NewEnergyNews: U.S. CAN LEARN FROM EU EMISSIONS TRADING AND PAY IT FORWARD

NewEnergyNews

Gleanings from the web and the world, condensed for convenience, illustrated for enlightenment, arranged for impact...

The new challenge: To make every day Earth Day.

YESTERDAY

  • FRIDAY WORLD HEADLINE-A NEW WAY TO SEE CLIMATE CHANGE
  • FRIDAY WORLD HEADLINE-EU OCEAN WIND TO CUT COSTS, KEEP GROWING
  • FRIDAY WORLD HEADLINE-COST-COMPETIVE NEW ENERGY, GERMANY’S ‘GIFT TO THE WORLD’
  • FRIDAY WORLD HEADLINE-NEW ENERGY MATCHES COAL ON COST, CAPACITY IN TURKEY
  • THE DAY BEFORE

    THINGS-TO-THINK-ABOUT THURSDAY, November 20:

  • TTTA Thursday-TOP REPUBLICAN DROPS CLIMATE DENIAL
  • TTTA Thursday-FORD ELECTRIC CARS FOR ‘THE MASSES’
  • TTTA Thursday-MIDWEST SOLAR MAKES SENSE AND CENTS
  • TTTA Thursday-NEW ENERGY JOBS BY THE BAY
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    GET THE DAILY HEADLINES EMAIL: CLICK HERE TO SUBMIT YOUR EMAIL ADDRESS OR SEND YOUR EMAIL ADDRESS TO: herman@NewEnergyNews.net

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    THE DAY BEFORE THE DAY BEFORE

  • THE STUDY: THE MIDWEST GRID IS READY FOR 40% NEW ENERGY
  • QUICK NEWS, November 19: OHIO NEW ENERGY JOBS REPORT SUPPRESSED; SOLAR GIANT BUYS WIND DEVELOPER; BUSINESS TO MAKE IT BIG IN SMART CITIES
  • THE DAY BEFORE THAT

  • THE STUDY: THE NEW ENERGY LIFE-CYCLE CUTS EMISSIONS
  • QUICK NEWS, November 18: U.S. TAKES WORLD LEAD IN WIND; SOLAR TO SHOW MISSOURI JOBS; WAVE ENERGY ROLLING SLOWLY IN
  • AND THE DAY BEFORE THAT

  • THE STUDY: A NEW TAKE ON THE COSTS AND BENEFITS OF SOLAR
  • QUICK NEWS, November 17: BIG TEST FOR SOLAR ROADS KICKS OFF; FORD TURNS TO NEW ENERGY; ADVANCED BATTERY SUPPLY CHAIN TO TRIPLE
  • THE LAST DAY UP HERE

  • Weekend Video: Hearing From Idiotic Idiots And Others
  • Weekend Video: The Aussies Say It Plainly
  • Weekend Video: Living In The Wasteland Of The Free
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    Anne B. Butterfield of Daily Camera and Huffington Post, is a biweekly contributor to NewEnergyNews

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT)

    November 26, 2013 (Huffington Post via NewEnergyNews)

    Everywhere we turn, environmental news is filled with horrid developments and glimpses of irreversible tipping points.

    Just a handful of examples are breathtaking: Scientists have dared to pinpoint the years at which locations around the world may reach runaway heat, and in the northern hemisphere it's well in sight for our children: 2047. Survivors of Superstorm Sandy are packing up as costs of repair and insurance go out of reach, one threat that climate science has long predicted. Or we could simply talk about the plight of bees and the potential impact on food supplies. Surprising no one who explores the Pacific Ocean, sailor Ivan MacFadyen described long a journey dubbed The Ocean is Broken, in which he saw vast expanses of trash and almost no wildlife save for a whale struggling a with giant tumor on its head, evoking the tons of radioactive water coming daily from Fukushima's lamed nuclear power center. Rampaging fishing methods and ocean acidification are now reported as causing the overpopulation of jellyfish that have jammed the intakes of nuclear plants around the world. Yet the shutting down of nuclear plants is a trifling setback compared with the doom that can result in coming days at Fukushima in the delicate job to extract bent and spent fuel rods from a ruined storage tank, a project dubbed "radioactive pick up sticks."

