pretty reading for Defra.

According to the report, the waste policy for England and Wales is "disproportionately" focused on domestic waste, despite the fact it contributes less than 10 per cent of overall waste; contains hardly any "firm targets" for commercial and industrial waste; has delivered "premature" funding cuts to services designed to help businesses manage their waste; and has singularly failed to establish waste as "valuable resource" that can be re-used, recycled or used to generate energy.

And it gets worse: the government has not done enough to tackle food waste or increased textile waste; its timeline for banning certain recyclable materials from being sent to landfill is "unambitious"; its targets for household recycling need increasing; it has failed to clearly make the case for waste charging schemes; failed to remove planning barriers for waste-to-energy plants; and not done enough to ensure that the agencies tasked with enforcing waste regulations are properly funded.

The government will claim that it is making progress, and it is true that targeting households has resulted in the amount of waste being sent to landfill in England and Wales falling by 23 per cent between 2001 and 2007, while household recycling rates have climbed to 37 per cent. However, the UK still lags far behind its continental neighbours where recycling rates frequently top 70 per cent, while it comes as no surprise that the first environmental services to face the axe as a result of government spending cuts have been in the waste sector.

The committee may offer a damning assessment of the government's waste strategy, but there is hardly anything in the 67-page report that will surprise anyone familiar with the challenges faced by the UK's waste management industry. It is encouraging for the sector to see its concerns aired in public, but those involved in the waste management and recycling industries will also be frustrated that it has taken so long for the these blindingly obvious issues to be addressed.

It is hard to explain rationally why the UK has such a poor record on waste management and recycling. The Dutch and Germans have proven over and over again that there are economic benefits to be realised from treating waste as a resource, while report after report has shown that waste-to-energy and anaerobic digestion systems represent one of the most cost effective forms of renewable energy technology around. Meanwhile, reducing business waste is one of the easiest and most effective ways of trimming corporate costs.

Of course, if you can't explain a phenomenon rationally, it is best to try and explain it irrationally. I am reluctant to revert to national stereotypes, but perhaps the reason for our failure to tackle waste head on lies in a certain reserved prudishness when it comes to the messy subject of rotting food and used nappies.

If this is indeed the case, and it is cultural factors that explain our reluctance to address the UK's waste mountain, then, as the committee concludes, the onus has to be on the government to take action.

The fact that the economics are broadly in favour of treating waste as a resource means it would be remarkably easy for the government to develop a zero landfill policy, curbing greenhouse gas emissions and bolstering a genuinely green industry in the process.

As the committee points out all that is needed are targets for cutting the amount of waste sent to landfill and requirements for large businesses to report on the waste they produce - essentially a replication of the emerging strategy for tackling carbon emissions. If these targets were backed up by sufficient penalties, they would immediately provide the incentive for increased investment in the recycling facilities, anaerobic digestors and waste-to-energy plants that would make it possible to divert waste away from landfill.

There might not be many votes in it, but it is about time the government held its nose and got to grips with the messy reality of its faltering waste policy.

Why all green businesses should pray Sarkozy gets his carbon tax

Tue, 05 Jan 2010 14:06:03 GMT

It might have gone largely unreported on this side of the Channel, but over in France a battle is raging that could eventually determine the pace and manner at which not only the French economy, but the entire global economic system, transitions towards a low carbon future.

In a surprise move the French Constitutional Council last week ruled that a carbon tax that was due to come into effect on January 1st was unconstitutional on the grounds that the large number of loopholes offered to businesses meant that the tax "violates the equality enjoyed by all in terms of public charges".

The decision represents a major blow to the political authority to President Nicolas Sarkozy, who had faced down huge public and political opposition to impose a carbon tax of €17 a tonne on oil, gas and coal that he argued was essential to the country's efforts to curb emissions, and has prompted a rapid response from the government which has vowed to have a reformed version of the legislation in place by April.

As a result, a debate is now raging within government as to how to impose the new tax equitably while still protecting those industries that would see their international competitiveness irretrievably damaged and avoiding a bout of the French national pastime of oil drum-burning, pitchfork-waving public protest.

A number of proposals are now being debated, including removing some of the exemptions, removing all the exemptions but imposing a lower carbon tax on those sectors such as farming and haulage that would be worst affected, and removing the exemptions for industrial emitters and carbon intensive firms but then allowing them to buy the emission allowances they have to purchase under the European emissions trading scheme at a reduced price.

Policy makers the world over will now be watching closely to see which approach the French opt for and how effective it proves.

Their interest is driven the two crucial issues which the French are wrestling with and which all governments will have to address if they are to adequately accelerate the transition to low carbon energy sources.

The first problem is how to impose an effective price on carbon without simply incentivising energy intensive industries to up sticks and move to territories where there are no such charges.

To date the European emissions trading scheme, the French government and others have opted for the exemption model - effectively offering a free ride to those industries most likely to leave. So far this approach has sort of worked and there have been no reports of firms exiting the EU because of the ETS. But as the French Constitutional Council pointed out there is an inherent problem in this approach which means that a larger chunk of the financial burden associated with carbon pricing mechanisms falls on those sectors of the economy that are least able to pack up and leave.

This is doubly problematic as those sectors that can't easily move elsewhere - energy generation, food production, retail, and on a human level the poorer sections of society - could do with the money they are shelling out on carbon taxes or emissions allowances to spend on the technologies they need to cut their emissions. Carbon pricing may mean they have an increased incentive to cut their emissions, but they are effectively subsidising businesses which due to the exemptions they are granted have more money in their back pocket but less of an incentive to cut emissions.

National policy makers have long been desperate to work out a solution to this conundrum, and will have become even more desperate after the fudged outcome from the Copenhagen Summit made the chances of a genuine solution in the form of global carbon pricing mechanism even less likely.

It will be intriguing to see how the French go about tackling the problem. Will Sarkozy simply seek to strike a slightly different balance that still protects those industries that argue they represent a special case, or will he take on board the central concern of the Constitutional Council and simply impose the tax across the board? If he goes with the latter option, it will be interesting to see if, as they have claimed, a relatively modest carbon tax really will bring French industries to their knees. Will companies really up sticks in large numbers and leave for China and India as a result of €17 a tonne charge on carbon? Personally, I'm guessing not.

Which leads nicely to the second reason, all eyes should be on France over the next few months. Namely, will a national carbon tax in a large industrialised economy work? Will it cut emissions and accelerate the development of a highly competitive and prosperous low carbon economy?

There is a growing school of thought - including amongst some of the energy firms and other carbon intensive businesses that will directly impacts - that a carbon tax would prove more effective at providing the certainty firms need to justify long term investments in low carbon infrastructure.

A cap-and-trade scheme may prove more sophisticated and is in theory a more cost effective means of cutting emissions, but as the EU emissions trading scheme has proven time and time again it also introduces a volatility to carbon pricing that makes it very difficult for businesses to judge their low carbon investment plans.

With the UK preparing to launch a national cap-and-trade scheme in the form of its Carbon Reduction Commitment, the French carbon tax raises the prospect of two test cases on either side of the Channel which will provide the perfect opportunity to compare the different models' effectiveness.

I may be a self-admitted Francophile, but personally my prediction would be that while a carbon tax will prove less popular and more challenging for many carbon intensive firms, it will also deliver deeper and faster cuts in emissions while providing a greater competitive advantage to emerging low carbon businesses.

In the meantime, let's hope that Sarkozy gets his way and manages to get a carbon tax in place, otherwise we'll never know.

Whitehall to bury bad news on green performance on last day of Copenhagen

Wed, 16 Dec 2009 17:17:18 GMT

If you were a Whitehall civil servant and you had to release figures that will almost certainly show that central government departments have delivered a, shall we say, patchy performance against environmental targets, what day of the year would you choose to release them?

Yup, you've guessed it. An email from the Office of Government Commerce (OGC) arrives this afternoon revealing it will publish data showing how government departments are performing against their own sustainability targets at 9am on Friday December 18, just as world leaders convene in Copenhagen for the last day of the Summit to Save the World.

A quick phone call to a dimension governed by different rules of plausibility to the one you and I inhabit (otherwise known as the OGC's press office) confirms that there is nothing untoward whatsoever about this arrangement.

It is also preposterous to suggest the scheduling consititutes an attempt to sneak out the figures at a time when the all the UK's environmental journalists are focused firmly on developments on the other side of the North Sea.

A diary notification has been issued, adds the spokesman, and the release date for the information has been scheduled for some time. Besides, it is also the same date the information was released last year - so that would be right at the culmination of the last big UN climate change summit in Poznan then.

Is it just me, or does The Thick of It look more like a documentary every day?

Copenhagen confusion set to fuel fresh round of conspiracy theories

Wed, 16 Dec 2009 14:57:02 GMT

I'm not usually big on conspiracy theories. It strikes me that those who believe that the moon landings never happened or that 9/11 was an inside job invariably occupy a position on the eccentricity spectrum somewhere between mildly offensive crank and full blown fantasist. And don't get me started on the "climate change is a hoax" brigade and their passing acquaintance with such tired concepts as rational thought and observable reality.

But putting aside my natural scepticism for a moment you can begin to see why the Copenhagen Summit is likely to become such a fertile source of fresh conspiracy nonsense.

With the central cast list constantly changing, the key decisions apparently being made in private rooms dotted around the cavernous conference centre, clashes with police outside, media struggling to get inside, NGOs being asked to leave, and logistics looking like they were put together after a lengthy trip round the local Heineken brewery, it is little wonder that even observers who have been close to the negotiations for years are confused by the opaqueness of proceedings. When ever people don't know what is going on, it is a short leap for them to start making it up.

In fairness, most of the problems so far appear to have been the result of cock up rather than conspiracy. But that said, the organisers have hardly helped themselves this morning with the surprise decision to replace the Summit president Connie Hedegaard with Danish Prime Minister Lars Lokke Rasmussen. If, as was claimed, this was a procedural move why was it such a surprise? It might be entirely logical for a head of state to chair a meeting that from now on will be dominated by heads of state, but the unexpected nature of the move only serves to fuel rumours that Hedegaard has been ousted for being too sympathetic to poorer nations.

Developing countries might have thought Hedegaard was too tough on them, but if that is the case they can expect a nasty shock now Rasmussen is in charge.

Of course, the apparent personal antipathy between Hedegaard and Rasmussen is insufficiently outré to qualify as a full blown conspiracy theory, but should the talks collapse expect plenty more off-the-wall explanations to emerge.

With so many countries apparently wanting a deal to be reached, one likely source of conspiracy theories lies in the fact that an agreement that is boycotted by some developing countries would provide some benefits to those that do choose to sign up.

For example, at the time of writing the draft texts still contain room for "trade measures" that would effectively allow the imposition of carbon tariffs on products from countries that do not deliver verifiable climate change commitments.

It would be a genuine disaster for the planet and I am not for a single second suggesting that any countries are pushing for such a negative result. But if certain countries make good on their threat not to sign up, those nations and individuals in favour of protectionist measures could find themselves waking up on Saturday morning to find they have been given the international legitimacy they crave.

