As President-elect Obama and a new Congress prepare to assume office in January, expectations for climate and energy legislation in the U.S. are arguably the highest in recent memory. And within the confines of the current economic climate, careful crafting of these policies has never been more important.
The Pew Center on Global Climate Change has put together a series of primers with input from a variety of outside experts. Pew says these briefs walk policymakers through important design choices and the strengths and weaknesses of various policy approaches. The modular format will allow additional briefs to be developed over time in response to questions from policymakers and their staffs.
Initial briefs cover the following areas:
Cap-and-Trade Design Elements for a Greenhouse Gas Reduction Program
- Greenhouse Gas Emission Reduction Timetables
- Scope of a Greenhouse Gas Cap-and-Trade Program
- Greenhouse Gas Emissions Allowance Allocation
- Containing the Costs of Climate Policy
- Greenhouse Gas Offsets in a Domestic Cap-and-Trade Program
- Addressing Competitiveness in U.S. Climate Change Policy
Complementary Policies to Reduce Greenhouse Gas Emissions
- Technology Policies to Address Climate Change
- Addressing Emissions From Coal Use in Power Generation
- Policies to Reduce Emissions from the Transportation Sector
- Tax Policies to Reduce Greenhouse Gas Emissions
Technorati Tags: cap-and-trade, climate-change, coal, greenhouse-gases, primer, transition2008, transportation
The International Energy Agency’s latest World Energy Outlook offers a stark reminder of the challenges of reducing carbon dioxide emissions.
The IEA’s “WEO-2008″ analyses policy options for tackling climate change after 2012, when a new global agreement – to be negotiated at the UN Conference of the Parties in Copenhagen next year – is due to take effect. The analysis assumes a hybrid policy approach, comprising a plausible combination of cap-and-trade systems, sectoral agreements and national measures.
On current trends, energy-related CO2 emissions are set to increase by 45% between 2006 and 2030, reaching 41 Gt, the IEA says.
Three-quarters of the increase arises in China, India and the Middle East, and 97% in non-OECD countries as a whole.
“Stabilising greenhouse gas concentration at 550 ppm of CO2-equivalent, which would limit the temperature increase to about 3°C, would require emissions to rise to no more than 33 Gt in 2030 and to fall in the longer term. The share of low-carbon energy – hydropower, nuclear, biomass, other renewables and fossil-fuel power plants equipped with carbon capture and storage (CCS) – in the world primary energy mix would need to expand from 19% in 2006 to 26% in 2030.”
This would call for $4.1 trillion more investment in energy-related infrastructure and equipment than in the Reference Scenario – equal to 0.2% of annual world GDP.
Most of the increase is on the demand side, with $17 per person per year spent worldwide on more efficient cars, appliances and buildings, the IEA says. “On the other hand, improved energy efficiency would deliver fuel-cost savings of over $7 trillion. The scale of the challenge in limiting greenhouse gas concentration to 450 ppm of CO2-eq, which would involve a temperature rise of about 2°C, is much greater. World energy-related CO2 emissions would need to drop sharply from 2020 onwards, reaching less than 26 Gt in 2030.”
Our analysis shows that OECD countries alone cannot put the world onto a 450-ppm trajectory, even if they were to reduce their emissions to zero.
Technorati Tags: cap-and-trade, carbon-tax, climate-change, energy, global-warming, oil-&-gas, renewable-energy
Countries today face numerous environmental challenges, such as climate change, air and water pollution, natural resource management, natural disasters and industrial accidents. The costs of not responding adequately to these challenges can be considerable, in some cases representing a significant drag on OECD economies, according to a new OECD study.
Based on a literature review in selected areas of environmental policy, the OECD report suggests that the economic costs of failing to introduce environmental policies that are “sufficiently ambitious”, can be considerable – i.e. a non-negligible share of GDP. For example:
The costs of not introducing the European Commission’s “Thematic Strategy on Air Pollution” have been estimated to represent about 0.35 1.0% of EU 25 GDP in 2020 (EC, 2005).
In non-OECD countries, 1.7 million deaths and 4.4% of the burden of disease (e.g. reduced years of healty life) have been attributed to unsafe water supply, sanitation and hygiene according to the WHO. Ninety per cent of the deaths involve children under 5 years old (Prüss-Üstün et al., 2004).