    With all these horrors to ponder you wouldn't expect to hear that you should also worry about the United States running out of coal. But you would be wrong, says Leslie Glustrom, founder and research director for Clean Energy Action. Her contention is that we've passed the peak in our nation's legendary supply of coal that powers over one-third of our grid capacity. This grim news is faithfully spelled out in three reports, with the complete story told in Warning: Faulty Reporting of US Coal Reserves (pdf). (Disclosure: I serve on CEA's board and have known the author for years.)

    Glustrom's research presents a sea change in how we should understand our energy challenges, or experience grim consequences. It's not only about toxic and heat-trapping emissions anymore; it's also about having enough energy generation to run big cities and regions that now rely on coal. Glustrom worries openly about how commerce will go on in many regions in 2025 if they don't plan their energy futures right.

    2013-11-05-FigureES4_FULL.jpgclick to enlarge

    Scrutinizing data for prices on delivered coal nationwide, Glustrom's new report establishes that coal's price has risen nearly 8 percent annually for eight years, roughly doubling, due mostly to thinner, deeper coal seams plus costlier diesel transport expenses. Higher coal prices in a time of "cheap" natural gas and affordable renewables means coal companies are lamed by low or no profits, as they hold debt levels that dwarf their market value and carry very high interest rates.

    2013-11-05-Table_ES2_FULL.jpgclick to enlarge

    2013-11-05-Figure_ES2_FULL.jpg

    One leading coal company, Patriot, filed for bankruptcy last year; many others are also struggling under bankruptcy watch and not eager to upgrade equipment for the tougher mining ahead. Add to this the bizarre event this fall of a coal lease failing to sell in Wyoming's Powder River Basin, the "Fort Knox" of the nation's coal supply, with some pundits agreeing this portends a tightening of the nation's coal supply, not to mention the array of researchers cited in the report. Indeed, at the mid point of 2013, only 488 millions tons of coal were produced in the U.S.; unless a major catch up happens by year-end, 2013 may be as low in production as 1993.

    Coal may exist in large quantities geologically, but economically, it's getting out of reach, as confirmed by US Geological Survey in studies indicating that less than 20 percent of US coal formations are economically recoverable, as explored in the CEA report. To Glustrom, that number plus others translate to 10 to 20 years more of burning coal in the US. It takes capital, accessible coal with good heat content and favorable market conditions to assure that mining companies will stay in business. She has observed a classic disconnect between camps of professionals in which geologists tend to assume money is "infinite" and financial analysts tend to assume that available coal is "infinite." Both biases are faulty and together they court disaster, and "it is only by combining thoughtful estimates of available coal and available money that our country can come to a realistic estimate of the amount of US coal that can be mined at a profit." This brings us back to her main and rather simple point: "If the companies cannot make a profit by mining coal they won't be mining for long."

    No one is more emphatic than Glustrom herself that she cannot predict the future, but she presents trend lines that are robust and confirmed assertively by the editorial board at West Virginia Gazette:

    Although Clean Energy Action is a "green" nonprofit opposed to fossil fuels, this study contains many hard economic facts. As we've said before, West Virginia's leaders should lower their protests about pollution controls, and instead launch intelligent planning for the profound shift that is occurring in the Mountain State's economy.

    The report "Warning, Faulty Reporting of US Coal Reserves" and its companion reports belong in the hands of energy and climate policy makers, investors, bankers, and rate payer watchdog groups, so that states can plan for, rather than react to, a future with sea change risk factors.

    [Clean Energy Action is fundraising to support the dissemination of this report through December 11. Contribute here.]

    It bears mentioning that even China is enacting a "peak coal" mentality, with Shanghai declaring that it will completely ban coal burning in 2017 with intent to close down hundreds of coal burning boilers and industrial furnaces, or shifting them to clean energy by 2015. And Citi Research, in "The Unimaginable: Peak Coal in China," took a look at all forms of energy production in China and figured that demand for coal will flatten or peak by 2020 and those "coal exporting countries that have been counting on strong future coal demand could be most at risk." Include US coal producers in that group of exporters.

