Carbon » Radical Green Watch

Ho Hum! The ocean “acidification” scare again

Carbon, Climate, General, International Comments Off

Aug 222012

The Warmist claim below — from an alleged “Science” magazine — that CO2 Pollution could erase Coral Reefs ignores the Warmists’ own theory that CO2 causes warming! A warmer ocean would hold LESS CO2 and there would therefore be LESS “acidification”! Basic physics indeed. You can demonstrate it in a school science lab using nothing more than two cans of Coke, one warm and one cold.

It’s hard to get more more dishonest or impervious to facts than these ocean acidifiers but for what it is worth, there are some additional facts on their nonsense following the excerpt below

Coral reefs, nature’s most lively architecture, could come tumbling down and it could take millions of years for them to return, if carbon dioxide emissions aren’t cut quickly, scientists warned today.

The world’s oceans have absorbed 40 percent of the carbon dioxide emissions produced by humans in the industrial age, but that buffering is changing the chemistry of the oceans. Already, the acidity of ocean waters, which are generally basic, has shifted about 0.1 on the pH scale, or 10 percent, since pre-industrial times, and could get far more acidic by mid-century.

In a editorial in the journal Science, the researchers also noted that unlike CO2′s climate impacts, which vary between models to some extent, ocean acidification is based on basic chemistry and is nearly sure to occur if we continue burning fossil fuels, with disastrous consequences for some marine life.

“What we’re doing in the next decade could mean that for the next two million years, there are no coral reefs in the ocean,” said Ken Caldeira, a Stanford professor, and recent Wired profilee.

While most of the attention on the impacts of carbon dioxide emissions has focused on its ability to act as a greenhouse gas, that warms the earth’s climate, the changes CO2 emissions will bring to the world’s oceans are receiving increasing attention. The more CO2 in the atmosphere, the more of it that dissolves into surface ocean water. That small chemistry change could cause huge changes in marine biology.

Marine organisms, like coral, that build skeletons out of calcium could find themselves unable to do so. If current emissions trends continue over the next decade, the world’s marine creatures will be dealing with what’s essentially an alien ocean. The last time ocean conditions like those predicted for mid-century existed was long before humans walked the earth.

More HERE

Carbon credits a goldmine for British fraudsters

Australia, Carbon, International Comments Off

Jun 082012

Figures obtained from the Financial Services Authority (FSA) revealed an explosion in companies fraudulently offering to deal in carbon credits – transferable certificates that allow companies to pollute. More than 100 companies have been reported to the watchdog over the past 12 months. The figure is up from just six prior to June last year.

The City watchdog has already published the names of 21 companies in its list of unauthorised firms. The list comes with the warning that some of the firms “knowingly run scams”.

USA leads world in CO2 cuts since 2006

Carbon, International Comments Off

Jun 082012

Pesky! USA leads world in CO2 cuts since 2006

As Obama’s “Green” policies send industrial jobs to China

“US emissions have now fallen by 430 Mt (7.7%) since 2006, the largest reduction of all countries or regions. This development has arisen from lower oil use in the transport sector … and a substantial shift from coal to gas in the power sector.”

How big is a cut of 430 million tonnes of CO2? It’s equal to all CO2 from all Canadians outside Alberta. From a US perspective, it’s equal to eliminating the combined emissions of ten western states: Alaska, Washington, Oregon, Idaho, Montana, North Dakota, South Dakota, Wyoming, Utah and Nevada.

It seems the planet’s biggest all-time CO2 polluter is finally reducing its emissions. The average American’s CO2 emissions are down to levels not seen since 1964 — over half a century ago.

Oil is the biggest source of CO2 in the USA. Now with rising oil prices, new vehicle regulations and the emergence of electric cars it looks like the USA’s biggest source of CO2 will continue to fall. Considering that Americans could cut oil use in half and still use more per person than Europeans, there is clearly lots of room for big declines ahead.

SOURCE

Carbon tax a foundational faith for the Australian Left?

Australia, Carbon Comments Off

Jun 082012

Taxes generally certainly are

LABOR was demonstrating “breathtaking arrogance” by refusing to countenance the repeal of the carbon tax under an Abbott government, the Coalition said yesterday.

“How arrogant and out of touch is this government to say it will defy the verdict of the people? The next election is going to be a referendum on the carbon tax … Any Labor Party which persists in opposition in supporting a carbon tax is a Labor Party which is arrogant and out of touch,” the Coalition leader, Tony Abbott, said yesterday.

Green taxes add 15% to Britain’s energy bills: Government finally admits how much more families pay to meet emissions targets

Carbon, International, Renewables Comments Off

Feb 232012

Electricity prices are 15 per cent more expensive than they should be because of green policies, Whitehall officials have admitted. Energy costs for hard-pressed consumers have been pushed up by extra charges imposed to help the Government meet pledges to cut carbon emissions.

