Tough targets for avoiding dangerous global warming may be easier to achieve than widely believed, according to a study that could ease fears of a prohibitive long-term surge in costs.

The report, by scientists in the Netherlands and Germany, indicated that initial investments needed to be high to have any impact in slowing temperature rises. Beyond a certain threshold, however, extra spending would have clear returns on warming.

Until now, most governments have worried that costs may start low and then soar — suggesting that ambitious targets will become too expensive for tackling threats such as extinctions, droughts, floods and rising seas.

“It gets easier once the world gets going … ,” said Michiel Schaeffer of Wageningen University in the Netherlands and lead author of the study in Tuesday’s edition of the journal Proceedings of the National Academy of Science.

“In a sense … our paper is bad news: doing a bit is hardly effective,” he told Reuters. “On the other hand it’s good news, because the return on the really ‘painful’ investments later on, of which the world is so afraid, gives you much better returns.”

More than 190 governments have agreed to work out a new U.N. climate treaty by the end of 2009. Global economic slowdown is making many wary of setting too strict goals.

The article suggested there was a 90 percent chance of limiting global warming to 2 Celsius (3.6 Fahrenheit) above 19th century levels with average annual global investments of 2 percent of gross domestic product (GDP) from 2005-2100.

That is roughly comparable to the percentage of GDP the European Union spends on environmental policies, Schaeffer said.

But early investments would have little impact. Spending 0.5 percent of world GDP would give a 10 percent chance of achieving the 2 Celsius goal while an investment of one percent of GDP would give a 40 percent chance.

Two Celsius is a goal adopted by the EU, some other nations and many environmental groups as a threshold for “dangerous” climate change.

The study focused on setting a ceiling for temperature rises, rather than on more normal goals of stabilising concentrations of greenhouse gases in the atmosphere, mainly from burning fossil fuels in cars, factories and power plants.

The scientists said that shift gave a better perspective and toned down worries about exponential rises in costs.

“This viewpoint is more relevant for real-life climate impacts,” Schaeffer said. “Concentrations don’t tell you that much about what happens in terms of rainfall … or to society.”

http://communities.thomsonreuters.com/Carbon/169701

The Australian government said on 15 December it will cut emissions to 5 per cent below 2000 levels by 2020 regardless of what other nations agree under international negotiations.

If a comprehensive global agreement to handle climate change is in place, Australia will slash emissions 15 per cent below 2000 levels by 2020, the government said.

This would have to be an agreement “where major economies agree to substantially restrain carbon pollution and advanced economies take on reductions comparable to Australia.”

At UN talks in Bali in 2007, Australia supported a statement that developed nations should cut their emissions 25-40 per cent below 1990 levels by 2020.

The government argued that a 5-per cent cut in total emissions to 2020 would equal a 27-per cent cut in per capita emissions.
The 5-15 per cent cut from 2000 levels equals a 4-14 per cent cut from 1990 levels.

In 2006, Australia emitted 576 million tonnes of carbon dioxide equivalent, an increase of 4.2 per cent from 1990.

Green groups slammed the government target, accusing Prime Minister Kevin Rudd of having “raised the white flag of surrender on climate change.”

”Kevin Rudd has put the coal industry ahead of Australia’s children and grandchildren. It will be much more expensive to rectify this historic mistake in the decades ahead. The 2010 federal election is shaping up as a referendum on tackling climate change,” Greens Senator Christine Milne said.

”This target is completely unacceptable,” said WWF Australia’s Paul Toni.

”The Australian Treasury’s economic modelling has shown that cuts of 25 per cent are affordable and achievable if part of an international agreement. This should be the government’s aim,” he said.

The Australian government on 15 December proposed rules for its emissions trading scheme.

Guided by an emission reduction target of bringing greenhouse gas output to 5-15 per cent below 2000 levels, Australia said it will implement its carbon pollution reduction scheme (CPRS) on 1 July 2010.

It published a ‘white paper’ on the scheme, and hopes to see the legislation pass in parliament next year.

The scheme features include:
• A cap for participants to be set after the UN climate meeting in Copenhagen in December 2009;
• 1,000 facilities to be covered;
• A price cap of A$40 (US$26.66) from the start, to be increased by 5 per cent annually and phased out after five years;
• Indefinite banking of allowances, 5 per cent borrowing from future vintages allowed each year;
• A ban on exportint Australia emissions units (AEUs);
• Unlimited use of project-based Kyoto credits;
• Lowered threshold for free allocation to trade-exposed industries;
• 31.2 million free AEUs per year to the most inefficient coal generators.

The government said it will spend the revenue from AEU auctions to assist households and businesses to adjust to the scheme.

