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Friday, April 08, 2011
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Balancing Biofuels and Food Prices

By Susanne Stahl

New York Times reporter Elizabeth Rosenthal wrote a piece this week outlining the complexities in the relationship between biofuel production and food prices. "The starchy cassava root has long been an important ingredient in everything from tapioca pudding and ice cream to paper and animal feed," she writes. "But last year, 98 percent of cassava chips exported from Thailand, the world’s largest cassava exporter, went to just one place and almost all for one purpose: to China to make biofuel. Driven by new demand, Thai exports of cassava chips have increased nearly fourfold since 2008, and the price of cassava has roughly doubled."

With food prices rising sharply in recent months, she continues, "many experts are calling on countries to scale back their headlong rush into green fuel development, arguing that the combination of ambitious biofuel targets and mediocre harvests of some crucial crops is contributing to high prices, hunger and political instability."

No one is suggesting abandoning biofuels, but some food experts suggest countries revise their policies so that fuel mandates can be suspended when food stocks get low or prices become too high. "It can be tricky predicting how new demand from the biofuel sector will affect the supply and price of food," Rosenthal writes. "Sometimes, as with corn or cassava, direct competition between purchasers drives up the prices of biofuel ingredients. In other instances, shortages and price inflation occur because farmers who formerly grew crops like vegetables for consumption plant different crops that can be used for fuel."

Read the full article here.

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Thursday, April 07, 2011
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The Basics of Shale Gas

By Josh Galperin, Associate Director

 

Want to understand the basics of shale gas? Then the U.S. Energy Information Administration has the primer for you. Key facts include:

  • U.S. shale gas plays could provide approximately 110 years of use in the United States at 2009 rates of consumption.
  • Shale gas (or natural gas extracted from shale resources) made up 14% of total U.S. natural gas supply in 2009.  The EIA estimates that this share could increase to 45% by 2035.
  • Natural gas is a predominantly domestic energy resource -- 87% consumed in the United States in 2009 was also produced in the United States.

There's much more, including links to other relevant EIA reports and some helpful visuals. This is an excellent starting point for further research.   

Posted in: Energy & Climate
Wednesday, April 06, 2011
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Natural Gas and RGGI’s CO2 Emissions Drop: The Overlooked Story

By Josh Galperin, Associate Director

 

According to a recent estimate, CO2 emissions in the RGGI region experienced a significant decrease from 2005 to 2009 -- approximately 33%. What's been overlooked is the key role natural gas played in that drop. Here's the relevant chart:

No doubt there are several important factors driving the emissions drop -- the recession, the weather, increased energy efficiency, and increased renewables capacity, among them. But what's worth underscoring is the 31.2% coming from fuel switching. That's all from natural gas -- specifically, generally decreasing natural gas prices that were lower than petroleum prices after 2006 and much closer to coal prices by 2009. Per another excellent chart:

This trend could be very important for our climate future. It suggests natural gas might actually be the viable transition fuel that's been heavily promised. Though of course much more research and analysis needs to be done on that front before a firm conclusion can be drawn. Nevertheless, natural gas prices are now something very much worth watching in the coming years.    

Posted in: Energy & Climate
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Cleantech Group Announces Second Highest Quarter Ever in Clean Tech Investment

By testpersona

The Cleantech Group released preliminary results yesterday from their 2011 first quarter report.  The major finding: a total of $2.57 billion in clean technology venture investment across 159 companies. While the total number of deals were down, actual dollar investments increased by 52% compared to the previous quarter.  The top investment areas were:

SOLAR - $641 million in 26 deals
TRANSPORTATION - $311 million in 8 deals
MATERIALS - $296 million in 9 deals
BIOFUELS - $148 million in 13 deals

The report also found a huge increase in investment in North America, while the UK saw a sharp drop from the previous quarter.  After the US, Canada raised the most clean tech investment dollars, followed by India.