Projections in Whitehall show that by 2020, the burden for electricity will be an astonishing 27 per cent more than it would otherwise have been. The figure for gas will be 7 per cent higher. The added expense could add up to £200 to the average energy bill by 2020 – unless householders dramatically cut the amount of power they use.

The green taxes will boost energy made from renewable sources by building vast wind farms, nuclear power stations, more solar panels and a new pylon network.

The Coalition claims the taxes will not necessarily push up bills as consumers will cut heating costs thanks to better insulation. But consumer groups insist it is very unlikely that people will be able to cut their energy use enough to keep bills stable.

The paper from the Department for Energy and Climate Change also raises the threat of a ‘high price’ scenario under which wholesale energy prices soar by more than expected. They have calculated that in eight years, the combination of green taxes and wholesale price rises could push electricity prices up by as much as 36 per cent from 2010 levels. Gas costs could rocket by 44 per cent.

If people do not slash their energy use, this ‘high-price scenario’ would see the average gas bill hit £997 and that for electricity soar to £812.

This leaves consumers needing to find more than £500 more than last year when average household bills were around £600 for electricity and £660 for gas.

Emma Boon, for the TaxPayers’ Alliance, said last night: ‘Plans for draconian climate regulations and expensive renewable energy subsidies are going to drive gigantic increases in energy bills in the next decade. ‘Politicians have tried to play down the cost of these green policies but independent estimates have made it clear that there is going to be an affordability crisis. ‘The Government needs to reform climate policy to make it more affordable and not ignore the plight of families facing huge pressure on living standards.’

Clare Francis, site editor at MoneySupermarket.com, said: ‘There is no doubt the trend for energy prices is up. ‘The only way people can make savings is to switch to a more competitive pricing plan, which will save them around £200 a year, and reduce energy use and make their homes more energy efficient. ‘Those who do nothing will just see their energy bills climb year after year. Now is the time to fight back as there are simple things people can do to offset rising prices.’

The DECC paper compares the price of a kilowatt hour of electricity in 2011 with what it would have been without climate change policies. Without the green measures, it was 13p but with them in place, it was 14.9p per kWhr, 15 per cent higher. Projections show that by 2020, the differential rises to 27 per cent: 14.4p without green policies and 18.3p with.

If people continue to use the current average of 4 megawatt hours per year, this means green policies will add £156 to the typical electricity bill.

The paper also includes a nightmare ‘high-price’ scenario, where wholesale prices are higher than expected. This could push electricity prices to 20.3p per kWhr in 2020.

The situation is similar for gas, according to DECC’s document which was published late last year. In 2011, gas prices were 4.1p per kWhr, 5 per cent more than they would have been without the green policies. By 2020, the differential rises to 7 per cent: 4.4p without green policies and 4.7p with. If people continue to use the current 16.9 MWhr average, this green differential will increase gas bills by £50 a year.

The projection says gas prices will rise by 15 per cent from 2011 to 2020. But under the ‘high wholesale price’ scenario, gas could cost 5.9p per kWhr in 2020, up 44 per cent.

Other projections on the DECC website show that premium unleaded petrol could breach the 140p per litre barrier as early as 2016. Under the ‘high-price’ scenario, petrol will cost 140.9p a litre in 2016 and 160p by 2028.

A department spokesman said retail energy prices would increase until 2030 ‘driven largely by rising wholesale and network costs and, to a lesser extent, energy and climate change policies’. He added: ‘Our policies will help us become less vulnerable to rises in fossil fuel prices and help people to use energy more efficiently in their homes and businesses.

‘If we don’t invest now to reduce our energy use and our dependence on fossil fuels in the long term, if we have to rely on ever-more expensive imports and leave ourselves at the mercy of international oil and gas prices, the impact on bills will be worse.’

SOURCE

Greener Than Thou

Carbon, ClimateGate, International, Renewables Comments Off

Feb 232012

Greener Than Thou

By Alan Caruba

The most obnoxious and hypocritical people are those who are always preaching a “greener” way of life, insisting that anything that constitutes our modern lifestyles are destroying the Earth and depleting its natural resources. Never mind that we depend upon oil, natural gas, coal, and a host of minerals and chemicals for that lifestyle, the absence of which caused people in earlier eras to live shorter, far more unpleasant lives.

Oil, other than ust an energy source is also a component in countless products, starting with plastic, and is so vital to modern life that its value goes far beyond just being able to drive our cars to visit grandma.

Greener than thou has replaced holier than thou ever since Rachel Carson penned her pernicious and seriously flawed attack on DDT and other chemicals, fertilizers and pesticides in 1962. The result has been the needless deaths of millions from malaria in Africa and subtropical nations after the U.S. banned DDT and other nations followed suit. If there was a comparable pesticide available today, the U.S. would not be suffering a biblical plague of bed bugs.

A bone fide environmentalist, David Owen, has written a book that quite literally filets environmentalism, “The Conundrum: How Scientific Innovation, Increased Efficiency, and Good Intentions can Make Our Energy and Climate Problems Worse.” ($14.00, Riverhead Press, softcover).

