news20091202gdn1

[News] from [guardian.co.uk]

[Environmnt > Emissions trading]
Australian Senate defeats carbon trading bill
Defeat of carbon trading bill delivers blow to government that had hoped to set an example at international climate change talks in Copenhagen
Toni O'Loughlin in Sydney
guardian.co.uk, Wednesday 2 December 2009 09.35 GMT Article history

Australia has dumped its plan to cut the nation's carbon emissions for the second time this year after climate sceptics seized control of the conservative opposition.

The Senate, where the government of the prime minister, Kevin Rudd, does not hold a majority, rejected 41-33 his administration's proposal for Australia to become one of the first countries to install a so-called cap-and-trade system to slash the amount of heat-trapping pollution that industries pump into the air.

It follows a tumultuous week in Australian politics, which saw the ousting of Malcolm Turnbull as opposition leader, after he had pledged to support the government's plans for the trading scheme.

The defeat further undermines Australia's already ailing credibility at the upcoming UN climate change talks in Copenhagen.

But parliamentarians from the Australian Greens party welcomed the demise of the Labor government's carbon emissions trading scheme, calling it "a dirty deal, an exercise in double think, and a deceipt on the Australian people".

Australian Greens senator, Bob Brown, said the debate in Australia had been hijacked by big polluters, particularly in the coal industry. "Climate change minister, Penny Wong, has made a point of seeing all the coal lobbyists. They're very formidable in the impact they have on policy in Australia," Brown said.

If an international agreement is reached in Copenhagen, the scheme of the prime inister, Kevin Rudd, would have cut carbon emissions from 5% up to 25% by 2020, depending on whether there is a global deal in Copenhagen. The scheme, which would have paid big polluting industries $AUS30bn in compensation, did not require a reduction in domestic emissions to meet its targeted cuts, because Australia could have met the target by purchasing permits to pollute from overseas.

"If Rudd's scheme was adopted worldwide, we would be very unlikely to limit the rise in global temperatures to 2C," Andrew Macintosh, associate director of the Australian National University's centre for climate law and policy, said. Still, the deputy prime minister, Julia Gillard, said the government would give the opposition, the Liberal-National coalition, "another chance" to act in "the national interest" by reintroducing the legislation when parliament resumes in February. "We all know the Liberal party is deeply divided on this question," Gillard said.

On Monday, after a week of angry exchanges the coalition dumped its leader, Malcolm Turnbull, who had brokered an agreement with Labour to support the emissions trading scheme.

His replacement, Tony Abbott, has previously described climate change as "crap" but this week claimed that he held a more "considered view". He wants the coalition to consider the introduction of nuclear power to cut Australia's emissions.

Political commentators are speculating the Rudd could call an early election to further divide the opposition which rejects the carbon trading scheme as a "massive tax" on Australians.


[Environment > Climate change]
Climate research chief Phil Jones stands down pending inquiry into leaked emails
Director denies conspiracy claims and stands by scientists' findings on global warming
Alok Jha and agencies
guardian.co.uk, Tuesday 1 December 2009 22.03 GMT Article history

The head of the climate research unit that had its emails hacked and posted online will step down from his post while an inquiry into the affair is carried out.

Messages between scientists at the University of East Anglia's Climatic Research Unit (CRU) were posted on the web last week, and climate-change deniers seized on them as alleged evidence that scientists have been hiding and manipulating data to support the idea that the world is warming up.

Professor Phil Jones, the director of the CRU, said he stood by the science produced by his researchers and suggestions of a conspiracy to alter evidence to support a theory of man-made global warming were "complete rubbish". But he said today that he would stand aside as director of the unit until an independent review into the hacked emails had been completed.

"What is most important is that CRU continues its world-leading research with as little interruption and diversion as possible," he said. "After a good deal of consideration I have decided that the best way to achieve this is by stepping aside from the director's role during the course of the independent review and am grateful to the university for agreeing to this. The review process will have my full support."

Emails between researchers at the centre were obtained by hackers and then published on websites run by climate sceptics. Some argue that the timing, just before next week's major climate talks in Copenhagen, seems meant to undermine the negotiations.

Critics of the argument that global warming is human-induced say the emails show evidence of collusion by scientists. Some claimed that the contents of some emails suggested scientists prevented work they did not agree with from being included in the fourth assessment report of the Intergovernmental Panel on Climate Change (IPCC), published in 2007. But earlier this week, Rajendra Pachauri, the chair of the IPCC, said there was "virtually no possibility" of a few climate scientists biasing the advice given to governments by the UN. He said that the large number of contributors and rigorous peer review mechanism adopted by the IPCC meant that any bias would be rapidly uncovered.

He was responding in particular to one email from 2004 in which Phil Jones said of two papers he regarded as flawed: "I can't see either … being in the next [IPCC] report. Kevin [Trenberth] and I will keep them out somehow – even if we have to redefine what the peer-review literature is!"

Pachauri said: "People should be discreet … in this day and age anything you write, even privately, could become public and to put anything down in writing is, to say the least, indiscreet … It is another matter to talk about this to your friends on the telephone or person to person, but to put it down in writing was indiscreet. If someone was to say something like this in an IPCC authors' meeting then there are others who would chew him up."

Peter Liss, a specialist in interaction between the oceans and atmosphere at UEA, will stand in as acting director of the CRU while the review is conducted. The university's vice-chancellor, Edward Acton, said: "I have accepted Professor Jones's offer to stand aside during this period. It is an important step to ensure that CRU can continue to operate normally and the independent review can conduct its work into the allegations."

The economist Nick Stern said the views of those who doubted the scientific consensus that humans are causing global warming were "muddled and unscientific". He admitted that all views should be heard, but said the degree of scepticism among "real scientists" was very small. The evidence for global warming stretches back more than 800,000 years, he said. "This is evidence that is overwhelming, from all sources, that's the kind of climate science we're talking about. I think it is very important that those with any kind of views on the science or economics have their say - that does not mean that unscientific muddle also has the right to be recognised as searing insight."

He added: "If they are muddled and confused, they do not have the right to be described as anything other than muddled and confused."

The move received a welcome from many involved in environmental non-government organisations.

One leading environmental campaigner said: "It seems like a sensible course of action – finally, the CRU seem to be getting their public response in order. But any reading of the emails in context would lead to the conclusion that nothing untoward happened here at all."

news20091202gdn2

[News] from [guardian.co.uk]

[News > Politics > David Davis]
Green movement in danger of crippling economy, says David Davis
Former Tory leadership contender says it is unsurprising more than half the public no longer believe in climate change since planet has cooled over last decade
Press Association
guardian.co.uk, Wednesday 2 December 2009 09.31 GMT Article history

A senior Tory attacked the "fixation" of the green movement with imposing ever tougher targets for reducing carbon emissions as having potentially "crippling" costs for the economy.

David Davis, an ex-shadow cabinet member and former party leadership challenger, said the UK was already facing a £55bn long-term price tag for its current policies and warned of a public backlash if more unpopular "green" measures were imposed.

His comments are likely to be seen as a direct challenge to the approach of David Cameron, who has made his commitment to tackling climate change a symbol of the way he has changed the party.

Writing in the Independent today, Davis said it was "unsurprising" that more than half the public no longer believed in climate change as it now appeared that the earth had been cooling rather than warming over the past decade.

"The fixation of the green movement with setting ever tougher targets is a policy destined to collapse," he said.

"The ferocious determination to impose hair shirt policies on the public – taxes on holiday flights, or covering our beautiful countryside with wind turbines that look like props from War of the Worlds – would cause a reaction in any democratic country.

"Many of the people signed up to the green movement instinctively believe in statist, regulatory, dirigiste regimes. They forget these approaches have failed many times before."

Davis said that building wind farms would blight hundreds of thousands of properties and "ruin" lives through the unbearable noise levels, while future predicted power shortages would further undermine public support for action.

"Lights going out around Britain could be an electoral off switch for environmental policy," he said.

He called for the development of an environmental "middle way" with "realistic" measures to reduce emissions without "crippling" the economy while containing the effects of climate change that cannot be prevented.

"Today the economic climate makes people question whether we can afford the expense of these policies," he said.

"We often worry, properly, about the potential effects of global warming on the poorer parts of the world. We should also worry that cutting the world's growth will condemn millions of people to continuing poverty in the decades to come."

Emily Thornberry, a Labour MP, said: "David Davis is representing the real views of David Cameron's Conservative party. This is the party that persistently fails to take the tough action on climate change and regularly opposes wind farms as 'bird blenders'.

"David Cameron's cycling to work can't cover the fact that he lacks a real green agenda and the strength to stand up to the anti-green rump in today's Tory party."


[Environment > Copenhagen climate change congerence 2009]
Prince Charles to attend Copenhagen climate change summit
Prince of Wales invited to address UN summit and expected to lobby for measures to reduce deforestationｆ
John Vidal, environment editor
guardian.co.uk, Tuesday 1 December 2009 18.26 GMT Article history

Prince Charles will join at least 65 world leaders in Copenhagen later this month, it was announced today.

In an unexpected move by Denmark, the prince has been invited by the host country to address the UN summit during the opening ceremony of the second "high-level" week of the conference, when political leaders arrive.