Price control measures

The government proposed a series of measures aimed at controlling the price of carbon permits, especially during the first years of the scheme’s operation.

While it dismissed the idea of launching the CPRS with a fixed price for AEUs, it has proposed an initial price cap to reduce the cost of the scheme.

Australia plans to cap the price at A$40 when the scheme takes off in 2010. The price cap will be increased by 5 per cent annually, then removed after five years.

The cap, equalling €19.82, is likely to prevent a formal link between the CPRS and the EU emissions trading scheme.

The government also proposed to allow firms to borrow 5 per cent from future vintages for compliance purposes each year. This could help companies control costs in case of a supply squeeze.

The government also wants to ban the export of AEUs so as to keep supply of permits at a sufficient level.

The white paper said this ban would only be lifted with a five-year notice, unless a bilateral link is established with a similar carbon scheme in another country, for example New Zealand.

Kyoto credits

Hard pressed by the difficult economic situation, the government abandoned its previous proposal to set a limit on the use of carbon credits issued by the UN under the Kyoto protocol.

From compliance year 2012/13, Australian firms can use an unlimited amount of credits from Kyoto’s clean development mechanism (CDM) and joint implementation (JI) for domestic purposes.

CDM credits issued by the UN from 2008 onwards will be eligible for use, except credits that stem from forestry projects.

The government proposed however not to recognise government Kyoto credits – assigned amount units (AAUs) – under the scheme.

Such credits are controversial as they are thought to have limited environmental integrity because most AAU sellers have a surplus originating from the economic turmoil in eastern Europe in the 1990s rather than from ambitious climate change policies.

The white paper did not bar the government from buying AAUs should it need to in order to comply with its Kyoto target.

More free permits

The white paper said it is unlikely that a significant amount of emissions would leak to other countries as a result of the CPRS, but nevertheless the government decided to boost the amount of permits handed out for free.

It lowered the threshold for energy-intensive trade-exposed industries to qualify for free permits under the scheme.

The green paper published in July suggested that industries emitting at least 2,000 tonnes of CO2 per million dollars of revenue be given 90 per cent of their needed permits for free.

Firms emitting 1,500 tonnes per million dollars of revenue would get 60 per cent of permits for free.

The threshold for the lower range of compensation has been lowered to 1,000 tonnes of CO2 in the white paper, qualifying many more facilities to get free permits.

The white paper also allows for a new way of calculating whether a company qualifies: if a company’s trade share is defined as more than 10 per cent of the value of its domestic production in any year between 2004/05 and 2007/08, it will qualify for free allocation.

Dirty coal

The government also proposed to compensate coal generators as a strongly affected industry.

During the first five years of the CPRS the government will allocate A$3.9 billion worth of AEUs for free to the highest polluting coal generators.

The government said the allocation will be decided using an assumed AEU price of A$25, meaning the coal industry will get 156 million AEUs for free over the period, or 31.2 million per year.

The free permits will be reserved for coal plants emitting more than 0.68 tonnes of CO2 per MWh generated.

The white paper also outlined a A$6-billion compensation package to households, A$2.4 billion in fuel-related assistance to consumers and a A$2.15 billion climate change action fund to help businesses and organisations make the transition to the CPRS.

http://www.pointcarbon.com/

LONDON/SINGAPORE, Nov 6 (Reuters) - President elect Barack Obama faces demands for proof of a change in U.S. tack on the climate from “green” investors and businesses around the world.

Obama said in his acceptance speech on Tuesday that climate change was a top priority, alongside wars in Iraq and Afghanistan — marking a sharp shift with President George W. Bush, criticised for downplaying the threat from global warming.

Obama’s other priority was to revive a wilting economy and that will take top spot on his agenda before dealing with national carbon trading and clean energy.

“Green” investors, analysts and bankers were not expecting miracles overnight but want early proof of Obama’s climate credentials, when he takes office on Jan. 20.

“The first is that he is seriously looking for a quick way through for national cap and trade in the United States,” said Henry Derwent, head of the Geneva-based International Emissions Trading Association (IETA), the carbon market lobby group.

Cap and trade is one way to drive investment in low carbon technologies, by putting a ceiling on greenhouse gases using a fixed quota of tradable emissions permits, an approach Obama backed during his campaign.

Obama could threaten to use existing U.S. clean air laws to force through a cap and trade scheme, widely considered a messy approach which may then encourage the Senate to back a climate bill, said Derwent.

More green proof would be regular mention of climate change in bilateral meetings in coming months, he added.

Analysts were wary of Obama’s campaign promises, not convinced he will deliver on cap and trade nor plans to invest $150 billion over 10 years in low-carbon energy sources.