- Estimates of the economic costs of climate change vary widely, with recent assessments generating figures as high as 14.4% in terms of per capita “consumption equivalents” (Stern, 2007), when both market and non-market impacts are included.
- The costs of natural disasters (e.g. floods, windstorm, earthquakes, etc.) for the poorest countries can be as much as 13% of annual GDP (The World Bank, 2006).
- Inefficient management of the east Atlantic bluefin tuna fishery may be resulting in reduced fishery yields with a value of USD 1 3 billion (Bjørndal and Brasão) (2005).
Some of these costs are already being reflected in public budgets, firms’ balance sheets as well as household budgets (e.g. increased public and private health expenditures, unemployment benefits for out-of-work fishers, remediation costs for contaminated sites, dikes and other flood protection infrastructure).
Even when the costs of inaction are deemed important, identifying the areas where environmental policies need to be strengthened still requires careful comparison between the costs of inaction versus costs of action (the latter are not covered by this report). This report provides introductory perspectives on the methodological issues in evaluating costs of inaction, and discusses some of the future problems likely to be encountered in this very complex area.
Technorati Tags: climate-change, environment, fishery, green, greenhouse-gases
Corporate responsibility reporting has gone mainstream, according to a new survey from KPMG. Nearly 80 percent of the largest 250 companies worldwide issued reports in 2007-08, up from about 50 percent in 2005.
KPMG says reporting is now the norm, not the exception, among the world’s largest companies. “Since motivations for reporting have shifted away from reactive and risk management factors and toward aspirational and innovative ones, we expect reporting to become more common at the national level and in smaller companies in the near future.”
National level companies trail the G250 with only 45 percent of the total sample issuing reports, but numbers vary from less than 20 percent in Mexico to more than 90 percent in Japan.
“Although the N100 companies are trailing their global counterparts, we are seeing a distinctive maturing of corporate responsibility management systems overall. The use of the GRI Guidelines by the majority of G250 and N100 companies shows that this has become a leading standard for reporting. Stakeholder engagement is an area that could be strengthened - and included as part of a broad-ranging approach to corporate responsibility strategy and reporting.”
Now that some of the world’s largest companies have been able to quantify the business case for corporate responsibility and reporting, it is likely that the practice will spread through countries and sectors to the smaller players.
Ethical considerations and innovation emerged as some of the most common drivers for reporting, while risk management fell in the G250 group, KPMG said.
Other findings:
- Although 92 percent of G250 companies disclose a corporate governance code of conduct or ethics, only 59 percent report on incidents of non-compliance with the code.
- Nearly all G250 companies have a supply chain code of conduct, but only half disclose the details of how it is implemented and monitored.
- While 62 percent of G250 companies disclose information about climate risks, 69 percent of N100 companies do not. Whereas understanding the risks starts with understanding the footprint, a large part of the G250 (41 percent) need to develop this. Carbon footprint reporting is focused largely on the own operations.
In theory the link between corporate governance and corporate responsibility seems clear, KPMG says, but in practice many companies do not appear to be making the connection and capitalizing on the potential benefits. “Reporting on supply chain risk and reporting by suppliers both look set to increase as investors, and customers in particular, demand greater responsibility and transparency. Whereas carbon footprint reporting is not as common as might be expected, there are other indications that companies are taking the risks and opportunities associated with climate change seriously.”
Technorati Tags: climate-change, corporate responsibility, corporate-governance, GRI Guidelines, supply-chain
Shareholder activism and the threat of regulation appear to boost the likelihood of fuller disclosure of companies’ policies and actions related to climate change, a new study* finds.
The challenges associated with climate change will require governments, citizens, and corporations to work collaboratively to reduce greenhouse gas emissions, a task that requires information on companies’ emissions levels, risks, and reduction opportunities, the paper’s authors write.
The study finds “strong support for our hypotheses that firms are more likely to acquiesce to a shareholder request if they or other firms in their industry have already been targeted by a shareholder action on a related issue.”
We also show that political context affects the success of private politics, in that firms under threat of regulation are more likely to acquiesce to a shareholder request.