Hopefully, this threat of carbon tariffs will be effectively used as the ultimate bargaining chip to get all countries on board and committed to action. That is certainly the way the US team appears to be interpreting the current state of the talks, and we can only hope their game of brinkmanship with the Chinese over emissions targets, climate funding and carbon tariffs ends well for both sides.

But the very real danger is that if this carbon tariff bargaining chip fails then a flawed and unevenly supported Copenhagen deal will not only condemn us to climatic catastrophe, it will also deliver an escalating trade war to keep us occupied while we wait fior disaster.

Darling's cowardice leaves bold green proposals on the shelf

Fri, 11 Dec 2009 16:01:31 GMT

First the good news: the green section of the pre-budget report or budget has now become so normalised it is as much a part of budget days as the jeering response from the opposition benches.

The pledge to support the "industries of the future" and the name-checking of Kyoto, Copenhagen, and carbon budgets has now featured in pretty much every budget of the last few years - and if anything environmental issues become more significant each time the Chancellor rises to the dispatch box.

Tax hikes, bonuses and bingo may have dominated the headlines, but Alistair Darling gave a surprisingly sizable chunk of his Pre-Budget Report speech over to the environment. The UK's car crash public finances meant there was never going to be a game-changing display of generosity from the Treasury, but there was still plenty for low carbon businesses to celebrate.

The government underlined its commitment to the carbon capture and storage sector, and also reassured investors in offshore wind that current levels of subsidy will be retained until at least 2014. Meanwhile, the microgeneration sector may have to wait until the New Year to see whether it should be celebrating or commiserating over the level feed in tariffs are set at, but it must have been encouraged to hear the Chancellor say income generated by households using the scheme will be tax free.

Firms providing energy efficient products and services will also be happy that changes to the climate change levy will drive up energy bills for many firms, while the electric vehicle sector was delighted that two of its highest priority markets, delivery vans and company cars, will enjoy tax exemptions for five years.

Somewhat surprisingly, there was money too. Not earth-shattering sums, admittedly but not to be sniffed at either. An additional £150m was found for low-carbon investment, with a further £200m also made available for green home improvements, primarily in the form of improved insulation and a new boiler scrappage scheme.

There will be understandable nerves amongst green business leaders that the unspecified cuts in services that will inevitably follow the election will impact low carbon industries, but on the whole there was plenty to pleased about in the PBR.

And yet, listening to Darling you get the impression these new green commitments came a little too easily. There was not a peep from the opposition benches during the environmental part of his speech, because there was nothing there that was in the least bit revolutionary or innovative. Every change that was made constitutes tinkering round the edges, when, as every green business leader you speak to will tell you, what is needed is a comprehensive re-engineering.

Nowhere is this more noticeable than with green taxes. As the Sun front page memorably put it, Darling screwed more people than Tiger Woods on Wednesday with his increase in National Insurance, but there are other ways to raise revenue besides taxing income.

Darling obviously understands the appeal of green taxes as on Wednesday he did announce changes to company car tax bands designed to make polluting vehicles more costly and greener vehicles cheaper. But why not make the same changes for all vehicles? There can only be one explanation: cowardice.

Even in its dog days the government remains terrified of Sun or Mail front pages accusing it of attacking motorists and incapable of making the case that the majority of drivers would benefit from changes to road tax bands that further reward those driving the greenest vehicles.

Equally, where is the VAT cut on green goods and services that was being touted a year ago? It could be paid for with higher rates of tax on non-green products, but again it seems easier for the Treasury to shelve the idea than display some genuinely progressive thinking. Excuses about the need to stay within EU guidelines on VAT do not wash, if the government really wanted to cut tax on green products it would find a way to do it.

More worrying still is the fact that even the ideas that would attract no controversy cannot gain traction. From right across the political spectrum there are calls for the government to either set up a green infrastructure bank or lean heavily on the banks it, sorry we, own to increase lending to low carbon projects. And yet the Treasury chooses to sit on its hands, failing even to offer a coherent reason why it will not support a green bank.

Equally, why make income from microgeneration technologies tax free for households, but not for the businesses that have the potential to really drive the onsite generation market?

With an election on the horizon and the nation's books looking like the Treasury has drafted in a crack team of accountants from Enron you can perhaps understand the Chancellor's caution. But if the government truly believes its own assessment that climate change is one of the gravest threats we face and that the transition to a low carbon economy is essential, then it has a duty to display a little more fiscal boldness. Who knows, explain it properly and ensure all tax hikes are balanced with an explicit reward elsewhere and the public may even respect them for it.

Obama's cool climate moves leave opponents floundering

Tue, 08 Dec 2009 13:41:06 GMT

I know this is hardly an original observation, but President Obama really is one very cool customer.

The administration's ability to steadily advance its low carbon agenda while facing conflicting pressures from Republicans (and some Democrats) angry at the proposed US climate bill, and diplomats in Copenhagen demanding the US shows more ambition, has been little short of a master class in political positioning. There is a long way still to go before he can declare victory, but you get the impression Obama will see some form of climate legislation passed early next year - and what is more, his opponents will not be quite sure how he did it.

The influential political blogger Andrew Sullivan has repeatedly observed how throughout both his campaign and his first 12 months in the White House, President Obama has outmanoeuvred rivals through almost preternatural displays of calmness and detachment.

Echoing Muhammad Ali's famous rope-a-dope strategy, Obama has let opponents expose their own position, unleash wave after wave of ill-conceived attacks, and reveal their strength and weaknesses, while all the time he quietly and coolly weighs up his options. Then, just when his rivals think they are heading towards victory, he has acted with swiftness and no little ruthlessness to land his own decisive blows and end up with exactly what he wanted.

He did it with the Clintons, he did it with McCain and Palin, he did it with the health care reforms, he is trying to do it with Afghanistan, and now he is pulling off the exact same trick with climate change and cap-and-trade bill.

For several months the White House has appeared rather detached from the debate surrounding the Boxer-Kerry climate bill. Obama made it plain that he supported the bill and wanted a cap-and-trade scheme that would provide a boost to green businesses and help limit US reliance on foreign oil, while managing the financial impact on carbon intensive firms. However, he carefully eschewed the rough and tumble of the on-going Senate debate, which has seen Republicans and a number of key Democrats rage against the bill as everything from a "jobs killer" to the first step towards a Communist One World government.

Obama has been able to do this because he knew he was holding the trump card in the form of the Environmental Protection Agency's "endangerment finding" that rules greenhouse gases pose a threat to public health and can be regulated under the existing Clean Air Act.

The EPA actually said they would issue the ruling back in the summer - and then, nothing. The Republicans were allowed to do everything in their power to block the Boxer-Kerry bill, demanding additional research on the bill and in a display of childish petulance even boycotting key committee hearings on the draft legislation.

And then yesterday, in a surprise move timed perfectly to coincide with the opening of the Copenhagen Summit, the administration formally approved the endangerment finding.

In one move, Obama has significantly increased the chances of his passing a domestic cap-and-trade bill and securing a genuine deal in Copenhagen.

US negotiators in Copenhagen can now guarantee that the US has the legal power to make good on President Obama's pledge to cut emissions by at least 17 per cent on 2005 levels by 2020 even if Congress blocks the climate bill.

And perhaps more importantly Democrat Senators can offer Republicans and opposing Democrats a stark choice: either get on board and help us shape a workable and ambitious cap-and-trade bill, or we will simply cut emissions through the blunt instrument of emissions standards for vehicles, industrial plants and power stations.

Making the case for the cap-and-trade bill yesterday, Senator John Kerry subtly spelled out precisely this choice, noting that "imposed regulations by definition will not include the job protections and investment incentives we are proposing in the Senate today". The Republicans appear to be over a barrel, they can either return to the negotiating table with their position much weakened or they can put up with more onerous carbon emission regulations.

Inevitably, this has prompted the usual sound and fury from Republican lawmakers who have accused Obama of acting unilaterally and displaying contempt for Congress. Although, accusing anyone of showing contempt for Congress when your Senators can't be bothered to show up for Committee hearings takes some brass neck.

They have also accurately predicted that any attempt to push new carbon rules through the Clean Air Act would face legal challenges. But then again this would not necessarily stop the EPA imposing the new rules while the legal battles proceed. Moreover, the Supreme Court has already ruled in support of the EPA's decision, meaning any law suit would have to come up with some pretty compelling new evidence that greenhouse gases are not a pubic health risk.

For business leaders in general and green business leaders in particular the EPA ruling has given them the investment certainty they crave. Anyone now doubting that the US will impose some form of regulation on carbon emissions, that energy bills will rise, and that low carbon business models and technologies will become more attractive is deluding themselves.

Of course, as the past few years of US politics have proven, plenty of people prefer delusion to reality, but fortunately the president is not amongst them. He has his eye on the main prize, and there is growing evidence that he could yet secure the climate victories he craves in both Washington, and perhaps more importantly, Copenhagen.

Climate sceptics are wrong - episode 4,356

Thu, 12 Nov 2009 10:23:33 GMT

So, oil is back above $80 again and officially the International Energy Agency (IEA) is warning that deep cuts in emissions are needed not just to tackle climate change but to avoid a doubling of energy bills by 2030, while unofficially a whistleblower at the agency thinks we are already in the "peak oil zone" and only behind the scenes lobbying stops government's admitting as much.

There are many reasons why climate change scepticism and a refusal to accept the need for urgent reductions in greenhouse gas emissions is a sure fire indicator of a mind deep in the throes of intellectual atrophy - the inability to discern between one off data points and long term trends, the support for theories that have been comprehensively debunked, the unedifying victim mentality - but now we can add peak oil to the list.

As we've argued before it is possible to construct a water tight case for action to tackle climate change without an expert understanding of climate change science - all you need to do is undertake a risk analysis. If the vast majority of the world's scientists are more than 95 per cent certain that human actions are leading to potentially irreversible climate change, then we should act now to tackle the problem on the not unreasonable grounds that it is stupid to gamble with the future of civilisation when the odds of doing nothing and getting away with it are so slim.

It's intriguing to ask what would have happened had the vast majority of the world's economists warned that we were heading for financial crisis? Or imagine what would happen if the world's intelligence community was 95 per cent certain that Iran had the bomb and was readying to use it? Then again don't, it's not a pretty picture.

The very real threat of peak oil further tilts this climate risk equation ever further in favour of low carbon action.

A bit of back-of-the-envelope game theory makes this plain. Imagine the stake is two per cent of GDP and the proposal is to invest it in rapidly transitioning to a low carbon economy.

If the climate scientists are right this would provide us with a reasonable chance of avoiding climatic breakdown and an economic and humanitarian crisis unprecedented in its scope and scale. But look at what we still get if they are wrong (which all the evidence suggests they aren't) - we get rid of the risk of peak oil, and as a result we get massively improved energy security, an end to unpalatable relationships with petro-dictatorships and reduced energy price volatility. Not to mention increased employment as a result of renewables higher level of labour intensity, and a massive fall in the hidden health and economic costs that arise from air pollution.