Posted in: Innovation & EnvironmentEnergy & Climate
Tuesday, April 05, 2011
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Climate Change Triage: The Northeast and Sea Level Rise

By Josh Galperin, Associate Director

Sobering look at sea level rise in the Northeast and the hard choices it puts before us.  Do taxpayers pay to defend coastline with expensive sea walls in what looks to be a losing battle?  Do emotionally-invested homeowners on the coast retreat now while their property may be at its optimal value?  What can we save from the sea's rise, if anything?  How will we as a society triage the many victims of this climate change harm?      

I detect no real sense that policy makers have a good handle on how to resolve, or even approach, these kinds of terrible choices.  Unfortunately, going forward blindly is also a choice, and one that usually doesn't end too well.

Posted in: Environmental Attitudes & BehaviorEnvironmental Law & GovernanceEnergy & Climate
Friday, April 01, 2011
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USDA Invests in Projects Looking at the Effects of Climate Change on Agriculture, Forests

By Susanne Stahl

The U.S. Department of Agriculture's National Institute of Food and Agriculture (NIFA) is investing $20 million dollars into each of three major studies looking at the effects of climate change on agriculture and forest production.

1. Dr. Lois Wright Morton of Iowa State University will lead a research team estimating the carbon, nitrogen and water footprints of corn production in the Midwest. The team will evaluate the effects of various crop management practices when various climate models are applied. The Iowa State project, which includes researchers from 11 institutions in nine states, will integrate education and outreach components across all aspects of the project, specifically focusing on a place-based education and outreach program called “I-FARM.”  This interactive tool will help the team analyze the economic, agronomic and social acceptability of using various crop management practices to adapt and mitigate to the effects of climate change.

2. Dr. Tim Martin, of the University of Florida, will lead a team looking at climate change mitigation and adaptation as it relates to southern pines, particularly loblolly pine, which comprises 80 percent of the planted forestland in the Southeast. The team of 12 institutions will establish a regional network to monitor the effects of climate and management on forest carbon sequestration.  Research in the project will provide information that can be used to guide planting of pine in future climates, and to develop management systems that enable forests to sequester more carbon and to remain robust in the face of changing climate.

3. Dr. Sanford Eigenbrode, of the University of Idaho, willlead a team monitoring changes in soil carbon and nitrogen levels and greenhouse gas emissions related to the mitigation of and adaptation to climate change in the region’s agriculture, which produces 13 percent of the nation’s wheat supply and 80 percent of its specialty soft white wheat for export. The research team will look at the effects of current and potential alternative cropping systems on greenhouse gas emissions, carbon, nitrogen and water-levels and how that, in turn, affects the local and regional farm economy.

“Climate change has already had an impact on agriculture production," said NIFA Director Roger Beachy. “These projects ensure we have the best available tools to accurately measure the effects of climate change on agriculture, develop effective methods to sustain productivity in a changing environment and pass these resources on to the farmers and industry professionals who can put the research into practice.”

For further details, see the full press release here.

Posted in: Energy & Climate
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The RGGI Emissions Cap:  Is It Too Forgiving?

By Josh Galperin, Associate Director

There are many valuable lessons to be drawn from the Regional Greenhouse Gas Initiative (RGGI), the nation's only operational, and mandatory, cap-and-trade program.  One worth dwelling on is the effectiveness of RGGI's CO2 emissions cap.  Recent analysis suggests this cap is much too forgiving -- not just now, but, more importantly, also over the next two decades.

The whole point of the RGGI emissions cap is to create a market for CO2 emissions from power plants that will ultimately drive down those emissions over time in the most economically efficient way possible.  A relatively harder cap - one set below actual CO2 emissions, for example - should make RGGI's tradeable CO2 pollution allowances more scarce and thus more valuable to polluters, resulting in higher prices per allowance than a cap set above actual emissions would.  The key idea here is that RGGI's cap on CO2 emissions from its regulated entities - electric utilities basically - creates a new market that has the potential to push those utilities towards low- or no-carbon generation.  Where policy makers set the cap can therefore matter a great deal; a relatively tough one pushes harder than a relatively lenient one.  This chart, produced on behalf of RGGI, strongly suggests the RGGI cap is not hard enough now, nor will it be hard enough in the future:

