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On the Environment

Monday, June 04, 2012
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YCELP Welcomes Environmental Law & Policy Fellow

By Susanne Stahl

The Yale Center for Environmental Law and Policy is very pleased to introduce Bruce Ho, who will be joining the Center and Yale Law School as an Environmental Law and Policy Fellow for the 2012-2013 academic year.

Mr. Ho is currently a Sustainable Energy Fellow at the Natural Resources Defense Council (NRDC) in Chicago where his research focuses on methods for accelerating the Midwest’s clean energy economy. He has worked on climate and energy issues for NRDC in Beijing, the California Air Resources Board, and the California Environmental Protection Agency as well as water quality and aquatic resource protection in northern California and his home state of Texas.

Mr. Ho is a graduate of Stanford Law School and the Yale School of Forestry and Environmental Studies; he holds a BA in History from the University of Texas at Austin.

YCELP: What initially drew you to environmental law and policy?

Bruce Ho: I have been interested in the environment and the outdoors since I was child, but I never saw this area as a career path – much less the passion that it has become for me – until my last semester in college when I enrolled, on a whim, in a class called Political Ecology. That course, and the wonderful professor who taught it – Professor Diana Davis, who is now at UC Davis – challenged me to think about how humans interact with our world and inspired me to pursue a new direction. In fact, I became so engaged that Professor Davis encouraged me to apply to graduate school, which ultimately led me to the Yale School of Forestry and Environmental Studies (FE&S). I owe her more than anybody for leading me to this path.

YCELP: You've spent time at the California Air Resources Board and the California Environmental Protection Agency as well as NRDC's Beijing and Chicago offices; given the geographic scope of your work, what do you see as some of the most pressing issues?

Bruce Ho: I also spent a summer working on groundwater in Texas, three years in California wine country at the state’s water quality agency, two years on the East Coast when I was a graduate student at FE&S, and some time in Europe as a law student participating in climate meetings, so I’ve been all over! Perhaps the most important thing that I’ve learned in my travels is that there is interesting and challenging environmental work to be done no matter where you are on all kinds of different issues. In the last few years, though, I have increasingly focused on energy and climate change, and I’d be hard pressed right now to point to anything more important than accelerating the movement toward cleaner and more efficient sources of energy – everywhere.

YCELP: What policy issues are you focused on right now?

Bruce Ho: Currently, I am working primarily on energy efficiency in the Midwest and the challenge of aligning the financial interests of utilities, which under traditional regulatory models profit by selling more electricity, with those of ratepayers and society more broadly, which benefit by avoiding the cost and pollution of expensive new power plants and reducing reliance on outdated, dirty old ones. In addition to my work on energy efficiency, which is by far the cheapest, cleanest, and fastest to deploy energy resource available, I am also working on electricity transmission planning and policies to accelerate the deployment of electric vehicles.

YCELP: What projects are you planning to work on during your time at Yale?

Bruce Ho: My project portfolio is still evolving, but as a fellow next year at YCELP and Yale Law School, one of my chief tasks will be to help instruct students in Yale’s Environmental Protection Clinic as they work on a variety of interesting and cutting-edge legal and policy issues. I also hope to help build the energy law and policy offerings available to graduate students and to continue working on some of the issues that I have been tackling at NRDC, such as figuring out ways to integrate increasing amounts of efficient and renewable energy onto the electric grid.

YCELP: Any environmental law & policy book recommendations?

Bruce Ho: I recently read Nature’s Metropolis by William Cronon, and I highly recommend this book to anyone interested in urban development or the growth of the United States and changes in our environment more broadly. It’s not an environmental policy book per se, but is a fascinating exploration of how the City of Chicago developed during the 19th century in concert with – and as a direct result of – the development and exploitation of its natural resource hinterlands. For anyone frustrated by the state of the global climate negotiations, I also recommend Scott Barrett’s Environment and Statecraft, which won’t necessarily make you more hopeful about the future, but does offer helpful insights that explain why these issues are so difficult to resolve and provides some thought-provoking recommendations on the pathways forward.

Posted in: Energy & Climate
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Yale, Columbia Partner with AIEES on Air Quality Initiative

By Guest Author, By Angel Hsu, Project Manager, Environmental Performance Index

Air pollution is a critical concern for both human health and ecosystems and has become a high-priority environmental issue. Concentrations of air pollutants, such as particulate matter (PM), ozone, and toxic chemicals (mercury, persistent organic pollutants, and lead), are contributing to increased rates of asthma, lung and cardiovascular disease, and cancer. The World Health Organization estimatesthat in 2004, slightly less than one million disability-adjusted life years were lost due to outdoor air pollution.

Policy interventions, such as the Clean Air Act in the United States and the Clean Air Directive in Europe, have helped, but in other parts of the world (Asia in particular), air pollution is becoming an increasingly severe problem due to rapid industrial and urban growth.

Policymakers and governments need timely, accurate information to develop and implement air pollution abatement and control policies, but existing datasets for air pollutant emissions are either incomplete or incomparable among countries and in a global context. This lack of comparability is largely due to the variation in air quality monitoring systems between countries, which often produce fundamentally dissimilar data. Some countries do not have adequate monitoring stations or networks to produce representative data samples. In other cases, countries may lack the technical capacity to measure some critical air pollutants, which results in data gaps and leaves policymakers unable to develop relevant global indicators and indices.

One way scientists have tried to address such shortcomings is by using models to estimate emission concentrations, predict future growth, and simulate transport of pollutants across national boundaries. At the most fundamental level these models are based on algorithms -- not ambient empirical data – which results in some inherent degree of uncertainty. Previous editions of the Environmental Performance Index (EPI)have relied on a combination of reported air quality statistics from international organizations, such as the World Bank, and some modeled data for outdoor air pollution indicators, but the 2012 EPI abandoned both sources and opted instead to use a estimation of fine particulate matter concentrations (PM 2.5)derived from the MODISsatellite. While not perfect, these country-level PM 2.5 estimations were consistently calculated for each country, providing a basis for comparing long-term average exposures to a pollutant that is known to have acute human health effects.

To address these persistent data challenges in global air quality, the Yale Center for Environmental Law and Policy (YCELP) and the Center for International Earth Science Information Network (CIESIN) at Columbia University, are teaming up with the Asian Institute for Energy and Environmental Sustainability (AIEES) to launch a new initiative, “Towards a next generation of air quality monitoring.”

The resulting report will include a series of background papers that will each focus on a critical pollutant (i.e. ozone) or group of pollutants (i.e. persistent organic pollutants or POPs), as well as a policy blueprint with recommendations for policymakers on investments and improvements in air quality monitoring, data, and indicators. The report also aims to bring the scientific and policy communities together to provide clear direction for both groups. First, for scientists, it will provide guidance on short-term actions related to monitoring and modeling as well as longer-term challenges. Secondly, for decisionmakers, the report will provide targeted activities at different levels – regional, national, global – also divided into short- and longer-term categories.

The project launched in May, and AIEES will host a workshop in Seoul, South Korea, in October that will convene scientists and policymakers to review the draft report, which will be released in early 2013.

Posted in: Environmental Performance Measurement
Friday, June 01, 2012
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Climate Change Justice

By Guest Author, By Halley Epstein, Yale Law School ‘14

Halley Epstein attended the recent Conference on Climate Change Justice at the University of Chicago. She’s summarized some of the highlights in the post below.

A deep debate exists among academics and policymakers about what constitutes climate change justice, and the failures of various international climate change summits – each convened to draft climate treaties with teeth – perhaps most acutely reflect the discord among power players, including the U.S., China, and India.

In their 2010 book Climate Change Justice, Eric Posner and David Weisbach argue for a climate treaty requiring nations to limit greenhouse gas emissions without addressing any issues not immediately connected to that task. Justice, whether distributive or corrective, should not guide the negotiations for a climate change treaty because the cooperation of all nations – both rich and poor, industrialized and developing – is required, and each nation holds conflicting views of the role justice should play. Posner and Weisbach’s central assertion is that a climate treaty must instead satisfy International Paretianism – it must make all nations involved better off (but could be satisfied if it makes at least one nation better off and no nation worse off). This, they contend, is a feasibility principle, not an ethical principle.

The recent Conference on Climate Change Justice, sponsored by the Institute for Law and Economics and the Chicago Journal of International Law, gave scholars an opportunity to respond to this idea while offering their own. Many conference discussions dealt with ethical questions of distributive and corrective justice, as well as whether moral and ethical considerations might actually alter nations’ views of their climate obligations.

I left the conference convinced that countries have been blinded by their pursuit of policy victories rather than reductions in greenhouse-gas emissions. Some highlights from the event follow.

Conflating a Climate Treaty with Distributive Justice

Posner and Weisbach assert that a treaty to reduce greenhouse gas emissions on a global scale should not involve the redistribution of wealth from rich to poor countries. Most conference participants seemed to agree that promoting all global goals through a climate treaty alone is unreasonable. University of Chicago Professor Martha Nussbaum cautioned against bracketing off distributive goals from a climate treaty entirely as there are opportunities to discover causal links and “fertile intervention points,” such as increasing the participation of women in matters of governance and promoting environmental policies and goals in countries such as India and Nepal.

As Posner and Weisbach suggest, sustaining ethical claims that a climate change treaty must redistribute wealth or that most abatement measures must occur in rich countries is difficult, but some presenters distinguished between seeking distributive justice through mitigation versus adaptation. University of Oxford Professor Henry Shue said it would be irrational for countries lacking the financial resources to deal with their own adaptation needs to make sacrifices for global climate change mitigation without an agreement from wealthier nations to help them with adaptation. Such an agreement, Shue said, could make up for the fact that poorer nations constrain development to some extent by restraining emissions, and whatever the treaty or agreement nations settle on for reducing emissions, distributive effects – whether from a moral or feasibility standpoint – must be part of the talks.[1]

Posner and Weisbach approach International Paretianism as an empirical principle with the assumption that no nation or state will agree to a treaty that leaves it worse off. But this does not address Shue’s concern about individuals. The poorest individuals lack political capital (as may their governments at the international negotiating table). So a treaty presumably could make a country better off, on the whole, while worsening conditions for its poorest people.