Now flip the equation around. What happens if we do nothing? Some climate sceptics argue the money would be better invested in poverty reduction and development in poor nations, but anyone who thinks the rich world will stump up a further two per cent of GDP for such admirable purposes is living in cloud cuckoo land (although many sceptics already spend plenty of time there dreaming up their scientific arguments, so perhaps they do genuinely believe this will happen). The reality is the money would be invested in the same old manner and would deliver the same old returns.

If the sceptics are right and there is no climate-related reason to switch to low carbon technologies we get these same old returns - and we still have to find a way to deal with escalating energy security. But if they are wrong, we get something akin to the end of civilisation.

In the complex world of futurology, economics and risk, the low carbon transition option is as close as you get to a no lose scenario, while the do nothing option results in a very high chance that we lose everything. Even the most booze-addled Vegas punter could assess the odds and pick the best option.

I would call it a no-brainer, but given the level of intellectual rigour the sceptics apply to tackling climate science I'm not sure that would preclude them from continuing to argue against action.

Would anyone like a cut in income tax?

Mon, 26 Oct 2009 14:56:10 GMT

How would you like to see a cut in income tax? I'm thinking about a cut of two, maybe even three pence in the pound for those on middle incomes, perhaps even more for those on low and high incomes. How's about similar cuts in National Insurance contributions or possibly even a reduction in corporation tax? Interested? Thought you might be.

Strangely, this is not an exercise in fevered wish fulfilment for George Osborne, nor the latest absurdist report from the Taxpayers Alliance, but serious proposals being put forward by a government-backed commission and an increasingly vocal coalition of environmental groups. Sadly, however, you would not know it from any of the reporting.

Today's recommendations from the Green Fiscal Commission that the UK should double the proportion of the tax take made up of green taxes and introduce around £150 billion in new levies on polluting behaviour is the latest in a long line of studies and reports to make a waterproof case for green taxes, only to be shot down by unbalanced reporting that focuses on tax increases and downplays the accompanying cuts in conventional taxes.

For example, the headline on the front page of the Sunday Times business section yesterday read: "£3,300 a car - Turner to unveil green tax blitz", despite the fact it could just have easily read "Turner proposes £150 billion in tax cuts".

The fact is that almost all proposals for increased green taxes are "revenue neutral" - that is to say that any increases in green taxes are offset by tax cuts elsewhere.

In other words, many people would be massively better off, while most would be neither better or worse off. Only those with unsustainably carbon intensive lifestyles or business models would suffer and they would undoubtedly look to change their behaviour as new green taxes began to bite.

On a purely self interested level, I can't wait for the Commission's recommendations to be enacted. Any cuts in income tax and National Insurance would leave me quids in, while as a city dweller living within walking distance of work increases in energy taxes or fuel duty would have a minimal impact on my outgoings.

Even those balking at the proposed £3,300 tax on new cars need to remember that: a) if they choose to do so they can use the money they save through lower income taxes to help cover this cost, and b) they could avoid the levy by buying greener vehicles.

For businesses the same calculations should apply. If your business is fractionally more carbon efficient than that of your rivals, then you stand to benefit from any increase in green taxes. By definition there will be at least as many winners as losers, but even those firms operating in carbon intensive sectors such as car manufacturing and haulage need not worry too much at the prospect of higher green taxes - the government would almost certainly sort out some form of tax credit protection to help out while the transition is made to lower carbon technologies.

Rather than worrying about the impact of increased green taxes, businesses should be welcoming the prospect of taxes they cannot avoid such as National Insurance and corporation taxation being replaced by environmental taxes they can avoid by simply embracing low carbon best practices.

It is time for the business community to get on board with the growing campaign for green taxes, not simply by promoting increased environmental levies but by lending their voice to calls for significant cuts in conventional taxes.

Let's hope the ASA has brushed up on its climate science

Wed, 21 Oct 2009 13:52:08 GMT

Some stories are shocking, others are intriguing, and then there are those that fill you with nothing so much as a wearying sense of inevitability. Reports the Advertising Standards Authority has launched an investigation into the government's latest advert encouraging people to cut their carbon footprint after receiving over 350 complaints falls firmly into the latter category.

You've probably seen the ad, which shows a father telling his daughter a bedtime story in which he warns of a future in which rising sea levels and droughts have devastated the land. There's even a cartoon dog that sinks beneath the waves, and a stark message that adults can help play a part in protecting their children from this future by tackling the 40 per cent of carbon emissions that result from day-to-day activities.

Cue an entirely predictable avalanche of complaints from people with far too much time on their hands, arguing that climate change is not happening, that there is no consensus on climate science, and that it is wrong to scare the little children.

The ASA now has to decide if it is going to take issue with the suggestion that scientists have said carbon emissions contribute to global warming and uphold complaints that there is no overwhelming consensus on the issue. If it were to go down that route (and if it does then it had better have its peer-reviewed science ready) then the government should get its chief scientist to organise its defence and tell the watchdog to "bring it on". Either that or simply change the voice over from "scientists said..." to "many, many, many respected scientists said..."

Slightly more interesting is the accusation of scaremongering and unsuitability for children - although again the ASA would have to set a pretty remarkable precedent if it is to uphold the complaints.

If the ad is to be banned on the grounds that it's a bit dark then all ads concerning road accidents, smoking and health will have to be banned too. If an ad about climate change is scary for a kid, I don't doubt those adverts telling them their parents are going to die if they smoke are pretty terrifying too.

The ad might seem hard hitting to some, but it is also entirely justified. Environmentalists have long complained that if people knew the full scale of the climate change threat they would be storming parliament demanding action, while the government's own research has shown time and again that one of the main reasons for inaction on carbon emissions is that people think the global warming threat is distant and ill-defined. Having tried almost everything else to instil greener behaviours, it is about time the government tried a more robust approach and it is to be applauded for giving it a go.

Of course, businesses would be wise not to emulate this approach in their marketing - promoting the benefits of a green product is always going to be more effective than trying to scare people into buying it - but there is a lesson for firms in the government's increasingly stark warnings.

Despite all the evidence that we are going to see fundamental changes to the climate during this half of the century, there is still a tendency for businesses to underplay the existential nature of the risks they face. This is entirely understandable given that no one really wants to spend too long thinking about devastation and destruction. But if a business really wants to accelerate its development as a low carbon operation then senior executives need to comprehend both the scale of the threat and the scale of the opportunity - after all, nothing focuses minds like fear and greed.

Increasingly, business leaders get the opportunity side of the equation as more and more reports highlight the rapid growth enjoyed by the clean tech sector and the huge potential presented by new regulations and incentives. But many are still burying their heads in the sand over the risks. Whether its climate change, carbon regulations or peak oil, there is a tendency to dismiss or downplay the risks businesses face.

Personally, nothing has had a more profound impact on my understanding of the need for urgent action, than a couple of days spent earlier this year listening to the world's top climate scientists present their latest findings. Every politician and business leader in the world should be made to sit through two days listening to these scientists and see if they still think they cannot make the case for investing in low carbon. Or, failing that, they could just watch the government's new ad and ask if they really want to be responsible for the drowning dog.

Cameron ties himself into knots spinning green policies and small government

Fri, 16 Oct 2009 17:36:11 GMT

If, as has been the case since at least 1997 and arguably long before, elections are won by the party with the most adept spin operation then David Cameron would be forgiven for booking the Number 10 moving van right now.

The Conservative leader's speech today on how to marry small government and low carbon is a masterpiece in triangulation and spin worthy of New Labour at its best/worst, depending on your point of view.

In fact, it is so stock full of casual contradictions and political positioning it is hard to know where to start in attempting to deconstruct what the man who would be prime minister is trying to tell the business community.

His central premise is that "co-operation with business is always preferable to coercion" and that "we want to call time on the big government approach" of diktat and regulation. He argued that instead transparency and the "carrot" of green incentives will prove more effective at promoting low carbon behaviour from both businesses and consumers alike.

So far, so New Tory, and Cameron backs up his vision of a light touch low carbon revolution with a number of innovative proposals, including energy bills that tell you how your energy use compares with your neighbours, online reporting for council offices' carbon emissions, and incentives for people who recycle, each of which sounds promising and fits neatly into the Cameroonian's favoured concept of "nudging" people to behave in the interests of the wider society.

These are entirely valid arguments and there is little doubt that the government has failed to properly harness the power of incentives and transparency to encourage sustainable behaviour. But once he has set out his stall, Cameron then has to deliver a master class in spin as he attempts to paper over the glaring contradictions of his small government vision and his support for decidedly interventionist environmental policies.

So, at the same time as espousing the benefits of small government and incentives, Cameron admits that "in some cases... imposing tough regulation" will be necessary and reiterates that a Conservative government would introduce legislation effectively banning the construction of coal-fired power plants without CCS.

He also commits the Conservatives to putting "a realistic cost on pollution and waste" through the continuation of the landfill tax until at least 2020 and the introduction of a carbon tax. There are scant details on the scale and extent of this carbon tax, which is understandable when Cameron is trying to position these green taxes as carrots that reward environmentally sustainable behaviour, when they are as much sticks with which to beat those who fail to fall into line.

Then there is the political positioning. The Conservatives, Labour and Lib Dems have been bickering for months over who was first to come up with proposals for smart meters, green home loans and feed in tariffs, and Cameron demonstrates that he is no mood to concede the argument claiming once again that these are all Conservative policies first and foremost.

He also delivers a remarkable display of brass neck, outlining plans for a new working group that would see the Conservatives co-operate with manufacturers to encourage the design of energy efficient appliances that no longer have stand-by and use "economy mode" as standard. He says that "we're not doing this to boss business around - we're doing this because we don't want to resort to regulation".

But Cameron must know full well that the EU is currently working on regulations that will mandate precisely these improvements under the Energy using Products Directive, which is due to pass early next year. Even if a Prime Minister Cameron chose to escalate hostilities with the EU and refuse to adopt the directive, most electronics manufacturers are pan-European and would simply conform to the new standard anyway. The result? The Tories will be able to say their co-operative approach with businesses has delivered more efficient appliances when in fact these firms are simply complying with EU regulations. Like I say you have to admire the political positioning, even if the whole thing smacks of mendacity.

The problem for Cameron is that arguably more than any other issue, the low carbon economy simply cannot be delivered through non-interventionist policies.

There are some great light touch ideas out there, such as incentives for recycling and measures to promote wider carbon reporting, which should all be rolled out more widely. Equally, there are plenty of grounds for criticising the government for its use of directionless quangos to promote low carbon business models and its failure to properly harness market forces to drive the development of clean technologies. But as a general rule the emergence of low carbon technologies will require high levels of government involvement. Be it through carbon pricing, bans on the most polluting activities, incentives for clean technologies or direct or indirect backing for large scale infrastructure projects such as nuclear power plants and high speed rail networks, the state simply has to get its hands dirty if it is to drive the transition to a low carbon economy.

Thankfully, Cameron's policies suggest he understands all this. It's just that the ideological ground on which he has chosen to fight the next election means that he can't say it - hence a speech that manages to spin some of the most demanding environmental regulations ever to be proposed in the UK as a prime example of small government at work.

When it comes to carbon, does every little help?