The important lines to look at for our purposes are the dashed one - that's the RGGI cap as set by agreement of the RGGI members - and the solid black line - that's both historical and projected total CO2 emissions from RGGI's regulated entities.  You can see that presently, the cap is simply way too high (and to be fair, some of that is on purpose).  The factors behind the recent massive drop in actual CO2 emissions are several (more on that later).  The recession undoubtedly plays a huge part.  Nevertheless, the cap just does not appear to be exerting real pressure on utilities right now.  Maybe that's not a problem.  There's an argument that a soft cap is just fine early on, as we refine and tweak RGGI.  That argument might be even stronger in the current economic climate.  No need to clamp down on utilities in the midst of the recession.

So perhaps the short-term performance issues of the cap are okay to put aside for the moment.  That's not at all true for the long-term performance issues.  Here's the major problem, and one policy makers should make an urgent focus of their thinking:  According to these projections, the cap doesn't appear to really bite until maybe 2030 or later, and that's just too late in the scheme of things.  Climate science tells us we need meaningful CO2 reductions much much sooner than that to avoid catastrophic harms.  So what's the point of an emissions cap if it doesn't drive change when we need it?  It's time to give serious thought to how best to tighten the RGGI cap to make it better correspond with the scientific reality we find ourselves in.    

Posted in: Innovation & EnvironmentEnvironmental Law & GovernanceEnergy & Climate
Wednesday, March 30, 2011
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EPA Revisits Hydraulic Fracturing and Drinking Water

By testpersona

As oil prices increase and energy security becomes a concern in the US, more is being done to explore cleaner burning fuels such as natural gas. Natural gas has seen big increases in the number of wells and total production as shale gas extraction, in particular, intensifies. The EPA projects that 20% of US gas supply will come from shale gas by 2020.

An EPA report in 2004 found that "there was little to no risk of fracturing fluid contaminating underground sources of drinking water during hydraulic fracturing of coalbed methane production wells." But public concern over the process by which shale gas is extracted  known as hydraulic fracturing, or "fracking," has escalated with the growing number of wells.  Each well requires the pumping of tremendous amounts of fracking fluid into the earth and, according to the EPA's 2004 report, "[t]here is very little documented research on the environmental impacts that result from the injection and migration of these fluids into subsurface formations, soils, and USDWs."  Until last year (when the EPA called for the voluntary reporting of chemicals used in fracking fluids), many of the chemicals used in fracking were unknown.  Chemicals now known to sometimes be involved in the process include: diesel fuel (which contains benzene and other toxic chemicals), polycyclic aromatic hydrocarbons, methanol, formaldehyde, ethylene glycol, hydrochloric acid, and sodium hydroxide. Given this situation, the EPA has announced another study to examine the effects of hydraulic fracturing on drinking water and groundwater.  The EPA aims to issue preliminary findings in 2012 and a full report in 2014.  The draft study plan is available at here.

Posted in: Environmental Performance MeasurementEnvironmental Law & GovernanceEnergy & Climate
Monday, March 28, 2011
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China amends air quality measures but misses key pollutant – PM 2.5

By Guest Author, Angel Hsu

This guest post by Angel Hsu, a doctoral student at the Yale School of Forestry and Environmental Studies, was originally published here.

The Chinese Ministry of Environmental Protection has been drafting new proposals (see rough Google translation in English here) to amend former daily reporting of the Air Pollution Index (API), which has been used the last 20 years to communicate air quality and health hazards posed by air pollution on any given day.  In 2000 the MEP (then the State Environmental Protection Agency, or SEPA) began reporting a daily API for 42 cities; now, data for 113 cities are available from the China National Environmental Monitoring Center.