Owen, who has authored 14 previous books, examines the way environmentalism frequently makes no sense at all. This is not to be confused with conservation, the earlier movement that led to the preservation of some of the nation’s natural wonders.

To live an environmentally acceptable way of life is the same as striving to be a saint, avoiding “sin” in order to secure a place in heaven. It is not only virtually impossible, but to be human is to consume what Nature provides. If you think about, all of Earth’s creatures are consumers, depending on where they are on the food chain.

For example, when environmentalists convinced Congress to reduce the amount of water in toilet tanks, the only thing they accomplished was to require that the newer, smaller tanks had be flushed twice to rid he toilet of feces and urine, i.e., more use of water, not less. The EPA has just issued a ruling they claim is necessary to reduce mercury emissions despite the fact that your average volcanic eruption puts more into the atmosphere than any human imposed restrictions could ever achieve. Congress, however, passed a law banning 100-watt incandescent light bulbs, thus requiring people to purchase mercury-filled ones that, if broken, require a hazmat team to clean up after.

Environmentalism is essentially irrational.

It believes that humans actually have anything to do with “saving the Earth” when the natural forces of the Earth are so far beyond any “control” that it routinely reminds us of this fact. We have zero impact on the climate and, as for carbon dioxide, the villain of all “global warming” claims, humans exhale about six pounds of it every day. And there are seven billion of us. Even so, it constitutes barely 0.033 percent of the atmosphere.

Owen begins by posing the question, “How do we truly begin to think about less—less fossil fuel, less carbon, less water, less waste, less habitat destruction, less population stress—when our sense of economic, cultural, and personal well-being is based on more?”

The real question at the heart of all environmentalism is what do we do when there are seven billion humans using the resources of the Earth and the real answer for environmentalists is how do we reduce the Earth’s population and how do they grow rich in the process? That is what lies at the heart of all the “solutions” put forth by the United Nations environmental program; an enemy of the human race if there ever was one.

What environmentalists want is “a vast, unprecedented transformation of human behavior in our relationship with energy and consumption.” The next time you hear anyone call for a “transformation” know also that they are a charlatan seeking control over your life.

The environmental assumption is that the Earth is running out of the sources of energy and that consumption is bad. Both are equally wrong because the Earth is not running out of the sources of energy and consumption is what humans and all other species on Earth do every day.

Owen believes that humans are “the world’s main emitter of manmade greenhouse gases” and this is utterly false. The so-called greenhouse gases are the ones in the atmosphere that not only keep the Sun from turning the Earth into a desiccated version of Mars or the Moon, but in the case of carbon dioxide, it is responsible for every single element of vegetation upon which all life depends.

Owen and many environmentalists would prefer that all of humanity live packed side-by-side in crowded cities, using mass transit or bicycling to work to save the Earth, but anyone who gives two thoughts to the amount of energy consumed to maintain a city knows this too is yet another idiotic environmental conceit.

Indeed, Owen notes that “There are many downsides to density, including the fact that squeezing people and their destinations close together makes diseases, wars, and natural disasters more efficient, too.”

That, says Owen, is a conundrum. Indeed, his book is filled with environmental conundrums that he tries to resolve while overtly and inadvertently exposing the idiocy of environmentalism.

Simply put, farmers are the world’s natural environmentalists, relying on the weather—which they cannot control—and the stewardship of their land to feed themselves and others. They must, however, have a means to move their crops to places where other humans can acquire them and that requires a massive system of transportation which, in turn, requires the affordable use of energy.

Environmentalism’s goals, clean air and water, are laudable, but a massive governmental bureaucracy to require that people use less energy and consume less is not.

Time and time again we see examples of environmentalism that only manage to kill people, whether it is the banning of beneficial chemicals or the use of the least efficient forms of electrical power, wind and solar energy.

The least reported story out of Europe these days is the extreme cold that is literally killing people because it puts the lie to all the environmental “solutions” advanced since the 1960s. Environmentalism has been decried as a religion and, for those who want to deny a greater power, Nature or God, it remains their holy grail.

SOURCE

Reformed Warmist gets good coverage in major Austrian newspaper

Carbon, ClimateGate, International, Media Comments Off

Feb 232012

The truth will out even in the “Ostmark des Deutschen Reichs”

Fritz Vahrenholt gives a comprehensive interview with leading Austrian daily KURIER here.

The interview covers a number of areas. But a few points I found particularly interesting. On the lack of warming since 2000, the KURIER asks if it’s too short of a time period: “Of course it is. But we still need an explanation on why CO2 emissions, which the IPCC says is responsible for global warming, and which rose continuously since 2000, has not caused any warming. There has to be natural causes: the sun and the 60-year ocean cycles – they were the reasons why we wrote the book.”