Corrective Justice: Who Pays? Do Historical Emissions Matter?

Posner and Weisbach do not believe historic emissions can or should be included in a climate treaty, but Georgia Institute of Technology Professor Paul Baer argued that the assumption that polluters should be unaccountable for cross-border damages is itself unsupportable. One of his major problems with the authors’ view is that they assume externalization of greenhouse-gas-emissions costs is a legitimate status quo.

Many conference presenters discussed the idea of fairness, which represents another feasibility constraint to forming a treaty that works for developed and developing nations alike. While some developing nations view historical emissions as a necessary calculation in determining nations’ obligations, nations that would shoulder responsibility for historic contributions reject the concept of accountability as justice, at least in this manner.

Lukas Meyer, a professor at the University of Graz, Austria, said compensating countries with cash payments for historical contributions would be difficult to justify, distinguishing that type of distribution from distributive justice – basing the latter on evening out undeserved benefits or harms. Nussbaum pointed out that applying corrective justice turns into the blame game with a lot of jockeying for a less blameful (or blameless) position rather than cooperation for the sake of actually reducing greenhouse-gas emissions. I agree with both speakers, and think their comments reflect feasibility constraints and political realities. Ideally, though, rich and industrialized countries that have contributed to historical emissions and laid the path for the world’s current emissions trajectory should recognize the effect of their actions.

Posner and Weisbach criticize the notion of collective responsibility and point out that many of the people living today in industrialized countries are not actually the ones responsible for climate change (though they acknowledge these people have benefited from the emissions of their predecessors in, say, the U.S.). Past emissions, they say, will be largely moot since developing nations, namely China, India, and Brazil, will catch up to the U.S.[2]

Equal Future Shares

University of Chicago Professor Raymond Pierrehumbert discussed the equal future shares theory, which disregards historical carbon emissions and divides up the remaining carbon commons equally per capita (based on limits). Using this method he calculates the fair share of remaining carbon commons at 70 tonnes per person. What does this mean for Americans and the Chinese, for example? At current rates, North Americans would need to stop emitting carbon in 13 years while the Chinese could continue emitting for 56 years. If historical usage is factored in, North Americans used up their fair share in 1970; the Chinese will use up their fair share in 2040. Hopefully, we will have a climate treaty well before 2040 and countries will collectively have initiated significant steps to reduce emissions by that time.

Equal distribution of emissions allowances in an international system would be arbitrary, said Tel Aviv University Law Professor Yoram Margalioth, and would further assume common ownership. That, Margalioth argued, is an assumption we do not apply to most other goods; for example, countries with valuable mineral deposits are not required to divide profits among other nations. Posner and Weisbach also criticized this assumption: “When governments close commons, they do not . . . distribute shares of it to citizens on a per capita basis.”[3] Climate change affects nations in different ways, so it is unclear how distributing emissions allowances on a per-capita basis would achieve justice if countries that would benefit and countries that would suffer greatly from climate change received the same allowances.

Realism or Pessimism: Some Predictions of the Way Forward for a Climate Treaty

The conference presenters expressed a range of ideas for what the future may hold for an international climate treaty:

     -Any international agreements may simply follow what nations are already doing to reduce GHG emissions.

     -For an effective international climate treaty that addresses mitigation, the world needs the buy-in of the U.S., China, India, and Brazil.

     -The U.S. should have been a first actor, but arguably has already positioned itself to be at best a second actor.[4]

     -The “common but differentiated responsibilities” outlined at Rio in 1992 and solidified in Berlin in 1997 simply will no longer work. Harvard Professor Robert Stavins said this “dichotomous distinction” made progress virtually impossible in later international   negotiations. At a minimum, Stavins believes the Durban Platform for Enhanced Action breaks with the Berlin Mandate because it is a mandate to adopt by 2015 a new legal framework to include all key countries for implementation in 2020; this opens up negotiations to outside-of-the-box thinking.

     -If countries continue to pursue cap-and-trade systems, harmonizing the systems in advance will minimize or avoid political discord about features of such systems, such as whether a safety valve should be included. For example, the EU does not want a safety valve provision while any U.S. system would likely include that “escape hatch,” so reconciling these positions will be necessary to achieve international coordination.

More information about the conference, including a list of participants and links to paper drafts, is available online on the conference website.

 



[1]
The debate over rich and poor countries’ obligations, and whether they should bear different responsibilities, continued at U.N. climate talks held May 2012 in Bonn, Germany. The gridlock does not bode well for reaching an agreement under the Durban Platform at talks in Qatar later in 2012.

[2] In fact, China surpassed the U.S. in 2011 as the largest emitter of greenhouse gases. While worldwide emissions increased 3.2%, China’s emissions increased 9.3%, according to the International Energy Agency.

[3] Eric Posner & David Weisbach, Climate Change Justice 136 (2010).

[4] Posner and Weisbach suggest in their book that first actors could be given preferential claims to surpluses generated by mitigation activities (in the form of harms avoided and so forth) to encourage countries to take early, strong stances when confronted with international issues, avoiding stand-offs.

Posted in: Energy & Climate
Friday, May 18, 2012
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Emerging Issues in the Electric Power Industry: Challenges and Opportunities in Meeting Clean Energy

By Guest Author, Beren Argetsinger, Pace University School of Law ‘13

Meeting clean energy goals, complying with environmental standards, achieving state renewable portfolio standards (RPS), and maintaining grid reliability require enormous resource and capital investment throughout the energy industry. The recent Energy Bar Association (EBA) Spring Seminar and 66th Annual Meeting in Washington DC offered insight into numerous aspects of these important issues, including the effects of shale gas and new EPA regulations on coal-fired electric generating units (EGU), challenges facing the integration of renewable energy resources, and a discussion of recent Federal Energy Regulatory Commission (FERC) orders, including Order 1000. A summary of meeting highlights follows.

Coal Plant Economics

Rapid growth in shale gas production throughout the United States has led to the lowest natural gas prices in over a decade. Futures prices dipped below $2.00 per thousand cubic feet in April 2012 for the first time since September 2001, and the Energy Information Administration projects that low natural gas prices (in the $4- to $6-per-thousand-cubic-feet range) will continue for the foreseeable future. Low natural gas prices combined with increasingly stringent EPA regulations on power plant emissions have important implications for the electric power industry.

Kurt Bilas, Executive Director of Government Relations at the Midwest Independent System Operator (MISO), noted that out of the approximately 70 gigawatts of coal-generation capacity in the MISO service territory, 60 GW will need to retrofit or retire as a result of EPA’s Mercury Air Toxics Standard (MATS) and the Cross-State Air Pollution Rule (CSAPR, which is currently under stay). Out of that 60 GW, approximately 12 GW (representing over 10 percent of MISO’s total generation capacity) would have to retire.

With EPA’s proposed greenhouse gas rule, the economics for coal fired EGUs – both existing and new – are becoming increasingly marginal in competitive wholesale electricity markets. Further complicating the issue, the decision to retrofit or replace these units must account for the possibility that a significant retrofit of a facility could trigger New Source Review (NSR) and compliance with New Source Performance Standards (NSPS) under the Clean Air Act. Many operators are looking for greater stability and certainty for the long term, and natural gas is quickly emerging as the fuel of choice for new electric power generation.

Infrastructure Limitations

Some regions of the country already rely heavily on natural-gas-fired generation. In 2010 natural gas supplied over 45 percent of the power produced in the ISO-New England service territory, up from just 6 percent in 1990. In other regions, natural gas represents the second largest portion of proposed new generation (second only to proposals for wind). However, switching from coal to gas generation is complicated: new facilities must be constructed and pipeline transportation infrastructure must be in place to deliver the fuel.

In fact, the pipeline infrastructure and nature of the natural gas delivery contracts represent some of the most significant barriers to the transition. In regions such as the Northeast, natural gas is also used as a heating fuel in the winter months. Because gas generators generally take natural gas delivery on an interruptible basis, other customers taking delivery on a firm contract basis – such as the home heating market – take precedent when demand is high and pipeline capacity is full. Expanding pipeline capacity is the logical solution to this problem; however, this takes years of planning, environmental review, siting, permitting, and construction.

Compounding the issue for coal plants is the EPA’s 2015 compliance deadline for MATS (2016, if a state extension is granted). Many operators will choose to retire these old generators rather than upgrading them to meet the new standards. Without adequate replacement capacity in the system, a generation facility could be called upon to run for reliability reasons – putting it out of compliance with the law. The U.S. House of Representatives recently responded to this issue with the passage of H.R. 4273

Liability Exemption?

H.R. 4273 would amend the Federal Power Act (FPA) to exempt a generator operating under an FPA Section 202(c) emergency order from liability if it were otherwise in violation of federal, state or local environmental laws. While the principles contained in the bill are sound – dispatching a generator for emergency reliability purposes should not subject that generator to liability for non-compliance with the law – it opens the door for generators to subvert environmental policy and extend the date of compliance.

Opponents of the legislation have argued the bill would effectively write a loophole into the FPA that would delay compliance with EPA regulation. Further, the EPA maintains that Section 202(c) orders are rare and the legislation is unnecessary, given the other tools that EPA has at its disposal. While the fate of HR 4273 may be a bellwether for how Congress ultimately responds to EPA regulation in the electric industry, the long-term generation resource portfolio that will replace retiring coal units largely will depend on economic, technological, and infrastructure constraints. Public policy, such as state RPS or EPA regulations like MATS, CSAPR, and the proposed greenhouse gas rule, must be considered in regional transmission planning processes pursuant to FERC Order 1000.

Transmission Planning

In July 2011 FERC issued Order 1000 in an attempt to address challenges associated with transmission planning and cost-allocation. At the EBA meeting, former FERC Commissioner Suedeen Kelley noted that the promotion of competition in regional transmission planning processes lies at the core of Order 1000. Requiring the incorporation of public policy into the planning process should stimulate a more holistic assessment of transmission needs, costs, and benefits for transmission infrastructure. This is particularly important for the integration of renewables – which has a sort of “chicken and egg” conundrum associated with it. Renewable developers won’t build new wind turbines if there are no transmission lines to deliver the power to load, and transmission developers won’t build new transmission in the hopes that a wind farm will go up and energize the line.