Fri, 09 Oct 2009 16:34:31 GMT

There were a few wry smiles in the BusinessGreen.com office yesterday morning when we read the report that a Japanese airline was requesting passengers take a toilet break before boarding an aircraft in an attempt to reduce weight and cut in flight carbon emissions.

All Nippon Airways (ANA) has apparently calculated that with a full human bladder weighing about 1kg it may be possible to strip out a fair few kilograms by reminding people to take a few moments to relieve themselves before they get on the plane.

Leaving aside the fact that only someone with a bizarre airline toilet fetish would need a reminder to make sure they were, shall we say, comfortable before they got on a plane, the question has to be whether this policy constitutes anything more than a vaguely amusing publicity stunt?

There is no doubt that lightening the load of an aircraft through any means will help reduce fuel use, but equally the impact of leaving a few unnecessary kilograms in the airport's facilities will have an infinitesimally small affect on fuel efficiency.

More significant are ANA's plans to reduce the weight of in flight materials, such as cutlery and glasses, and request that passengers not bring unnecessary luggage. A number of airlines, such as Emirates, have already scrapped in-flight magazines in an attempt to cut down on weight, while budget airlines such as Ryanair and EasyJet have long kept fuel costs down by keeping their aircraft as light as possible.

But the question remains as to whether even these fuel savings are worth while. Small savings will add up when spread across an entire fleet, but is attempting to cut aviation's carbon emissions by shedding a few unnecessary pounds a bit like trying to bail out the Titanic with a thimble.

Professor David MacKay the newly appointed chief scientist at the Department of Energy and Climate Change who has been encouragingly prone to contentious remarks during his short time in the post, has been at pains to point out that focusing on minute, incremental cuts in carbon can distract from the sheer scale of the transformation that is actually required. As he observes, "if we all do a little, we'll achieve only a little".

There is validity in this argument, in terms of their carbon savings small scale measures are not far short of a waste of time. As MacKay's already famous calculations show, the carbon saved by turning off your phone charger each day is equivalent to driving your car for one second. Even when multiplied across an entire economy savings on this scale will never get us anywhere near the kind of carbon emission reductions that are required. The only way to really decarbonise the economy is to develop an entirely new low carbon energy and transport infrastructure that strips the emissions out of every aspect of our day-to-day activities.

But direct carbon savings are not the only factor to consider when looking at micro-scale improvements in efficiency - there is a psychological element at play as well.

I recently interviewed David Halford, head of ethical sourcing and environmental policy at BBC Worldwide, about the company's green initiatives and while he was under no illusions as to the importance of large scale carbon reduction projects he also argued that small scale initiatives had a key role to play.

Most notably, he revealed that the company had moved to get rid of disposable plastic cups, despite the fact that a lifecycle analysis comparing disposable cups and ceramic mugs had shown that the carbon savings were pretty negligible. "Every time we had a meeting we had with staff about environmental issues someone would bring up the need to get rid of the plastic cups," he explained, adding that getting rid of the dreaded cups had removed a layer of resistance and freed the environmental team get on with more ambitious measures.

The same phenomenon applies to turning off phone chargers and perhaps even visiting the toilet before getting on a plane. The carbon savings might be minimal, but ensuring people are conscious of energy use and reminded to reduce it where possible can only help secure support for more demanding initiatives.

You could argue that promoting these micro-scale measures can lull people into a false sense of security, but equally they can serve to pave the way for the kind of more ambitious projects that are required. After all, it is not such a big leap from asking people if all their luggage is necessary to asking them if their flight is necessary.

Perhaps the old adage is right after all, every little does help.

Copenhagen poker game remains on a knife edge

Wed, 23 Sep 2009 12:18:43 GMT

If, as Ed Miliband suggested yesterday, the UN's Copenhagen negotiations resemble an uniquely high stakes poker game, then we have now reached that four in the morning point where everyone looks tired and a bit the worse for wear, but still no one is yet willing to lay their cards on the table.

It is entirely understandable that attendees at yesterday's UN climate summit in New York would attempt to hail the meeting as a success, and there is no doubt that the Copenhagen negotiations look considerably healthier than they did 24 hours ago. But it was categorically not the breakthrough that many had hoped for.

China's commitment to set a carbon intensity target is hugely welcome and further underlines its willingness to act on climate change. But US chief negotiator Todd Stern is right to point out that the announcement's significance depends on the nature of the target.

China's carbon intensity is falling pretty rapidly anyway as an inevitable result of industrialisation. It could conceivably opt for a target that is simply in line with business as usual, which would be good for nothing. This scenario is pretty unlikely given the country's increased commitment to enhance energy efficiency and generate 15 per cent of its energy from renewables, but the threat remains and there is a risk that the failure of rich nations to set stringent targets of their own could prompt China to opt for a pretty unambitious goal.

It was also encouraging to see Japan and France reiterate their commitment to getting a deal finalised, and Japan's pledge to cut emissions 25 per cent by 2020 provides yet more evidence that deep cuts in emissions are feasible.

But Japan and the EU have had very little to do with the current road blocks. That dubious honour rests with the US, or more specifically the US Senate, and on that front there was little sign of progress. As Michael Tomasky blogged on the Guardian we even got the unprecedented sight of President Obama delivering a bad speech.

Despite Miliband's call for an end to the cards-close-to-the-chest brand of diplomacy that has consistently hampered the progress of talks to agree a successor to the Kyoto Treaty, it now looks inevitable that businesses will have to wait until the final hours of the Copenhagen meeting to get a sense of whether a meaningful deal will be reached.

None of the key players (which basically translates as the US, China and India) are willing to set out detailed proposals at this stage, which means that like all the best poker games we are all currently trapped in a state of near unbearable tension. China and India are justifiably trying to wring more concessions from rich nations before staking out their own positions and the US administration is completely hamstrung by the fact Congress will almost inevitably block any deal that commits the country to deep short term emission cuts.

The question now is whether each of these countries are secretly holding nothing more than a pair of twos in the form of unambitious and voluntary emissions targets, or are they preparing to lay down the Full House that will deliver a workable and effective deal?

Given the stake is the future of the planet we can only hope it is the later, while recognising that the odds are still in favour of something in between - perhaps a pair of sevens in the form of increased climate funding, expanded carbon trading and largely unsatisfactory emission targets.

Either way, we are not going to find out until dawn breaks in Copenhagen and all the players finally lay their cards on the table.

What I did on my holidays

Mon, 14 Sep 2009 17:41:23 GMT

Ultra middle class sentence alert: I have just got back from a week's holiday in Provence.

By complete coincidence, my holiday choice meant that I was sunning myself by the pool in a little village in southern France at the same time as President Sarkozy made his play to establish the country as the world's premier green economy with his controversial plans for a carbon tax.

As has been widely reported, the proposals to introduce a levy on transport fuel and gas bills equal to €17 per tonne of carbon have met with widespread opposition and given the French propensity to strike as quickly as you can say whatever the French is for "pass the placards and the lighter fluid", Sarkozy will need all his powers of persuasion to ensure the tax is introduced next year.

But judging by the speech last week in which he drew parallels between the new tax and the equally unpopular but morally justified decisions to end France's colonial rule and abolish the death penalty, Sarkozy is up for the fight and sees the row over the tax as a test of his political virility. His Napoleon Complex may not be to everyone's taste, but when it comes to challenges to his authority Sarkozy has a good record of coming out on top.

Moreover, it is hard to imagine a major economy better placed to lead the transition to a genuinely low carbon economy than France. Germany may have won the plaudits to date with its highly successful renewable energy strategy and the UK may have the only legally binding climate bill, while the Scandinavian nations may have the longest history of progressive environmental policies and the US, China and South Korea may be investing the greatest sums in clean tech, but in many ways France has a head start on all of them.

As a result of its penchant for nuclear power France already has arguably the lowest per capita emissions of any large economy. Recent figures put French carbon emissions per person at nine tonnes, well below the UK's 11 tonnes per person, Germany's 12.3 tonnes and the gargantuan 24 tonnes that are emitted each year by the average American.

Meanwhile, the spectre of climate change is also more visible in France than in many developed countries. Provence has not seen rain for over two months this summer and France was the country hardest hit by the European heat wave of 2003 that killed tens of thousands of people. You can't attribute one or two droughts to climate change, but there is widespread expectation that heat waves and water shortages will become more severe in the coming years.

Based on current climate predictions, one of the world's most prestigious industries in the form of France's vineyards could genuinely become unviable by the second half of the century. If Sarkozy really wants to mobilise French public opinion in favour of climate change measures, perhaps he should point out that without urgent action Burgundy's vineyards will have to cross the Channel to Kent.

On top of that, the country has a car industry that has long specialised in small fuel efficient cars, impressive solar, wind and even marine and geothermal energy resources, and a high speed rail network that is second to none and managed to whisk me from London to Avignon in five hours at a lower cost than the equivalent flight. It is little wonder that today's Low Carbon Competitiveness report from the Climate Institute and E3G ranked France just ahead of Japan and the UK as the country best prepared to benefit from the shift to a low carbon economy.

But, perhaps most importantly, France has a culture which, despite the protests at the carbon tax, appears more conducive to a low carbon economy than many other industrialised nations.

Any discussion of so-called "national character" is an inevitable muddle of gross generalisation and tired cliché, but that disclaimer aside there are elements of French culture that could provide a template for a more sustainable economy.

Firstly, France's long history of state intervention, high taxes and strict regulation may have become the poster child for European "socialism" on the other side of the Atlantic, but it also makes it relatively easy for the government to introduce the kinds of regulations and incentives necessary to fast track the development of a low carbon economy.

Meanwhile, the concept of French localism may be something of a tourist cliché, but the desire for local and seasonal produce that underpins the country's fiercely nationalistic cuisine, and the concept of weekly markets and small community's supported by local stores offers an lower carbon alternative to the giant supermarkets and all-year round vacuum packed food favoured by Anglo-Saxon economies. Intriguingly, the French pastoral idyll (which, again, I accept is a mix of myth and reality) offers an alternative lower impact consumer model that is idealised for two weeks of the year by the same Daily Telegraph reading British tourists who would protest if they ever turned up at a UK supermarket and found that they could not buy strawberries in the middle of November.

Other countries will now be watching closely to see if Sarkozy can face down the protests and deliver a carbon tax that manages to curb emissions without instigating the emigration of carbon intensive industries. If he manages it (and the promise of other tax cuts and exemptions for some industries means he just might), there is every chance those Francophiles who return from France each year wondering wistfully why we can't be more like the French, will be referring as much to their carbon footprint as the long lunches and fine wines.

Copenhagen: 100 days and counting

Fri, 28 Aug 2009 16:02:01 GMT

It is one of the truisms of negotiating that you are far more likely to find yourself being outmanoeuvred by the other party when you are in the wrong.

Go in with a ridiculously low offer and in most circumstances the other party will simply tell you where to go. Get it wrong the other way and go in way too high and you have will have lost before the negotiations have even begun.

Hence, with precisely 100 days to go before the start of the UN's climate change conference in Copenhagen, the negotiators working on behalf of the world's rich nations once again find themselves being comprehensively outmanoeuvred in the court of global public opinion by their counterparts from emerging economies.