But the Prince of Wales, who will only be in the Danish capital city for four hours on 15 December, will not take part in any formal negotiations. It is understood that his role will only be to help set the "tone" of the meeting. He will also meet meet global business leaders to lobby for measures to reduce deforestation, including a carbon market.

Forestry is expected to be one of the key discussions at Copenhagen, but the negotiations are on a knife edge, with no guarantee that money will be found to pay poor countries to protect their trees.

Two years ago, Prince Charles set up the Prince's Rainforests Project and since then then he has hosted several international forestry meetings in London.

The UK prime minister, Gordon Brown, was the first national leader to pledge to attend Copenhagen, and will be joined by Brazil's president, Luiz Ignácio Lula da Silva, France's Nicolas Sarkozy and others.

news20091202nn1

[naturenews] from [nature.com]

[naturenews]
Published online 2 December 2009 | Nature | doi:10.1038/news.2009.1119
News
Australia rejects carbon trading
Labor Party loses crucial vote amid political turmoil.
Stephen Pincock

Australia's government has failed to pass laws to create a carbon-trading scheme, ahead of next week's United Nations Climate Change Conference in Copenhagen, after the country's Senate rejected proposed legislation for the second time.

There had been speculation that Labor Prime Minister Kevin Rudd would call a snap general election if the Carbon Pollution Reduction Scheme legislation was not approved. But the government says that it will give the opposition Liberal Party another chance to vote for the scheme when the parliament resumes sitting in February.

"We believe that over the Christmas period there is time for the calmer heads in the Liberal Party to consider this question, to consider acting in the national interest," Julia Gillard, the deputy prime minister, told a press conference.

"The prime minister, on a number occasions, has said it's his intention to have the parliament go full term," she said. "The prime minister has also said that he is determined to see this legislation pass the parliament."

The rejection of the scheme comes after a fortnight of political turmoil, in which the opposition demanded major amendments before it would support the deal, only to withdraw its backing after changing leaders.

The government had needed the support of at least seven opposition senators to pass its package of 11 bills, but only two Liberal senators broke ranks. The resulting 41 to 33 vote represented a quick victory for new Liberal Party leader Tony Abbott, who took up the post on 1 December.

Although his predecessor Malcolm Turnbull had offered bipartisan support for the legislation, Abbott has dismissed the government's proposal as an energy taxation scheme. "This isn't about climate change, it's about the mechanism for dealing with it. It's about stopping a great big new tax," he said yesterday.

Anything is possible

Although many saw the government's plan as flawed, its defeat was a disappointment, says Erwin Jackson, research and policy director at the Sydney-based Climate Institute, which promotes innovation to tackle climate change. "The scheme wasn't perfect, but it did provide a springboard for Australia to reap the benefits that will come from being ready for a low carbon future," he says. "As of today, we're stuck in a quagmire."

Predicting what might happen next is "like nailing jelly to the wall", Jackson adds. "But if Australia is going to play its part in addressing climate change, it has to have a carbon price."

Nick Rowley, director of Kinesis, a company in Sydney that works with government and business on climate issues, says that Rudd cannot now back away from emissions trading. "He will need to come back with another form of the Carbon Pollution Reduction Scheme at the next election that will be different and simpler than the current proposal," he says.

Other are hopeful that the Senate's rejection of the scheme could open the door for other approaches to tackling emissions. "The way politics have changed in the past 24 hours means anything is possible," says Donna Green, a climate policy expert at the University of New South Wales in Sydney.

"What seems like bad news might be good news," she adds. "Labor might decide to take an alternative strategy and implement something that would promote the growth of the low-carbon industry in Australia — and start to entice back some of our best scientists and engineers who've given up on trying to get their ideas out here. To me that has to be a carbon tax."


[naturenews]
Published online 2 December 2009 | Nature 462, 551 (2009) | doi:10.1038/462551a
News
Battle lines drawn over e-mail leak
Climatologists remain sanguine over incident.
Quirin Schiermeier

As the blogosphere continues to buzz with discussion about e-mails leaked from the Climatic Research Unit (CRU) at the University of East Anglia (UEA) in Norwich, UK, climatologists are insisting that the controversy will not discredit their science, or hamper a global climate deal.

CRU confirmed on 20 November that more than 1,000 e-mails and documents had been copied from its servers and distributed on the Internet (see Nature 462, 397; 2009). Since then, climate sceptics have seized on the material, citing the contents of selected e-mails as evidence that the case for anthropogenic global warming has been over-stated, and US Senator James Inhofe (Republican, Oklahoma) has promised an investigation into the affair.

Yet climate experts say the broader impact of the leak will be minimal. "Any suggestions that these e-mails will affect public and policy-makers' understanding of climate science give far too much credence to blog chatter and boastful spin," says Peter Frumhoff, director of science and policy at the Union of Concerned Scientists in Cambridge, Massachusetts.

Some, however, are pointing out that certain e-mails highlight a tendency for scientists to respond to critics either by retreating into an ivory tower, or by attempting to quiet dissenting voices. In an open letter posted on http://climateaudit.org, Judith Curry, a climatologist at Georgia Institute of Technology, Atlanta, wrote last week: "Scientists need to consider carefully skeptical arguments and either rebut them or learn from them. Trying to suppress them or discredit the skeptical researcher or blogger is not an ethical strategy and one that will backfire in the long run."

The UEA has launched an independent inquiry into both the security breach and whether CRU has dealt appropriately with the deluge of requests for raw climate data it has received under the UK Freedom of Information Act (see Nature 460, 787; 2009). It has also pointed out that more than 95% of the raw data used in CRU climate models has been publicly available for several years.

What the climate experts say

Thomas Stocker, University of Berne
"Science and science institutions should be transparent, but they are not a 24-hour help service for climate sceptics who lack fundamental scientific and technical skills."

Svend Soeyland, of environment group Bellona Foundation, Washington DC
"Only openness will make the buzz go away. If only the vaguest impression lingers on that studies have been cooked up or that facts have been hidden it will feed conspiracy theories for ages."

Eric Rignot, University of California, Irvine
"Given the overwhelming scientific evidence for climate change, we should deal less and less with climate sceptics. Otherwise we should also deal with folks who think Elvis Presley is still alive, that Earth is less than 6,000 years old and that we cannot possibly have descended from monkeys."

Guy Brasseur, National Center for Atmospheric Research in Boulder, Colorado
"It is important that scientists make their studies completely transparent, but the least ethical way to accuse others is to highlight a sentence and ignore the context in which this sentence has been written."

Mike Hulme, University of East Anglia, UK
"It is possible that climate science has become too partisan, too centralized. The tribalism that some of the leaked e-mails display is something more usually associated with social organization within pre-modern cultures; it is not attractive when we find it at work inside science."

Rajendra Pachauri, chair of the Intergovernmental Panel on Climate Change
"I doubt that negotiations in Copenhagen will be influenced by this unfortunate incident."

news20091202nn2

[naturenews] from [nature.com]

[naturenews]
Published online 1 December 2009 | Nature | doi:10.1038/news.2009.1115
News
Standards agency boss talks priorities
Patrick Gallagher takes the helm at the US National Institute of Standards and Technology.
Eric Hand

NIST director Patrick Gallagher.NISTWith a US$820 million budget and about 3,000 employees, the US National Institute of Standards and Technology (NIST) in Gaithersburg, Maryland, is an important supporter of basic research. Nature discussed the future of the agency, part of the Department of Commerce, with new NIST director Patrick Gallagher, whose position was confirmed by the US Senate on 5 November after he had served as acting director for more than a year.

Many people think that NIST just looks after reference measurements such as the standard kilogram and the atomic clock. Is that fair?

We certainly do those things, but it understates what NIST is.

NIST promotes innovation and industrial competitiveness. The 'keeper of kilograms and time standards' label doesn't recognize that.

Going all the way back to 1901, the very first director recognized that, although NIST was focused on industry — and in particular the reliability of measurements in industry — making sure that the transactions that industry depends on were based on good information required deep fundamental science roots. That has been part of our bone marrow since the beginning.

Why does NIST operate a laboratory in Colorado (JILA, formerly known as the Joint Institute for Laboratory Astrophysics) that does pioneering atomic physics?

The fundamental reason for that is clocks.

One uses the precision of clocks now in a whole variety of ways, including some surprising ones, such as clocking financial transactions, and the accuracy of the Global Positioning System.

In the case of finance markets, money doesn't physically move around any more — information about money is moved around. The timing of those moves is everything. A lot of money is made on the timing of trades. For that system to work, it has to be based on trust. You want to know if you're making a financial move, that when you said it's going to happen is when it happened.

Why are you're spending about half of the $600 million in economic stimulus money on lab facilities?

The NIST construction money came in two parts. One was for facility needs at US universities — the reality is that there is just enormous pent-up demand.

With regard to construction on the NIST sites, I don't think I'm alone in having a lab that has a lot of facility needs, more than you can ever afford.

You're getting $10 million from the Department of Energy to work on smart-grid protocols. Why are these important?

The modernization of the electrical grid is simply a necessary infrastructure if you're going to promote renewable energy generation.

The smart grid itself is not one technology, it's a web of technologies tying various systems together. It's putting embedded information processing in meters, in appliances, in power controls and in generation equipment. Whenever you have sets of technologies that need to operate with each other you have to have standards to define that.