The Midwest has vast wind resource potential that could play an important role in the nation’s energy portfolio over the long term. Texas, Kansas, Montana, Nebraska, South Dakota, North Dakota, and Iowa have over 6,900 GW of combined wind generation potential. With only 46 GW of installed wind power capacity in the United States in 2011, wind has a long way to go to before it represents a significant portion of the nearly 1000 GW of the country’s total installed capacity.

Balancing Short-Term Market Signals with Long-Term Energy Policy

FERC Order 1000 fosters greater competition and inter-ISO/RTO cooperation in transmission planning, requiring the incorporation of public policy goals in the transmission planning process.  While this is a step in the right direction, comprehensive Congressional action is critical – but unlikely in the near term. That makes it all the more critical for states and regional entities to coordinate on clean energy goals and cost-effective solutions to meeting environmental standards while maintaining grid reliability.

Greater harmonization of state RPS, even if only among states within the same ISO/RTO service territories, could lead to more cost-effective renewable power integration and ease the transmission planning and cost-allocation process. While increased natural gas development will and must be part of our energy future, short-term market signals must be tempered by long-term energy policy goals, including increased federal attention to transmission and renewable energy development.

Beren Argetsinger is a joint-degree student at the Yale School of Forestry & Environmental Studies, where he is pursuing a MEM with a concentration in energy systems and policy, and Pace Law School.

Posted in: Energy & Climate
Wednesday, May 02, 2012
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The Strategic and Economic Dialogue and Energy and Climate

By Guest Author, Angel Hsu, Yale School of Forestry and Environmental Studies, and Deborah Seligsohn, World Resources Institute

This post was originally published May 2, 2012, on ChinaFAQs.

The State of Play of Chinese Policy and Bilateral Issues

The Obama administration’s fourth major meeting with China, involving multiple Cabinet Secretaries and Chinese Ministers, the Strategic and Economic Dialogue (S&ED), will be held May 3 and 4 in Beijing. As usual, the U.S. delegation will be led by Secretaries Clinton and Geithner, and their Chinese hosts will be Vice Premier Wang Qishan (who focuses on economic policy) and State Councilor Dai Bingguo (responsible for foreign policy).

This S&ED comes at a time when there are particularly sensitive political and economic issues for the two countries to address, and many of these will obviously be the focus of the meetings. However, if past S&ED’s are any indication, we would expect at least some discussion of climate change, and climate and energy cooperation, despite areas of genuine difference, can be a positive and fruitful area of engagement. Moreover, several of the economic topics likely to be discussed are connected to climate and energy debates. With that in mind we preview some of the climate and energy issues.

Looking at domestic policy there have been a number of important recent developments:

1. Moves Toward Absolute Targets: the Coal Cap and Industrial Capacity Cuts

China’s 12th Five Year Plan set overall national targets, including the 16% energy intensity and 17% carbon intensity (both per unit GDP) reduction targets that have been widely publicized. Implementation depends on sectoral and provincial level Five Year Plans that spell out more of the details. The intensity targets were distributed to the provinces last year, but one of the big open questions was whether China would also start to set some absolute limits. There had been considerable speculation of an overall energy cap, and while that has not emerged, one of the alternatives to a total energy cap was a total coal cap, and that has now appeared.

In the “12th Five-Year Coal Plan”, released in April by the National Development and Reform Commission, coal production capacity is capped at 4.1 billion tons and an annual output target of 3.9 billion tons by 2015, which would limit coal production growth to about two percent per year, considerably lower than the 5-10% growth seen in recent years. While this type of guidance is not as binding as the overall intensity goal, it does give strong policy direction to controlling the share of coal in China’s overall energy mix.

In addition, the Ministry of Industry and Information Technology announced this past week a series of industrial capacity cuts that should also help to reduce energy consumption and carbon intensity. The Ministry plans to shut 7.8 million tons of steelmaking capacity, 700,000 tons of copper smelting capacity this year, 270,000 tons aluminum capacity, 10 million tons iron-making capacity, 320,000 tons zinc capacity and 1.15 million tons of lead capacity by the end of the year. Of these, only the copper target is higher than last year. The lower targets in part reflect the fact that many inefficient plants were closed during the previous Five Year Plan, and also the overall slowing of GDP and industrial growth, suggesting the market is already shifting somewhat from industry to services.

2. Seven Emissions Trading Pilot Programs:

China has continued preparation for the launch of seven carbon-trading pilots by next year and an eventual nationwide carbon-trading program in 2015. The emissions trading programs will be piloted in the cities of Beijing, Tianjin, Shanghai, Chongqing and Shenzhen and the provinces of Hubei and Guangdong. These pilots will provide inputs into the design of the eventual nationwide program, and in large part will shape the future of carbon markets in China.

The specific design and implementation details for the pilots are still being worked out. We can expect that the caps will be closely tied to the energy intensity reduction goals specified in the NDRC’s “Energy Conservation and Emissions Reduction Comprehensive Workplan for the 12th Five-Year Period (2011-2015)” (Chinese only). Each pilot is being designed separately, and as with earlier policy pilots, we’d expect the national government to compare the effectiveness of different approaches before designing a national program. Many of the details are still under discussion, but some cities such as Beijing have begun to discuss possible details. Beijing has announced that more than 600 companies with emissions exceeding 10,000 tons per year – likely industrial plants and utilities – will be included on a mandatory list for emissions limits. It is possible that other cities will choose to focus on specific sectors. While the national government has not formally committed to using absolute caps rather than intensity targets for the trading schemes, our understanding is that there is widespread recognition that for trading to be most effective there will need to be absolute caps for firms included in the trading itself, even if the cities overall do not have absolute caps. These caps can then be distributed by allocation or auction. While most economists see auction as more economically efficient, most countries find it difficult to begin that way – rather than with free allocation. Beijing indicated it might begin with 15% auctioned and the rest allocated.

For the pilot trading schemes to be successful, the select cities and provinces will need to build local capacity to accurately measure and account for greenhouse gas emissions, as well as ensure that the legal infrastructure can spell out clearly defined emission permits, allocation systems, trading rules, monitoring, and enforcement (See this report by the Stockholm Environment Institute for more details of these challenges).

Finally, while there was much discussion amongst Chinese officials about a likely carbon tax during this Five-Year Period, there is still a question as to whether a tax will be instituted and how it will relate to a nationwide emissions trading program. It is likely that the Chinese will begin with the emissions trading pilots first, and decide on how to integrate a carbon tax at a later point in time.

These programs are an effort over the medium term to move from targets and quotas to more market-based mechanisms. In the near-term they will contribute mainly to learning and policy development. The existing infrastructure of quotas and targets under the Five Year Plan will deliver most of China’s emissions control.

3. Higher Prices, But Energy Shortages Remain:

While China is working to curb energy demand, policy analysts still expect shortages this summer. The China Daily reported blackouts are likely, especially in Eastern and Southern China, as China Electricity Council estimates 30-40 million kW shortages during peak demand periods in the summer. These shortage levels are similar to last year and reflect the same mixture of weather (droughts have once again limited hydropower production) and policy choices. Many outside observers argue for market-based pricing, although many fail to note that Chinese electricity prices are not low – they are actually comparable to U.S. prices and in many cases higher. However, they do not vary with peak loads, as they do in the U.S. For example, electricity prices in China in March were 12.4 cents for commercial and industrial consumers and 8.4 cents for residential consumers. This compares to an average price in the U.S. in March of 9.6 cents, with industrial users paying the least – 6.6 cents – and residential consumers the most – 11.6 cents.1 Thus on average Chinese industry pays considerably more for power than does U.S. industry. Since industry is the major user in China, and residential use is more substantial in the U.S., focusing higher charges on the larger group of consumers is more effective at providing a price signal to influence consumption.

While China has higher electricity prices, these prices vary far less than in the U.S., where rates vary not just state by state, but also with daily shifts in demand. This, in part, reflects different opportunities – commercial and residential demand is more variable, while China’s industrial demand is fairly constant. However, the blackouts in the summer are caused by peaking demand from residential and commercial consumers of air conditioning during particularly hot spells during the summer months. Variable pricing would enable the grid to more easily discourage other uses during these peak demand times. Instead, the grid generally deals with these shortfalls by cutting power to industries on a schedule.

Overall, industrial electricity prices having been rising steadily in China, up over 16% in the last 5 years. Coal prices, while fluctuating month to month, have more than doubled over the same period, with high quality coal for power plants now priced at over $120/ton, well above prices in much of the world. Chinese analysts do not expect to see prices fall. The much more rapid change in coal prices, compared to the regulated electricity price, provides an incentive for power producers to look at renewable energy.

Gasoline is also not inexpensive in China. The current price in Beijing is about $5/gallon, over $1 higher than the current U.S. average. Prices are regulated, so there is less fluctuation in China, but that has meant that they tend to hold steady or rise, and not fall, regardless of global market conditions.

In addition, the meeting may be a venue for discussing current multilateral and bilateral disputes:

1. Opposition to European Union’s Aviation Tax:

One area where the U.S. and China have aligned their positions, albeit in opposition to a climate change measure, is with regard to the European Union’s Aviation Tax. In early February, China banned its airlines from complying with the EU’s plan to include airline emissions in its Emissions Trading Scheme (ETS). The move would require airlines with flights originating in and leaving Europe to purchase carbon permits to cover excess emissions. China is not alone in opposing the move and is joined by the United States and India. China’s opposition was intensified when Beijing also suspended the purchase of $14 billion worth of aircraft jets from Airbus, a European manufacturer of long-haul carriers.

While the U.S. and China are essentially on the same page with respect to the E.U.’s plans, there is danger that such a strong stance and economic retaliation could stymie the progress of international climate talks. There are indications that the European Union might be backing down from its initial stance to allow another year for additional negotiation and possible compromise. Thus, there is an opportunity for the U.S. and China to engage in constructive dialogue with the E.U. so as to prevent a global carbon trade dispute and perhaps find a more constructive and climate-friendly approach for both the U.S. and China.