Although these new specifications are still in draft form, it’s interesting to take a look to see what the MEP is considering, particularly in light of the fact that China’s annual National People’s Congress parliamentary meetings just concluded and approved the 12th Five-Year Plan (full text in Chinese here).  As I’ve written with my colleague Deborah Seligsohn of the World Resources Institute, the new Plan includes an ambitious range of energy and environmental targets, including those for air pollutants like SO2 and for the first time nitrogen oxides (NOx).  While the Plan included a blueprint for major reduction goals for these criteria pollutants, the specifics as to how targets will be allocated and policies implemented still remain to be developed over the coming months by the individual Ministries, provinces, and cities.

These draft AQI guidelines provide some insight as to how monitoring of criteria air pollutants might change as a result of the Plan.  I’ve taken a look at the second draft, which the MEP posted on their website during the last week of February, prior to the release of the 12th FYP.  Most notably, the new specifications appear to reflect a greater attempt by the Chinese MEP to make the former API more consistent with the United States’ Air Quality Index. This effort is reflected through:

  • Renaming the API the “Air Quality Index” to be consistent with the U.S.’s nomenclature.
  • Providing a consistent color classification system identical to the U.S.’s AQI color scheme.
  • Descriptions of health effects of AQI scores in language similar to that used by the AQI
  • Inclusion of new particulates carbon monoxide (CO) and Ozone (O3), which were previously absent from the API
  • Changes to the calculation methodology to reflect the U.S.’s AQI

I’ll spend the rest of this post highlighting some of these proposed changes.

Consistent Communication

Figure 1. Color classifications and descriptions of the new AQI, compared to
previous versions and the US. Sources: MEP, 2011 and Andrews, 2009.

 

Even though the API was originally based on the United States’ AQI, there are differences in the scale and corresponding health hazard categorizations as well as color classification schemes.  Inconsistencies in color classifications within China are due to the fact that unlike in the United States, where the AQI colors are standardized, local environment protection bureaus (EPBs) in China have been allowed to set their own color schemes.  As Figure 1 depicts, the MEP is proposing a color coding scheme that is entirely consistent with the U.S.’s AQI, unlike the example Andrews (2009) shows of conflicting colors between Beijing and Guangzhou that could be confusing for travelers between the two cities.  Making the colors classifications the same as the United States will also provide more transparency and clarity for those familiar with the U.S. AQI system.

Further, while the descriptions of the AQI classes (i.e. ‘Excellent,’ ‘Good,’ etc.) haven’t changed from the previous API, the descriptions of the Health Effects are similar to those provided by the U.S. EPA.

How is the new AQI calculated?

Remember that the API was determined from only using three pollutants:  SO2, NO2, and PM10. The concentration of each pollutant is measured at various monitoring stations throughout a city over a 24-hour period (noon to noon). The average daily concentration of each pollutant is then converted to a normalized index, which means that each pollutant is given its own API score.  The daily API then only reflects the pollutant with the highest API (see Vance Wagner’s concise explanation on how the API is calculated).

Figure 2. Concentration normalization table for pollutants in the AQI. Source: MEP, 2011. 1) If 1 and 2 are the same, then use 1/2 of 2; 2) Use the concentration limit of Class 2 (TBD); 3) if the concentration of O3 exceeds 0.800 mg/m3 then it exceeds the scale.

As shown in Figure 2, the AQI now includes three additional measures: carbon monoxide (CO), Ozone (O3) – 1 hour average and Ozone (O3) – 8 hour average. The concentrations of each of these six pollutants are normalized according to the table in Figure 2.  The (1),(2), and (3) annotations mean that the MEP is still debating what concentration levels should be. Several options under consideration are found in the “Instruction Manual” document of the draft proposals (in Chinese only).

What is notably missing, however, is a measure of PM 2.5 (air particulates with a diameter of 2.5 microns or less; known to have serious health implications such as asthma, lung cancer, and cardiovascular disease, due to their ability to penetrate human lungs).  Despite the fact that many major countries report PM 2.5 concentration data, some are viewing the lack of PM 2.5 from the new AQI as a major disappointment.

Ma Jun, Director of the Institute of Public and Environmental Affairs (IPE), the Beijing-based NGO who released the Air Quality Transparency Indexwrote about earlier this year, said in a Global Times article that leaving it out was a mistake.