“A cap and trade system is by no means a done deal,” said Guy Turner at London-based New Carbon Finance, given that would need Senate support.

“I’d like to see the first $15 billion (of low-carbon cash) funded in his first budget,” said Mark Diesendorf, environmental and sustainable energy analyst at Australia’s University of New South Wales.

The Australian government was elected last year partly on promises to cut greenhouse gases and expand renewable energy. “However, in its first budget in May 2008, it funded almost none of its promises to renewable energy,” said Diesendorf.

COST

“A U.S. cap and trade scheme will provide a strong stimulus for the development of (low carbon) technologies,” said David Russell, co-head of responsible investment at the London-based USS pension fund, which has 30 billion pounds under management.

The world’s biggest wind turbine maker Vestas Wind Systems A/S would invest more in the United States if renewable energy targets were made stronger, said Ditlev Engel, chief executive of the Danish company.

“Thirty states have their own renewable portfolio standards, now a solution for the entire U.S. is needed. We need long term targets and long term energy plans,” he told Reuters.

Environmental markets depend on tough climate goals, to drive a switch to low-carbon fossil fuel alternatives. It therefore matters what the country most responsible for climate change now — according to scientists — does about the problem.

Under Bush, the United States is the world’s only industrialised country not to ratify the Kyoto Protocol.

More proof of change would include a multi-year extension of tax credits for the wind energy industry, similar to solar, said Michael McNamara, London-based analyst at Jefferies Bank.

“The question is does this get bundled into a broader energy bill — that could slow things down,” he added.

Green policies may face opposition, because carbon markets and promoting renewable energy often raise energy costs — something difficult to endorse as recession looms. Obama has underscored job opportunities from climate policies.

“I don’t see the U.S. becoming competitive again in the car industry, steel industry, cement. Renewable energy could be a new source of growth,” said Emmanuel Fages, SocGen analyst.

But depleted government coffers, rising unemployment and plunging profits across most industries could prevent him from making sweeping changes in his crucial first year.

Obama wants to cut carbon dioxide emissions to 80 percent below 1990 levels by 2050.

“He’s certainly committed to a very aggressive reduction target,” said Abyd Karmali, global head of emissions trading at Merrill Lynch.

“The economic downturn suggests that there may be a light start approach, similar to that we had in Europe,” said adding that the draft Dingell-Boucher climate bill allowed gentler carbon emissions cuts than previous proposals.

Another strong signal would be Obama or his advisors’ participation in an unofficial role at U.N.-led climate talks in Poland next month, said Josh Margolis, co-chief executive of carbon brokers, CantorCO2e.

http://communities.thomsonreuters.com/Carbon/123687

Silicon Valley startup Ausra fired up a five-megawatt solar power plant outside Bakersfield Thursday, the first big solar station to go online in California in nearly two decades.

Ausra has a 20-year contract with utility PG&E (PCG) for a 177-megawatt solar power plant to be built some 70 miles away on the Carrizo Plains in San Luis Obispo County. But like competitors who also aim to sell solar technology untried on a large scale, Ausra constructed the demo plant, called Kimberlina, as a proof of concept for investors who will have to be persuaded in these tight times to pony up half a billion dollars or more in project financing. “It’s important because this is the technology banks’ engineers want to see so they’re comfortable recommending financing for the Carrizo Plains site,” Ausra CEO Robert Fishman told Green Wombat.

At Kimberlina’s unveiling Thursday, PG&E CEO Peter Darbee warned against letting the financial crisis derail the fight against global warming. “The capital markets are going to distinguish between high-risk projects and low-risk projects and the high-risk projects are not going to get financed in the future,” he said. “PG&E stands ready to take on the challenge of financing renewables.”

While Ausra built Kimberlina to show that its compact linear fresnel reflector technology can generate utility-scale electricity, the plant is also designed to demonstrate that solar tech can be deployed for other industrial uses. At heart, a solar thermal power plant is a steam machine. In Ausra’s case, long rows of flat mirrors that sit low to the ground. concentrate sunlight on water-filled pipes that hang over the mirrors to create steam. That drives an electricity-generating turbine, but Ausra and other companies are looking to sell the steam as well.

For instance, take a drive around Bakersfield and you’d think you were in Texas, what with all the oil rigs rocking back and forth across a treeless landscape. Bakersfield oil is thick and heavy, so steam is injected into the ground to make it flow. Fishman wants oil companies to stop burning expensive natural gas to boil water and start using the sun.

“We’ve been doing a lot of show and tell,” says Fishman, referring to the Kimberlina plant, which sits just off the Bakersfield oil patch’s main highway. “If you look at putting a solar generator in, the economics look pretty good.”