2. Trade Issues:

The most likely issues to appear in the S&ED plenary are issues more directly connected to economic concerns. Secretary Geithner has been quoted in the Chinese press naming key concerns as currency and intellectual property. Intellectual property concerns, while far broader than energy, are of great interest to the clean energy community.

Two other trade disputes might well be discussed. These are the anti-dumping case against Chinese solar panels and a World Trade Organization (WTO) case concerning rare earths. The Commerce Department made a preliminary decision in March to place a modest tariff on Chinese panels, and is reviewing that case until May 17. This gives time for both governments to discuss the issues. There have been growing calls in the U.S. not to impose high tariffs on Chinese goods. Editorials and news articles have argued that much of the U.S. solar industry actually benefits from these imports. Others have argued that fairness is also at stake, and that perhaps there is an opportunity to get Chinese manufacturers to shift some production to the U.S. One potential bright spot is that China’s current solar plan calls not just for increasing production, but also increasing installed capacity in the country and reducing the domestic price of solar power to encourage domestic use. ChinaFAQs has compiled a list of resources concerning the solar trade case here.

The U.S., Japan and the European Union also filed a WTO complaint against Chinese restrictions in the export of rare earths, minerals used in the production of many high-tech products. The rare earths issue is complicated, because China currently produces most of the world’s supply, but there are reserves elsewhere, including in the U.S. Moreover, part of China’s current dominance is fueled by poor environmental standards enabling cheaper production, and there has been an effort by the Chinese government to close down poor facilities, with limited success. The rare earths case is in many ways similar to a case decided against China last year, concerning other Chinese mineral exports. Given the number of disputes, and the risks of economic harm from a trade war, it will be worth watching this meeting to see if any agreements are worked out. In the past, the U.S. and China have often used these bilateral meetings to resolve such issues.




1. All U.S. prices from the Energy Information Agency. Chinese prices from the National Development and Reform Commission, the China Petroleum and Chemical Industry Association and DBCCA analysis, except for the price of gasoline, which is the observed retail price in late April.

 

Angel Hsu is a doctoral student at the Yale School of Forestry and Environmental Studies and project manager of the 2012 Environmental Performance Index. Deborah Seligsohn serves as Principal Advisor to WRI’s climate and energy program on issues in China as well as to the ChinaFAQs China Climate and Energy Network.

Posted in: Environmental Performance Measurement
Monday, April 02, 2012
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Measuring Progress at Rio and Beyond

By Guest Author, Angel Hsu, PhD candidate, Yale School of Forestry and Environmental Studies

This post was originally published March 31, 2012, in Sage Magazine.

This past Sunday at the US-Canada Citizens Summit for Sustainable Development, I facilitated a group discussion on metrics and indicators for measuring progress toward sustainable development goals. Indicators and targets are mentioned throughout the “Zero Draft” document titled “The Future We Want,” a 19-page document that distills over 6,000 some pages of viewpoints from member states and major groups. This document has been serving as the basis for negotiations, and hopefully will be adopted as some sort of “outcome document” at the Earth Summit in Rio this June.

What does the Zero Draft say about indicators and metrics? Paragraph 33 makes mention of a “set of indicators to measure progress” toward implementation of countries’ implementation of green economy. Paragraph 43 elaborates a recognition of the importance of measuring global progress. The goal of establishing indicators and measures “to evaluate implementation” is stated for achievement in the next three years. Subsequent to Paragraph 108, which makes mention of Sustainable Development Goals (SDGs) to complement the Millenium Development Goals (MDGs), Paragraph 109 states, “We also propose that progress towards these Goals should be measured by appropriate indicators and evaluated by specific targets to be achieved possibly by 2030.” Lastly, included in Paragraph 111 is a statement that expresses agreement of the limitations of GDP as a measure of well-being.

Discussion of metrics, indicators, and targets to better quantify and track progress toward green economy, poverty eradication, and sustainable development goals came up in every session I attended during the Summit. Representatives from civil society, the private sector, municipal governments, and academia voiced the need for better data and metrics.  How does a city know how much money it will save from energy efficiency measures, and how will it know which measures to implement and how those policies are performing?  How does a country know how its ecosystems are functioning if there is no data by which to measure its conditions?  How can cities be considered “sustainable” without metrics to define them?

These are daunting questions that decision-makers at every level are facing. Unfortunately, through my observations of the latest informal negotiations on the Zero Draft at the United Nations this past week, neither do most negotiators. Discussions haven’t progress past the conceptual level at the UN – what the insertion of “planetary boundaries” means and what the scope of green economy should include, for example.

The 2012 Environmental Performance Index (EPI) can be a possible solution and specific tool that can help bring some level of clarity to the discussion.  A joint project between The Yale Center for Environmental Law and Policy and the Center for International Earth Science Information Network at Columbia University, the 2012 EPI provides countries with a comparative framework by which to assess environmental performance on a range of issues.  These include the environmental burden of disease, air quality, water quality, forestry, agriculture, water quantity, climate change and energy issues, biodiversity and fisheries.  Incorporating the last decade’s worth of globally-available data on these issues, countries can clearly see areas in which they perform well, where they lag, and how they’ve improved or declined overall.

The EPI framework and methodology already measure progress toward some key environmental goals that came out of Conventions originally negotiated at the 1992 Earth Summit.  An indicator on biodiversity and habitat protection gauges how close or far countries are from protecting 17 percent of each terrestrial biome within its borders – a target set by the Convention on Biological Diversity at its 10th Conference of Parties in Nagoya, Japan in 2010.  The EPI also uses a target for carbon dioxide emission levels established by the Intergovernmental Panel on Climate Change, the scientific body on climate change whose work supports the UN Framework Convention on Climate Change.  Therefore, countries can already get a sense of how they are doing on key issues originally identified at Rio 20 years ago, as well as an indication of how far they still have to come.

While the EPI provides a starting point, there are still persistent data gaps that prevent a more complete picture of sustainability.  We identified several of these gaps in our analysis, including missing global data for recycling rates, toxic and chemical exposures, heavy metals, municipal waste management and treatment, desertification, water quality (sedimentation and organic/industrial pollutants), nuclear safety, climate adaptation, agricultural soil quality and erosion, to just name a few.  These gaps are indications that while we have come a long way in terms of improving data and measurement practices for environment and sustainability issues, we still have much further to go if we hope to be able to better understand the complexity of ecosystems, human impact on the environment, and whether we have achieved green economic growth.

Although it is unlikely that Rio will produce a new indicator for capturing social, economic and environmental progress that will replace GDP, leaders can at least begin to move toward a definition of a set of indicators that better encapsulate sustainable development, poverty eradication, and green economy (all identified themes of the Earth Summit this June).  This way countries, cities, organizations, industries, and individuals can begin to identify what information needs to be collected and where investments in monitoring are needed.  But for these improvements to happen, negotiators must also earmark financing to support data collection and monitoring.

A summary of the main conclusions from this session as well as others are available in the Outcome Document, which can be accessed on www.citizenssummit.org as soon as it’s compiled.

Angel Hsu is a doctoral student at the Yale School of Forestry and Environmental Studies and project manager of the 2012 Environmental Performance Index.

Posted in:
Wednesday, March 21, 2012
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Ending Deforestation in the Amazon: Turning a Possibility into a Reality

By Guest Author, Jonathan Smith, JD/MEM candidate, Yale Law School and the Yale School of Forestry & Environmental Studies

For the past several months, the Yale Center for Environmental Law and Policy has invited global experts to speak about the climate policies of the top ten greenhouse-gas-emitting nations in its Climate Change Solutions: Frontline Perspectives from Around the Globe webinar series. For most of the nations in the series, that means policies addressing emissions from energy use, electricity, and transportation. For instance, over three-quarters of greenhouse gas emissions in both the US and EU are attributable to the energy sector. But the issues Brazil faces are much different – it is the only top-ten nation with emissions primarily derived from land use change, deforestation, and agriculture. Dr. Paulo Moutinho, Executive Director of the Amazon Environmental Research Institute (IPAM), spoke recently about these issues and others. A recording of the webinar is available here.

Over the last twenty years, an area the size of Texas has been deforested in the Brazilian Amazon. Seventy percent of this deforestation is due to cattle-ranching activities, but other factors -- such as increasing corn, soy, and sugar cane production for food and biofuels -- are also stressing the environment. The Brazilian government’s subsidies of traditional, intensive agricultural practices dwarf that of sustainable, low-carbon agriculture. And governmental investment in transportation and urban infrastructure in the Amazon similarly threatens its forests, with over 70 percent of deforestation occurring within 50 kilometers of roads. Settlements are a relatively new driver of deforestation, and in the last ten years small landholders and settlers have been playing an increasingly major role in deforestation. At current rates, over 40 percent of the Amazon forest could be gone by 2050, potentially releasing up to 40 billion metric tons of the carbon stored by the forest into the atmosphere.

Moutinho condenses the myriad of contributing factors to four main threats to the forest: 1) the lack of environmental safeguards in the government’s huge Growth Acceleration Plan that is building infrastructure in the Amazon; 2) the growing demand for beef and grain commodities around the world, and the ensuing incentives for cattle ranchers and farmers to cut down forestland; 3) governmental settlement policy that encourages the deforestation of a large number of small land plots; and 4) threats to weaken protections in the Forest Code that are currently under debate in Brazil’s Congress.

But though the threats to the Amazon loom large, progress has been made. Deforestation rates have been reduced to two-thirds below the 1996-2005 average through programs like the compensated reduction of deforestation and the Amazon Fund, the creation of protected areas, and improved law enforcement measures. And the national goal of an 80-percent reduction in deforestation by 2020 could avoid the release of nearly 6 billion tons of carbon into the atmosphere. At the subnational level, some Brazilian states such as Para and Amazonas are instituting their own state-level REDD programs. And at the sub-state level, forest protection is highly dependent on stakeholders, such as the indigenous communities, who live on lands that hold 30 percent of the carbon stock of the Amazon, and have traditionally low rates of deforestation.

Moutinho stresses the importance of a national REDD regime within which state-level REDD programs are nested, so that targets and methodologies could be standardized across states. And aside from REDD, he also advocates for a national emissions trading scheme, expansion of protected areas, and programs to both increase the land-use efficiency of cattle ranchers and promote the growth of crops on land that had already been cleared for ranching.