He goes on to say:

“Technology for measuring PM2.5 is not a problem for China any more, as cities in developing countries like New Delhi and Mexico City have already made the index public,” said Ma. He said a reluctance to include the crucial index has to do with concerns about local economies.

“Government agencies feel the index may hurt the image of many cities that want to attract investment or that they may not be able to improve PM2.5 pollution in a short time,” Ma said.

However, contrary to Ma Jun’s assessment that it’s not a technological capacity issue, I wonder if the decision to leave PM 2.5 out of the new AQI isn’t really due to local availability of PM2.5 monitoring technology.  There is a sentence (6.1 地方各级环境保护行政主管部门可根据当地的实际情况和环境保护工作的需要,参照本 标准的要求,增加空气污染物评价项目,如细颗粒物(PM2.5 等)) on Page 4 of the draft proposal that says that local EPBs can consider projects that increase the range of pollutant monitoring, specifically mentioning PM2.5.

On the other hand, one notable improvement in the AQI’s calculation is the change in methodology proposed.  While the U.S.’s AQI is based on the highest reading in a city and thus represents the “worst” air quality case a person could encounter, the Chinese API represents an average.  The draft proposals improve upon the API’s methodology, adopting a similar calculation method to that of the U.S.

First, “individual AQIs” are calculated as follows:

Figure 3. Formula for determining the Individual Air Quality Index (IAQI). Source: MEP, 2011.

where:

IAQIp is the individual AQI;
Cp is the concentration of the six pollutants (SO2, NO2, PM10, CO, O3-1hr and O3-8 hour averages. If a city has more than one monitoring station, the average of the pollutant concentrations are used [对于城市区域为多测点的日均浓度值]).

BP(hi) is the pollutant with the highest concentration
BP(lo) is the pollutant with the lowest concentration
IAQI(hi) is the index score of BP(hi) (on the IAQI 0-500)
IAQI(lo) is the index score of BP(lo) (on the IAQI 0-500)

The max of these IAQIs (Figure 4) is then used to determine the AQI.

Figure 4. Formula to determine the AQI. Source: MEP, 2011.

I will spend some more time going through the longer instruction guidelines for the proposals and will update this post if I find more details. In the meantime, I welcome any comments or alternative interpretations.

References:

Andrews, S.Q. 2009. “Seeing through the Smog: Understanding the Limits of Chinese Air Pollution Reporting.” China Environment Forum, Vol. 10.  http://www.wilsoncenter.org/topics/pubs/andrews_feature_ces10.pdf

Ministry of Environmental Protection. 2011. Technical Regulation on Ambient Air Quality Index Daily Report. Second Draft. Available here:  http://www.mep.gov.cn/pv_obj_cache/pv_obj_id_47B37A70B7A7F94EBAE2DC9709456678C1210400/filename/W020110301385498176520.pdf

Acknowledgements:
Thanks to Chris Haagen for providing some translation assistance.

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Friday, March 25, 2011
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As the VSL Turns…: In Value of a Statistical Life Debate at EPA, Moral Decisions Hide Behind Techn

By Guest Author, Douglas Kysar

This post by Yale Law School Professor Doug Kysar was originally published here on the Center for Progressive Reform's website.

A report yesterday from Inside EPA offered a fascinating overview of the agency’s struggle to update the way it assigns dollar values to the suffering and premature death that its regulations prevent. Seriously, as far as economic esoterica goes, this stuff is riveting. What’s more, your life may depend on it.

Currently, EPA values each statistical human life saved by its rules at $7.9 million. This number is derived from so-called “wage-risk premium” studies that examine large data sets on employment and occupational risk. The idea is that, if you control for education, job sector, geographic region, and other relevant factors, then you should be able to come up with a number representing the portion of an employee’s wage that compensates for higher on-the-job health or safety risks. Depending on how a worker values health and safety compared to other goods, he – and he is an important distinction here since the value-of-life studies tend to only look at male-dominated blue collar jobs – might be willing to take a higher wage in exchange for accepting higher levels of occupational risk. In theory, then, the studies can pull out the amount at which workers themselves value risk exposure, which can then be converted into a uniform “value of a statistical life” (VSL) for policy analysis. By using the VSL number to value the health and safety benefits of regulations, EPA can avoid the messy task of government deciding on its own how much protection is worth investing in.