“These findings extend existing theory by showing how organizational change can be sparked by both activist groups and government policymakers, and that challenges mounted against a single firm (and industry) can inspire field-level (and state-level) changes.”
*Responding to Public and Private Politics: Corporate Disclosure of Climate Change Strategies - by Erin M. Reid and Michael W. Toffel, Harvard Business School.
Technorati Tags: climate-change
The Environmental Protection Agency’s just published final report on the effect of climate change on US health and welfare paints a discouraging picture, especially for people living in coastal areas.
The 283-page report focuses on “impacts of global climate change, especially impacts on three broad dimensions of the human condition: human health, human settlements, and human welfare.”
While there may be fewer cases of illness and death associated with climate change in the United States than in the developing world, we nevertheless anticipate increased costs to human health and well being.
The key findings of the study:
- It is very likely that heat-related morbidity and mortality will increase over the coming decades.
- The impacts of higher temperatures in urban areas and likely associated increases in tropospheric ozone concentrations can contribute to or exacerbate cardiovascular and pulmonary illness if current regulatory standards are not attained.
- Hurricanes, extreme precipitation resulting in floods, and wildfires also have the potential to affect public health through direct and indirect health risks.
- There will likely be an increase in the spread of several food and water-borne pathogens among susceptible populations depending on the pathogens’ survival, persistence, habitat range and transmission under changing climate and environmental conditions.
- Health burdens related to climate change will vary by region.
- Climate change is very likely to accentuate the disparities already evident in the American health care system.
- Changes in precipitation patterns will affect water supplies nationwide, with precipitation varying across regions and over time. Likely reductions in snowmelt, river flows, and groundwater levels, along with increases in saline intrusion into coastal rivers and groundwater will reduce fresh water supplies.
- Communities in risk-prone regions, such as coastal zones, have reason to be concerned about potential increases in severe weather events.
- Finally, population growth and economic development is occurring in those areas that are likely to be vulnerable to the effects of climate change.
Approximately half of the U.S. population, 160 million people, will live in one of 673 coastal counties by 2008. Coastal areas – particularly those on gently-sloping coasts and zones with gradual land subsidence – will be at risk for sea level rise, especially related to severe storms and storm surges.
Still, all this is not enough to convince the EPA to regulate greenhouse gas emissions, at least until after climate-change skeptic President George Bush leaves office.
Technorati Tags: climate-change
Droughts, heavy downpours, excessive heat, and intense hurricanes are likely to become more commonplace in the U.S. as humans continue to increase the atmospheric concentrations of heat-trapping greenhouse gases, according to a new report from the U.S. Climate Change Science Program.
The report is based on scientific evidence that a warming world will be accompanied by changes in the intensity, duration, frequency, and geographic extent of weather and climate extremes.
Global warming of the past 50 years is due primarily to human-induced increases in heat-trapping gases, according to the report. Many types of extreme weather and climate event changes have been observed during this time period and continued changes are projected for this century. Specific future projections include:
- Abnormally hot days and nights, along with heat waves, are very likely to become more common. Cold nights are very likely to become less common.
- Sea ice extent is expected to continue to decrease and may even disappear in the Arctic Ocean in summer in coming decades.
- Precipitation, on average, is likely to be less frequent but more intense.
- Droughts are likely to become more frequent and severe in some regions.
- Hurricanes will likely have increased precipitation and wind.
- The strongest cold-season storms in the Atlantic and Pacific are likely to produce stronger winds and higher extreme wave heights.
Technorati Tags: climate-change, global-warming, weather
The thinning ranks of climate change deniers are confronted with more compelling evidence in this week’s issue of Nature.
Nature reports that a comprehensive analysis of trends in tens of thousands of biological and physical systems has provided more evidence to bolster the near-universal view that man-made climate change is altering the behaviour of plants, animals, rivers and more.
The study, by an international research team featuring many members of the Intergovernmental Panel on Climate Change (IPCC), is a statistical analysis of observations of natural systems over time. The data, which stretch back to 1970, capture the behaviour of 829 physical phenomena, such as the timing of river runoff, and around 28,800 biological species.