Vahrenholt also has words on Germany’s current attempt to move to renewable energy: “We’ve gone into a hectic rush and today in Germany we are converting wheat into bioethanol, and installing 50% of all the world’s photovoltaic systems in a country that gets as much sunshine as Alaska – namely Germany. This uncoordinated mad rush is rooted in fear: It’s our fault, we could trigger a climate catastrophe.”

On the IPCC filtering out the sun and other factors: “It is indeed interesting that of the 34 members of the IPCC editorial team that wrote the summary report, one third are connected to the WWF and Greenpeace. That is legitimate, but that has to be made transparent. Imagine just the opposite and the editorial team were one third Exxon supporters. Wouldn’t people say: ’Hello! Is that really necessary?’”

Vahrenholt on why the climate debate has inquisitorial undercurrents: “Because it has long since not been about a purely scientific issue, rather it is about how to run society. Some are saying that we are entering an uncontrollable situation, and so claim any means against it is justified.”

Like throwing democracy overboard, as some are advocating. Here Vahrenholt specifically singles out Schellnhuber’s WBGU and his Great Transformation of society masterplan, which calls for: “…changes in consumption behavior, changed trade behavior and that non-sustainable living styles be stigmatized by society.”

On the success of the book? “It’s no. 14 on the Spiegel bestseller list. Of course I hope the book will be read. The worst thing that could happen would be a spiral of silence, a discussion that never gets held. In five or ten years, we’ll know who is right.”

Overall, a solid and convincing interview by the KURIER. This will push book sales in Austria, Switzerland and Bavaria. Readers can visit the “http://kaltesonne.de/” site, which has an English translation button.

SOURCE

What if They are Wrong?

Carbon, ClimateGate Comments Off

Feb 232012

What if They are Wrong?

by Mike Stopa

Because the theory of anthropogenic global warming (AGW) depends on a feedback mechanism between an increase in CO2 and an increase in atmospheric water – a mechanism about which there is considerable, scientifically justified doubt – it is possible that CO2 has effectively no influence on global climate.

There is now considerable data collected, and being collected, that gives a fairly accurate view of the global temperature, insofar as such a thing can be defined. And the temperature record shows reasonably clearly that a heating took place from around the beginning of the industrial age in the early 20th century until around 1940, followed by 30-40 years of cooling, followed again by 20 years of warming until ~1998. In an interesting admission the (British) Met Office and the University of East Anglia Climatic Research Unit have now admitted that the global temperature has ceased rising for the last 15 years. Don Surber has done a nice little riff on this report here.

The main point is that there are other potential mechanism to account for the warming trend of 1980-1998 than CO2. Notably, ocean climates and interactions between solar wind and cosmic rays relating to earth’s cloud formation are scientifically established mechanisms for the change.

Here I ask this. Suppose it turns out that CO2 has essentially nothing to do with the earth’s climate. How will the history of this colossal mistake be written?

They will say that a mechanism called the “greenhouse effect,” was postulated long ago (~1824 by Joseph Fourier) and gained adherents in the late 20th century. They will say that the theory was seemingly invalidated by the decrease in global temperatures from 1940-1975, but that the adherents patched this up by explaining the cooling with pollution, specifically sulfur, from industry

They will say that the theory was challenged by the noted vast gap between the amount of CO2 produced by civilization and the substantially smaller increase in CO2 in the atmosphere, but that the theory was patched up by examining the increased CO2 uptake by the hydrosphere and the biosphere.

They will say the theory was seemingly invalidated by the evidence that the atmosphere was already nearly opaque in the wavelengths that are absorbed by CO2 and so the additional CO2 could have, on its own, little effect, but that the theory was patched up by positing a feedback mechanism between the small temperature increases directly due to CO2 and the production of water vapor which is the main greenhouse gas.

They will note that the theory of anthropogenic global warming (AGW) proceeded much like any scientific theory (cf. Thomas Kuhn, The Structure of Scientific Revolutions) in that it was modified and patched up and adjusted to fit empirical challenges until it finally collapsed altogether under the weight of incontrovertible evidence. But, the scientific historians will have a new phenomenon to consider, and that is the social and political context of this particular scientific theory.

Kuhn describes very well the build-up of evidence that ultimately leads to the over-turning of accepted orthodoxy within the scientific community, of some particular theory. But AGW is intrinsically wrapped up with political ideology and, increasingly, with economics and government (cf. “Solyndra”). The only apt comparison I can think of is Lysenkoism, the anti-genetics theory of Trofim Lysenko that was bought wholesale by Stalin and ultimately hobbled the entire Soviet biological establishment for generations (to say nothing of its role in leading to the starvation of people who followed its tenets in regard to things like agriculture).

Scientific revolutions are difficult and traumatic enough without the added inertia of government sponsorship. To put it more bluntly, scientists have difficulty enough admitting that they have egg on their faces. Throw in the Solyndras of the world and the United Nations and the entire anti-capitalist Global Left and the backing out of this theory will be nothing short of a fiasco.