According to the Inside EPA report, staff experts are recommending a new, updated methodology, but the agency’s Environmental Economics Advisory Committee (EEAC) cautioned that the new method might be “too complicated for non-specialists to understand.” This claim is a real howler as it seems to imply that the current methodology is accessible to non-specialists. It is not. Deep and controversial value judgments are embedded within the current methodology, ones that lay persons can scarcely glean. For instance, studies show that union workers receive much higher wage-risk premiums than non-union workers – a finding that suggests bargaining power has a lot to do with the market outcomes that are supposedly capturing individuals’ true “preference” for life preservation. Should EPA use the higher union VSL, rather than the lower non-union VSL that economists tend to favor? This is not a matter of expertise. It is a value judgment that should include a full range of democratic inputs, but its import instead is buried deep within the technicalities of economic regression models.

Apparently the EEAC wants to push EPA even deeper into the weeds by asking the agency to compile a unique VSL figure for each regulatory context that the agency addresses. For instance, if a mercury emissions regulation would disproportionately benefit Native Americans (who eat far more contaminated fish than the general population), then the monetary value of reducing mercury exposure would be calculated using studies that find out how much Native Americans in particular are willing to invest in health and safety. In theory, this would bring the agency closer to the economists’ ideal world in which all values are assessed by the affected individuals themselves, rather than by collective democratic processes. In practice, however, it would involve the government intimately in the perpetuation of discrimination.

The VSL is affected not only by an individual or group’s willingness to invest in health or safety, but also by the ability to do so. This is made clear by the difference between union and non-union VSL data. It is also made clear by studies that show certain minority groups, especially African-Americans, actually receive significantly lower wage-risk premium than should be expected based on their occupational hazard exposure. We might say this represents a weaker “preference” for staying alive among those groups, so that if EPA’s cost-benefit calculations weigh benefits to them at a lower rate than non-minorities, then, well, that’s just giving the people what they “want.” Alternatively, we might say that the picture is messier than this, and that past injustices continue to impact deeply the social and economic opportunities available to individuals and groups today. Treating current market outcomes as somehow neutral and objective does not wash the government’s hands of this history.

The VSL debate is a gripping saga, one with more than a little fiction in it, but with all too real consequences. And it is anything but accessible to non-specialists. For an attempt to break it down in more detail, and for supporting citations, see Chapter 4 of my book, Regulating from Nowhere: Environmental Law and the Search for Objectivity.

Posted in:
Thursday, March 17, 2011
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Cargill Flies a Kite

By Susanne Stahl

Cargill, the international agriculture giant, is installing a 320-square-meter kite on one of its chartered shipping vessels in the hopes of improving fuel efficiency and reducing greenhouse gas emissions.

The kite, made by Hamburg, Germany-based SkySails, is designed to cut fuel consumption by up to 35 percent under ideal sailing conditions. It flies ahead of the ship at a height between 100 meters and 420 meters to generate propulsion; it is computer controlled by an automatic pod to maximize wind benefits and requires only minimal handling by the crew.

"For some time, we have been searching for a project that can help drive environmental best practice within the shipping industry and see this as a meaningful first step," said G.J. van den Akker, head of Cargill's ocean transportation business. "The shipping industry currently supports 90 percent of the world's international physical trade. In a world of finite resources, environmental stewardship makes good business sense. As one of the world's largest charterers of dry bulk freight, we take this commitment extremely seriously."

Cargill transports more than 185 million tons of commodities annually.