You have a relatively new programme in greenhouse-gas measurements. Isn't this straying onto the turf of your Department of Commerce colleague Jane Lubchenco at the National Oceanic and Atmospheric Administration?

NIST doesn't operate a CO2 monitoring programme. We support Jane's work by making sure that, as people start to do gas measurements on a global scale, we understand the measurements and can compare them to different measurements made with different technologies in different parts of the world. It's almost a calibration effort.

In 2007, NIST's Advanced Technologies Program (ATP) was replaced by the Technology Innovation Program (TIP). How is TIP different from ATP, which conducted applied research that critics said rarely led to patents and that the private sector might have supported anyway?

TIP is different from ATP in a number of ways, the most important one being that it is much more 'pre-competitive'. It [TIP] is focused farther upstream in the development cycle and is less focused on the commercialization of specific technology.

It also focuses investment in areas where there's a clear government role — 'critical national need' areas — and it broadens the participation to include universities in leading roles.

Do you have any examples of how TIP is different from ATP?

In the first year, the critical national need was [for] a 'resilient physical infrastructure'. Some of the awards were grants to develop novel concepts of sensor technologies that could be deployed to monitor the condition of bridges and road structures. It was less geared towards developing a commercial product stream, than to creating a technological breakthrough.

How is NIST's decade-long work on the electronic kilogram coming along?

The electronic kilogramme is one of the more challenging ones [standards]. It's taking a very macroscopic quantity and relating it to fundamental forces that we can understand at the fundamental constant level. It's a real tour de force. The NIST electronic kilogram is the most accurate realization in the world. I think it will form the basis of a redefinition of what mass is at some point.

news20091202nn3

[naturenews] from [nature.com]

[naturenews]
Published online 1 December 2009 | Nature | doi:10.1038/news.2009.1116
News
Overfishing linked to algal blooms
Depletion of large predatory fish disrupts food chain.
Matt Kaplan

{Predatory pike can ultimately help to control algal blooms.}

Nitrogenous fertilizers and detergents have long been known to cause algal blooms that block sunlight and strangle ecosystems, but a study now reveals that overfishing of large predatory fish is also playing a key part.

Britas Klemens Eriksson at the University of Groningen in the Netherlands noticed that populations of predatory fish in the Baltic Sea seemed to be declining in areas where algal blooms subsequently tended to form. Curious as to whether there was a connection, Eriksson and a team of colleagues from the Swedish Board of Fisheries in Öregrund set up an investigation.

The team reviewed a year's worth of field data on predatory pike (Esox lucius) and perch (Perca fluviatilis) populations from nine areas covering 700 kilometres of coastline in the Baltic Sea. They then compared this information with information collected during the same period on smaller fish and algal populations in the region. They found some intriguing patterns.

"In areas where there were strong declines in perch and pike there were massive increases in smaller fish and large blooms of algae," comments Eriksson. Where perch and pike populations were intact, the surrounding waters had a 10% chance of experiencing an algal bloom; in areas where their populations had been substantially reduced, the chances of an algal bloom were 50%.

Intrigued by these trends, the researchers ran small-scale field experiments for 2 years in unpolluted waters to investigate the forces responsible for controlling algal growth. They manipulated the environmental conditions in these experiments by: sometimes excluding large predatory fish through the use of cages; sometimes adding nitrogenous fertilizer pellets; sometimes applying both techniques; and sometimes leaving areas as untouched controls.

As expected, the nitrogenous pellets increased algal growth. But surprisingly, when predatory fish were prevented from accessing a given area, algae in that area became much more prevalent. The effect even proved to be true when nitrogenous pellets were not added to the system.

"This is the first study to show that top predators are linked to the formation of macroalgal blooms," says marine biologist Heike Lotze, at Dalhousie University in Nova Scotia, Canada.

In tiers

Eriksson speculates that the effect results from the disruption in the food chain caused by excluding the large predator fish. Top-predatory fish feed on mid-level predatory fish, which in turn feed on invertebrate herbivores such as snails and crustaceans. These are the animals that control the algal community. Knock out the top predators, and mid-level predators develop huge populations which, in turn, reduce the numbers of algal-eating species, allowing blooms to grow unchecked, explains Eriksson.

The team report in Ecological Applications1 that, on the basis of their findings, fighting algal blooms by more tightly controlling nitrogenous materials in waste water and agricultural run-off is not the best approach. "If we want to manage algal blooms effectively, we need to start by taking an ecosystem perspective … we have to restore depleted fish communities," says Eriksson.

"That they are showing effects over four trophic [feeding] levels is really impressive," says Lotze. "We've tried to experimentally explore these sorts of interactions before, but with so many levels there is often too much noise to see trends. That they've managed to get clear results is exciting."

Yet even with these results, nitrogenous material must not be ignored. "When we added nitrogen and removed predators we saw blooms that were two times larger than those created by predator depletion alone. The two certainly appear to be connected," says Eriksson.

This is an important finding, because environmental management programmes currently handle fish population conservation and algal-bloom control as separate entities. "Environmental practice has to change based upon these results," says experimental ecologist Birte Matthiessen at the Leibniz Institute of Marine Sciences in Kiel, Germany. "Eutrophication and fisheries management need to be combined."

news20091202nn4

[naturenews] from [nature.com]

[naturenews]
Published online 1 December 2009 | Nature 462, 550-551 (2009) | doi:10.1038/462550a
News
China's climate target: is it achievable?
The world's top emitter pledges cuts, but "substantial societal reforms" are needed to make them.
Jane Qiu

Climate analysts are praising China's promise to slash the country's emissions — even as they wonder if the target is achievable or ambitious enough.

Last week, China's State Council announced that the country will cut its carbon intensity — carbon emissions per unit of gross domestic product (GDP) — by 40–45% from 2005 levels by 2020. "It is a very welcome decision," says Fatih Birol, chief economist at the International Energy Agency in Paris. "If the target is met, it would have significant implications for China and the rest of the world."

Yet some think that the target is not far-reaching enough given China's booming economy and its track record of improving energy efficiency. The country reduced its energy intensity — energy consumption per unit of GDP — by 47% between 1990 and 2005, and looks likely to cut it by another 20% from 2005 levels by the end of next year. Carbon intensity can drop faster than energy intensity if clean-energy sources are brought into the mix.


Online collectionXie Zhenhua, deputy director of China's National Development and Reform Commission, says that China has picked low-hanging fruit by closing energy-inefficient factories and power plants. In China, industry accounts for an unusually large share — 50% — of energy consumption. "The further we go, the more challenging and costly it will get," he says.

If China sticks to current policies, it will reduce its carbon intensity by about 30% by 2020, says Zou Ji, an environmental economist at Renmin University in Beijing. "To get extra mileage and reach the 40–45% target, China will have to instigate substantial social and economic reforms across the board," he says.

Indeed, the China Council for International Cooperation on Environment and Development (CCICED), a joint Chinese and international advisory board to the state government, recently laid out a road map to a low-carbon economy. It includes recommendations in such wide-ranging areas as energy pricing, industrial development, technological innovation, tax systems, land use and urban planning. "The daunting challenge that China faces cannot be underestimated," says Zou. "The concern is not only whether China is willing to make that step forward but whether its development state will allow a smooth economic transition."

Emissions peak

The new pledge will be included in China's next five-year plan along with policies to help it shift towards a low-carbon economy.

The target puts China on a path for emissions to peak around 2030, says Knut Alfsen, head of research at the Center for International Climate and Environmental Research in Oslo, and an author on the CCICED report. That peak, he says, "will take place at a level where emissions per capita are only half of what we have in the developed world today".

China's announcement came the day after US President Barack Obama pledged to cut his country's emissions by 17% from 2005 levels by 2020. It is the first time that the world's top two emitters have offered specific targets at the same time for controlling their emissions.

"It's very important for the two countries to put numbers on the table," says Jim Watson, a policy researcher at the University of Sussex in Brighton, UK.

In recent weeks other developing countries have made ambitious pledges. South Korea has promised a 30% cut below a business-as-usual scenario, and Brazil at least a 36% cut by 2020. Both would be modest cuts compared with 2005 emissions.

India followed China's announcement by saying it would "be willing to sign on to an ambitious global target for emissions reductions or limiting temperature increase" — but with the catch that "this must be accompanied by an equitable burden-sharing paradigm". China and India, along with Brazil, South Africa and Sudan, last weekend reiterated developing countries' insistence that developed nations help bear the cost of climate change, including facilitating technology transfer (see page 555).

So far, the European Union has pledged the most aggressive emissions cuts in the developed world, of 20% from 1990 levels by 2020, to be increased to 30% below if rich non-EU nations follow suit. The US target announced last week would be equivalent to a 3% reduction from 1990 levels.

Obama must also work with the Democrat-­dominated Congress to pass climate legislation that would make its targets binding. The 17% cut he announced last week is in agreement with a bill passed by the House of Representatives earlier this year. The Senate is expected to vote on its own version of climate legislation early in 2010. The Environmental Protection Agency has the authority to regulate carbon dioxide emissions if Congress does not act.

Meanwhile, the Australian parliament has been trying to pass a climate ruling that would cut emissions by up to 25% from 2000 levels by 2020. But on 1 December, the main opposition party elected a new leader who has vowed to oppose the bill, throwing its future into jeopardy. Australia has the highest emissions per capita of any developed nation.