    Our world is undergoing many sorts of change and upheaval. We in the industrialized world have spent about a century dismissing ocean trash, overfishing, pesticides, nuclear hazard, and oil and coal burning with a shrug of, "Hey it's fine, nature can manage it." Now we're surrounded by impacts of industrial-grade consumption, including depletion of critical resources and tipping points of many kinds. It is not enough to think of only ourselves and plan for strictly our own survival or convenience. The threat to animals everywhere, indeed to whole systems of the living, is the grief-filled backdrop of our times. It's "all hands on deck" at this point of human voyaging, and in our nation's capital, we certainly don't have that. Towns, states and regions need to plan fiercely and follow through. And a fine example is Boulder Colorado's recent victory to keep on track for clean energy by separating from its electric utility that makes 59 percent of its power from coal.

    Clean Energy Action is disseminating "Warning: Faulty Reporting of US Coal Reserves" for free to all manner of relevant professionals who should be concerned about long range trends which now include the supply risks of coal, and is supporting that outreach through a fundraising campaign.

    [Clean Energy Action is fundraising to support the dissemination of this report through December 11. Contribute here.]

    Author's note: Want to support my work? Please "fan" me at Huffpost Denver, here (http://www.huffingtonpost.com/anne-butterfield). Thanks.

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    Anne's previous NewEnergyNews columns:

  • Another Tipping Point: US Coal Supply Decline So Real Even West Virginia Concurs (REPORT), November 26, 2013
  • SOLAR FOR ME BUT NOT FOR THEE ~ Xcel's Push to Undermine Rooftop Solar, September 20, 2013
  • NEW BILLS AND NEW BIRDS in Colorado's recent session, May 20, 2013
  • Lies, damned lies and politicians (October 8, 2012)
  • Colorado's Elegant Solution to Fracking (April 23, 2012)
  • Shale Gas: From Geologic Bubble to Economic Bubble (March 15, 2012)
  • Taken for granted no more (February 5, 2012)
  • The Republican clown car circus (January 6, 2012)
  • Twenty-Somethings of Colorado With Skin in the Game (November 22, 2011)
  • Occupy, Xcel, and the Mother of All Cliffs (October 31, 2011)
  • Boulder Can Own Its Power With Distributed Generation (June 7, 2011)
  • The Plunging Cost of Renewables and Boulder's Energy Future (April 19, 2011)
  • Paddling Down the River Denial (January 12, 2011)
  • The Fox (News) That Jumped the Shark (December 16, 2010)
  • Click here for an archive of Butterfield columns

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    Some details about NewEnergyNews and the man behind the curtain: Herman K. Trabish, Agua Dulce, CA., Doctor with my hands, Writer with my head, Student of New Energy and Human Experience with my heart

    email: herman@NewEnergyNews.net

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    Your intrepid reporter

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      A tip of the NewEnergyNews cap to Phillip Garcia for crucial assistance in the design implementation of this site. Thanks, Phillip.

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    Pay a visit to the HARRY BOYKOFF page at Basketball Reference, sponsored by NewEnergyNews and Oil In Their Blood.

  • ---------------
  • Wednesday, June 25, 2008

    U.S. CAN LEARN FROM EU EMISSIONS TRADING AND PAY IT FORWARD

    A cap-and-trade system is widely regarded as the most politically accessible way for the U.S. to put a price on emissions, bring market factors to bear on emissions reductions and begin helping in the fight to mitigate global climate change. The European Union (EU) Emissions Tradng Scheme (ETS) and the United Nations (UN) Clean Development Mechanism (CDM) have made mistakes getting their unprecedentedly ambitious efforts started. As a result, emissions reductions have not been impressive.

    Jacqueline McGlade, executive director, European Environment Agency: "Of course it was ambitious to set up a market for something you can't see and to expect to see immediate changes in behavior…"

    NewEnergyNews has been making this point for a long time: When the U.S. implements its cap-and-trade system, it should pay the EU a copyright fee. The EU and the world have learned much from the mistakes. The EU ETS grows more financially stable each year. Nobody who was realistic expected dramatic emissions reductions right away. Real reductions are not likely to occur until Phase 3 begins in 2013.

    It is actually impossible to accurately estimate the EU program’s real effectiveness. How much would emissions have grown without the ETS? Where would the U.S. be on emissions caps without the EU’s leadership?

    That said, a quick reconnoitering must follow.

    Mistake number one: Allowing too many free emissions permits. That has been corrected. A progressive proportion of emissions allowances is being auctioned.

    Mistake number two: Allowing special interests to exert influence. Corrected, especially in plans for 2013's Phase 3. Heinz Zourek, director general for enterprise and industry, European Commission: "As long as you treat [special interests] badly…it's better to treat them equally badly."