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Tuesday, March 15, 2011
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A Lens on Nuclear Power

By testpersona

The disaster in Japan has focused new attention on nuclear power in the United States. Here are the basic contours: At present, the U.S. has 104 nuclear plants in 31 states - producing 20% of the nation's electricity. Of the pending proposals to build 30 new units, it is likely that fewer than seven will be built before 2020. No new power plants have been built in the U.S. since the partial meltdown at Three Mile Island in Pennsylvania in 1979. The Obama Administration wants to ramp up nuclear power in the U.S. as part of a plan to increase domestic energy security and meet clean energy targets. In practical terms, that means an investment of $54 billion in U.S. loan guarantees for nuclear energy - loan guarantees are often used to help investors since nuclear power plants are extremely costly to set up, have uncertainty around permit approvals, and often take many years to realize a profit. Read more here.

Posted in: Energy & Climate
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Counting CO2

By Josh Galperin, Associate Director
Perhaps the most intriguing CO2 counter I've come across so far. Check it out here.
Posted in:
Monday, March 14, 2011
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How does China’s 12th Five-Year Plan address energy and the environment?

By Susanne Stahl
This post originally appeared here on the World Resources Institute's website. The post was written by Deborah Seligsohn, WRI's principal advisor on climate and energy in Beijing, and Angel Hsu, doctoral student at the Yale School of Forestry and Environmental Studies. The draft of China's much-anticipated 12th Five-Year Plan was released this Saturday, March 5 at the opening session of the National People's Congress (NPC). The plan will actually be brought to a vote at the close of the session later this week. While there may be some changes to the plan, in past years these have not been large. The 118-page draft of the 12th Five-Year Plan is not yet available online, but we were able to acquire a hard copy to review. In the meantime, Xinhua provided a summary of the major targets included in the 12th Five-Year Plan. In addition, a number of the key reports delivered at the first day of the NPC are also online in both Chinese and English, and these reports include the Work Report issued by Premier Wen Jiabao. Premier Wen's Work Report includes both an assessment of the previous five years and a summary of highlights of the next Five-Year Plan. Our analysis below is derived from both the initial draft of the 12th Five-Year Plan and the Work Report. What's notable in the plan and the work rwoeport is the prominent position of both climate change and environmental issues, in addition to energy. Indeed, not only is this the first Five-Year Plan that mentions climate change, but it is mentioned at the top of the environmental section. There is also a full paragraph detailing China's commitment to international cooperation and the U.N.-led climate negotiation process, including concerns of climate finance and technology transfer. The plan also discusses the need to implement more climate adaptation-related policies, such as greater preparedness for extreme weather events. Energy and climate targets: As expected, there are separate targets for energy intensity (16 percent reduction by 2015) and CO2 emissions per unit GDP (17 percent reduction by 2015). These are within the expected range and congruent with the 40 to 45 percent reduction in carbon intensity from 2005 levels that was first announced in the Copenhagen talks and reaffirmed in Cancun this past November. Clearly defined and distinct energy and CO2 emissions targets will help ensure provinces implement energy policies with carbon goals clearly in mind. Somewhat surprisingly, there was no mention of a total energy consumption target, which was recently announced by China's former minister in charge of the National Energy Administration, Zhang Guobao. It will be interesting to see whether this emerges in the specific energy-sector plan that will come later this spring. The draft plan and work reports also include noteworthy policies in: Forests: China has been steadily increasing forest cover since the founding of the People's Republic in 1949. This next five-year plan goes a significant distance toward meeting China's Copenhagen commitment on forests. In the plan itself the Chinese government set a goal to increase the area of forest cover by 31 million acres by 2015, while in Premier Wen's Work Report, he announced a forest stock volume goal of 785 million cubic yards. While the forest cover area goal seems more or less in line with the already stated 2020 goal to increase forest cover by 98 million acres over 2005 levels, the volume stock target seems more ambitious because it seeks to achieve almost half of the 15-year target of 1.7 billion cubic yards by year 2020. Tracking implementation: To achieve these climate and energy targets, the level of detail and specificity, covering a full range of resource and environmental issues, provided in the plan and the work reports are impressive. Premier Wen stated that China would put in place "well-equipped statistical and