China, if it sticks to its plans, may end up leading the way for developing countries. Compared with current levels, the new target would avoid 1 gigatonne of carbon dioxide emissions — equivalent to a quarter of what the world would need to do to limit global temperature rise to 2 °C over pre-industrial times. "China would champion the fight against global warming," says Birol.

news20091202reut1

[Top News] from [REUTERS]

[Green Business]
Clean energy tariff cuts should precede Doha: UK minister
Tue Dec 1, 2009 7:56am EST
By Laura MacInnis

GENEVA (Reuters) - Governments should not wait for a full Doha Round deal before slashing punitive tariffs on wind turbines, solar panels and water-saving showers, Britain's top trade official said on Tuesday.

Gareth Thomas, minister for trade and development, said that countries should voluntarily cut import duties on "green goods" at once in order to encourage business in environmentally friendly technology.

"Why hold back now, just because we are waiting for the Doha Round to be done?" he told Reuters during a ministerial meeting of the World Trade Organization.

The WTO's 153 members are aiming to wrap up the Doha accord, which spans all areas of global trade, including food, cars and banking, in 2010. Talks on the agreement began in November 2001, making it the longest-running trade round to date.

While many countries are sensitive about cutting back the subsidies they give to farmers or losing revenue streams from lower border taxes, there is wide consensus about the need to foster environmental goods as an engine for future prosperity.

Thomas said that an early implementation of the clean energy tariff cuts would not carve up the Doha deal, which is designed as a "take it or leave it" accord where nothing is agreed until it is entirely agreed.

"It doesn't preclude us reaching an agreement in the Doha Round. We have got to take the whole of the Round together, but there are all sorts of things that you can do to take steps forward in each of the dossiers," he said.

Earlier on Tuesday, New Zealand Trade Minister Tim Groser said he was hopeful that governments worldwide could agree on the need to boost clean energy products and services.

"It is something we have to do," he told a conference on the sidelines of the WTO meeting, called to take stock of the health of global trade relations and the steps forward for trade governance.

Brazilian envoy Flavio Damico said that regardless of when the multilateral agreement is wrapped up, trade policies must be put in line with the new climate change regulations about to be developed in Copenhagen.

"Climate change is a question of economics and trade," he told the side conference, where Indonesian Trade Minister Mari Pangestu also stressed the necessity to see "the inter-linkages between trade, climate change and development."

(Editing by Louise Ireland)


[Green Business]
Britain seeks immediate cuts to clean energy tariffs
Tue Dec 1, 2009 8:00am EST

GENEVA (Reuters) - Governments should not wait for a full Doha Round deal before slashing punitive tariffs on wind turbines, solar power heaters and water-saving showers, Britain's top trade official said on Tuesday.

Gareth Thomas, minister for trade in the department for international development, said countries should voluntarily cut import taxes and duties on "green goods" at once in order to encourage business in environmentally-friendly technology.

"Why hold back now, just because we are waiting for the Doha Round to be done?" he told Reuters during a ministerial meeting of the World Trade Organization. The WTO's 153 members are aiming to wrap up the Doha accord, which spans all areas of global trade, including food, cars and banking, in 2010.

(Reporting by Laura MacInnis)


[Green Business]
EU carbon steady; ignores Aussie scheme threat
Tue Dec 1, 2009 9:10am EST

LONDON (Reuters) - The benchmark contract for European Union carbon emissions futures were steady on Tuesday, ignoring the threat of a blocks to an Australian emissions trading scheme, traders said.

The Dec-09 contract for EU Allowances (EUAs) inched up 2 cents to 13.16 euros ($19.79) a tonne at 1003 GMT, after opening strongly at 13.27 euros.

Traders said news of opposition's plans to block an Australian carbon scheme was not a surprise and was not affecting carbon prices on Tuesday.

Australia's plans to cut carbon emissions headed for defeat in a hostile Senate after the elevation of a new opposition leader against carbon trade laws set a trigger for an early 2010 election.

New Liberal opposition leader Tony Abbott said conservative senators, many of them climate change skeptics, would reject Rudd's emissions trading laws if they were not deferred until early 2010.

Meanwhile, OTC contracts are due for expiry on Tuesday, which could mean that traders will take less new positions on the EUA market.

"We expect a range-bound week a bit lower than present levels," Societe Generale/orbeo analyst Emmanuel Fages said in a research note.

The benchmark EUA contract should trade around 13 euros a tonne this week, and certified emissions reductions (CERs) around 12 euros, he said.

Coal prices should stabilize and UK natural gas will stay around 30 pence per therm due to mild temperatures expected over central and Eastern Europe this week.

Carbon prices have shown a strong correlation with German power prices, which is likely to continue in the coming week.

U.S. oil climbed toward $78 a barrel on Tuesday, adding to the previous session's advance, as concern eased that Dubai's debt problems would set back the global economic recovery.

German Calendar 2010 baseload power on the EEX was up 0.59 percent at 43.59 euros per megawatt hour.

CERs were down 2 cents or 0.16 percent at 12.18 euros a tonne.

(Reporting by Nina Chestney; Editing by xxx)


[Green Business]
World carbon emissions overshoot "budget": PwC
Tue Dec 1, 2009 9:19am EST
By Alister Doyle, Environment Correspondent

OSLO (Reuters) - The world has emitted extra greenhouse gases this century equivalent to the annual totals of China and the United States above a maximum for avoiding the worst of climate change, a study estimated Tuesday.

Global accounting firm PriceWaterhouseCoopers said in the report that almost all major nations, including European Union countries that pride themselves on climate policies, were lagging since 2000 in a push for low-carbon growth.

It said the world was already far above a "budget" of total emissions of 1,300 billion tonnes of carbon dioxide from 2000-50 which it estimated as the maximum permissible while avoiding the worst of climate change.

"For 2000-08, the cumulative global budget overshoot, or 'carbon debt', is estimated at around 13 billion tonnes of carbon dioxide -- roughly equivalent to the annual carbon emissions of China and the United States combined in 2008," it said.

China and the United States are the top world emitters of greenhouse gases, mainly carbon dioxide from burning fossil fuels. A conference in Copenhagen from December 7 to 18 will try to work out a new U.N. pact to curb rising emissions.

"If you stay on this path the entire carbon budget will be used by about 2034, about 16 years early," John Hawksworth, head of macroeconomics at PwC, told Reuters of the report, based on a new PwC Low Carbon Economy Index.

CARBON INTENSITY

The index is a nation-by-nation tracker of efforts to improve "carbon intensity" -- the amount of carbon dioxide emitted per dollar of economic output -- rather than the usual yardstick of changes in overall national emissions.

So far this century, the world had improved carbon intensity by only about 0.8 percent a year, it said.

"To get back on track, world carbon intensity would have to fall by about 3 percent a year, four times the speed at the moment," said Richard Gledhill, global leader of climate change at PwC. "That shows the policy challenges."

China's rate of cutting carbon intensity was 0.7 percent a year from 2000-08, the United States 2.2 percent, the European Union 1.8 percent and India 2.1 percent. All were lagging the rates set by PwC for their carbon budgets.

It estimated a budget of 1,300 billion tonnes would give a fair chance of limiting global warming to a 2 degrees Celsius (3.6 Fahrenheit) rise over pre-industrial levels, widely seen as a threshold for "dangerous" change.

PwC calculated the world would have to cut carbon intensity by about 85 percent between 2008 and 2050 to avoid the worst of climate change such as more powerful cyclones, desertification, wildfires and rising sea levels.

China last week set itself a goal of cutting its carbon intensity by between 40 and 45 percent by 2020, compared with 2005 levels. Hawksworth estimated that would still allow China's overall emissions to rise by 65 percent in the period.

Former U.S. President George W. Bush also once set a carbon intensity goal that let U.S. emissions rise.

(Editing by Andrew Dobbie)

news20091202reut2

[Top News] from [REUTERS]

[Green Business]
Solar company Trina signs China market deal
Tue Dec 1, 2009 9:26am EST

NEW YORK (Reuters) - Chinese solar company Trina Solar Ltd said on Tuesday it entered into a sales agreement to supply approximately 8 megawatts of photovoltaic (PV) modules to the Chinese domestic market.

It also said it has received Chinese government approval for a project of about 2 MW under the Golden Sun program, which aims to install approximately 20 MW of solar power capacity in every province of the country.

Trina Solar, which is based in Changzhou, China, gave no other details, but said the 8 MW sales agreement was to supply PV modules at predetermined prices. Shipments began last month and are scheduled to continue through the end of this year.

In October, the company announced a sales deal with solar distributor PROINSO for 108 megawatts worth of solar panels to boost its market share in Europe.

The company manufactures solar products from the production of ingots, wafers and cells to the assembly of PV modules.

(Reporting by Steve James, editing by Maureen Bavdek)


[Green Business]
Heliocentris sees higher sales in 2010 vs 2009: CFO
Tue Dec 1, 2009 9:31am EST
By Christoph Steitz

FRANKFURT (Reuters) - Heliocentris Fuel Cells, a German expert for clean energy storage, sees higher sales next year as it hopes to benefit from support programmes around the world, its chief financial officer told Reuters.

"Next year, we want to grow regarding revenues as we expect the market for clean energy storage to pick up further," Andras Gosztonyi said in an interview on Tuesday.