    Mistake number three: Allowing utilities and power companies too many permits made it easy for them to profit from the first phase of the ETS, creating a backlash against the system. The fight with those big, powerful interests is ongoing.

    Mistake number four: Offset projects in third world countries via the UN CDM may be preventing investment in New Energy. The UN CDM is making corrections but it is slowing progress.

    The mistakes the EU has corrected and the ones it is struggling with as it prepares the 2013 plan are invaluable to the U.S. as it prepares its own program. The U.S. pioneered emissions trading in the early 1990s with a small system that effectively dealt with acid rain. The EU, though, has made the real progress on such markets since the Bush administration shut down consideration of U.S. participation in early 2001.

    David Victor, director, Program on Energy and Sustainable Development/Stanford University: "The politics you're now seeing in Europe are the real politics of carbon…The central lesson from Europe is that governments must find ways of managing the allowances that clearly are going to be one of the most valuable pieces of public property in the 21st century."

    Both Senator McCain and Senator Obama favor a cap-and-trade system. They differ on the severity of emissions reductions necessary. Obama would begin with auctioned permits while McCain would eventually auction them.

    Some of the EU’s most difficult challenges came because the U.S. refused to participate. Those difficulties will likely to be easier to manage once the U.S. comes in, especially because U.S. participation is expected to initiate an agreement with emerging economies (India, China, Indonesia, Brazil, etc.).

    The most important question remaining: Once the systems are up and running, can the regulators tighten the caps enough to significantly cut emissions and effectively mitigate global climate change?


    A market has been built from scratch. Eventually, it will act on emissions. (click to enlarge)

    Europe’s carbon market holds lessons for the U.S.
    James Kanter, June 19, 2008 (International Herald Tribune)

    WHO
    Cap-and-trade advocates, including Senators Barack Obama and John McCain; EU ETS participants; European Environment Agency

    WHAT
    The European Environment Agency reported carbon emissions from industries participating in the EU ETS cap-and-trade system continue to rise.

    Improvements in regulation learned from tough lessons now make the market stable for investors...(click to enlarge)

    WHEN
    - 2005: Trading began in the EU ETS
    - 2005 to 2006: EU emissions rose 0.4%
    - 2006 to 2007: EU emissions rose 0.7%
    - The Obama goal for cap-and-trade is to cut emissions 80% below 1990 levels by 2050.
    - The McCain goal is to cut emissions 60% 1990 levels by 2050.


    WHERE
    - Emissions from 12,000 factories and plants producing electricity, glass, steel, cement, and pulp and paper and trading emissions permits in the EU ETS are quantified.
    - British iron and steel sector emissions rose 10+%.
    - British cement industry emissions rose 50+%.
    - Smaller, emerging economies like Hungary want easier restrictions on growth while environmentalists want harsher restrictions.

    WHY
    - The EU’s first mistake was in allocating too many emissions permits in the first year of trading, allowing the permit value to plummet. That mistake has been corrected.
    - Undue influence from individual industries has been curbed.
    - Ferocious lobbying over the details for Phase 3 of the EU ETS is ongoing.
    - Effective market oversight is crucial.
    - The EU steel and aluminum sectors use a lot of energy, generated big emissions in the first 2 phases of the ETS and are fighting for big allocations in phase 3.
    - Some multinationals are threatening to punish the EU by pulling investments out.
    - EU airlines say they can’t compete against airlines in countries without cap-and-trade.
    - Problems with the UN CDM may diminish investment in New Energy.

    ...In the beginning, it was a nightmare. The U.S. does not to need to make the same mistakes. (click to enlarge)

    QUOTES
    - Hugo Robinson , research group Open Europe: "We currently are in danger of losing yet another decade in the fight against global warming…The sheer amount of lobbying creates so much uncertainty about the way these markets operate that nobody really is investing in cleaner technologies in Europe…"
    - Jacqueline McGlade, executive director, European Environment Agency: "It's easy, with hindsight, to say we could have been tougher…"
    - David Victor, director, Program on Energy and Sustainable Development/Stanford University: "Government largess on a vast scale was actually one of the main reasons that the European system actually got off the ground…The challenge for the United States now will be to have enough pork to get people to the meal, but not to give away so much that we end up squandering public resources."

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