A long and multi-pronged effort is necessary in order to slow—or eventually stop—deforestation in the Amazon. But with deforestation not only directly threatening one of the world’s richest biomes, but also indirectly threatening biomes the world over through climate change, the effort must be made.

Posted in:
Monday, March 12, 2012
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2012 ARPA-E Summit Highlights: the Benefits of Investing in Energy Innovation

By Guest Author, Rafael E. Torres, MBA ’13, Yale School of Management, MEM ’13 Yale School of Forestry & Environmental Studies

Investing in innovation in any industry is a risky proposition, yet often one worth pursuing. Technological innovation is the driving force for economic growth, but it requires firms to make significant investments in research, development, and commercialization in order to produce results. The energy industry is no exception to this requirement, though the energy system’s nuances present unique challenges to potential innovators, including high capital intensity, as well as technical complexities and risks. Energy technology innovation, while highly desirable from a social perspective, is a tough nut to crack, even for the entrepreneurial forces of the private sector. This is where ARPA-E comes in.

The Advanced Research Projects Agency—Energy (ARPA-E), authorized in 2007 and first funded in 2009, was established within the U.S. Department of Energy (DOE) to fund projects developing breakthrough energy technologies that increase energy security, reduce energy-related emissions, and improve efficiency. ARPA-E’s objective in funding and providing expertise to these high-risk/high-reward projects is to assist inventors through a critical and sensitive phase of the technology development process in order to commercialize energy technologies and attract private sector investment. To date, ARPA-E has funded over 180 projects with $521.7 million in awards across 12 program areas, and its awardees have sourced more than $200 million of private capital after receiving ARPA-E funding.

Now an annual event, the 3rd ARPA-E Energy Innovation Summit—held at the end of February just outside of Washington, DC—brought together an eye-catching lineup of speakers and energy experts to discuss the issues of the day and to celebrate the success of ARPA-E awardees’ projects. The Summit featured a technology developers’ workshop aimed at providing training to entrepreneurs, multiple keynote presentations, fireside chats to promote interactive dialogues among experts, a technology showcase highlighting ARPA-E awardees, and plenty of networking events. Keynote presentations included commentary by U.S. Secretary of Energy Steven Chu, ARPA-E Director Arun Majumdar, President Bill Clinton, Microsoft Founder and Chairman Bill Gates, and prominent members of the U.S. Congress, among others. Nearly 2,500 people attended the Summit, comprising mainly researchers, corporate leaders, entrepreneurs, investors, policymakers, government officials, and students.

Summit participants had the opportunity to absorb a wealth of knowledge and to witness firsthand the remarkable innovation ecosystem that has arisen from ARPA-E’s efforts. Some examples of the technologies showcased: lithium air and lithium water batteries, microbial fuel cells, solar hydrogen generators, an ultra-compact solid state cooling system for refrigeration, high-powered laser drilling, and advancements in assorted types of solar and wind energy generation components. Venture capitalists, corporate managers, and technologists alike lined up to engage innovators and learn about their exciting new energy technologies. During the panel discussions and keynotes, experts from a variety of disciplines shared their perspectives on topics such as commercialization of technologies, financial tools, investment mechanisms, institutional frameworks, policy measures, national security considerations, and even political roadblocks.

Among many memorable takeaways, the following remarks stood out:

-Secretary of Energy Steven Chu highlighted our vulnerability to price fluctuations in the fuel markets, most recently to oil and gasoline, as well as our inability to drill our way out of the problem. Secretary Chu made the case for leveraging energy innovation in order to reduce our exposure to oil price fluctuations and improve the U.S.’s economic competitiveness.

-Former President Clinton discussed some of the hazards to the energy innovation project, including advances in fossil fuel extraction techniques that could lock us into dirty energy consumption, the lure of short-term jobs in oil and gas, constrained federal budgets that limit spending on research, and ideological imperatives to deny climate change. However, he built a case for continued investment in energy innovation domestically, and he noted that the nation’s economic future depends on the successful projects of the entrepreneurs present.

-Serial entrepreneur Steve Blank encouraged innovators to get out of their buildings and speak with customers to find out what they need. In addition, they should focus on deploying the lowest acceptable functional technology in the market in order to bet smaller while they learn, as opposed to ‘betting the farm’ on a more developed (and more expensive) project.

-Bill Gates drew a distinction between the IT revolution and the energy transition currently underway, noting that the IT revolution is an exception in terms of how quickly things can change. Energy transitions have historically taken 60-70 years on average, mainly due to their capital intensity. Mr. Gates argued that the U.S. is currently under-spending on energy R&D, and that the private sector needs incentives to jump into an area that has failure rates over 90 percent and that needs thousands of firms initiating projects to produce just a few viable options.

-Senator Jeff Bingaman described science and technology as critical to U.S. competitiveness and indicated that partisan politics is creating obstacles to continued progress in the energy system. Whereas regulation, spending on innovation and tax incentives had been effective policy tools in the past, they were now under sustained attack. Higher lighting efficiency standards are in the process of being rolled back, Solyndra has been used as an excuse to defund innovation projects, and the production tax credit’s renewal is in jeopardy. Senator Bingaman expects that we may need to wait until the November elections to make further progress in energy.

The ARPA-E Summit brought together the energy innovation community to demonsrate what is possible when the government invests in and incentivizes innovation. Knowledge networks and communities of practice form around the seeds of innovation capital, and new technologies find a way from laboratory to prototype, and from prototype to marketplace. Certainly, no one would dispute that we likely will come across some failures along the way, nor would they deny that some of the outcomes of R&D investment will be difficult to measure. However, with great risk comes the potential for great reward, and the ARPA-E Summit provided a sneak peek at what some of the fruits of our innovation investments might look like.

For more information on the 2012 ARPA-E Energy Innovation Summit, visit the website.

Posted in: Innovation & Environment
Friday, March 09, 2012
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Bottom Up or Top Down? Another Way to Look at an Air Quality Problem

By Guest Author, Erica Zell, Stephanie Weber, and Alex de Sherbinin

This post originally appeared on State of the Planet, the Earth Institute's blog.

Air quality matters for human health, and many of the world’s urban areas suffer from high levels of contamination. One of the worst pollutants is PM2.5., which are microscopic particles less than 2.5 microns in diameter that lodge deep in the lungs, potentially leading to respiratory and cardiovascular disease in exposed populations. According to World Health Organization research on the environmental burden of disease, outdoor air pollution causes close to one million premature deaths worldwide each year, with particulate matter as one of the leading contributors. Fine particulates originate in large part from fossil fuels combustion and from agricultural and forest fires.

How do we know how polluted the air is? In some cases, we know it when we breathe it —like when our throat and lungs get irritated.  In other cases, we can see it, when visibility is reduced and the horizon is hazy.  Air pollution concentrations can be monitored with ground-based instruments. However, not all countries have the financial wherewithal and capacity to deploy ground-based instruments, and for some countries monitoring information is not available to the public, for example, through health advisories. For PM2.5, there are about 40 times more air quality monitors in North America and Western Europe than in the rest of the world combined. Each monitor costs on the order of $18,000 and requires something like $5,000 per year to operate.

But there is another way to assess air pollution levels: from the top down, through satellites.  Satellites have broad geographic coverage, provide regular observations (twice daily in some cases), and produce data that are generally available quickly and freely via the Internet. This is a major advantage over data from ground-based instruments. There are, however, some challenges associated with applying air quality measurements from satellites. Satellites, by definition, look down through the atmosphere and, as such, typically produce a column measurement of pollutants which does not necessarily reflect concentrations at ground level.  They may also have difficulty measuring pollution on city scales. Yet these problems are not insurmountable.

For PM2.5, satellites measure a property called Aerosol Optical Depth (AOD), which is an indication of light extinction that can be related to particle concentrations in the air. Aaron van Donkelaar and his colleagues at Dalhousie University have addressed the challenge of deriving surface concentrations from satellite AOD measurements. They tie the satellite measurements to ground-based PM2.5 concentrations and use NASA’s GEOS-Chem global chemical transport model to factor in weather and chemical conversion factors affecting surface concentrations.

Map showing average exposure to particulate matter fine concentrations

Figure 1.

Building on this work, a team of researchers at Battelle Memorial Institute collaborated with the Center for International Earth Science Information Network  at The Earth Institute to generate estimates of annual PM2.5 exposure for populations worldwide over a 10-year period, as derived from NASA MODIS and MISR data. This work was funded by the NASA Earth Science Division Applied Sciences Program.

Battelle’s satellite-based results provide some insight on air pollution levels in China, a topic that has generated headlines recently. Because air pollution is influenced by the weather — for example, a stagnant air mass tends to hold any pollutants in place — it is best to look at several years of data to understand average pollution levels independent of weather patterns.  Figure 1 shows the average exposure to PM2.5 by province in China for the years 2008–2010. The data show that PM2.5 levels in China are above WHO guidelines for annual average PM2.5, (10 micro-grams per cubic meter (µg/m3)) by several-fold in many areas.

Map showing population distribution

Figure 2.

Our methodology weights the results by population distribution such that concentrations in more densely populated areas are more heavily weighted than concentrations in areas with lower population density. Figure 2 shows the population distribution of China according to CIESIN’s Global Rural Urban Mapping Project. In general we find that pollution concentrations are highest near population centers, since the industrial and transportation sectors are leading sources of emissions.

Map showing average exposure to fien particulate matter concentrations change between 2201-2003 and 2008-2010

Figure 3.

Figure 3 shows the change in surface concentrations of PM2.5 in China over a 10-year period.  Air pollution concentrations grew by more than 5% in Jiangsu and Xinjiang provinces, and though we are unable to pinpoint the exact reasons for this (most probably increases in population and industry), it can point policymakers to areas that may need greater attention.

The question of how polluted the air is can best be answered with a combination of ground-based and satellite-based monitors. Studies such as this one, and recent data sharing by the Chinese government, bring us one step closer.  After all, there’s more than one way to look at an air quality problem.

This work was the basis of the Particulate Matter Indicator in the Yale-CIESIN 2012 Environmental Performance Index (EPI), and has generated considerable buzz in the media, including an Economist article and a posting by the Guardian Environment Network on China’s air quality, and a blog post by the New York Times on India’s air quality problems.