The company -- whose competitors include Canada-based Hydrogenics and German unlisted FutureE -- on Monday reported 9-month sales of 2.3 million euros ($3.46 million), an increase of 33 percent year-on-year. The company has not given a concrete outlook for this year or 2010.

Its net loss for the period came in at 2.1 million euros, mainly due to personnel expenses as the company is hiring to expand its business -- the storage of clean energy through fuel cells and batteries.

"We hope to benefit from government programmes as well as from the fact that companies, such as big carmakers, are increasing their efforts in the energy storage business," Gosztonyi said, adding that the company was planning to increase its R&D spending.

Heliocentris is already carrying out projects in the automotive industry, where the push for electric cars has led big players such as Honda Motor Co and Toyota Motor Corp to develop vehicles powered by fuel cells.

At the same time, governments around the world are increasing their efforts to develop and fund renewable energy projects, a subject that is likely to be highlighted at the United Nation's climate change conference that will start next Monday.

(Reporting by Christoph Steitz)


[Green Business]
Germans miss out on cheaper electricity
Tue Dec 1, 2009 9:45am EST
By Vera Eckert - Analysis

FRANKFURT (Reuters) - Millions of Germans will pay more for their electricity despite sharply lower fuel prices, footing the bill for utilities' losses, renewable energy and higher transmission grid charges.

Market competition is not, therefore, working as well as it should, its critics conclude.

A number of big firms have announced prices hikes, meaning many of the 40 million households in Europe's biggest economy will not benefit from discounted wholesale power -- despite cheaper oil and weak demand.

"Wholesale prices have been falling significantly for the past 14 months, you would expect this to result in lower prices for retail customers at some stage," said Thorsten Kasper, energy specialist at the Federation of German Consumer Organizations, VZBV in Berlin.

"If competition was fully functioning, it should not take that long for lower prices to arrive, but they haven't."

Some 40 firms, including big players Vattenfall Europe and EWE will hike retail power prices by at least 5 percent from January, although others such as E.ON and RWE will hold theirs steady.

But retail prices across the country had already risen by 7 percent in the year to date.

By contrast, the wholesale contract for round-the-clock power delivery in 2010, at 44 euros a megawatt hour, is some 25 percent below the price 12 months ago, Reuters data shows.

TIMING OF PURCHASE, GREEN FEES

There are valid reasons for higher prices.

Hundreds of local distribution firms without generation assets of their own buy one or two years ahead and are sitting on expensive supply contracts agreed in 2007 and 2008.

Also, Germany's feed-in tariff for renewable energy, which is mandatory, will rise from January under legal provisions.

The bill for renewables which is shared by all consumers in 2010 is forecast to go up to 12.7 billion euros ($19.13 billion) from 10.0 billion in 2009, said industry association BDEW.

But energy regulator Matthias Kurth has said that some companies were using this fact to blur their own pricing strategy.

His authority had worked out that the renewable rises should contribute 0.2 cents per kilowatt hour (kWh) to the retail price which is roughly around 20 cents/kWh.

But some companies have claimed they needed to charge up to 2.0 cents/kWh to represent their rising renewables bill.

"Something's wrong there," Kurth said.

However, Kurth himself contributed to higher prices by allowing power grid operators higher network usage fees.

Taxes and fees make up 39 percent of total retail bills in Germany, which means the state benefits from high prices.

By contrast, the Czech and Dutch markets are lowering retail power prices next year as renewable fees are cut, or companies' trading arms behaved more prudently than German peers and hedged their purchases more successfully.

CUSTOMER POWER?

Utilities are shielded from an immediate backlash, partly due to customers' lethargy. Outrage at the higher costs has been limited and so is switching suppliers.

BDEW says while some 20 percent of customers have left their former monopoly supplier since liberalization 10 years ago, some 41 percent opted for basically the same old contracts offered by traditional firms in new guise and 39 percent changed nothing.

"Many utility companies still bet on the customers' inaction," said Thorsten Storck, spokesman for the internet portal Verivox, which compares prices and encourages switches.

But analysts studying sectoral changes more deeply see a growing number of customers who can afford, for example, green power at a premium and who are interested in self sufficiency and control of what type of energy they consume.

"I would go as far as saying the readiness of such customers to study alternative power supply models such as decentralized supplies is enhanced by higher prices," said Wolfgang Haag, a partner at consultancy A.T. Kearney.

(Additional reporting by Catherine Hornby in Amsterdam)


[Green Business]
EU carbon futures rise as oil firms
Tue Dec 1, 2009 10:13am EST

LONDON (Reuters) - The benchmark contract for European Union carbon emissions futures rose two percent on Tuesday after a fairly steady morning's trade as oil prices firmed, traders said.

The Dec-09 contract for EU Allowances rose by 1.98 percent to 13.40 euros ($20.15) a tonne at 1402 GMT, with heavy volume at 4,194 lots.

"It's mainly due to oil and someone was aggressively buying this morning which has ramped prices up," said an emissions trader.

Compliance buyers such as utilities were not involved in the buying activity, another trader said.

U.S. oil climbed to $78 a barrel on Tuesday, adding to the previous session's advance, as concern eased that Dubai's debt problems would set back the global economic recovery.

There could be also increased volatility as OTC contracts expire on Tuesday, other traders said.

For the coming week, the benchmark EUA contract should trade around 13 euros a tonne, and certified emissions reductions (CERs) around 12 euros, Societe Generale/orbeo analysts said.

"We expect a range-bound week a bit lower than present levels," Societe Generale/orbeo analyst Emmanuel Fages said in a research note.

Traders said news of opposition plans to block an Australian carbon scheme was not a surprise and was not affecting carbon prices on Tuesday.

Australia's plans to cut carbon emissions headed for defeat in a hostile Senate after the elevation of a new opposition leader against carbon trade laws set a trigger for an early 2010 election.

New Liberal opposition leader Tony Abbott said conservative senators, many of them climate change sceptics, would reject Rudd's emissions trading laws if they were not deferred until early 2010.

German Calendar 2010 baseload power on the EEX was down 0.37 percent to 43.65 euros per megawatt hour.

CERs were up 26 cents or 2.13 percent to 12.46 euros a tonne.

Trading exchange BlueNext and financial services company Citi will auction 200,000 Emission Reduction Unit (ERU) auction in the first half of January 2010, the companies said on Tuesday.

Until now, most ERU trades have been done over-the-counter which has led to complaints about the lack of transparent pricing in the market.

(Reporting by Nina Chestney; Editing by xxx)

news20091202reut3

[Top News] from [REUTERS]

[Green Business]
EPA delays action on more ethanol in gasoline
Tue Dec 1, 2009 11:23am EST
By Tom Doggett

WASHINGTON (Reuters) - Newer American cars will likely be able to handle higher ethanol blends in their gasoline but the decision to approve an industry request to change the fuel mix will have to await final testing next year, the U.S. Environmental Protection Agency said on Tuesday.

The EPA was supposed to decide by December 1 on a petition from Growth Energy and 54 ethanol manufacturers to let gasoline contain up to 15 percent ethanol.

While farmers who provide the corn to make ethanol also support the initiative, automakers asked the EPA during the summer not to approve higher blends until the agency had test results showing the fuel would not damage vehicles.

The EPA said it needs more time to review test data on the effects a higher ethanol ratio would have on vehicles. U.S. gasoline is now approved to contain up to 10 percent ethanol, which is made mostly from corn.

The EPA expects to have final vehicle testing data on the effects of higher-blended ethanol by mid-June, according to a letter to Growth Energy that the EPA posted on its website.

But the agency said initial tests show that vehicles built after 2001 "will likely be able to accommodate" gasoline blended with as much as 15 percent ethanol, commonly known as

E15.

Growth Energy said it welcomed the EPA's announcement, claiming it indicates the agency was preparing to approve E15 upon the completion of ongoing tests next year.

"We are confident the ongoing tests will further confirm the data we submitted in the Growth Energy Green Jobs Waiver and silence those critics, allowing more American-produced energy to enter the market," said Tom Buis, chief executive of Growth Energy.

The Renewable Fuels Association, the trade group for ethanol producers, slammed the EPA's delay, saying it "threatens to paralyze" the U.S. ethanol industry.

The group said the EPA should immediately approve intermediate ethanol blends, such as gasoline containing 12 percent ethanol, while the agency finishes its testing on E15.

They said because the EPA has never allowed U.S. automakers to use gasoline blends with more than 10 percent ethanol, companies had no reason to design, test or provide warranties for vehicles that use higher ethanol blends.

Farm groups and the struggling ethanol industry have been pressing for the higher standard as it would boost demand for their product.

But there is also pressure from some critics who oppose the idea of using food -- in this case corn -- to produce fuel.

The Obama Administration has been a supporter of the ethanol industry because it displaces the need for some oil imports.

Some green groups, however, dispute ethanol is good for the environment because it comes mostly from corn in the United States and modern farming uses a lot of petroleum-based fuel to run machinery. So a lot of energy is used to make a gallon of ethanol.

Energy legislation passed by Congress in 2007 set binding targets for fuel blending each year, with ethanol use rising from 4 billion gallons in 2006 and 11.1 billion gallons in 2009 to 20.5 billion by 2015 and 36 billion by 2022.

It was also envisioned that the ethanol industry would gradually move away from using corn to produce fuel and produce cellulosic ethanol made from switchgrass and farm waste.