If someone were, for instance, to come up with indisputable evidence tomorrow that CO2 has essentially no impact on earth’s climate, could the world accept it? With the development of frakking and the concomitant extension of carbon based energy resources hundreds of years into the future, what would they do with all the windmills?

Well, the truth of this issue should be apparent within about 15 years…at which point we may be allowed to buy incandescent light bulbs again.

Update:

My recent post, “What if They Are Wrong,” explored the possibility that human-generated CO2 will be determined, after all is said and done, to have no appreciable affect on climate. The post generated a lot of discussion. I want to follow up on some of that discussion with this brief post.

CO2 is, after all, a trace gas and humanity has added to it a trace amount. An essential requirement that it have a major influence on our climate is a set of feedback mechanisms that magnify its effect. Most notably, for CO2 increase to have any seriously dangerous ramifications for human life it is necessary that a positive and significant feedback exist between the CO2 abundance in the atmosphere and the water abundance. This feedback loop, its sign and its magnitude, are seriously in question.

To take one example, it is well-established that water vapor in the upper troposhpere and lower stratosphere (the region known as the “tropopause”) has been decreasing for the last ten years. This was not only not predicted by climatological computer models, it has not yet been explained by those models. Speculations as to the origin of this drying out include an unexpectedly large rise from the 1998 El Nino (which is only now drying out) to a decrease in the atmospheric content of methane, another greenhouse gas, over the past decade or more. Alas, the decrease of the methane is also not explained.

A short but well-presented description of this discrepancy was given almost exactly two years ago in Scientific American (hardly a global warming skeptic publication!). Sci. Am. quotes one of the authors of the original (Science Magazine) study thusly:

“We found that there was a surface temperature impact due to changes in water vapor in a fairly narrow region of the stratosphere,” explains research meteorologist Karen Rosenlof of the National Oceanic and Atmospheric Administration’s (NOAA) Aeronomy Laboratory, one of the authors of the study. “The reason for the water vapor change is the temperature drop at the interface between the troposphere and the stratosphere over the tropics. What we don’t know is why the temperature dropped.”

Note that the researchers in this publication are by no means heretics in the scientific establishment. They make genuine efforts to explain these findings. But the results are still a mystery.

All told, stratospheric water vapor declined by 10 percent since 2000, based on satellite and balloon measurements, yet that was enough to appreciably affect temperatures at ground level according to climate models. “Reduce the water vapor and you have less long-wave radiation coming back down to warm the troposphere,” Rosenlof says. Conversely, an apparent increase in water vapor in this region in the 1980s and 1990s exacerbated global warming.

And, as noted above, the authors considered the influence of methane on the atmospheric water:

Of course, the amount of water vapor in the atmosphere is also affected by another potent greenhouse gas—methane—which has unexpectedly failed to increase in recent years. “The other influence is methane, which breaks down into two water molecules and CO2 in the stratosphere,” explains climate scientist Drew Shindell of NASA’s Goddard Institute for Space Studies (GISS). “Methane’s growth rate has dropped, so it’ll have become a weaker source of stratospheric water, but we don’t fully understand why its concentrations have not increased as rapidly in recent years as they did for the previous several decades.”

As a producer of greenhouse heating, methane is typically considered to be about twenty times as effective, molecule-for-molecule, as CO2.

The main issue I am raising is not that the scientists who are at the front line of this research are blind or bellicose – not that they are unscrupulous or fraudulent. Most of the scientists working in the field are not trying to push an ideological position but are genuinely trying to get at the truth. If they can be accused of any moral failing, it is simply the tendencey to go with the flow when it comes to writing grant proposals and alluding to the possibility of global warming as a justification for supporting their research. Nothing horrible about that.

That does not say that there are not a few at the top and at the edges who are true believers – who think that behaving as deceivers is ethically the right thing to do given the gravity of the threat (that they perceive) and the ignorance of the masses to that threat (as they perceive).

Sound science will, unimpeded by the hysterics, lead to sensible public policy. It is my belief that the final conclusion will be that CO2 produced by humanity will be found to be of only minor importance for global climate and that it will be heavily outweighed by exchange of heat with oceans of evolving temperature and other factors such as solar-determined cloud formation. But I am open to evidence and, alas, a lot of global warming hysterics in the scientific community (and especially in the non-scientific, political community) have their ears stopped with gobs of wax.

I want to finish this post with a reference to a significant letter that appeared in the Wall Street Journal a few days ago. Signed by sixteen (sober) scientists, this letter lays out the case against hysteria better than I can and I urge the worshipers in the Church of the Green to read it and ponder it deeply. They make reference to Yale economist William Nordhaus who, while simply accepting the scientific conclusions of the IPCC uncritically, nevertheless concludes that the radical policies of the Kyoto accord, which calls for dramatic limitations on CO2 emissions in the west, are counter-productive to the extent that they undermine the health of our economy and its capacity to deal with climate problems in the future. The WSJ article states:

A recent study of a wide variety of policy options by Yale economist William Nordhaus showed that nearly the highest benefit-to-cost ratio is achieved for a policy that allows 50 more years of economic growth unimpeded by greenhouse gas controls.