Each 1,000-foot row, or line, of Ausra mirrors generates six megawatts of heat, according to Fishman, who says the company has talked to potential clients who would need anywhere between five and 50 lines.

Ausra also is exploring other markets for its steam technology, such as food processing.

Rival power plant builder eSolar, the Pasadena startup incubated by Bill Gross’ Idealab and funded in part by Google (GOOG), also sees other markets for its green tech. Last month, eSolar, which has a contact to supply utility Southern California Edison (EIX) with 245 megawatts of electricity, licensed its technology to stealth renewable fuels startup Sundrop, based in Pojoaque, N.M., north of Santa Fe.

Sundrop CEO John Stevens will say little about the Kleiner Perkins-backed company’s plans. “Sundrop uses low-cost concentrated solar energy to drive renewable energy into fuels,” he wrote in an e-mail. “We will produce low-cost renewable fuels. We expect to be demonstrating scale production in 2009-2010.”

eSolar CEO Asif Ansari told Green Wombat his company will provide fields of mirrors called heliostats to Sundrop along with software and control systems to concentrate the sun’s rays on a tower. (Venture Beat uncovered documents that indicates Sundrop may plan to produce hydrogen and other fuels.)

“Basically, we’re a technology company; we don’t want to be in the construction business,” says Ansari. “What we really are trying to develop here is a standard global platform for delivering concentrated solar energy to any target that can be used for a variety of applications.”

Besides using solar energy to produce such fuels as hydrogen, Ansari, like Ausra, sees the oil industry as a potential market. He says the food processing and fertilizer industries also could substitute eSolar’s technology for natural gas to make steam.

Back in Bakersfield, California Governor Arnold Schwarzenegger presided over the official opening of Ausra’s Kimberlina solar plant on Thursday. (Live streaming his appearance.) “California is going green and it’s going green really fast,” the governator said before an audience that included PG&E chief executive Peter Darbee and Silicon Valley venture capitalists Ray Lane and Vinod Khosla.

The solar power station is plugged into the grid and will supply PG&E with enough electricity to power about 3,500 homes in central California. The mirror arrays were made at Ausra’s robotic factory in Las Vegas.

“This represents the best of American and Australian ingenuity and get-it-done attitude,” said Fishman at the ceremony, referring to Ausra’s roots in Sydney. “People don’t need to think of Ausra as an alternative energy company. As of today it is simply an energy company.”

Schwarzenegger gave the signal and Kimberlina officially came online, the 1,000-foot-long mirror arrays rotating toward the sun.

http://greenwombat.blogs.fortune.cnn.com/2008/10/23/solar-power-not-just-for-electricity/

The Federal Government’s climate change adviser Ross Garnaut says the Government’s proposed emissions trading scheme should go ahead as planned, despite the global financial crisis.

The Government wants the scheme to begin in 2010, but there have been calls for it to be delayed because of current economic conditions.

Professor Garnaut has told Radio National’s Saturday Extra program that 2010 is the best possible time to push ahead with the scheme.

Financial crisis is not an easy time politically to make major long-term structural reforms but it’s actually the right time economically,” he said.

He says the resources needed to implement the changes will stimulate employment and economic growth.

“Any large reform involving structural change, involving low emissions technologies and low emissions forms of transport and so on, requires investment,” he said.

“That is easier to manage as you recover from a downturn. It’s perhaps counter-intuitive but that’s the reality.”

Professor Garnaut cited the Hawke Labor government’s removal of protectionist trade policies in the early 1990s as a good example of growth being stimulated by significant structural changes during an economic downturn.

“Climate change will damage the economy very, very severely if it’s not mitigated,” he said.

“But it’s long-term damage, and so the question isn’t economy versus environment.

“It’s also short-term economics versus long-term economics and don’t forget it’s short-term economics that got us into this financial mess.”

The chief economist with AMP Capital, Shane Oliver, says with unemployment likely to rise, there will be an abundance of workers who could be diverted to climate change initiatives.

“Introducing an emissions scheme at a time when those resources are still unemployed … makes sense because those resources can then be reabsorbed into the cleaner parts of the economy,” he said.

He is forecasting the economy will pick up just before the start of 2010.

http://www.abc.net.au/news/stories/2008/10/18/2394749.htm

GOVERNMENT climate adviser Ross Garnaut will use his final report to set out a framework to cut Australia’s greenhouse emissions to near zero by the middle of the century through clean power generation.

The comprehensive report — to be handed to Prime Minister Kevin Rudd this morning — will outline how the country can move away from dirty coal-fired power, with modelling explaining the potential role of gas, clean coal technology and green energy forms such as wind and geothermal.