(Additional reporting by Ayesha Rascoe and Timothy Gardner; Editing by Russell Blinch and Walter Bagley)


[Green Business]
Coal concerns lead U.S. climate bill challenges
Tue Dec 1, 2009 11:56am EST
By Richard Cowan

WASHINGTON (Reuters) - For anyone trying to understand why the United States is having such a hard time joining an international effort to combat global warming, a short drive west from Washington to one of the smaller states in the country might explain a lot.

Even though it has a population of only 1.8 million people in a country of 308 million, West Virginia is not to be ignored as Congress struggles over ways to reduce carbon emissions blamed for international climate change problems.

Coal is buried in nearly every nook of its 24,231 square miles (62,758 square km) and any legislation to reduce the role of dirty energy sources such as coal could hit the state hard.

The politics surrounding coal may be among the thorniest in the U.S. effort to craft climate change legislation, and the hurdles show why President Barack Obama will need to keep one eye on Charleston, the West Virginia capital, even as he travels to Copenhagen for international climate negotiations this month.

West Virginia's two U.S. senators, like several of their fellow Democrats from other major coal states, say they want to do something to ease carbon pollution -- with conditions.

"We have leverage and bargaining position for a good reason because our people essentially are going to pay this price," Senator John Rockefeller recently told reporters.

And so a less ambitious timetable for reducing U.S. carbon emissions than currently being debated and more government concentration on developing "clean coal" technologies are essential for the support of Rockefeller and other senators.

"I know my coal miners," Rockefeller said, adding that workers in West Virginia view "cap-and-trade to be a really bad word."

As a result, Rockefeller wants Congress to allow more time to educate voters about how the complicated regime would work allowing companies to trade pollution permits with each other.

Throughout the Midwest and South of the United States, coal and coal-fired power plants are central to local energy production and to jobs.

Paul Sracic, chairman of the political science department at Youngstown State University in Ohio, a coal state that also has suffered significant manufacturing job losses in recent decades, said, "While legislation aimed at combating global -- emphasize global -- warming might garner support in theory, it quickly loses its popularity if it is thought to cost local -- emphasize local -- jobs."

OBAMA IN COPENHAGEN

Obama will arrive in Copenhagen on December 9 at the beginning of a two-week international global warming negotiating summit lacking Congress' backing for specific climate change actions the United States could pledge.

The White House last week said, however, that the U.S. would aim to cut its carbon emissions "in the range of 17 percent" by 2020, a goal set in legislation passed by the House of Representatives last June. Similar legislation is bogged down in the Senate.

In recent months, it became apparent that the 190 or so countries attending the Copenhagen summit would not be able to reach a final deal on new global carbon emission goals.

But the White House on Monday said Obama hopes he can help bring participants to the brink of a deal.

His attendance "certainly raises the stakes of the summit," said Frank O'Donnell, president of the U.S.-based Clean Air Watch. "It looked as if it would be pretty flat but Obama's presence puts it front and center, page one, around the world."

A strong performance also could jump-start legislation in the Senate, he added.

Even so, Obama will have to hit just the right chord in Copenhagen, offering enough to encourage other countries to negotiate a strong deal without promising a too-ambitious domestic plan that the U.S. Congress would refuse to ratify.

Obama's carbon-reduction goal would amount to a mere 3 percent cut from its 1990 emissions. The European Union, by contrast, promises to cut emissions by 20 percent below 1990 levels by 2020.

Why does the EU have the political will that could be lacking in the United States?

Coal, which is not as ubiquitous in western Europe as it is in much of the United States could be one reason. But there are others.

The U.S. Senate operates in ways that make it difficult for any major initiatives to move quickly. Instead of simple majority rule, at least 60 votes out of 100 are needed for important legislation to pass. And every senator's vote, whether he or she is from the gigantic state of California or the tiny state of Rhode Island, is equally weighted.

Other factors also may have contributed to the United States dragging its feet on climate change: The issue has gotten serious attention from the White House only in the past year with Obama's election; Washington has been fixated on reforming the U.S. healthcare system all year, putting climate change on a slower track; lately there have not been monster storms, like the 2005 Hurricane Katrina, that environmentalists could point to for faster action on climate change.

And with a U.S. economy badly in the doldrums, American lawmakers are not itching to cast votes on a bill that will raise energy prices, even if only marginally.

Meanwhile, the U.S. nuclear power industry is working hard to be included in any climate bill, as are domestic oil firms that want to expand offshore production even though that would do nothing to cut carbon emissions.

The Obama administration and Democratic leaders in Congress will try to cast the climate debate in economic terms, arguing that a move toward renewable energy will create jobs. It's an argument many refuse to buy so far.

Carol Browner, Obama's climate adviser, acknowledged the fight ahead. "It will not be easy," Browner said in a November 20 speech to an environmental group, adding, "There are a lot of people to educate in the towns and cities in this country."

(Editing by Cynthia Osterman)

news20091202reut4

[Top News] from [REUTERS]

[Green Business]
Knight Capital Group opens emissions trading desk
Tue Dec 1, 2009 12:23pm EST

LONDON (Reuters) - U.S.-based liquidity provider Knight Capital Group has opened an emissions trading desk, with Daniel G. Braun appointed head of carbon trading, the company said on Tuesday.

The company plans to hire additional emissions traders in London in 2010, a spokeswoman told Reuters.

Knight Capital will focus on trading EU Allowances and U.N.-backed certified emissions reductions futures and options, Braun said.

"I anticipate our client base will include compliance buyers," Braun said.

Prior to joining Knight, Braun was an advisor on carbon credit development and trading and has a background in energy trading. (Reporting by Nina Chestney; Editing by Keiron Henderson)


[Green Business]
Europeans could save planet for $3 a day: study
Tue Dec 1, 2009 1:03pm EST
By Pete Harrison

BRUSSELS (Reuters) - Europeans could help cut climate warming emissions to much safer levels for just 2 euros ($3) each per day, but they would also have to cut back on driving and meat eating, a report said Tuesday.

Other long-term changes would include using the train instead of flying for journeys of under 1,000 km, said the report by the Stockholm Environment Institute, commissioned by Friends of the Earth Europe (FOEE).

The study targets a European cut in climate-warming emissions such as carbon dioxide to 40 percent below 1990 levels over the next decade.

"It's not just about investment, it's also about lifestyle changes," said FOEE campaigner Sonja Meister. "This report shows one pathway that would see air travel in the EU cut by 10 percent by 2020 and travel in private cars by 4 percent."

"Travel by rail would rise by 9 percent, and meat consumption would be reduced by about 60 percent," she added.

The European Union has pledged to cut emissions of carbon dioxide, the main gas blamed for climate change, to 20 percent below 1990 levels by 2020.

It also says it will cut by nearly a third if other rich nations agree to follow suit when they meet for global climate talks in Copenhagen in December.

But many scientists say much deeper cuts are needed from rich nations to keep the climate temperature increase below 2 degrees Celsius.

Poorer countries preparing for Copenhagen say industrialized nations caused the climate problem in the first place and should cut emissions to 40 percent below 1990 levels.

That could be achieved in Europe for a cost of 2 trillion euros, or around 2 percent of cumulative gross domestic product (GDP) over the next decade, said the report.

"Put another way, this cost would be the equivalent of temporarily holding GDP constant for about one year before resuming normal growth," it added.

The cost equates to about 2 euros per European per day, but that does not take account of the positive impact of job creation and reduced spending on hydrocarbon imports.

True to FOEE's politics, the assessment excludes the use of nuclear energy or carbon capture and storage (CCS) technology that would allow European power suppliers to keep on burning coal. It also rules out most carbon offsetting.

Instead, it assumes Europeans will accept higher taxes and make major lifestyle changes -- something politicians have not yet dared demand.

Such lifestyle changes could be continued to 2050, leading to a 90 percent cut in emissions, said the report.

Journeys in private cars would be cut to 43 percent of all journeys by 2050, compared to roughly 75 percent today, while people would switch from air travel to rail for 80 percent of the flights being made today of less than 1,000 km.

Wind power would be scaled up from its current 3.3 percent share of generating capacity to 22 percent in 2020 and 55 percent in 2050.

(Reporting by Pete Harrison)


[Green Business]
Egypt eyes solar power exports, costs too high now
Tue Dec 1, 2009 3:02pm EST
By Maha El Dahan

CAIRO (Reuters) - Egypt, which plans to start its first solar power unit in 2010, said on Tuesday it wanted to expand solar power production for export but that costs of the technology would need to fall first to make it feasible.

The North African country, a gas and oil producer, aims to generate 20 percent of its energy from renewable sources by 2020. It already has installed wind capacity of 430 megawatts and is adding 120 megawatts by mid 2010.

Wind farms are expected to meet 12 percent of Egypt's power needs by 2020 but solar power projects have lagged.

"Solar energy is four times as expensive as energy generated from combined cycles so when this figure starts going down to three or two times as much, this is when we will see developing countries go heavily into the business," Electricity and Energy Minister Hassan Younes told Reuters.

"Exports are in our plan, but taking into consideration the development of suitable technology and its spread so that the price goes down," he added.

Egypt, whose population is concentrated on just 10 percent of its land, has ample desert areas to set up solar power units. The most populous Arab country is also situated in the sun belt where sunshine is available all year round for power generation.