In conclusion, global warming is an unchallengeable “consensus” only among those who deeply yearn to save the planet. The conviction of those politicians and activists and (few) scientists that debate is destructive is itself destructive. It arises from the dungeons and dragons psychodrama going on in the minds of those deluded saints – where they embody themselves as the White Wizards and the skeptics as the Morlocks.

The appropriate role for conservatives is to oppose the bias of hysteria and the “cautionary principle;” to demand every essential cost-benefit analysis and, understanding the daydreams of the holy, to insist that progress comes by first placing our feet upon the ground.

SOURCE

Carbon trading dead on its feet

Carbon, International Comments Off

Dec 202011

With progress slow on climate talks, banks withdraw from the industry

Greenhouse gases aren’t rising to the top of most agendas right now. Emission caps established under the Kyoto Protocol are set to expire at the end of 2012, and a United Nations-led effort to forge a new global compact is inching forward. The European Union, which runs the world’s biggest carbon trading market, has other things on its collective mind. One side effect of all this is a 47 percent drop this year through Dec. 12 in the value of C0₂ allowances issued under the EU’s Emissions Trading Scheme. The permits, which mostly go to utilities and other industrial companies, can be banked or traded.

The biggest banks, trying to recover from trading losses and a regulatory clampdown on using their own money to make bets, are scaling back their carbon trading operations. “People are leaving the industry because they’ve been fired or because they see no prospects,” says Emmanuel Fages, head of energy research for Europe at Société Générale (SCGLF) in Paris. “That is the sad story.”

The latest casualties include Odin Knudsen, managing director for environmental markets at JPMorgan Chase (JPM), who in October left his New York post after his team was shrunk. The previous month, UBS Securities (UBS) fired Vice-Chairman Jon Anda and the rest of his Stamford (Conn.)-based climate policy team. Anda and Knudsen confirmed their departures in interviews. JPMorgan would not comment. UBS spokesman Christiaan Brakman said in an e-mailed response to questions that UBS “remains committed to address climate change.” Fages’s employer, Société Générale, announced on Nov. 25 that it had agreed to sell its 50 percent stake in carbon trading joint venture Orbeo to partner Solvay Group (SVYZY), a chemical maker.

In Europe, demand for emissions permits has been crimped by the economic slowdown, which has forced industry to idle plants. The value of carbon trading fell 8 percent, to €23.7 billion ($32 billion), in the third quarter from the previous three months as the price of permits tumbled, according to Bloomberg New Energy Finance data.

A carbon offset program operated by the UN is in jeopardy as a result of the expiration next year of greenhouse gas caps set by the Kyoto Protocol. Under the UN program, companies and nations can earn credits to offset fossil-fuel emissions by sponsoring renewable-energy projects. A follow-up treaty to Kyoto won’t come into force until 2020 at the earliest. Japan, Russia, and Canada have refused to accept new limits in the meantime.

The carbon trading industry’s dimming outlook can be seen in the thinning membership rolls of the International Emissions Trading Assn. About 10 institutions have quit the Geneva-based trade group this year, cutting membership to around 150 companies. “There are shakeouts and departures happening as you would expect to be the case during any market that was a little bit unsure about where it was going,” says Henry Derwent, the organization’s president. Carbon trading “is currently suffering, as so many other markets are, from low economic activity in the main area, which is the European Union.”

SOURCE

Australian Households could be forced to find an extra $1400 for non-electric hot water under Labor Party green scheme expansion

Australia, Carbon Comments Off

Dec 202011

I have had experience with both types of gas hot water systems and they are all prone to blowing out when it is windy — which is hugely pesky

HOUSEHOLDS could be forced to find an extra $1400 for hot water under a massive expansion of another federal Labor green scheme.

The state government has warned that some families could struggle to comply with the little-known scheme, which bans electric systems in favour of expensive solar units and other systems.

NSW families will most likely have to pay $1.7 billion over the 10-year life of the scheme.

Under the second phase of the plan, about 70 per cent of NSW households will have to find up to $1400 for new solar, heat pump or gas systems if their energy-intensive electric hot water units break down and can’t be repaired.

A spokeswoman for the Parliamentary Secretary for Climate Change and Energy Efficiency said the scheme would help the “hot water industry to move to a low emission future” within 10 years.

Phase one of the scheme started last year, when electric water heaters were banned from being installed in new detached, terrace or town houses.

Phase two, which extends the ban to existing homes, was slated for next year but is likely to be delayed because the majority of households that rely on electric hot water systems do not have access to reticulated natural gas and only 7 per cent have solar.

The scheme was greeted with caution yesterday. “Before making a decision on implementation in NSW we need to be satisfied that the industry has a clearly demonstrated capacity to supply and install alternative technologies and that there are means available to assist lower income householders to manage the higher upfront costs of a solar or heat pump systems, where gas is unavailable,” a NSW Office of Environment and Heritage spokeswoman said.