Erica Zell and Stephanie Weber are from Battelle Memorial Institute and Alex de Sherbinin is a senior research associate at CIESIN. CIESIN deputy director Marc Levy and de Sherbinin serve as PI and co-PI, respectively, on the NASA ROSES Decisions grant NNX09AR72G that funded this work.

Posted in:
Wednesday, March 07, 2012
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Q&A with Mary Nichols, Chairman of the California Air Resources Board

By Guest Author, Agustín F. Carbó-Lugo, MEM '12, Yale School of Forestry & Environmental Studies

Mary Nichols, Chairman of the California Air Resources Board, gave the keynote address at the Yale Environmental Law Association’s second annual New Directions in Environmental Law Conference. While she was on campus, she sat down for an interview with Agustín F. Carbó-Lugo, a MEM candidate at the Yale School of Forestry & Environmental Studies.

Agustín Carbó: Environmental justice groups argue that California’s greenhouse gas emissions cap-and-trade program will create “hot spots” in low-income communities. How is California addressing these concerns from a legal and programmatic perspective?

Mary Nichols: First of all, when we began developing the cap and trade program, we were operating under the requirements of AB 32, which has very specific provisions that order the Air Resources Board to consider environmental justice in every aspect of our decisionmaking. And before we could even begin to adopt a market-based program of any kind, we had to make certain findings, including findings that the program would not increase air pollution in any community in the state.

So from the beginning we were analyzing the rule and developing it in a way that we felt [we] would be able to make those kinds of findings -- that [process] involved looking at how the program would actually operate in a worst-case situation: Assuming that the most polluting companies in the state subject to the rule were trying to buy as many credits as they could rather than cleaning up themselves, would they actually be able to do that in a way that would increase localized air pollution?

We were able to satisfy ourselves based on some scenarios that we developed that it could not happen because of existing air quality regulations already on the books. But we also, in the course of writing the regulation, put in some safeguards that we felt would make sure – and hopefully assure concerned members of the public – that it was not going to happen. Those safeguards involved extra monitoring at the localized level and the ability to take action to disallow further use of imported allowances or offsets if we found increased pollution from facilities under the cap and trade program.

One reason we think there’s not a real issue here, despite the concern, is that there’s a tendency on the part of facility owners to make decisions based on actual costs of compliance with the program. In other words, putting a price on carbon causes people to take a look at their operations and decide how to operate more efficiently. Generally speaking, the oldest, dirtiest plants are also those where the company has chosen not to clean up because they’re not operating very efficiently in addition to the pollution that they put out. Either they decide to clean up – and thereby also improve their operating profile – or they’ll tend to shut down their least efficient facilities and concentrate on the places where they get more output per unit of fuel.

The other reason is that when we look at our low-income and minority communities in California with the greatest concentrations of toxic contaminants, the sources of those pollutants tend not to be the industrial facilities themselves, but instead community-level transportation like the ports and the rail yards where the major pollutants of concern are diesel toxic emissions. These facilities are not being directly affected by the cap and trade program, but they are subject of a lot of other regulatory attention from the Air Resources Board these days.

We do understand how in parts of the world – where there are great concerns about whether localized communities have any kind of air pollution protection – adding in carbon trading or carbon allowances could add to a community’s concerns if they’re not also accompanied by a push to deal with health. But in our situation in California, we just don’t think it’s an issue.

Agustín Carbó: Is California’s cap-and-trade program pushing the climate change agenda to a national level? Do you foresee that eventually the federal government may preempt this issue?

Mary Nichols: Some of the thinking behind the original AB 32 was clearly that if our state and other states adopted climate legislation, especially if that legislation was in some ways conflicting or created different pressures on companies, that it would make them more anxious to support federal legislation.

The truth is, a lot of impetus behind the adoption of the Waxman-Markey legislation by the House of Representatives came from the business community; large companies that operate at the national and international level were already experiencing the push and pull of being held accountable in different states and were hoping Congress would step in and preempt state programs like ours. Of course, no bill was passed in the Senate, and it looks now like it’s going to be a long time before that happens.

But I expect that someday Congress will take action. There will be federal climate legislation and if it has a cap and trade element, then state programs probably will be merged into that program. Whether it would be an absolute preemption or a set of steps creating incentives for states to join I can’t say – either way, we would much prefer to be operating under a national program rather than running our own; it’s just more efficient that way.

Agustín Carbó: In light of skeptics and partisan propaganda that insists climate change is not real, what needs to happen to gain more public acceptance and force the U.S. government to commit to international initiatives to fight climate change?

Mary Nichols: I don’t think the impediment has anything to do with science. The science debate is a distraction. Scientists are still debating exactly how cigarette smoking causes cancer. That’s the nature of science – to continue to raise problems and objections.

I recognize that people will be questioning the accepted consensus on human-caused climate change for many years into the future. But the fact is there is enough agreement on the need to curb our emissions of greenhouse gases. That’s not what’s holding back any kind of effective regulatory or legislative program. It’s politics, and it’s the cost – and until there’s a sufficient demand and understanding that there are ways to do this that don’t hurt the economy, that actually help the economy, we’ll continue to see blockage at the national level.

Agustín Carbó: Recent UN Framework Convention on Climate Change (UNFCCC) negotiations have made it clear that climate protection will depend on actions on the ground in both developing and developed countries, a concept that may involve Nationally Appropriate Mitigation Actions (NAMAs) and Low-Emissions Development Strategies (LEDS). Is California considering to design, plan and/or implement some of these measures?

Mary Nichols: I think the California program and the programs we’ve worked on with other states and other subnational groups through various mechanisms – including the Western Climate Initiative and others — constitute that kind of on-the-ground control measure. We think what we’re doing is actually developing some of the operating rules and the experiences that will make it possible for other places to do some of the things we’re doing. The cap-and-trade program is only one example. We also have the low-carbon fuel standard, our advanced fleet cars programs, our industrial audits – there’s a panoply of rules that we’re working on.

But I think what’s more relevant to many parts of the developing world are programs we’re working on that involve incentives and/or voluntary programs – working with agriculture, working with local sanitation districts, helping to promote better technology for the capture and reuse of methane from waste materials. These areas are critically important if we’re actually going to make a dent in the overall buildup of greenhouse gasses. And these are programs that are also underway in California, but they’re not all necessarily being led out of the Air Resources Board. We have a variety of other government agencies at the state and local level working together with the private sector to pioneer some of these activities.

It’s very exciting to pick up the paper every morning to see examples new technologies. For example, there’s a little rural community outside of Las Angeles called Norco, which is famous because it’s zoned for horses. Along with the horses, they also have a very large waste disposal problem – and the city has been spending tens of thousands of dollars each year to collect and truck the stuff to a land disposal site. They’ve just signed a contract with a subsidiary of Chevron, which is developing for them a waste-to-energy plant. The plant will not only alleviate the cost of disposal, but also provide the city with some of its electrical power. This is great stuff, and it’s happening because of interest in waste disposal, energy policy – and it also helps our climate numbers.

This interview has been edited and condensed. A video recording of their conversation is available below as well as here.

Posted in: Energy & Climate
Tuesday, March 06, 2012
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Man U Scores One for Sustainability, but We Should be Changing the Playing Field

By Guest Author, Ysella Yoder, Program Manager, Yale Center for Environmental Law & Policy

Premier soccer team, Manchester United, just became the first English soccer club to achieve the international Environmental Management System standard, ISO14001 – saving themselves £500,000 (or $792,000) over the last few years in the process.

The ISO14004 provides a “framework for a holistic, strategic approach to the organization's environmental policy, plans and actions.” In order to achieve this standard, Manchester United implemented a range of sustainability measures including plucking the low-hanging fruit: improving efficiency in lighting, heating and cooling, and encouraging fans to use public transport to and from matches.

This type of low-hanging fruit is the easiest, quickest, and most cost-effective route to realizing cost savings while greening your business. In the Green to Gold Business Playbook, Dan Esty and P.J. Simmons highlight the importance of going after the low-hanging fruit first for quick payback by:

·      Investing in energy efficiency;

·      Reducing major environmental risks;

·      Launching a pilot project or two; and

·      Finding ways to engage employees.

Dell expects to save about $5.8 million a year as a result of increasing energy efficiency measures. And Walmart sought out cost-saving ideas from their employees. One employee suggestion to turn off the back-light break room vending machines led to a cost savings of $1 million per year.[1] Employee engagement is key. Often it’s the middle managers who are the ones tasked with improving efficiencies and, without buy-in from key people in the company, success is limited.

The Playbook lists countless examples of these return on investment success stories and provides tools to help companies achieve their broader sustainability goals. But achieving these gains is not easy and cannot be done through a one-size-fits-all approach. Each business’s needs are unique and time will need to be invested in assessing where the greatest gains can be achieved. For Manchester United, one of the biggest paybacks may have been lighting, but, for Google, most gains might be seen in more efficient heating and cooling of data centers.

It’s important to note that companies large and small, for-profit or not-for-profit, can all benefit from incorporating sustainability measures into their business practices and achieve real cost savings, decrease impact on the environment, build brand value, cultivate loyal customers, and ultimately score one for the home team.



[1]
NEEF, The Engaged Organization: Corporate Employee Environmental Education Survey and Case Study Findings, March 2009, p.32.

Posted in: Innovation & Environment
Thursday, March 01, 2012
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Data’s Power to Spur Environmental Progress

By Guest Author, Renee Cho, Staff Blogger, the Earth Institute

This post originally appeared on State of the Planet, the Earth Institute's blog.

In January, 132 countries received their environmental report cards. The Environmental Performance Index, released at the World Economic Forum in Davos, ranked countries on aspects of environmental impacts on human health and on ecosystems. The rankings were based on scores each country earned on 22 indicators dealing with environmental health, air pollution, water, biodiversity and habitat, agriculture, forests, fisheries, and climate change and energy.

Coming in at first place on the 2012 EPI is Switzerland, with Latvia, Norway, Luxembourg, and Costa Rica rounding out the top five. The U.S is ranked 49th and Iraq is in last place.