monitoring systems for greenhouse-gas emissions, energy conservation and emissions reductions" to ensure these policies are tracked and properly implemented. Efficiency: China has had a particularly successful track record on industrial energy efficiency in the previous five years. In the new plan, there are both new policies to promote greater industrial efficiency, and a major push to include all other sectors of the economy, including both new and existing buildings. For example, the plan introduces a 10,000 Enterprises Program. While we don't have details as to what this program will be, it appears to be a ramp up of the successful Top 1,000 Enterprises Program. We'll certainly be following this development closely in the coming months. Following the endorsement of new types of mechanisms in the October Party Plenum Document, the plan specifically endorses market approaches like energy service companies that help to finance energy efficiency. Transport: While China certainly has plans for additional air and road transport, what is striking is the commitment to rail, both long distance and in urban mass transit. The plan includes proposals for the construction of 21,750 miles of high-speed rail and a goal to connect every city with a population greater than 500,000. There are also plans to improve subway and light rail in cities that already have urban transit systems, building new systems in at least nine other cities, and making plans for six or more cities. We expect to see more detail and perhaps more cities as the sector-specific plan becomes available. Non-fossil energy: The plan incorporates the goal of 11.4 percent non-fossil fuels in primary energy consumption by 2015 announced by Zhang Guobao last month. China continues to exceed earlier targets in non-fossil development. For example, the five-year target for wind is 70 gigawatts of additional installation, which exceeds the 2020 target of just a few years ago. For nuclear, the plan is to install 40 additional gigawatts of capacity by 2015. China currently has around 10 gigawatts of installed nuclear capacity now, which means that if this five-year target is achieved, China is likely to exceed even the expectation of 70 gigawatts by 2020 discussed a year ago. If China achieves these numbers, it will have the world's highest installed capacity of nuclear energy by 2020. Environment: The plan itself does not make clear the specific targets for major environmental pollutants. However, they were all announced at an official NPC-connected press conference. On March 6, Zhang Ping, director of the National Development and Reform Commission, stated that the reduction targets for Chemical Oxygen Demand and Sulfur Dioxide are 8 percent, while ammonia nitrogen and nitrogen oxides are 10 percent. Director Zhang also said that these targets would be made binding for the first time in the 12th Five-Year Plan, as well as an "index evaluation system" implemented to allocate targets to provinces and ensure they are on track to meet reductions. We are not clear on exactly how these targets will be made binding, whether there will be additional documents at this NPC, or whether they will be binding in a later sector-specific plan. While the plan itself is general on targets, it is much more specific on policies. It assigns specific targets for cities required to reach new motor vehicle emission standards and sets goals for a wide variety of environmental infrastructure, including wastewater and solid waste treatment. There is also a strong emphasis on reuse and recycling, or what the Chinese call "circular economy." China is a middle-income, developing country and the next five years is when it needs to put in place the infrastructure that will enable it to develop successfully into a high-income developing country and beyond. There's a clear recognition in these plans of the importance of environmental sustainability in being able to reach not just higher levels of income and but also increased welfare of the Chinese people. The plan itself is highly specific in some areas but also in others somewhat unclear (for instance, target pollutants). Much of the clarity in implementation comes through sectoral plans and later regulations and guidance. We will continue to track policy implementation as it unfolds.
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House Tries to Block EPA From Regulating Greenhouse Gas Emissions

By testpersona

The House Energy and Power Subcommittee approved a bill on Thursday by Fred Upton (R-Mich.), Chairman of the Committee on Energy and Commerce, to halt the EPA’s plans to regulate greenhouse gas emissions. Upton claims that the cap-and-trade legislation and other “needless EPA regulations stifle growth, kill jobs, and raise energy costs.” In December 2010, the EPA announced that it would regulate greenhouse gas emissions from power plants and oil refineries, the nation's two biggest sources of carbon dioxide (accounting for almost 40% of U.S. greenhouse gas emissions), beginning in 2011. The Energy Policy Act of 1992 called for the voluntary reporting of greenhouse gas emissions and carbon sequestration activities, but the EPA is now looking to take the next step by actively regulating these emissions. Read more here

Posted in: Energy & Climate

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