It will also outline how to cut greenhouse pollution in transport, agriculture and forestry, which are responsible for 37% of Australia’s emissions.

But the message will come with a caveat: deep cuts in Australia will depend on reaching a strong global deal, which Professor Garnaut considers unlikely.

The 600-plus page report comes after three bruising weeks for Professor Garnaut following his previous report, which did not include final recommendations. That report faced criticism for its recommendation that Australia should agree to make a proportionate emissions cut of 10% below 2000 levels by 2020 as part of a limited but achievable global climate deal.

Climate scientists and environmentalists have damned the proposal, which would aim to initially stabilise carbon dioxide emissions at 550 parts per million. According to an earlier Garnaut report, it would give only a one-in-four chance of limiting global temperature rises to 2 degrees — the point considered the threshold for catastrophic famine, flooding and species extinction.

Sixteen authors with the Intergovernmental Panel on Climate Change have called on Mr Rudd to ignore Professor Garnaut’s advice and set a minimum 2020 target of a 25% cut as a fair contribution to avoiding dangerous climate change.

A similar call was made by World Vision Australia chief Tim Costello, who issued a late appeal to Professor Garnaut warning that a global deal would be less likely if Australia set a weaker target.

“The suggestion that 550 parts per million might be the best we can do could become a self-fulfilling prophecy,” Mr Costello said.

Professor Garnaut is expected to today stress a part of his last report that has largely been overlooked: that he believes Australia should still push for a target of stabilising carbon dioxide levels at a lower level — 450 parts per million — in the lead-up to the key UN meetings in Copenhagen next year.

This would require the Rudd Government to commit to a 25% emissions cut by 2020.

But Professor Garnaut is pessimistic about the likelihood of this target winning support, estimating it would require rich countries to cut emissions by 34% between 2012 and 2020.

It is believed the final report will stress that Treasury modelling shows Australia will remain prosperous and living standards will continue to improve if it agrees to deep cuts.

http://www.theage.com.au/environment/garnaut-to-fire-his-final-shot-20080929-4qev.html

GOVERNMENT climate change adviser Ross Garnaut is set to recommend that Australia make deep cuts in its greenhouse emissions only after a strong global commitment.

In a speech tomorrow to the National Press Club in Canberra, Professor Garnaut will argue that the Federal Government should take a lead in climate change negotiations but ultimately decide how much it will cut its emissions by 2020 based on the level of international agreement.

He will set out several emissions trajectories and targets, each dependent on the level of global commitment - the stronger the international resolve, the deeper Australia should slash its pollution.

The latest Garnaut report - the penultimate from the climate change review team headed by the veteran economist - comes as the Federal Government faces intense pressure from business to soften the key plank of its attack on climate change, an emissions trading scheme.

http://www.theage.com.au/environment/garnaut-take-the-lead-on-emissions-20080903-48ya.html

TAX changes to make it easier to buy vehicles with the latest technology could cut transport’s greenhouse gas emissions, according to a transport expert.

The Federal Government’s emissions trading scheme (ETS) should also take into account the cost disadvantages faced by local transport operators compared with international players, says Apelbaum Consulting.

Company director John Apelbaum said tax changes to allow accelerated depreciation would encourage the faster introduction of new technology in road, rail, sea and air.

http://business.theage.com.au/business/ets-needs-appreciation-of-depreciation-expert-20080730-3nf9.html

Global giant GE Energy says it could build a coal-fired power station in Australia by 2015 that would be the first in the nation to bury its greenhouse gas emissions.

GE Energy is garnering support from governments and industry this week to build a commercial-scale Integrated Gasification Combined Cycle (IGCC) power plant that costs about $3 billion.

If approved soon, the plant could be ready to operate in another seven years, GE Energy says.

http://news.smh.com.au/business/ge-energy-to-build-clean-coal-plant-20080730-3naj.html

AUSTRALIA’S new emissions trading scheme could be worth $11 billion within three years, a carbon market analyst says.
Point Carbon said it believed the scheme would involve a “relatively lenient cap” equivalent to a 2.0-6.0 per cent cut in emissions during its initial phase between 2010 and 2013.

It also estimated that pollution permits to be released by the Federal Government during that time would be worth about $10.4 billion, based on a five per cent cut in emissions and current average market prices of $19 a tonne.

“Taking the same cap and assuming a level of trading in line with growth seen in the EU ETS (European Union Greenhouse Gas Emissions Trading Scheme), the value of traded credits could reach $11 billion within three years of operation,” it said.

http://www.news.com.au/story/0,23599,24033277-29277,00.html