When last we left the men and women entrusted with saving the planet at the close of this month's Bonn talks, the negotiating process was once again in deadlock. It is a gross simplification of a mind-bendingly complex situation, but in essence the rich nations were demanding that the likes of China and India do more to tackle climate change, while poorer countries were demanding that the West face up to its historic responsibility and agree to deeper emission cuts and more generous clean tech funding.

The problem for the rich countries is that they keep backing themselves into a corner. They keep asking for greater demonstrations of commitment from emerging nations and they keep getting exactly that.

In the past few weeks, China has passed its first climate change resolution, laying the legal framework for a full blown climate change strategy (contrast this with US legislators apparent inability to fast track their increasingly anaemic climate change bill), hinted strongly that it accepts the need to set emission targets in the not to distant future, introduced some of the world's most generous renewable energy incentive schemes and given the go-ahead for a raft of new low carbon projects.

Meanwhile, India, which had been flirting with the position of negotiating blockade formerly occupied by the US, has given its clearest signal yet that it will introduce serious efforts to cut emissions in the form of a wide-ranging energy efficiency programme. And Indonesia, the other big emitter from the developing world, has put EU talks of 20 per cent emission cuts to shame by acknowledging that with the right support it could cut emissions 60 per cent by 2030.

The rich nations are likely to respond by arguing that this is all well and good, but means little unless large polluters such as China and India agree to binding emission goals.

But again you can see how simple it will be for China and India to repel this gambit. "Fine, we'll have targets," they will say. "But they have to be on a per capita basis. You say a human life is worth the same whether they are in the rich or poor world, so prove it." My maths may be a little hazy, but that would basically mean most western nations committing to emission cuts in excess of 40 per cent by 2020, while emerging economies would be able to continue to grow their emissions steadily for another 10 years or so.

Like I say, it is easy to outmanoeuvre someone when they are in the wrong, and the rich world is morally, tactically and strategically in the wrong on this one.

Business leaders have the power to kill this "climate change trial" farce

Wed, 26 Aug 2009 13:19:51 GMT

Oh dear, oh dear, oh dear.

I have now moved beyond the initial wave of shock and anger, and am simply sitting at my desk, shaking my head ruefully, wondering if civilisation will ever claw its way out of the rabbit hole it slipped down some point in the not too distant past. I'm sure the impotent rage will return pretty soon.

In case you missed it, the US Chamber of Commerce, a group representing three million businesses, has filed a request with the EPA for a public hearing on the scientific evidence behind its decision to declare climate change a threat to human health.

The group is absolutely unequivocal about its intentions - it wants a Scopes Trial on the science of climate change, a full blown "trial of the century" complete with millions of miles of column inches, cross questioning of scientists, and a final decision on whether global warming is manmade. And there you were thinking the quality of scientific debate and rational thought might have moved on since the famous 1925 case that saw evolution pitted against the creationists.

As William Kovacs, the chamber's senior vice president for environment, technology and regulatory affairs, puts it: "It would be evolution versus creationism. It would be the science of climate change on trial."

It must be tempting for environmentalists and climate scientists to respond with a resounding "bring it on"; to seize the opportunity to once and for all lay to rest all the myths surrounding climate change. After all the legendary lawyer Clarence Darrow - who if you listen carefully you can hear spinning in his grave this morning - won the Scopes Trial, defeating the creationists in open court.

But let's be clear here, this is an absolute no-win scenario for the EPA and the scientific establishment.

They have debunked the sceptics time and time again, dismissing virtually every objection using solid evidence and peer-reviewed reasoning, they have uncovered the links between many climate sceptics and industries with vested interests in the carbon intensive status quo, they have made it clear that there are enormous associated benefits to curbing carbon emissions besides tackling climate change, and it is still not enough. They would win, but there is nothing to be gained from repeating the exercise in a public hearing. After all, Darrow and co won the Scopes Trial and there are still plenty of people out there who believe in creationism.

And there is plenty to lose. Further delays to US legislative attempts to curb carbon emissions would inevitably result, climate sceptics would be given the perfect platform to spread their misinformation (they must be like pigs in muck this morning) and an awful lot would be resting on a judge's ability to comprehend complex scientific arguments.

Moreover, the Chamber of Commerce has already inadvertently revealed that it will not accept any decision that does not get it what it wants - namely the scrapping of plans to regulate carbon emissions.

Writing on the Chamber's blog, Bob Peck offered an "aw shuck's, we just want some transparency" defence of the group's position, in which he offered up one of the most fist-chewingly moronic sentences I have ever read. Insisting that the call for a hearing was entirely reasonable, he argued that "to enact effective policy we need transparency and scientific data which is beyond question, not data deemed beyond questioning".

Well while we're wishing for stuff that can never exist why stop at "scientific data which is beyond question", let's have world peace and a perpetual motion machine as well.

By definition, there is no such thing as "scientific data which is beyond question". It does not exist, that is the nature of science, you question everything, test everything and then draw conclusions based on the best available evidence. Those conclusions can then change if the evidence changes. It's messy and complicated, but it is what gives us scientific progress.

Of course, the real Machiavellian genius at the heart of this call for a public hearing is the fact that the EPA has been backed into a corner: engage in this farce and you waste time establishing what reams and reams of the best available evidence already tells us, but tell the Chamber where to go (as seems likely) and you will be accused of running scared by the climate sceptics, further fuelling their sense of a giant global conspiracy.

So what can be done?

Well it is businesses, through the US Chamber of Commerce, that have caused this problem and it should be them that try to solve it.

As we have argued here before, the nuts and bolts of climate science are hugely important, but for businesses climate change is primarily a risk rather than a scientific issue.

Imagine that back in 2007 the vast majority of the world's economists had told you that there is a huge bust coming, it will start in mid- to late-2008, several of the world's largest banks will collapse, governments will intervene to prop up their economies running up massive deficits in the process, the US and Europe will be hit worst, and a deep global recession will result. They could not predict this with absolute certainty on the grounds that time travel is impossible, but if almost all the world's finest economic minds were telling this same story it would be a dereliction of corporate duty not to try and identify the areas of greatest risk, implement policies and legislation that attempt to avoid the crash, and generally prepare for the worse.

Now the vast majority of scientists are telling us something very similar about the climate, except that theirs is not an "inexact science", they are dealing with physical laws and are far more certain that their models are accurate than economists could ever be. There is a vanishingly slim chance that they could be wrong, but it would again be a dereliction of corporate duty not to try and avert potential disaster. Any vaguely intelligent business executive, shareholder, investor, politician or legislator knows this, just as they know that the fringe benefits of carbon legislation in terms of energy security, more stable energy prices, cleaner air and new clean tech industries will be massive regardless of climate change.

As such any business that is a member of the US Chamber of Commerce and recognises climate change as a long term threat to their operations should immediately tear up their membership in protest at one of the most misguided and potentially harmful lobbying campaigns in the long undignified history of misguided and potentially harmful lobbying campaigns.

Meanwhile, it is now time for those businesses that understand the critical importance of addressing climate change risks to deliver one almighty slap down to the Chamber of Commerce. They must start giving the emerging green business groups the funding and public backing they need to fight back, and offer on-the-record condemnation of the way in which the Chamber of Commerce and its dream of a Scopes Trial on climate change is wilfully damaging America's long term economic prospects.

Just as politicians are now being asked to match their rhetoric on climate change with real action it is time for our businesses leaders to do the same. They might not like getting their hands dirty on controversial issues like this, but this time the row is too important not to get involved. So, Chrysler, Ford, GE, GM, Google, HP, IBM, JPMorgan, Microsoft, Wal-Mart, et al, where are you? We need you.

Darling's week in charge offers perfect chance to end VAT on green products

Tue, 18 Aug 2009 15:53:51 GMT

With his boss away on holiday, a more daring chancellor than Alistair Darling would currently be casting around for a headline grabbing pronouncement or two with which to mark his week in the Downing Street hot seat.

As luck would have it the British Retail Consortium (BRC) managed to give him just what he should have been looking for yesterday in the form of a letter to the chancellor calling on him to scrap VAT on green and energy saving products.

In one swoop the chancellor could, if he so chose, do more for the UK's carbon footprint and green businesses sector than all the transition plans, incentive schemes and R&D funds put together - providing a sizable fillip to the economy in the process.

What's more, the returning prime minister could hardly complain too long and loud (not in public at least) as it was kind of his idea in the first place.

Back in his final budget as chancellor in 2007, Gordon Brown said that he would write to his counterparts across the EU urging them to cut VAT on energy efficient products. He then revisited the topic in early 2008 teaming up with French President Nicholas Sarkozy to call on other EU leaders to back VAT cuts for green products.

Then, like so many of the prime ministers good intentions, the idea drifted into the political ether never to be spoken of again.

But why was this proposal allowed to die? And what is there to stop the Chancellor resuscitating it?

As the BRC observed scrapping VAT on green products would slash carbon emissions by 1.3 million tonnes a year by 2020 and would also spark a clean tech arms race between companies as they battle to ensure their products qualify for zero rate VAT. Perhaps more importantly, such a move would eradicate the price premium that is typically associated with many green products, removing the last excuse many businesses and consumers use to avoid buying sustainable products.

The Treasury has argued that it cannot make changes without the approval of other EU member states, but this is not strictly true. Under EU rules it cannot unilaterally scrap VAT on a product, but it can slash rates to as low as five per cent and it certainly had no problem cutting the standard rate from 17.5 to 15 per cent last autumn as part of its economic recovery plan.

There are also plenty of precedents. A quick glance down the list of goods and services that are either exempt from VAT or subject to the reduced rate of five per cent reveals that with the exception of gambling virtually every product or service can be judged to be in the public interest - an argument that could easily be extended to green products.

Donations to charities or charges for cultural events, for example, are VAT free, while newspapers, books, certain food stuffs, sports activities and children's clothes are all famously zero-rated. More pertinently for the campaign for lower rates of VAT for green products, a raft of renewable energy and energy efficient products, including solar panels, combined heat and power units and energy saving materials installed in residential or charitable properties, face only a five per cent VAT rate.

The argument that we would need to act in harmony with our European neighbours to extend this five per cent rate to other energy efficient products is a political fig leaf of microscopic proportions.

Concerns that implementing an effective VAT cut on green products could prove difficult are slightly more valid. Any cuts would have to be backed up by a robust and continuously updated system for rating new products and services and ensuring only the greenest, most energy efficient products qualify for the five per cent rate. But while this would undoubtedly be challenging there are plenty of existing schemes out there (not least in the form of the government-backed Energy Saving Trust labelling scheme) which could be adapted for the purpose.

So why are we still paying standard rate VAT on products that the government should be doing everything in its power to accelerate the development and roll out of?

The answer lies partly in the woeful state of the public finances, but mainly in the Treasury's status as Whitehall's last unreconstructed bastion of anti-environmental thinking.

It is true that the public finances currently have the bloodied visage of Ricky Hatton after 12 rounds, but as the BRC calculates the £507m a year in lost VAT receipts that would result from scrapping VAT on green appliances is equivalent to that lost in little more than two weeks as a result of the across-the-board VAT reduction introduced last December.