The EPI and its precursor, the Environmental Sustainability Index, were developed by the Yale Center for Environmental Law & Policy and the Earth Institute’s Center for International Earth Science Information Network in 1999. Since 2006, the EPI has been released every two years. In addition, this year’s new Pilot Trend Environmental Performance Index ranks countries according to how much progress they have made over the last decade.

The EPI’s importance lies in its ability to goad leaders into action by letting them see their countries’ strengths and weaknesses compared to other countries, and to enable those that want to do better to dig into the data and identify the best practices of countries with higher scores.

In addition, the Pilot Trend Environmental Performance Index will be helpful for the private sector, allowing companies to see which countries take sustainability seriously, and thus might offer better business prospects.

“Most of the smaller Asian countries are very concerned if they don’t do well and track these findings closely,” said Alex de Sherbinin, senior research associate at the Center for International Earth Science Information Network. He added that countries in every region are competitive.

Seoul pollution in 2005. Photo credit: Craig Nagy

A good example of the EPI’s power to drive change is South Korea’s progress on air quality. In the 2002 Environmental Sustainability Index, South Korea came in 135th out of 142 countries; in reducing air pollution, it was 139th. Troubled by its standing, South Korea brought together various ministries, non-governmental environmental organizations and automakers to address the issue of air quality, mainly Seoul’s.

Air quality is often determined by measuring particulate matter in the air (produced by dust, the burning of fossil fuels, and power plants) that is smaller than 10 micrometers, or PM10. Because of their small size, these particles can enter the lungs and cause serious respiratory problems. The World Health Organization’s PM10 target guideline is 20 micrograms per cubic meter as an annual average.

In, 2002, South Korea started a special program to improve urban air quality aimed at significantly reducing PM10 and the pollutant nitrogen oxide, produced during combustion. The government’s plan to improve air quality involved tightening discharge allowances for vehicles, promoting low-emission vehicles and emission-reducing devices, and the early retirement of old vehicles. It also raised fuel quality standards and intensified vehicle inspections.

To reduce industrial pollution, large industries were given total discharge allowances. Buses running on cleaner compressed natural gas were introduced in 2001; by 2010 there were estimated to be 23,000 in use; a bus rapid transit system and congestion fees at tunnels were also established. The government is planning to increase the number of hybrid and electric vehicles; and parkland will be expanded by 2020, with five new parks and the conversion of a landfill into a park. In addition, South Korea is preparing to begin trading carbon emissions in 2015.

Restoration of the Cheonggyecheon Stream in Seoul helped reduce small particle air pollution. Photo credit: Kaizer Rangwala

As a result of the measures taken since the 2002 EPI, South Korea’s ranking rose to 43rd in 2012; it came in 51st for air effects on human health. The Pilot Trend EPI, measuring progress, ranked South Korea 13th. South Korea’s move up 51 places from its 2010 EPI ranking is touted on the Ministry of the Environment’s website.

In contrast, China, with its poor 2012 EPI ranking of 116th, air effects on human health rank of 128th and air ecosystem effects rank of 114th, has not reacted publicly to its scores; but nevertheless, it has been pressured into improving air quality by activists and bloggers fired up over air quality data released by the U.S. Embassy in Beijing.

Photo credit: urbangarden

Beijing’s particulate levels fell by almost a third from 2006 to 2009 in the run-up to the 2008 Olympics, but have been climbing ever since. The country’s Pilot Trend EPI ranking of 100th means that its performance has actually declined over the decade. And indeed, China’s pollution, stemming largely from coal-fired power plants and mounting numbers of cars, has made headlines recently. In December, pollution in Beijing shut down highways and grounded almost 700 flights. The deputy director of the Beijing Health Bureau reported that although smoking rates in Beijing have not increased in the past decade, the lung cancer rate rose 60 percent, likely as a result of air pollution.

Until last month, Beijing’s air quality monitoring reported only PM10 levels. But according to Angel Hsu, project manager for the 2012 EPI and a Yale doctoral candidate, fine particles that measure less than 2.5 micrometers in diameter (about 1/30 the width of a human hair), or PM2.5, constitute 50 percent of the particulate matter of China’s air. PM2.5 is produced by dust and combustion (from vehicle exhaust, coal-fired power plants, wood burning). Because of their tiny size, PM2.5 are thought to pose the most severe health risks since they can lodge deep in the lungs and enter the bloodstream, increasing the risks of lung cancer, and cardiovascular and respiratory disease.

Beijing traffic.

Beijing and other Chinese cities began monitoring PM2.5 and ozone a few years ago, but did not release their findings to the public. In 2008, the U.S. Embassy in Beijing began measuring and reporting PM2.5 levels via Twitter, and found that over 80 percent of days exceeded American standards for safe levels of air pollution. The readings were in stark contrast to Beijing’s official air quality reporting (of only PM10) which often concluded that the air was safe. The capital’s annual average PM2.5 concentration has been approximately 100 micrograms per cubic meter, while the proposed yearly standard is 35 micrograms per cubic meter. Roused by the embassy’s reports, citizens began putting intense pressure on the government to publicly report PM2.5 levels.

On Jan. 26 as the Year of the Dragon began, Beijing acceded and began publishing hourly PM2.5 readings from one monitoring station. It now plans to establish 35 PM2.5 monitoring stations throughout all districts and counties of the city by the end of 2012. (By international standards, monitors should be 50 meters from pollution sources; the U.S. Embassy monitor is only 15 meters from a large ring road, which may account for continued discrepancies in readings.)

According to China Radio International, a newly announced air pollution control program for Beijing aims to reduce PM2.5 levels 30 percent by 2020. In addition to the new PM2.5 monitoring stations, a satellite remote sensing system will oversee overall air quality.

By 2020, the plan also aims to:

- Get 1.6 million cars with outdated emissions standards off the road

-  Reduce the city’s annual total consumption of coal 62 percent below 2015 levels

- Close all cement plants run for profit in Beijing

- Ban heavy industry from opening new facilities or expanding in the city

- Expand forest area in the city by 133,000 hectares (328,650 acres) and water surface by 2,000 hectares (almost 5,000 acres)

By 2015, 1,200 asphalt, glass and ceramic factories will have to leave the city.

The Chinese government has ordered 30 major cities to begin monitoring PM2.5 this year, and 80 more next year. China Daily reported that China aims to reduce its pollutant emissions 30 to 40 percent by 2015 in accordance with its 12th Five-Year Plan (2010-2015) for environmental protection. The plan calls for an investment of 3.4 trillion yuan ($539 billion) in environmental protection efforts.

If China can realize these ambitious plans, it will significantly improve its air quality, but getting air pollution under control will be an ongoing challenge.

“Without effective monitoring, tracking and transparency, you don’t know where you stand, and the potential for collaborative problem-solving involving a strengthened civil society and citizens is reduced. Researchers, academics and NGOs need the data,” said de Sherbinin. “Indicators alone won’t solve the problems, but they are guideposts to help you get where you want to go.”

It will be interesting to see how China fares on the 2014 EPI.

Renee Cho is a staff blogger for Columbia University's Earth Institute and a freelance environmental writer.

Posted in: Environmental Performance Measurement
Tuesday, February 28, 2012
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What Jeremy Lin and US-China Cooperation on Climate Change Don’t (Yet) Have in Common

By Guest Author, Angel Hsu, PhD candidate, Yale School of Forestry and Environmental Studies

This article by Angel Hsu originally appeared on The Huffington Post.

It may not be coincidental that soon after NBA Knicks' Jeremy Lin dazzled the nation with a seemingly infallible jump-shot, China's vice president, heir apparent and avid basketball fan Xi Jinping made an official U.S. visit.

But while Lin -- a Harvard graduate raised with Chinese and American values by a "Tiger Mom" -- has proven remarkable on the court, China and the U.S. as players in the environmental arena have performed more like junior-varsity playground scrappers.

This year's Environmental Performance Index, produced with my colleagues at Yale and Columbia Universities, revealed the U.S. and China respectively ranked at 49th and 116th place out of 132 countries. The U.S. and China fare even worse if we look at their performance trend index numbers across the last decade: 77th and 100th, respectively. While both countries have made some progress in a few environmental categories, notably environmental health conditions, their showing on climate change - often considered one of the world's greatest environmental threats -- is paltry: Out of 132 countries, China ranks 93rd; the U.S. ranks 121st -- firmly in the bottom decile.

These are frightful scores for two countries that collectively emit more than 40 percent of the world's carbon dioxide. To make matters worse, any mention of climate change -- or, more broadly, environmental concerns in general -- was noticeably absent last week when Xi met with top U.S. officials in Washington D.C. to discuss a range of "greatest concerns" for both countries.

These are consequential omissions that could set the wrong precedent for China's leadership transition. Particularly at a time when U.S.-China cooperation on climate and energy under a new Xi leadership is uncertain, this recent trip missed an opportunity to set key messages for Xi to consider in the coming months.

One of the most straightforward aims must be U.S.-China cooperation on technology innovation. Although China's carbon intensity (emissions of CO2 per unit of GDP) decreased last year, its overall emissions increased. China was able to achieve easy efficiency gains in the last five-year policy period through elimination of small manufacturing facilities in energy-intensive sectors and by targeting its greatest energy consuming enterprises. For China to meet the carbon intensity reduction goals outlined in its next Five-Year Plan -- a national reduction of 16 percent -- will almost certainly demand research and development collaboration in emerging technologies like carbon capture and storage.

Xi's meeting with President Obama could have also advanced mutual understanding of domestic clean energy policies in both countries, helping to ease tensions over issues like subsidies - a sticking point offered small remedy last January when Presidents Obama and Hu Jintao met. In that meeting, President Hu agreed to end domestic subsidies for China's wind industry, a move seen by U.S. trade representatives as hugely progressive due to the controversial nature of China's seemingly protective domestic policies. The U.S. and China must continue to resolve differences in national economic policies that inhibit joint innovation and advancement of renewable energy technologies.

Finally, both countries must redefine their roles as leaders in global climate negotiations.