Industry bosses said plumbers need more training before the program is fully rolled out. “You can’t just remove hot water systems without there being greater access and availability of gas as a cheaper alternative to going solar,” Master Plumbers Association chief executive officer Paul Naylor said.

The Clean Energy Council said substantial rebates would need to be provided, backed by a strong educational campaign, to ensure households did not simply install the cheapest system with no environmental benefits.

SOURCE

Another Sweet deal for Buffett – Who pays? You do!

Carbon, Climate, ClimateGate, International, Renewables, Water, Wind Farms Comments Off

Dec 202011

by Bruce Krasting

Yesterday, First Solar (FSLR) announced that it had sold its interests in a big solar project called Topaz. The buyer was MidAmerican Energy Holdings, a subsidiary of Berkshire Hathaway. So Warren B. is behind the transaction. I think he got another sweetheart deal. This time, it’s the taxpayers who will be making Buffett richer.

The transaction is between two companies. As a result there has been little disclosure of the actual terms and conditions. The following is my thinking on what is behind the transaction. If I have it wrong, the nice folks from Omaha can send me a note and I’ll publish their response.

There are a number of angles to consider in this story. I’ll outline a few and try to tie them together.

The Topaz solar project is in San Lois Obispo, California. Construction began a month ago, and will not be completed until 2015. The facility is designed to produce 550MW of energy. The cost per MW of these types of facilities is between $3mm and $4mm per MW. Using the mid point of $3.5mm you get an estimated cost of construction of $1.925 billion. Add in another $75mm of soft costs and the total should come to $2 billion.

Bloomberg confirms my estimate on the completion costs of Topaz with this headline.

Buffett has purchased the rights to build a solar farm. The money he is putting up will be the construction costs over the next four years. First Solar will get some consideration as it has absorbed all the front-end costs, but it would be a mistake to assume that FSLR is getting anything close to $2B from Buffet. (Neither of the press releases from the companies mentions cash consideration.)

Buffett’s only condition to the deal is that the Power Purchase Agreement (“PPA”) that Topaz has previously entered into is affirmed to Berkshire’s lawyer’s satisfaction. This is a critical part of the deal.

California’s monster electric utility, Pacific Gas & Electric (PGE), has entered into a 25 year PPA with Topaz. With PGE taking all of the power from Topaz, the risks in the deal fall sharply. The output of Topaz has already been successfully monetized. All that needs be done is complete the construction and then let the sun shine.

It’s important to understand that Uncle Warren has a seat at this table because the Department of Energy failed to approve a big loan to Topaz prior to 9/30/2011 (the deadline to get federal subsidies). The DOE did substantial work before nixing the deal. This PDF link to the DOE shows just how much had been accomplished prior to 9/30. (How much did this report cost the DOE/us? Many millions.) All of the necessary approvals and engineering work had been completed. Construction of these solar farms is not all that complicated once the approvals and site work has been signed off on. Buffet got a deal that was teed up and ready to go. Construction commenced a month ago. Warren bought into a deal in the 11th hour. He got a shovel ready investment. He has very little risk at this point.

When Topaz is completed, energy will be produced. Pursuant to the PPA Topaz/Buffet will receive checks monthly from PGE for the next 25 years. That stream of revenue is assured. PGE is a single A. Its long-term debt yields are in the mid 4% range. I’m certain that Buffet got a better yield than that. But the yield is not what brought Buffet into the deal. It was taxes and his desire to avoid them that got this deal inked. Again, that Bloomberg Headline:

It’s clear that as part of the deal, Buffett got the tax breaks associated with Topaz. The federal tax subsidies for solar construction belong to Buffett. The numbers are huge.

Once completed, the owners of a solar farm get one of two massive incentive payments:

1) The owner gets a cash grant equal to 30% of the construction cost, or;

2) The owner gets a break on their federal taxes equal to (get this) 100% of the cost of the project. This “Bonus tax deduction” can be used to reduce federal taxes in the year that that the project is first completed.

Berkshire Hathaway paid 29% taxes in 2010. This would imply that it would opt for the cash payment of 30% ($600MM!). But BRK is actually faced with a statutory tax rate of 35%. Therefore the value of the tax reduction could be as high as $700mm. (Warren can engineer any income necessary to max out the tax deduction.)

The PPA with PGE will return all of Buffett’s $2B of investment plus a return of at least 5%. But when you add into the calculation that in four years Buffett gets a mega tax-break the implied returns soar. I did an IRR assuming a 2015 construction completion, $2b cost and a 25-year payback. It comes to a return of 15 -17% pa. This is a terrific return from what is functionally an A risk.

This monster result is exclusively the result of the tax breaks Buffet will enjoy. In other words, “you” are making Warren richer.