Moreover, removing the price premium on many green products is arguably a more effective means of encouraging investment in their clean tech development than the millions the government has ploughed into various low carbon funds and subsidies over the years.

The real reason for the failure to give the VAT proposals due consideration lies in what the outgoing chair of the Sustainable Development Commission, Jonathon Porritt, rightly diagnosed as the Treasury's record of having "killed a lot of the energy around sustainable development".

Porritt's description of the Treasury as "startlingly arrogant" will have chimed with any green business or environmental group having to deal with Whitehall and it is undoubtedly this ingrained desire to downplay environmental issues that has put paid to the VAT proposals, just as it managed to neuter calls for a Green New Deal last year, and continues to put a brake on efforts to cut emissions across the public sector.

It is about time the Chancellor banged some of his mandarins' heads together and there are few better places to start than by ordering them to scrap VAT on green products - not only would he give one almighty kick start to the UK's green businesses, he might even get some positive press out of it for his week in charge.

Have Bond Villains taught us nothing about messing with the climate?

Mon, 10 Aug 2009 15:49:33 GMT

There is something uniquely tantalising about the concept of geo-engineering and the climate altering technologies it promises. If the history of civilisation is the story of mankind's steadily increasing dominion over the natural world, then the ability to tinker with the climate is arguably the final chapter. It takes us to the summit of Mount Olympus, rubbing shoulders with the gods.

The idea that we can respond to rising global temperatures by simply re-engineering the climate - which was given fresh impetus last week by the release of a new report from Bjorn Lomborg's Copenhagen Consensus Centre arguing that geo-engineering techniques could prove far more cost effective at lowering temperatures than curbing carbon emissions - plays into an appealingly optimistic understanding of modernity in which humankind has the technical answer to every problem it faces.

It is extremely tempting to sign up to a school of thought that runs, "we screwed the climate, but it's alright because all we have to do is re-engineer it and everything will be fine". It certainly has more immediate appeal than the increasingly depressing predictions from the world's climate scientists that we might just be doomed.

And yet you do not have to be a student of Greek mythology to understand that human beings with God complexes rarely fare too well - just watching a couple of James Bond films ought to be reminder enough.

Those who support geo-engineering may like to characterise its critics as modern day Cassandras who take perverse delight in bleak predictions and are fearful they will be out of job as soon as the climate change crisis is resolved. But this cheap cliché soon founders on the rocks of entirely legitimate concerns about the technical and moral efficacy of geo-engineering.

Take the proposal for "cloud ships" endorsed by Lomborg and the new Copenhagen Consensus Centre's report as the most promising geo-engineering technology. It certainly has a lot going for it. We know from the clouds that form behind shipping lanes that using ships to spray salt water into the air will form high level clouds that would serve to reflect back some of the sun's energy. Moreover, at a cost of around $9bn such a project would be extremely cheap in the grand scheme of things, while unlike proposals to pump particles into the atmosphere we could quickly stop the experiment if it had adverse effects.

But major problems still remain. First up, you barely need a GCSE in geography to understand that the weather and ocean current systems that shape our societies are influenced by both delicate variations in ocean temperatures and the difference between air temperatures over sea and land. Tinkering with these temperatures could have unforeseen and disastrous side effects thousands of miles from where the clouds are created.

Speaking to Lomborg last week, he admitted that more research was required into the likely side effects of cloud ships, but added that the proposed fleet would aim to operate in the Pacific in an attempt to reduce the impact on those rainfall systems that make landfall.

Of even greater concern is the fact that the project would only serve to mask the effect of climate change, not reverse it by addressing concentrations of greenhouse gases in the atmosphere.

This is worrying on a number of fronts. Firstly, it would mean that we would be signing up to maintaining and operating a fleet of cloud creating ships indefinitely, with all the future costs and risks that go with that.

Secondly, the failure to address rising concentrations of CO2 in the atmosphere would mean that the acidification of the oceans would continue to accelerate regardless of the project's success. When this point was put to Lomborg he suggested that the biggest environmental challenge put forward by green groups was rising global temperatures and as such it was "disingenuous" of them to highlight a different issue in response to a potential solution to global warming. Lomborg has a long history of windiong up environmental groups, but quite how raising awareness of the acidification of the world's oceans and the resulting collapse of an ecosystem that supports billions of people globally can be described as "disingenuous" is still not entirely clear.

Finally, the creation of any successful geo-engineering system would simultaneously create an unprecedented political and security challenge as world leaders attempted to negotiate who gets to play God and control the technology. Not that I wish to sound like those Bond villains, but whether it is cloud creating ships or "artificial trees" capable of capturing carbon from the atmosphere we are talking about technologies that could prove as powerful and destructive as a slow motion nuclear arsenal. If the UN's largely failed attempts to check nuclear proliferation have taught us anything it is that mistrust and posturing are the default setting when it comes to world-ending technologies and there is no reason to think geo-engineering will be any different.

Of course, none of these concerns are an argument to immediately end all research into geo-engineering and Lomborg and co may be right in calling for more research into geo-engineering as a last best hope of avoiding climatic disaster. But none of the proposals under discussion are in any way viable in their current form and if there is to be more research it has to be undertaken with no expectation of success lest the work serves to distract from the crucial fight to curb carbon emissions.

The only proposals on the table that could help address both rising temperatures and ocean acidification are sci-fi style "artificial trees" capable of extracting carbon dioxide from the atmosphere and storing it underground. But we already have a tried and tested way of creating larger carbon sinks - it is called afforestation and it has been shown time and again to be the most cost effective means of tackling climate change.

Equally, even the most successful geo-engineering technologies would do nothing to address the increasing level of energy insecurity that characterises our reliance on carbon intensive fuels. Again, we already have the proven technologies for simultaneously cutting carbon emissions and bolstering energy security in the form of everything from solar panels to hydroelectricity, and wind turbines to biomass plants.

The failure to roll these technologies out quickly enough should spur us on to act faster, not serve as a green light for another reckless gamble on technologies that are unlikely to ever work and will only create fresh problems even if they do. If there is one lesson that both Greek Myths and Bond films have in common it is that if something looks too good to be true, it almost invariably is.

Green shoots for green businesses raise hopes for 2010

Thu, 06 Aug 2009 15:29:39 GMT

I am always wary of making predictions, particularly when my recent attempts at crystal ball gazing include such classics as, "this Twitter nonsense will never take off", "Brown will be gone by the summer", and "Newcastle United are gonna get relegated". Actually, I got that last one right, but then again it was never in much doubt.

However, my patchy soothsaying record aside, it looks increasingly safe to say that the clean tech sector has already put the worst of the recession behind it.

Hailing the presence of green shoots is a high risk art and it should be noted that any number of variables could yet blow the fragile recovery off course. The Copenhagen talks could still collapse, undermining much of the political certainty many clean tech businesses have been built on; as yet unidentified banking scandals could kill off any signs of encouraging activity in the wider economy; and the chances are the price of carbon in the European Emission Trading Scheme could get worse before it gets better. But let us not be in any doubt - for the global clean tech sector the recovery is now underway.

The most compelling evidence for this optimistic outlook comes in the form of the recent figures from Dow Jones VentureSource showing that global venture capital investment in clean technology rose 73 per cent during the second quarter of the year, to $572m across 48 deals.

It might still be well down on the bumper investment levels recorded during 2008, but it still marks a dramatic recovery on the first three months of the year and provides a good gauge of the confidence flowing back into the sector.

It's worth remembering that venture capitalists are not exactly well known for their refined sense of sentiment. These guys (and they are almost invariably guys, but that's a whole other story) are all about making money and the fact that after a chastening year they are flocking back to the clean tech sector rather than more established industries suggests the optimistic predictions for the industry that were commonplace prior to last summer have not lost any of their resonance during the downturn.

Meanwhile, the green shoots in the investment sector are being mirrored in other parts of the clean tech ecosystem.

The Obama administration's approval ratings might be enduring the inevitable journey back from deity to mere mortal, but the president still deserves considerable kudos for the breakneck speed with which the multi billion dollar stimulus package has been pumped into the low carbon economy. While on this side of the Atlantic the government has finally backed up its always impressive rhetoric with some workable financial support mechanisms, not least in the form of the £1bn in new financing now on offer to wind farm developers.

Even some of the potential dark clouds that dot the horizon for the wider economy could provide a boost to the clean tech sector.

Fears that oil prices will soar as demand increases might spell bad news for motorists and carbon intensive businesses, but it is only good news for low carbon technologies that look ever more attractive each time the price of a barrel of oil rises.

Similarly, each time Republicans in the US argue that climate change legislation and the shift to renewables will lead to higher energy costs they only serve to remind astute business executives that the best way to insulate yourself against rising energy bills and volatile fossil fuel prices is to cut energy use and identify a diverse mix of fuel supplies.

Even concerns that the recovery will be undermined by future high levels of national debt and public sector spending cuts are unlikely to bother clean tech execs. In the UK, the current political debate is dominated by talk of government spending cuts, and yet proposals for electrified and high speed rail links, the world's largest tidal energy project, increased support for electric cars, and a huge expansion in offshore wind energy are still gaining support across the political spectrum. The transition to a low carbon is a top priority for most governments and as such clean tech firms know that spending on green infrastructure projects will be protected almost regardless of how tight public finances get.

Unfortunately, the clean tech recovery will not be a case of a rising tide lifting all ships. It might not seem like it given this week's announcements of multi-billion pound bankers' bonuses, but the world has changed in the past year. Investors and customers will increasingly demand technically proven, commercially viable green products, and it is the more mature firms that have already made the transition from development to delivery who are most likely to prosper during the recovery.

Equally, with any recovery in consumer confidence still six months off at best those clean tech firms focused on the low carbon infrastructure projects beloved of governments are more likely to lead the recovery than the firms with the latest green gadgets.

But all in all the outlook for the global clean tech sector during the second half of 2009 and the whole of 2010 looks pretty bright. Or at the very least, it looks a damn sight brighter than it does for Newcastle United.

How do you solve a problem like the Nimbys?

Wed, 29 Jul 2009 13:33:59 GMT

Anyone familiar with the two steps forward, one and three quarter steps back world of the UK's renewable energy industry is unlikely to have been surprised by the past week, but that does not stop it being teeth-gnashingly frustrating.

Just a fortnight on from the release of the government's much-vaunted Low Carbon Industrial Plan and the familiar pattern of wind farm objections, Nimby protests, planning difficulties, and investment setbacks has returned.

The most high-profile slap in the face for the sector comes in the form of Vestas' plans to close its wind turbine factory on the Isle of Wight, despite the brave efforts of staff to oppose the decision by staging a sit-in at the plant, jeopardising any chance of redundancy payments in the process.

There have been plenty of suggestions that Vestas' decision to close the plant is shortsighted and that the government should step in to nationalise the facility. But while the issuing of dismissal letters inside a food parcel sent to the protestors was crass in the extreme, it is much harder to fault the commercial logic behind the decision to close the plant.

The factory was building blades that were being exported to the US. At the same time, the company has a plant in the US capable of delivering the same blades at lower cost. It makes sense from both a commercial, and indeed an environmental perspective for turbines for the US market to be built in the US.

