MORE SUNDAY WORLD, 8-30: CHINA AHEAD IN SUN RACE; EU LAW NAILS CO2 SCAMMERS; QUESTIONS ON EU-SAHARA SUN SHARE; AUSSIES COMMITTED TO CAP&TRADE

CHINA AHEAD IN SUN RACE
China Racing Ahead of U.S. in the Drive to Go Solar
Keith Bradsher, August 24, 2009 (NY Times)

"…China that has stepped on the gas in an effort to become the dominant player in green energy — especially in solar power…Chinese companies have already played a leading role in pushing down the price of solar panels by almost half over the last year. Shi Zhengrong, the chief executive and founder of China’s biggest solar panel manufacturer, Suntech Power Holdings, said…[his company] is selling solar panels on the American market for less than the cost of the materials, assembly and shipping [to build market share].

"Backed by lavish government support, the Chinese are preparing to build plants to assemble their products in the United States to bypass protectionist legislation…[and working] to tamp down anti-Chinese sentiment before it takes root."

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"The Obama administration is determined to help the American industry…[most recently with] $2.3 billion in tax credits to clean energy equipment manufacturers. But…Western companies may have fragile prospects when competing with Chinese companies that have cheap loans, electricity and labor, paying recent college graduates in engineering $7,000 a year…[and] governments at the national, provincial and even local level…[that] offer solar companies ever more generous subsidies, including free land, and cash for research and development. State-owned banks are flooding the industry with loans at considerably lower interest rates than available in Europe or the United States.

"…[Suntech] is on track this year to pass Q-Cells of Germany, to become the world’s second-largest supplier of photovoltaic cells… behind only First Solar in Tempe, Ariz…[A] growing list of Chinese corporations backed by entrepreneurs, local governments and even the Chinese military [is] seeking to capitalize on an industry deemed crucial by China’s top leadership…"

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"China’s commitment to solar energy is unlikely to make a difference soon to global warming. China’s energy consumption is growing faster than any other country’s, though the United States consumes more today. Beijing’s aim is to generate 20,000 megawatts of solar energy by 2020 — or less than half the capacity of coal-fired power plants that are built in China each year…Solar energy remains far more expensive…than energy from coal, oil, natural gas or even wind. But in addition to heavy Chinese investment and low Chinese costs, the global economic downturn and a decline in European subsidies to buy panels have lowered prices.

"…[Suntech] will build a solar panel assembly plant in the United States…Yingli Solar, another large Chinese manufacturer…[also plans] to assemble panels in the United States…Western rivals (Germany’s Q-Cells, Conergy and SolarWorld), meanwhile, are struggling… because of declining sales…[But resistance] to Chinese exports could be difficult, particularly as [1] Chinese discounting makes green energy more affordable…[2] First Solar…the solar leader… using a different technology…is actually profitable…[3] [Suntech] executives at its United States operations…[hold] the top posts at the two main American industry groups…[and, 4] almost 98 percent of Suntech’s production goes overseas."


EU LAW NAILS EMISSIONS TRADE SCAMMERS, Part 1
Climate change campaign creates carbon crimes; Fraudulent Permit Trading Surfaces In Europe
Arthur Max, August 23, 2009 (AP via San Diego North County Times)

"Customs agents…arrested nine people in the London area suspected of a multimillion dollar fraud in trading carbon permits, bringing attention to a rich new field for crime sprung from the fight against climate change…[and confirming] fears among law enforcement officers that swindlers ---- operating from the trading floors of Europe to the tropical forests of the Pacific ---- are being attracted to a market that has grown to more than $100 billion.

"…[Carbon dioxide (CO2) is]… a pollutant derived from fossil fuels…[is regulated by] making permission to produce it a commodity that can be traded like gold, oil or hog futures…Trade in CO2 permits has expanded exponentially since the European Union required thousands of industries to limit carbon emissions to specified targets. Industries exceeding their ceiling can buy credits from companies that have held their emissions below target, acting through commodities exchanges. The average price this year for a ton of carbon is about $15…"

The carousel fraud diagrammed. (click to enlarge)

"That carbon market will get a lot bigger if the U.S. Congress passes its own cap-and-trade bill…And it will grow bigger still if a new international climate change agreement will include financial incentives for countries to protect their forests. Negotiators from 192 countries hope to conclude a global warming accord at a major U.N. conference in Copenhagen in December.

"…130 British customs agents raided 27 properties in and around London for evidence of a "carousel fraud" believed to have robbed the treasury of 38 million pounds ($63 million) in unpaid value-added tax. Seven men and two women were arrested and released on bail…[I]t was the first time the scam has been uncovered in the carbon market, expanding from the more established trade in mobile phones and computer chips…The carousel fraud, also known as a missing trader scheme, exploits VAT-free commerce between countries. Conspirators import goods free of tax, sell it domestically with VAT to another company, which exports the products to third country. Rather than pay the VAT owed to the government, the merchants pocket the tax and disappear."

The carousel fraud explained. (click to enlarge)

"In July, France, the Netherlands and Britain initiated action to pre-empt the swindlers. France and Britain set a zero VAT rate for carbon trading, while Holland transferred the obligation to pay VAT from the seller to the buyer…The British Treasury also warned last month that Britain would become a major target of tax theft in carbon emissions permits in the next few months…[S]uspicions of VAT fraud surfaced last May when the volume of carbon trade rose on the Paris BlueNext exchange from 27.2 million tons in October, spiking six months later at 186 million tons…[BlueNext] said the risk of fraud can be high in any new commodities market, and CO2 is no different in the need for high regulatory standards.