Notes:

As I indicated, the PPA with PGE is central to Buffett’s investment. It’s important to understand why PGE has stepped up to facilitate Topaz. California (and 30 other states) have passed laws that mandate that electric utilities MUST produce or acquire a percentage of their electricity from alternative sources. In California. Executive order S-14-08 mandates that 30% of all power sold in California must come from alternative sources by the years 2020. This means that PGE is in a bind. It HAS to have alternative energy or it can’t grow. So PGE came into the Topaz deal desperate for a supply of power that did not come from fossil fuels. Topaz solved (in part) PGE’s problems.

There is one technical aspect to the Buffet/Topaz deal that I don’t quite understand. The rules on the tax breaks/rebate are very clear. Not less than 5% of construction must have been completed by 9/30/2011 in order to qualify for the subsidies. As I have indicated construction of Topaz did not commence until November. It would appear that the requirements for the subsidies has not been met. The possibility exists that the DOE agreed to allow for the subsidy and waived the 9/30 deadline. Another possibility is that the DOE gave credit toward the 5% completion by allowing for the pre-construction soft costs of the project. If it is the latter, I’m confused. Other projects that I’m aware of did not get credit for pre-construction soft costs. One additional possibility is a waiver of the completion requirements was granted, AKA “Side Deal”.

When the DOE money did not come through, it must have been a big blow to the White House. Topaz was a big prize for them. I wonder if Obama called his pal Buffett and asked for a “fix”. Warren B. delivered. But, as usual, he charged a pound of flesh. Obama got what he wanted. He avoided another solar disaster when WB stepped in.

Summary:

-Buffett gets another sweetheart deal that makes him richer.

-PGE gets a long-term supply of alternative energy that allows them to grow for a few more decades.

-First Solar gets out of a huge headache. It gets get to sell solar panels to Topaz.

-The citizens of California that will use this power will get nothing. They will continue to pay the highest rates for electricity in the country.

-The US tax payers foot the bill for another $600 – $700mm. That’s the “Vig” for Warren. Those taxpayers also get nothing in return.

SOURCE

Some electricity generators already on the brink — with the carbon tax a last straw

Australia, Carbon, Renewables Comments Off

Dec 202011

LOY YANG POWER, a major supplier to the east coast electricity market, has been forced to ask the corporate regulator for special permission to continue trading in the face of financial strain due to debt refinancing and the carbon tax.

Details of the financial difficulty come less than a week after a federal government report predicted that, should the Loy Yang A plant be forced to close suddenly, wholesale electricity prices would nearly double, with an immediate flow on to household power costs.

The findings, contained in the federal government’s draft white paper on energy, said wholesale power prices would surge by nearly 80 per cent in Victoria and by more than 45 per cent in NSW.

Loy Yang Power’s chief executive, Ian Nethercote, told the Herald the company had received a “no action” letter from the Australian Securities and Investments Commission – allowing it to continue to trade after debt totalling $565 million due in November became a current liability on its books.

Mr Nethercote said Loy Yang Power was already in talks with federal ministers, the Treasury and the government’s new Energy Security Council about its share of $5.5 billion worth of free carbon permits set aside to help electricity generators through the introduction of the carbon tax.

The company, whose Loy Yang A plant in Victoria’s Latrobe Valley supplies one-third of Victoria’s power needs, was also talking to ministers and the council about the possibility of the government becoming its lender of last resort in its bid to refinance the debt.

Mr Nethercote said this was not “our preferred option” because “we imagine the conditions will be more onerous”.

Other energy industry sources said Loy Yang was emerging as the first big test of the government’s policies aimed at ensuring the electricity market coped with the introduction of the $23-a-tonne carbon price in July without major disruption.

Mr Nethercote said it was “more than likely” Loy Yang would have had to get a no action letter from ASIC even without a carbon price, which will cost it about $450 million a year.

He said some of Loy Yang’s customers had asked for more information about the company’s financial situation and were reviewing the conditions they placed on their dealings with the generator. Other sources said several companies had stopped trading with Loy Yang.

Only the chairman of the Energy Security Council – a Tasmanian, Michael Vertigan – has been publicly announced, but the Herald has learnt the other eight members of the crucial advisory body have been appointed and the council has begun negotiations with several generators, investment banks and financial institutions.

The Tokyo Electric Power Company, operator of the Fukushima nuclear plant, owns 32.5 per cent of Loy Yang, but the company has denied its Japanese shareholder is looking to divest in order to concentrate on the clean-up operations required at home. Another 32.5 per cent is owned by AGL.

Loy Yang lobbied fiercely but unsuccessfully for an amendment to the carbon tax laws that would have allowed deferred payment when generators bought forward-dated pollution permits under the scheme, a provision included under the Rudd government’s emissions trading scheme that would have reduced the sudden increase in their working capital requirements.

Loy Yang is ineligible for the government’s scheme to pay for the closure of brown coal plants. Plants that could access it are Hazelwood, Yallourn and Morwell in the Latrobe Valley, Playford in South Australia and Collinsville in Queensland.

SOURCE

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