Vestas did look at converting the Isle of Wight factory to produce blades for the UK market, but decided that the risk that demand for the new turbines would not be forthcoming was too high. Was this an unreasonable decision?

Well, the British Wind Energy Association is right to point out that up to 2,700 new wind turbines are expected to be erected by 2012 with more than 700 under construction and nearly 2,000 having secured planning permission. Meanwhile, the additional £1bn of financing announced by the government this week should ensure that those projects that have planning permission are indeed built.

And yet Vestas would be forgiven for arguing that it has seen such predictions in the past, only for the pipeline of new projects to be blocked time and again by local objections to planning applications, followed by long, winding appeals that in many cases ended in disappointment.

It could point to Greenpeace's recent report showing that between December 2005 and November 2008 Tory councils blocked 158.2MW of wind energy projects, approving just 44.7MW, while Labour councils fared only a bit better, rejecting 62.6MW and approving just 68.3MW.

If it wanted more timely examples, it could highlight the news today that the RSPB is to formally oppose plans for the UK's largest onshore wind farm on the Shetland Islands, after previously indicating it would support the proposal. Or the decision by RES to cut the number of turbines at its planned Minnygap wind farm in Scotland from 15 to 10 in an attempt to win planning approval. Or Ecotricity's recent appeal against a decision that saw plans for a 12MW wind farm in North Dorset rejected despite planning authorities recommending to councillors that the proposals should be approved. The list goes on and on.

It is horrible for the workers involved, but you can understand why Vestas has decided that it has had enough of operating in an environment where the market it serves is at the whim of a small minority of locally fixated Nimby protestors and popularity-courting councillors. If staff, trade unions and green groups want to protest against Vestas' decision, it is the government, and in particular wind farm-blocking councils, that should be the target.

The fact is Nimbyism is at the root of most of the clean tech industry's problems, and what's more, it will only get worse. The conservationist campaign against the proposed Severn Barrage is already gathering momentum, the anti-wind lobby is if anything getting more vocal and has substantial support on the back benches of a Conservative party that looks destined to form the next government, objections to biomass and waste-to-energy plants are increasingly common, and if the recent opposition to planned carbon capture and storage plants in Germany and the Netherlands is anything to go by, even this technology could be hamstrung by people worried about living above carbon sinks.

Thus far the response from the renewables industry has tended to be one of impotent rage. Talk to anyone involved in trying to gain planning approval for a wind farm opposed by local parish worthies and they are often engaged in a scarcely concealed internal battle to resist an attack of apoplexy.

They can't understand why - when surveys have shown the vast majority of people like wind turbines, when the reality of climate change means they are trying to invest in a project that is essential to the continuation of our way of life, when the government is pretty unstinting in its support for low carbon technologies, when the latest turbines are ghostly quiet and governed by stringent planning rules that keep them a good distance from buildings - small numbers of people complaining about changes to their view can effectively torpedo an entire industrial revolution.

But while it is always fun to have a bit of rant, it will never solve the problem - in fact, it tends to exacerbate it by making local opponents to wind farms feel bullied.

So what is the answer?

The first step has to be to understand the origin of the opposition to these developments. Opponents of wind farms like to dress up their objections in vaguely technical (and easily countered) arguments about the efficacy of wind and the damage turbines can do to bird life, but in most cases the root of the opposition comes down to visual impact.

The government recently undertook a major survey which found that the vast majority of people like the look of turbines, and almost everyone agrees they have more architectural value than a coal-fired power plant. But the vocal minority's opposition to wind farms is based not so much on aesthetic judgements but a deep-rooted conservative, with a small c, mentality (although given their councillors' record, maybe that should be with a capital C too). My guess is that opponents to wind farms simply don't like change, pure and simple.

So how do you win them round? The rigours of democracy quite rightly ensure that the totalitarian approach of telling them to lump it and evicting anyone who protests too loudly is out of the question. As a result, the renewables sector needs to get much better at the gentle art of persuasion.

Those who manage to secure approval for a wind farm tend to engage in genuine and lengthy consultation and engagement exercises with residents, while the practice of donating funds to local community projects has become increasingly prevalent. But such engagement exercises are only going to have limited success when faced with a deep-rooted fear of change.

Perhaps the answer is to be found in one of the few mechanisms proven throughout history to help people get over their fears: money.

My godfather lives near Sellafield. Not near enough to see it, but close enough to know that if anything ever goes badly wrong, his health insurance claim would make for interesting reading. As a teacher with impeccable left-leaning, anti-nuclear credentials and a life-long love of the surrounding countryside, he always said that he did not like having a power plant in the back yard, but he was fully aware that without it he would most likely be out of a job and an area with an already pretty precarious economy would be tipped over the edge.

Unfortunately, this economic rationalism will not work quite so well with wind farms, when you consider that once they are built, the employment prospects are pretty minimal. Consequently, the onus has to be on developers to make the economic case more explicit, and if that means paying local residents some form of reparations or annual stipend then so be it.

The financial rewards might still not be sufficient to convince those with an irrational hatred of wind farms, but I'm guessing their opposition would soon be drowned out by those who quite fancied the idea of the local wind farm paying for their holiday each year.

Brown's TED call for a global climate body is welcome, but will it work?

Wed, 22 Jul 2009 16:35:50 GMT

In his surprise speech to the Technology, Entertainment and Design (TED) conference in Oxford yesterday, Gordon Brown said something thought provoking about climate change.

Actually, he was thought provoking on any number of topics, so much so that as the standing ovation began the Prime Minister would have been forgiven for wondering what his career prospects would be like if he could deliver all his speeches to an audience of liberal intellectuals and technology entrepreneurs.

But back to his thoughts on climate change. As part of a wide-ranging speech calling for the creation of new international institutions to cope with a world irreversibly changed for the better by technology and mass communication, Brown argued that there was an urgent need for a new global climate change body to oversee the transition to a global economy.

It is worth quoting him at length:

"Is it not absolutely scandalous that we have a situation where we know that there is a climate change problem, where we know also that that will mean we will have to give more resources to developing countries to deal with that, where we want to create a global carbon market, but there is no global institution that people have been able to agree upon to deal with this problem?
"One of the things that has to come out of Copenhagen in the next few months is an agreement that there will be a global environmental institution that is able to deal with the problems of persuading the whole of the world to move along a climate change agenda."

With less than six months to go until Copenhagen it would have been nice for the Prime Minister to pipe up a bit earlier about what he wants to see on the agenda, but he makes a valid if somewhat belated point.

The issue of how any Copenhagen agreement will be managed and enforced has been strangely absent from the negotiating process thus far, mainly because it raises dilemmas even more complex and contentious than the still unresolved question of shared emission targets.

Brown's call for a new institution has a certain base appeal. Just as the recently launched International Renewable Energy Agency was formed as a direct challenge to the International Energy Agency's perceived inability to take renewables seriously, it is extremely tempting to respond to the UN's failure to properly enforce Kyoto and the World Bank's abject failure to accelerate the roll out of clean technologies by basically telling them that "if you can't do it, we'll get someone else in".

But the question that Brown's speech begs is whether a new institution would prove any more successful than the current mechanisms for curbing carbon emissions?

A dedicated International Low Carbon Agency or UN Climate Change Programme would certainly increase focus on global warming, but its success would depend entirely on how much power it is entrusted with.

A new agency would require the ability to impose real sanctions on those countries that breach emission targets, creating an environment where failure to cut emissions is as embarrassing and damaging for a country as having to turn to the IMF for a bail out. Any international agency tasked with policing carbon targets, promoting sustainable behaviour, managing the carbon market and distributing clean tech funds to the developing world, would from day one have to be as powerful as the World Bank, the IEA and the IMF combined. In fact, we'd need an institution pretty much on a par with the UN Security Council - although given its recent record a Climate Security Council might have to be even more powerful than that.

This is not an unreasonable ask given the scale of the threat climate change presents, but nor is it a particularly realistic one. The US and China are simply not going to agree to an institution capable of imposing meaningful penalties on those who fail to cut emissions, and even if they do it's a safe bet they will be ignored.

So will Copenhagen be worth the paper it is written on? Would Brown's International Carbon Police make one iota of difference?

Well, yes and no. An ambitious and meaningful deal will be hugely helpful, driving investment, delivering legislative certainty, stimulating innovation and raising the profile of the climate change threat. Equally, a tough new international climate change body cannot do any worse than the current agencies tasked with cutting global emissions, and might just do a lot better.

But the global transition to a low carbon economy will only be realised when there is a near universal acceptance that this course of action is better and more cost effective than the alternative. Until there is agreement that a wind or solar farm will always make more sense than a coal plant, any international climate change institution will be ignored in much the same way that today's global bodies are ignored by those regimes who refuse to accept basic humanitarian values. Sadly, as Brown's speech made clear in references to Zimbabwe, Burma and Iran, international institutions alone are rarely strong enough to force governments to act in ways they do not want to.

This is the challenge faced by political and business leaders - to make low carbon a universally accepted economic model, a "no brainer" for firms and individuals the world over.

Institutions and international treaties will help in this process, but the real onus is on businesses to develop products and services that are not just greener, but unequivocally better than any alternatives. Ultimately, it is up to us, not institutions, to deliver the low carbon future.

How can anyone guess their energy bill for 2020?

Mon, 13 Jul 2009 16:17:54 GMT

I know that in terms of unpopular public statements sympathising with politicians is currently right up there with suggesting the music of Michael Jackson was a tad derivative, but I can't help feeling a bit sorry for ministers at the Department of Energy and Climate Change.

As the countdown towards its long anticipated renewable energy strategy enters its final days, the battle for supremacy between the various factions in the UK energy industry has escalated from its usual rats-in-a-sack level of viciousness to something closer to full scale warfare.

The CBI, ever quick to do the bidding of the traditional energy firms, has called on the government to downgrade wind energy targets and step up its focus on nuclear and carbon capture and storage, while the wind lobby has hit back with a series of reports suggesting the UK grid will cope just fine with a huge increase in wind energy. The solar and micro-renewables sector, meanwhile, was last spotted over in the corner of the room bellowing "don't forget about us" as loud as its little lungs could manage. The biomass and waste-to-energy guys would like to do a bit of shouting too, but sadly they don't like to draw too much attention to a technology that many green groups still equate with incineration.

The net result is that everyone will be disappointed by the government's renewable energy strategy when it is finally announced on Wednesday. All the various energy tribes will complain that there is not enough support for them, or that where there is enough support, as is likely to be the case for wind and nuclear, there is still not enough effort being put into streamlining planning decisions. The green groups for their part will once again claim, with some justification, that we do not need yet another renewable energy report - we need concerted action now.

Of course, energy and climate change secretary Ed Miliband and his ministers fully expect this reaction and will not be asking for any sympathy as long as they get a fair hearing. But nor will they get that fair hearing. In fact, if the tenor of the reporting over the weekend is anything to go by they will get the exact opposite.