Younes told a conference on renewable energy that Egypt could export to Europe via Libya and Tunisia, which are in turn linked with Morocco and Spain.

As a first step, Egypt would install capacity of 140 megawatts from its solar project south of Cairo at Koraymat for domestic consumption by the end of 2010, Younes said.

European governments, which depend significantly on Russia for energy, are looking at renewables to cut their greenhouse gas emissions by 80 percent below 1990 levels by 2050. Some plans envisage importing solar power generated from Africa.

(Editing by James Jukwey)


[Green Business]
Dying to be green? Try "bio-cremation"
Tue Dec 1, 2009 4:49pm EST
By Nicole Mordant

VANCOUVER, British Columbia (Reuters) - Worried you haven't been green enough in life? Don't let death come in the way of a more eco-friendly you.

From coffins made of recycled cardboard to saying no to embalming chemicals that seep into the soil, people are increasingly searching for ways to make their final resting place a more environmentally-friendly one.

Now cremation, the choice today of a third of Americans and more than half of Canadians, is getting a green make-over.

A standard cremation spews into the air about 400 kilograms (880 pounds) of carbon dioxide -- a greenhouse gas blamed for global warming -- along with other pollutants like dioxins and mercury vapor if the deceased had silver tooth fillings.

On top of that each cremation guzzles as much energy, in the form of natural gas and electricity, as a 500-mile (800 kilometer) car trip.

Enter alkaline hydrolysis, a chemical body-disposal process its proponents call "bio-cremation" and say uses one-tenth the natural gas of fire-based cremation and one-third the electricity.

C02 emissions are cut by almost 90 percent and no mercury escapes as fillings and other metal objects, such as hip or knee replacements, can be recovered intact and recycled.

"The target audience are those people who buy organic salmon rather than farmed salmon. Those that buy a hybrid rather than a regular car," said Paul Rahill, president of the cremation division of Matthews International Corp.

The Pittsburgh, Pennsylvania-based company that makes caskets and other funeral products is planning the world's first commercial launch of human alkaline hydrolysis in January at a funeral home in St Petersburg, Florida.

The technique is not new but has only been used to dispose of laboratory animals and medical research cadavers at a few institutions.

Its commercial use has been held up partly because of its cost -- the equipment is four times as expensive as that of traditional cremation -- and because state and provincial legislation may need to be changed, especially laws governing what can be disposed of in the water system.

Overcoming peoples' squeamishness when they hear the process described, what Rahill calls the 'ick' factor, is also an obstacle.

The Catholic Church in parts of the United States has objected, saying the practice "is not a respectful way to dispose of human remains".

In alkaline hydrolysis the body is submerged in water in a stainless steel chamber. Heat, pressure and potassium hydroxide, chemicals used to make soap and bleach, are added to dissolve the tissue.

Two hours later all that's left is some bone residue and a syrupy brown liquid that is flushed down the drain. The bones can be crushed and returned to the family as with cremation.

"This is the first new alternative to come into the (cremation) market in over 100 years," said Allen Bessel, president of Transition Science, a Toronto-based company that owns the exclusive rights to the process in Canada. It is targeting a commercial launch next spring.

"It is very quiet, there is no noticeable odor that comes from it and there is no emission. The concerns of area residents would be much less if (an alkaline hydrolysis machine) was being installed than if a crematorium was built," Bessel said.

Although Rahill says the public response has been mostly positive, an attempt to introduce human alkaline hydrolysis in New York state a couple of years ago was opposed by the Catholic Church and others, and the bill was dropped.

news20091202reut5

[Top News] from [REUTERS]

[Green Business]
Australia carbon scheme immaterial to world prices
Tue Dec 1, 2009 3:03pm EST
By Michael Szabo - Analysis

LONDON (Reuters) - Defeat of Australia's emissions trading plans may temporarily dent political momentum ahead of next week's U.N. climate talks, but succeed or fail, the scheme is unlikely to affect global carbon prices until at least 2013.

The Australian government's cap-and-trade scheme, which limits greenhouse gas emissions by forcing polluters to buy permits, was headed for defeat in a hostile Senate on Tuesday after the election of a new opposition leader opposed to carbon trading laws.

European emissions traders said, regardless of whether some opposition members cross party lines and back the bill or it fails completely, an Australian scheme in its proposed form will have little immediate impact on carbon prices.

"This won't affect carbon prices much before 2013," said Trevor Sikorski, director of environmental market research at Barclays Capital.

"It's a political sideshow," said Simon Glossop of emissions traders CF Partners.

Australia's population of 21 million has the world's highest per capita carbon emissions, as the country is heavily reliant on coal, shipping and motor transport, so its environmental policies and carbon-cutting potential are closely watched.

Australian Prime Minister Kevin Rudd has struggled to get his climate change bill passed in the upper house, the Senate, before parliament adjourns until February, compromising with the opposition on key elements of the cap-and-trade scheme.

The bill would launch the Carbon Pollution Reduction Scheme (CPRS) from July 1, 2011, forcing Australia's 1,000 biggest polluting companies, representing 75 percent of the country's emissions, to buy carbon permits.

It also calls for coal-rich Australia's emissions to be cut by 5 percent by 2020, or by 25 percent from 2000 levels if nations agree an ambitious climate change pact at upcoming U.N.-backed talks in Copenhagen.

Last week, China and the United States, the world's two largest emitters, boosted a new agreement's hopes by pledging reduction targets ahead of the December 7-18 summit.

Observers said this new momentum could be stalled by the Australian bill's defeat, but any effect would be short-lived.

"It's not a major setback ... By next Monday people will have forgotten what's happened in Australia and will be fighting in the pits in Copenhagen to get a new agreement," said Andrei Marcu, head of regulatory and policy affairs at Geneva-based traders Mercuria Energy.

LITTLE INFLUENCE ON U.S. DEBATE

Marcu said a defeat of the Australian CPRS will also be of little concern to American lawmakers, who are also mulling over new domestic climate legislation.

"It may give more courage to those not in favor of it, but the bill's failure would have little influence on the U.S. debate," Marcu added.

"Australia will end up passing a scheme eventually, but it will be heavily influenced by what the U.S. does."

Under the bill, Australia prohibits the use of carbon permits from other markets to meet emissions targets, so allowances from the European Union's $92 billion emissions scheme, seen as the global benchmark for carbon prices, will not be directly affected, traders said.

The CPRS does allow for unlimited importing of international carbon offsets issued under the Kyoto Protocol, called Certified Emissions Reductions (CERs).

But with a A$10-a-tonne ($9.24) price cap in the Australian scheme's first year, compared to CERs forecast to trade around 16-18 euros ($24-$27) by 2012, no firms are expected to buy CERs for compliance in 2011.

"From July 2011 to July 2012, the scheme is essentially a A$10 tax so there will be no CER buying at all from Australia," Sikorski said.

"In 2012 there will be a price cap that could be below CER prices, so this is unlikely to affect pre-2013 prices ... At best we could expect CER demand of around 25 million tonnes in 2013, based on an annual emissions cap of 500 million."

With Kyoto set to expire in 2013, the future of the CER market is unclear and investors are reluctant to make long-term commitments.

Regardless, analysts have warned that the scheme's emissions caps were weakened by compromises made between Rudd's Labor party and the opposition Liberals, which called for more free permits to be handed out to industry.

The scheme's caps have yet to be set, so more free permits under generous caps could lead to low carbon prices.

(Additional reporting by Nina Chestney; Editing by Anthony Barker)


[Green Business]
U.S. ethanol industry set to win battle of the blend
Tue Dec 1, 2009 6:15pm EST
By Chuck Abbott and Timothy Gardner - Analysis

WASHINGTON (Reuters) - The U.S. ethanol industry, darling of the powerful U.S. farm lobby, is on track to win approval for higher allowable blend rates that could eventually help it sell billions of gallons more of the fuel a year.

The U.S. government has hinted it may approve higher ethanol blends in gasoline as soon as mid next year, despite howls from the auto industry that a higher ethanol blend might ruin car engines and concerns from some anti-hunger activists who say making fuel from food is folly.

The Environmental Protection Agency said on Tuesday that cars built since 2001 will "likely" be able to burn fuel blends of up to 15 percent ethanol. The current allowed level of ethanol in regular gasoline for all cars is 10 percent.

EPA said if government tests on burning high blends in cars "remain supportive" it could approve by the middle of 2010 a requirement for gasoline containing 15 percent ethanol -- known in the industry as E15 -- for cars built since 2001.

"It sounds like an implicit promise to go to E15," said analyst Mark McMinimy, at the consulting firm Washington Research Group.

The EPA also said it would take steps to address labeling issues on fuel pumps associated with the higher blends. Analysts read that pledge as a further signal that the agency would eventually approve the higher blends.

Growth Energy, the trade group that filed a petition with the EPA to raise the blend level, said E15 could put an additional 7 billion gallons of ethanol on the market in the near term.

Ethanol production has mushroomed this decade and is set to keep growing, aided by mandates that require use of the renewable fuel, which in the United States is mostly distilled from corn.

"EPA's punt doesn't change the headline, which is a trend toward more ethanol, it just changes the timing of the decision," said Mark Routt, senior staff consultant at KBC Advanced Technologies.