In light of its obstinacy this past December in Durban, the U.S. must act more aggressively and positively as a leader of climate change policy if it expects China to follow suit; U.S. stubbornness legitimizes the excuses of other countries that shy away from effective action. First and foremost, U.S. leadership must sidestep partisan politics on climate change and willingly contribute to a legally-binding deal to be decided by 2015. (Admittedly, we must wait until November to see whether we experience our own Executive transition.)

Regardless, weak U.S. leadership in global negotiations could tip China the same way under a new Xi presidency. Although China demonstrated new and considerable leadership in Durban last year, its recent opposition to the E.U. airline tax on carbon emissions demonstrates an uneasiness to fully accept the responsibilities implied in such a global leadership position. This slipperiness portends a China that, while more constructive than the U.S. in the global climate regime, still plays largely to its own domestic interests.

If China and the U.S. aim to bring their own version of "Linsanity" to climate and energy policy under new leadership, then both countries must pursue active and open dialogue and seek middle ground in the current race of self-interest.

Posted in: Environmental Performance Measurement
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The Next Global Debt Crisis

By Guest Author, P.J. Simmons, Chairman, Corporate Eco Forum

Today’s global sovereign debt crisis is keeping a lot of government and business leaders up at night. But another global debt crisis is brewing that, while invisible to most CFOs and finance ministers, threatens to unleash long-term economic hardships that make today’s recessionary worries seem trivial.

I’m referring to the economic collision course we’re on because of systemic, global patterns of over-borrowing from planet’s “natural capital” and asset base—a remarkably productive network of land and water systems that annually produce a staggering $33-$72 trillion worth of “free” goods and services that we depend on for a well-functioning global economy. Because these non-man-made benefits aren’t bartered and sold in the human marketplace, their value is exceedingly hard to monetize on corporate or government financial statements. So we generally don’t. But that shortcoming in accounting doesn’t make the value of these assets—or the cost of losing them—any less real: As we’ve seen with debacles like Enron and the derivatives meltdown, our imperfect accounting practices can sometimes get it dangerously wrong.

At risk are critical life-support systems that are also the lifeblood of our global economy. These natural land and marine systems, thanks to more than four billion years of planetary R&D, far outcompete man-made technology in their capacity to churn out—at scale and affordably—vital goods and services we need for global economic stability and growth. Without charge, this living natural infrastructure works behind the scenes to purify massive amounts of precious drinking water and breathable air; generate abundant and stable supplies of raw materials and commodities integral to supply chains; replenish fertile soil and fish stocks needed to meet growing food demand; buffer people and businesses from the worst effects of floods, droughts, fires and extreme weather events; provide barriers to the spread of disease; maintain awe-inspiring destinations that fuel tourism; and house a treasure trove of biological information that propels scientific and medical breakthroughs.

In short, these assets are priceless. Literally. And that is the problem.

Having developed habits of taking “nature” for granted, we have collectively taken from it for free, drawing down Earth’s natural capital and mismanaging natural assets as if they were endlessly renewable. Yet even this planet’s remarkable natural systems—unique in the known universe and incredibly resilient—cannot sustain damage beyond certain thresholds. Eventually, they break down. Only then does the market begin to understand the full economic value of what we have lost, as what were once dismissed academically as “externalities” suddenly become real, costly burdens.

How much is our current mismanagement of natural assets costing the global economy today? The most recent U.N. estimates are around $6.6 trillion a year—the equivalent of 11% of global gross domestic product—through effects like contamination of water supplies, loss of fertile land through soil erosion and drought, and supply chain disruptions from deforestation and overfishing. The damage could skyrocket to $28 trillion by 2050 under business as usual, which would eclipse the economic damage expected from climate change. However sobering the numbers, in the abstract they are merely statistics affecting someone else and therefore still largely off of most government and business leaders’ valuation radar screens. But the costs hit home when ecosystem degradation translates into lost lives or illness, when scarcities bring supply chains to a grinding halt, when homes are destroyed or jobs lost, or when preventable damage from natural disasters overwhelms the budgets of insurers and governments.

Today’s more farsighted business leaders grasp what’s at stake. They know that investments in protecting and maintaining natural systems are mandatory to ensure continued opportunities and prosperity for businesses, communities, and even nations—not optional philanthropic acts. They understand that just as we invest in maintaining our critical human-built infrastructure, whether roads, bridges, power plants, or orbiting satellites, so too must we be vigilant in safeguarding natural infrastructure to avoid crippling costs down the road. They see the business logic in taking action today, to avert tomorrow’s balance sheet risks and even to seize new revenue opportunities as the demand for environmentally restorative solutions escalates.

Coca-Cola, for instance, is investing in preserving healthy watersheds to ensure the long-term availability of fresh water for its business and the communities in which it operates. Mars is investing tens of millions to advance sustainable cocoa farming practices to head off supply chain disruptions. Darden Restaurants (owner of Red Lobster) has made protecting healthy ocean systems a top business priority, acknowledging that “seafood sustainability is essential to the continued success of our business.” Weyerhaeuser now expressly manages forests for wood production but also for “the ecosystem services they provide.” In 2011, Puma became the first company to issue an “environmental P&L” statement, and Dow Chemical announced a $10 million collaboration with the Nature Conservancy to develop practical tools to help businesses better “assess the value of nature.”

These forward-thinking companies are among a growing list of those getting out ahead of governments in forging solutions to the accelerating “natural debt” crisis. To add to the momentum, the Corporate Eco Forum that I chair—a membership group of 80 large companies with combined revenues of over $3 trillion—announced a new initiative on the “Business Logic of Investing in Natural Infrastructure” at the Clinton Global Initiative in September. In the first half of 2012, we will work with our diverse membership to catalyze a new round of private sector-led commitments to safeguard natural assets, to be announced at the June 2012 Earth Summit, in Rio de Janeiro.

Turning around the brewing natural debt crisis will require broader participation from visionary business leaders, especially when the world’s governments are consumed by more urgent short-term economic challenges. But time and again, the private sector has shown its enormous capacity to innovate fast to solve big problems. Let’s hope this time is no exception.

A version of this article originally appeared on Forbes.com

Posted in: Innovation & Environment
Wednesday, February 22, 2012
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Chasing data in China’s provinces

By Guest Author, Angel Hsu, PhD candidate, Yale School of Forestry and Environmental Studies

The following post is republished from China Dialogue.

China’s environmental data has created many international headlines in recent months, particularly its controversial air-quality measurements. While Deng Xiaoping urged the Chinese citizenry to “seek truth from facts”, China is still a long way from providing the environmental data and information that allows for just that.

My colleagues and I recently released a study that provides a detailed analysis of provincial-level environmental data in China. We introduced a model framework for environmental performance indicators to assist the Chinese government in tracking progress toward policy goals, as well as recommendations for how the Chinese government can apply more aggressive performance metrics to environmental decision-making. 

In total, we looked at 32 indicators in 12 environmental policy categories (among them air pollution, water quality, climate change, biodiversity, agriculture and forestry). The data we reviewed and used to construct these indicators were all derived from official Chinese statistics.

We concluded that the lack of clear policy targets for many environmental metrics in China, as well as concerns over data sources and transparency, hamper the government’s ability to effectively address pressing environmental issues at the provincial level. While the report elaborates these challenges in detail, a few of the main findings are summarised below.

First, the existence of baseline environmental data is highly uneven. To develop performance indicators that evaluate the efficacy of environmental policies, baseline data are necessary to benchmark performance. Less than half the indicators evaluated had this. Baseline data were most prevalent for economic sustainability indicators (68%) and least prevalent for ecosystem vitality indicators (20%), while environmental health indicators were in the middle (42%). This pattern reflects the priorities of Chinese environmental policymaking in the past decade, which has emphasised pollution control and resource efficiency in the industrial sector. 

Second, difficulties in accessing raw data hinder data quality evaluation. Our report provides pilot indicators based on official statistics; however, we did not have the ability to independently evaluate those statistics. We found that official statistics for most indicators lack detailed information on data collection methods and monitoring systems, and in no instance were we able to obtain raw data from monitoring stations. Nor were we able to obtain data from third parties that might have been used to corroborate official statistics.

For all these reasons, it proved difficult to assess the validity and reliability of the official statistics. These difficulties gave us concerns about how much the official statistics reflect the reality of on-the-ground conditions.

Third, ongoing measurement systems are also highly uneven. Consistent measures, produced on a regular basis, following established methodologies, in a transparent and verifiable manner, are critical for environmental performance monitoring. In China, the measurement systems related to industrial efficiency are exemplary models. In this area, the published data meet the foundational requirements and, as a result, permit operational use of performance indicators in the five-year plans.

The other measures generally fall short. For example, methodologies for ecosystem measures tend to change over time, making comparison problematic, and the metrics used to measure air and water quality are transformed in ways that make tracking performance difficult.

And fourth, policy targets for the vast majority of candidate indicators are not easily identified. Overall, we were able to establish a basis for constructing a policy target for 21 of the 33 indicators we included in our framework — eight in the environmental health objective, seven in the ecosystem vitality objective and six in the economic sustainability objective. We considered 50 additional indicators but did not include them because of the lack of clear policy targets by which to gauge performance. However, the lack of properly specified policy targets is not unique to China. Similar challenges around goal-setting exist in many countries, especially in the developing world.

A major theme underpinning all of these conclusions is the need for greater data and information transparency. Even though laws on the disclosure of environmental information came into effect on May 1, 2008, China still has a long way to go in terms of providing environmental data transparently.

Researchers at Chinese NGO the Institute of Public and Environmental Affairs and the US-based Natural Resources Defense Council found that most big cities in China failed to publish adequate pollution information in 2011 in the third edition of the Pollution Information Transparency Index (PITI), released last month. Only 19 out of 113 cities received passing scores for information transparency. The authors concluded that environmental information disclosure is an “innovative system” in China that does not, so far, go beyond the initial stages.

It is our belief that the value of both the PITI and our report, “Towards an Environmental Performance Index in China”, lies in being able to provide transparency to environmental data and results in China. Transparency and access to information are fundamental tenets of sound environmental policymaking. Greater transparency can stimulate research and policy for developing innovations that can only help China navigate the difficult path of sustainable development.

Angel Hsu is a doctoral student at the Yale School of Forestry and Environmental Studies and project director for the 2012 Environmental Performance Index.

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