Among the warming-linked changes seen in the study are the timing of plant flowering, bird nesting, ice melting, salmon migration and pollen release; declines in populations of polar bears, krill and penguins; and increased growth of Siberian pines and cool-water ocean plankton.
“This paper outlines an extremely robust case for linking a range of observed physical and biological changes to human-induced climate change, specifically warming,” says Roger Jones of the Centre for Australian Weather and Climate Research. “Unfortunately, the coverage of such data is not global and many regions of the world, including Australia, are not very well covered. Many of the regions that lack coverage are also thought to be highly vulnerable to the impacts of climate change.”
Technorati Tags: climate-change
Throw a frog into a pot of boiling water and it will jump out. Put that frog in a pot of cold water and heat to boiling and the frog will stay in the pot until it is cooked as it doesn’t notice the gradual but catastrophic increase in temperature. Or so they say. Whether or not this is true, it makes for an appealing analogy.
It can be applied to the to all manner of ills in the financal and economic world, from the subprime crisis to global warming.
Another candidate for the boiling frog theory is corporate responsibility and management integrity, where the water appears to be getting warm enough for people to start taking notice.
This was evident in Research Recap’s most popular post of the week, based on an Audit Integrity report identifying stocks with questionable management integrity. Audit Integrity Chairman Jim Kaplan says the ratings are “cause for concern that the companies may be intentionally deceiving their shareholders to mask serious problems,”
Meanwhile, Sir Evelyn Rothschild, former chairman of NM Rothschild & Sons, laments the decline in ethical behavior in the financial sector, in a commentary in today’s Financial Times. “Financial services and banking should set the very highest standards for ethical behaviour, ” he writes.
Ethics is not only a question of acting correctly. It is a matter of not trying to avoid regulation even if one thinks one can get away with it.
“This must be taught at a very early stage and demonstrated in the way a firm is managed. I passionately believe that this is something that has deteriorated in the past few years,” he concludes.
Corporate behavior was also a theme of another popular post, on Berkshire Hathaway’s annual shareholder meeting. In the words of Berkshire’s Charlie Munger, “It’s a crazy culture of greed and overreaching and overconfidence in trading algorithms.”
Signs of improved corporate responsibility were evident in our post on Climate Counts’ latest ranking of companies’ commitment to fighting climate change. A cynic might say that the improvements registered over the past year represent a commercial calculation rather than a sudden ethical awakening. But the outcome is what matters, not the motivation.
Technorati Tags: berkshire-hathaway, climate-change, corporate-governance, Zeitgeist
What’s a climate-conscious hipster to do? Nonprofit Climate Counts suggests they eschew iPods and iPhones due to Apple’s lack of commitment to saving the planet from global warming. They better put on their Climate Counts-approved Nikes and run over to console themselves with a venti latte (made with Stonyfield Farms milk) from Starbucks. While there they might want to use Google to shop for a GE washing machine and Tide detergent from Procter and Gamble. Just make sure to have it shipped by DHL. Then head home and enjoy a Bud from Anheuser Busch while applying for a job at IBM.
Climate Counts encourages shoppers to patronize these companies, which scored highest in their respective sectors. But they should stay away from Wendy’s, Darden’s Red Lobster, YUM Brands‘ Pizza Huts, Burger King and Jones Apparel, which all earned a score of zero on Climate Counts’ scale.
Climate Counts has updated its Scorecard, first issued last June. “The new Scorecard shows a real shift towards greater climate commitment across most industry sectors — with 84% of scored companies improving their Climate Counts scores. Looking at the companies that showed the most improvement—Google, Levi Strauss and Anheuser-Busch—shows the diverse kinds of great American companies committed to paying attention to global climate change.”
The average overall Climate Counts score jumped 22% to 39 (from 30). That number, 39 out of 100, also shows that there is still a lot of work to do.
Climate Counts uses a 0-to-100 point scale and 22 criteria to determine if companies have:
- MEASURED their climate “footprint”
- REDUCED their impact on global warming
- SUPPORTED (or suggest intent to block) progressive climate legislation
- Publicly DISCLOSED their climate actions clearly and comprehensively
Climate Counts believes the Scorecard motivates both companies and consumers to step-up their efforts on climate change.
The full interactive Scorecard is available here.
Technorati Tags: climate-change, consumer-products