Various reports over the weekend trailing Wednesday's announcements led on the fact that the planned increase in renewable energy capacity will result in a rise in average energy bills of between £200 and £230 a year. My immediate assumption was that the government had once again leaked the key figures ahead of the report, but according to DECC this was not the case and the projected bill increase of £200 bears no resemblance to anything to be found in the forthcoming report.

Leaving aside the question of where the £200 figure came from (and personally, I would not rule out a back of an envelope calculation), DECC knows that regardless of what Wednesday's report contains the main focus from the press will be on this issue of how much renewable energy will cost the average punter. The government will likely pander to the calls from Fleet Street with its own figures, despite the reality that such figures are all but meaningless.

The fact is that any attempt to second guess the impact of renewable energy investment on energy bills is couched in so many caveats and assumptions to be meaningless.

The suggestion that investment in renewables will lead to bill increases of over £200 by 2020 implies that we know what energy prices will be by that date if we don't invest in renewables. But this is an absolute fallacy. We do not know with any real confidence how energy prices will behave next year, let alone in ten years time.

If those who reckon oil supplies will peak some time around 2015 are proved right then by 2020 soaring oil and gas prices could easily mean that average energy bills would be far higher had we not invested to increase our renewable energy capacity. Or what price the 2020 Kremlin turning off the taps and blocking gas imports to Europe, sending fossil fuel prices through the roof. Similarly, breakthroughs in solar energy technology or a spike in the price of carbon could manipulate the price of energy up or down in ways that no one yet fully understands. Or the government's proposals for green home loans could actually work, leading to a huge reduction in energy demand and a commensurate fall in average bills.

We do not know with any confidence how much a renewables based energy mix will cost by 2020, just as we do not know how much a fossil fuel based energy mix will cost. Anyone who says otherwise is lying.

What we do know is that all households and businesses would be wise to invest in energy efficiency as a matter of urgency, on the grounds that energy bills will rise under both a do-nothing scenario and a renewables investment scenario. The difference between the two scenarios is that under the do-nothing scenario the planet cooks and energy costs will eventually rise indefinitely as fossil fuel supplies dwindle, while under the renewables scenario not only will energy prices eventually plateau (the wind and sun are, after all, free) but we will also realise many associated economic and environmental benefits, such as reduced carbon emissions, increased job creation and improved energy security.

It would be nice to read a headline in the papers on Thursday morning explaining how new wind farms could actually help lower energy bills and improve energy security, but sadly there is more chance of Ed Miliband announcing the new strategy in the Commons with Michael Jackson's Earth Song playing as an inspiring backing track. Now that would definitely get reported.

Coral tragedy heralds corporate catastrophe

Tue, 07 Jul 2009 16:08:24 GMT

Whenever a big story breaks about the dire straights in which the natural world finds itself, it always sparks something of a debate at BusinessGreen.com's Central London bunker (actually, that's a bit of a lie; there aren't many of us so it tends to be a debate carried out entirely within the confines of my head, but you get the idea).

The question is one of whether BusinessGreen.com, as a dedicated business news website, should report on news that is almost entirely focused on the perilous state of the rainforest, Arctic sea ice, or in the case of this morning's papers Australia's Great Barrier Reef.

Does the news that scientists now firmly believe global warming will lead to the inevitable destruction of the Australian coral reef within 20 years really constitute a business story?

As a rule, we decide against reporting on such stories, not because they do not have an impact on businesses, but because those impacts are several stages removed from the actual destruction of natural habitats. Unless firms are directly causing or being directly affected by the changing environment, the business angle is too opaque to justify the story's inclusion on the site.

And yet, the more these reports of environmental disaster surface, the more obvious it becomes that this editorial decision downplays the way impacts on the natural world invariably lead to impacts on the business world.

The idea that the environment provides services for the economy in the form of food, water, soil, clean air and forests is not new, nor is the realisation that it is all but impossible to put a financial value on assets that are essential in the truest sense of the word. But as climate change leads to the rapid deterioration of these environmental services the extent to which they provide the foundation of economic activity becomes painfully clear.

Taking the inevitable demise of the Great Barrier Reef as just one example it is relatively easy to trace massive commercial and economic impacts from the destruction of this unique habitat.

First up, the Australian tourism industry was worth around $85bn last year, providing nearly four per cent of the country's GDP and employing close to half a million people. This might be slightly unfair on the country that gave us Kylie Minogue, Rolf Harris and Neighbours, but not many of the international visitors who injected over $22bn into the country's economy were there for the culture.

Deep green environmentalists might regard it as crass to talk about economic costs when we are faced with the destruction of a uniquely beautiful habitat, but it is worth noting that the death of the reef can be talked about it in terms of job losses as well as species losses. The sad truth is that when the reef goes, people will lose jobs and communities will suffer as one of the main sources of income for Northern Queensland disappears.

Some economists would argue that tourist dollar would simply migrate elsewhere and the net impact on the global economy would be pretty minimal, but there are other economic impacts that are similarly easy to envisage.

As any marine biologist will tell you, coral reefs provide a key link in a complex marine food chain that would be irrevocably changed by its removal. No one knows for sure what impact the death of coral reefs would have on fish stocks, but it is unlikely to represent good news for a global fishing industry already facing up to dwindling supplies.

Moreover, coral reefs provide another critical environmental service by buffering coast lines against tropical storms. With global warming already likely to lead to an increase in the incidence of such storms the Queensland coastline could find itself increasingly vulnerable to such storms just at a time when it needs the reef's protection more than ever.

And then there are the soft benefits.

As David Attenborough put it in a speech at the Royal Society yesterday, "anybody's who's had the privilege of diving on a coral reef will have seen the natural world at its most glorious, diverse and beautiful".

A whole generation of backpackers and tourists had that privilege and in many cases it left an indelible imprint on them. It is impossible to quantify the financial value of this sense of wonder (and what's more, you would never want to try), but it is not too esoteric to suggest that access to the natural world makes people healthier, more relaxed and arguably more motivated in their day-to-day lives - or at least it always has done for me.

Regardless of what your hard-nosed, old school business exec thinks, the natural environment's contribution to a happy and healthy workforce has considerable economic value.

On balance, we will probably continue to eschew direct reports of environmental destruction in favour of those green stories with a more explicit business angle - after all there are so many hours in the day and you would probably grow bored of reading an explanation of how environmental services effect the wider economy every time you clicked on a story about habitat damage.

But the next time you do read reports of disappearing rainforests, melting glaciers or dying reefs it is worth remembering that they represent an economic as well as an environmental tragedy.

Childhood reminiscing and the Carbon Reduction Commitment

Tue, 07 Jul 2009 12:04:38 GMT

Do league tables really work?

Obviously, as a means of determining whether one group of men is better at kicking/throwing/hitting a ball than another group of men they are nonpareil. But when it comes to more important issues, such as our health, our children's education, and now our efforts to tackle climate change, does publicly ranking organisations' performance really drive improvements, or does it just demoralise the losers?

As the son of two teachers growing up in the nineties, the merits of league tables, which were at the time being introduced for schools across the UK, was a source of considerable debate around the Murray dinner table.

My parents were forced to take a fair degree of professional interest in the annual league tables, often resulting in pride one year and dismay the next as their schools' fortunes fluctuated.

They were also painfully aware that any improvements that the publication of league tables delivered were at least partly offset by the iniquities inherent to the naming and shaming of struggling schools.

There was always the fear amongst my parents and their colleagues that the publication of the league tables would create a self fulfilling prophecy that further opened up the gap between the best and worst schools - a situation that many education experts believe has subsequently come to pass.

In essence, pushy middle class parents would make sure their children, who were statistically more likely to deliver stronger academic results in any case, got into the schools near the top of the league table. This would in turn make it easier for those top schools to maintain their position, while also providing them with a stronger position from which to apply for additional funding for facilities, equipment and the like.

As a rule, my parents schools probably benefited from this arrangement given they were always pretty well ranked in the league tables and received consistently good inspection reports, but that did not stop them questioning the wider merits of the league table system.

Moreover, there were similar question marks hanging over the efficacy of the league tables themselves.

My father was head of a relatively small primary school, so in some years the whole school's position in the league table would be determined by a group of just 12 or so 11 year olds. In such a small group pass rates could change dramatically from year to year based on the performance of just one or two pupils. The school could jump up and down the league table from year to year based on a minute change in its exam performance.

More than a decade on the government appears to have finally acknowledged some of these concerns and has just set out a new set of proposals to ensure school league tables are based on a wider set of criteria than straight exam results. But that does not mean that its love affair with league tables is over and fears are now mounting that the same problems associated with school and NHS league tables could soon afflict the government's Carbon Reduction Commitment (CRC).

As has been widely reported, the Carbon Reduction Commitment will not only require firms to report on their carbon emissions and energy use, it will also rank them in a league table demonstrating which organisations have performed best and worst.

The not unreasonable hope is that those that end up at the bottom of the league table will be shamed into taking action to curb energy use, while the system of financial bonuses and penalties that accompanies the league table will also provide firms with a fiscal incentive to cut their carbon emissions.

But will it work?

The problem is that shame is a funny thing. I don't want to reveal too much about my own moral compass, but public condemnation tends to have two diametrically opposed effects on people. Some will act swiftly and decisively to rectify their mistakes, others will decide it is not really worth the effort and embrace the "no one likes us, we don't care" philosophy beloved of football fans.

It is easy to envisage some of those firms languishing at the bottom of the league table deciding to take the financial hit and ignore any condemnation that comes their way. We could even see self-styled mavericks such as Ryanair's Michael O'Leary revelling in a poor carbon rating and using it promote his opposition to green taxes and climate change legislation.

The government plans to combat this by steadily increasing the size of the bonuses and penalties paid through the CRC. But such a move only risks a scenario already familiar to teachers across the UK, whereby those organisations that need the least help receive an extra boost, while the poorest performers are penalised still further.

Moreover, as with school league tables, the system will only work if the rules governing the league are beyond reproach and accepted by all parties. This is certainly not the case with the CRC at the moment with high profile companies such as BT warning that the legislation's credibility is fatally undermined by its failure to recognise investments made in renewable energy technologies. The government will never successfully shame companies into action, if those languishing near the bottom of the table can point to reporting rules that make the whole exercise worthless.

The basic premise of the CRC is admirable, but there are plenty of potential pitfalls awaiting it when it comes into force next year and it will be interesting to see how widely the new league tables are supported.

It might run counter to the capitalist principle of rewarding those who perform best, but given the main aim of the CRC is to cut emissions across the entire the economy there is a strong case for a completely different system of rewards whereby it is those that end up at the bottom of the league that receive the extra money they need to invest in energy efficient technologies.

Such an approach would seem weird to those used to the winner-takes-all mentality of European sports leagues, but it would also be familiar to anyone who follows US sports and their annual draft system, whereby the teams that perform worst get first pick on the next wave of promising players from the college leagues.

Of course, the government would be reluctant to seen to incentivise failure and is unlikely to change the CRC at this late date, but it will have to keep a very close eye on whether the concept of league tables helps or hinders efforts to cut carbon emissions.

After all, the results of the Premier League each year do not really matter in the grand scheme of things, but the success of our efforts to cut carbon emissions, and educate our children, does.