"When the carbon market was getting started, big companies were involved and the traders knew each other.. But it has grown so fast that small unknown operators are now doing big business, making self-policing more difficult…"
(Part 2 will be in MORE NEWS on Monday)


QUESTIONS ON EU-SAHARA SUN SHARE
Europe's Saharan power plan: miracle or mirage?
Tom Pfeiffer (w/Erik Kirschbaum, Christoph Steitz, Jonathan Gould, Hamid Ould Ahmed, Gerard Wynn and Sara Ledwith), August 23, 2009 (Reuters)

"Desertec…[a 400 billion euro ($774 billion) plan to power Europe with Sahara sunlight and] the world's most ambitious solar power project [is gaining momentum, even as critics see high risks in a large corporate project using young technology in north African countries with weak rule of law]. Fields of mirrors in the desert would gather solar rays to boil water, turning turbines to electrify a new carbon-free network linking Europe, the Middle East and North Africa…[A] dozen [mostly German] finance and industrial firms…say it will keep Europe at the forefront of the fight against climate change and help North African and European economies to grow…

"Others warn of numerous pitfalls, including Maghreb politics, Saharan sandstorms and the risk to desert populations if their water is diverted to clean dust off solar mirrors…[and] say the concentrated solar power (CSP) technology behind Desertec involves greater costs and risks than the fast-growing patchwork of smaller-scale photovoltaic [PV] cell installations that generate most of Europe's solar energy today."

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"Desertec's founders are lured by the fact that more energy falls on the world's deserts in six hours than the world consumes in a year…Proposed by the Club of Rome, an international group of experts that suggests solutions to global problems, Desertec became an industrial project last month when reinsurer Munich Re hosted its launch…They have yet to draw up a business plan or specify how it will be funded but hope to recruit shareholders and partner companies from a variety of countries.

"Desertec officials say the Sahara could one day deliver 15 percent of Europe's electricity…[It will] advance in small stages with completion not before 2050…[but will be a positive gesture from the developed world to countries of the Middle East and North Africa, which stand to suffer most from the more frequent droughts and desertification blamed on global warming]…"

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"Supporters of…[PV solar] argue decentralized generation will prove more popular as falling prices make the heavy infrastructure needed for CSP unviable…[and say] producing renewable energy within their own borders [is a better choice. German solar energy visionary Hermann] Scheer said the costs of Desertec were being downplayed artificially and its technical capabilities over-estimated…Desertec would need 20 or more efficient, direct-current cables each costing up to $1 billion to transmit electricity north beneath the Mediterranean…

"Southern countries that import most of their energy like Morocco, Tunisia and Jordan would also benefit from Desertec…Morocco buys in 96 percent of its energy…a massive drain on state resources…The Moroccan government says Desertec could solve Morocco's energy dependency…Among hazards facing the scheme are the fact that Desertec would need tight coordination between governments to succeed, yet Maghreb states have tried and failed for two decades to integrate their economies and deepen political ties…Analysts play down the risk to Desertec's infrastructure posed by Al Qaeda-aligned rebels…[and agree] security risks can be managed, but the project could become entangled in broader talks between the EU and north Africa on energy, investment and trade."


AUSSIES COMMITTED TO CAP&TRADE
Despite Defeat, Australian Government Vows to Move Ahead With Emissions Legislation
Phil Mercer, 20 August 2009 (Voice of America)

"Australia's government promises to push through a sweeping carbon emissions trading system despite a parliamentary defeat. The plan would require the country's biggest polluters to buy permits for emitting carbon dioxide. Government ministers want the legislation to be passed before United Nations climate change talks in December.

"The Australian government has proposed what some say is the world's most ambitious carbon trading program. It would force the country's 1,000 worst polluters to buy carbon dioxide permits and would cover about 75 percent of emissions. The aim is to curb greenhouse gas pollution by between five and 25 percent by 2020."

Austraia's initial targets are low but grow to world class levels over time. (click to enlarge)

"The plan needs the approval of Australia's upper house of parliament, the Senate. A recent vote, however, saw the plan defeated by an unusual alliance of Greens, who think the program does not go far enough to protect the environment, and conservative lawmakers, who say it will damage industry and cost jobs…Undeterred, Climate Change Minister Penny Wong says the government will try again [before December]…

"Conservative [Senate] politicians think that Australian businesses, especially the dominant resources sector, will lose their competitive edge under the government's carbon trading program…[The government rejected their proposal but there] is hope that a compromise can be reached…[They] have struck a deal to approve the part of the climate legislation that sets renewable energy targets…[requiring] 20 percent of Australia's power supply [to] come from renewable sources by 2020. But…[the] contentious legislation covering carbon trading… still divides Australia…[and] could trigger an early election."

Australia is serious about New Energy. (click to enlarge)

"…[Australia] relies heavily on coal to generate electricity…The mining industry is spending vast amounts to find ways to produce coal that burns more cleanly…[Some scientists say] storing carbon emissions deep underground is one way forward…Australia, one of the world's worst per capita emitters of greenhouse gases [and highly vulnerable to climate change], also is pursuing a renewable energy options, including wind, solar, geothermal and tidal power…

"…[C]limate change skeptics say that warming temperatures are part of a natural cycle and are not influenced by man's use of fossils fuels. The majority of Australians disagree and want their political leaders to take a decisive stand against global warming that many believe has the potential to inflict more severe damage."