WIDE SLICE OF THE ECONOMY

Routt said the EPA was correct to delay its decision until testing on vehicles was completed. He noted that industries comprising a wide slice of the economy, from oil refining to farming, to engine making, depend on making sure higher blends do not hurt car engines.

Ethanol was once widely touted as a green fuel, but the industry is now under criticism for diverting a third of the U.S. corn crop away from the food supply. Critics say this will worsen food shortages, raise prices and hurt the poor.

The U.S. farm lobby has broad political support, with strong allies in the Obama administration as well as the previous administration of former President George W. Bush.

A host of environmental and food manufacturing groups applauded the delay but ignored signals that the EPA was giving the green light to the ethanol industry.

"Raising ethanol blend percentages without testing what it would do to air quality and vehicle engines is like going in for surgery before getting a diagnosis," said Jeremy Martin, a senior scientist at the Union of Concerned Scientists.

Frank O'Donnell, president of Clean Air Watch in Washington, said the government's move could end up confusing consumers at the pump.

The EPA "appears to be on a course that ultimately might permit two types of ethanol blends: E15 for new cars, and E10 for older cars as well as things such as boats and lawnmowers."

Supporters of the ethanol industry maintain that corn-based ethanol is only a stepping stone to more advanced fuels like cellulosic ethanol which will be made from non-food feedstocks such as wood chips.

Some said the EPA's decision could cause problems in the drive for such advanced biofuels. Routt said the delay on E15 could depress investment in cellulosic ethanol, because the supply of conventional ethanol could become glutted unless more of it is allowed to be blended into gasoline.

"If a mature business like corn ethanol isn't economic then that could spell trouble for cellulosic which is unproven and untested," said Routt.

Cellulosic ethanol plants are expensive and production lags behind the mandates.

Lenders are leery of investment in cellulosic ethanol because of the recession and an industry shakeout that included the bankruptcy of one of the largest U.S. ethanol producers last fall.

But Divya Reddy, an analyst at the Eurasia Group, said reaction was overstated and delay was not a blow to cellulosic which U.S. mandates say will eventually become a bigger market than corn ethanol.

"It would only be a problem if the EPA rejected E15 outright, and that was not the signal we got," she said.

(Editing by Russell Blinch and David Gregorio)

news20091202reut6

[Top News] from [REUTERS]

[Green Business]
FACTBOX: Australia's failed carbon trading scheme
Wed Dec 2, 2009 1:31am EST

(Reuters) - Australia's parliament rejected laws to set up a sweeping carbon emissions trade scheme on Wednesday, scuttling a key policy of Prime Minister Kevin Rudd and setting a trigger for an early 2010 election.

Here are some facts about how the failed carbon-trade scheme would have looked.

* The Carbon Pollution Reduction Scheme was set to have started on 1 July, 2011. Under the scheme, about 1,000 of Australia's biggest polluting companies and operations would have had to purchase carbon permits, covering 75 percent of national emissions.

* The government committed to an unconditional emissions cut of 5 percent by 2020. The target could have been increased to 25 percent if the world agreed to a tough new climate pact to expand or replace the U.N.'s Kyoto Protocol.

* The "cap-and-trade" scheme required polluters to buy a permit for every tonne of carbon produced. The government proposed a flat carbon price cap of A$10-a-tonne on start-up. Full auctioning and trading of permits was to have started from 2012.

* The government estimated a carbon price of A$26 a tonne in 2012-13 due to the strong Australian dollar.

* The scheme included compensation for businesses and households, with money raised from permits helping taxpayers cope with increased costs for fuel and electricity. The government had also promised to cut fuel excise to match increases under emissions trading, while welfare payments would have been increased as well.

* Additional expenditure measures would initially have cost A$1.28 billion and $7.01 billion over the period 2019-20. A lower estimated carbon price meant a reduction in assistance to households that would have totaled A$5.76 billion to 2019-20.

ASSISTANCE TO KEY SECTORS

* Some polluters exposed to overseas export competition would have received assistance in 2011-12 at 94.5 percent for high emission intensive activities, 66 percent for moderate emission intensive activities and decline at 1.3 percent per annum.

* Coal Sector: A total of A$1.5 billion in transitional assistance over five years, up from A$750 million previously.

* Voluntary Action: The government would have ensured the CPRS took into account voluntary action by households to cut emissions.

* Electricity sector: An increase of A$4 billion in assistance, increasing the total value of permits to A$7.3 billion.

* Electricity Prices: A$1.1 billion would have been allocated to assist medium and large manufacturing and mining businesses with CPRS-related rises in electricity prices in the early years.

* Agriculture: Farmers would have been exempt from the scheme, but would have been able to take part in the market for carbon offset.

* Food processing: A five-year, A$150 million assistance package would have been established within a Climate Change Action Fund.

* Cost of Living: Living costs would have risen by around 0.9 percent, although power bills would have risen by 16 percent. Gas and other household energy bills were seen up 9 percent.

* Households: Around 90 percent of low-income households would have received assistance equivalent to 120 percent or more of their cost of living increase under the scheme.

(Reporting by James Grubel and David Fogarty; Editing by Jonathan Standing)


[Green Business]
SNAP ANALYSIS: Rudd handed election option on climate
Wed Dec 2, 2009 1:31am EST

CANBERRA (Reuters) - Australian Prime Minister Kevin Rudd has been handed a trigger for an early election, giving him the option of going to the polls any time from early 2010 in order to resolve a deadlock over his carbon trade scheme.

The carbon emissions trade scheme was a key plank of Rudd's political agenda and plan to curb greenhouse gas emissions, and was a central promise of his 2007 election win.

This is how the issue might now play out.

* Rudd's carbon trade laws are unlikely to be revived until after an election. Normal elections for the lower house and half the Senate are due in late 2010.

* But Rudd could call a double dissolution, of the full Senate and House of Representatives, to clear the deadlock on the carbon bills. If he wins, he can then push the deadlocked package of 11 bills through a special joint sitting of both houses of parliament, where he would normally have a clear majority.

* The most likely dates for an early election would be in March or April 2010. But Rudd is a cautious politician, and will be wary about going early. Polls suggest Rudd would win, but he could find it very tough to sell a policy that is expected to drive up power bills and increase costs for business.

* The election of social conservative Tony Abbott as opposition leader on Tuesday further clouds the outlook. Abbott would be expected to have a honeymoon period of popularity in the polls, making an early election a risk for Rudd.

* Rudd has said he would prefer to serve out his full term. That would enable him to focus on other reforms and deliver another budget in May. The government has planned a major debate in 2010 on tax reform, with the head of Treasury due to report options for change later in December.

* A snap election might throw economic policy up for grabs, with Abbott likely to campaign for firmer action against asylum seekers, more restrictions on trade unions, less government borrowing and potentially a firmer stand against gay marriage.

(Reporting by James Grubel)


[Green Business]
Q+A: What happens now to Australia's carbon-trade plan?
Wed Dec 2, 2009 1:35am EST
By James Grubel

CANBERRA (Reuters) - The parliamentary defeat of Australia's carbon-trade laws has handed Prime Minister Kevin Rudd a trigger for an election from early 2010 to salvage his emissions trading scheme and key climate policy.

WHAT HAPPENS TO THE CARBON BILLS NOW?

* Rudd plans to re-submit his carbon trade laws to parliament again in February, at the end of a forecast sizzling hot summer, giving climate skeptics in the opposition another chance to support the plan. The government may be hoping expected summer heatwaves and bushfires will harden public opinion in favor of tough action to curb carbon emissions.

WILL THERE BE AN EARLY ELECTION?

* The government is playing down the option of an early election and Rudd has repeatedly said he would prefer to serve out a full three-year term. Regular elections for the House of Representatives and half the Senate are due in late 2010. This is the most likely outcome, given the carbon trade bills will be given one more chance in parliament.

WHAT ARE THE BENEFITS OF AN EARLY POLL?

* With the carbon laws twice rejected by a hostile Senate, Rudd has the option of a double dissolution, of the full Senate and House of Representatives, to clear the deadlock on the carbon bills. Rudd can now call a double dissolution election any time until August 11.

* If he wins, he can then push the deadlocked package of 11 bills through a special joint sitting of both houses of parliament, where he would normally have a clear majority. He cannot call a joint sitting after a regular election.

WHAT ARE THE RISKS OF GOING EARLY?

* An early double dissolution election would make it easier for Greens, minor party and independent candidates to win seats in the Senate, which could make life more difficult for Rudd in the long term.

* Rudd is a cautious politician, and he will be wary about going early. Current polls suggest Rudd would win. But polls can shift quickly and he could find it tough to sell a policy that is expected to drive up power bills and increase costs for business.

* The election of social conservative Tony Abbott as opposition leader on Tuesday further clouds the outlook. Abbott would be expected to have a honeymoon period of popularity in the opinion polls, making an early election a risk for Rudd.

WHAT ARE THE BENEFITS OF A LATER ELECTION?

* Rudd can call a regular election of only half the Senate and the full House of Representatives any time from July 1, 2010. A regular election would likely see Rudd's Labor and the Greens pick up Senate seats at the expense of opposition conservatives, giving Rudd a better chance of controlling the upper house.

* Rudd would be keen to deliver another budget in May, so his government can be seen to rein in spending, countering an opposition attack on his big spending government and economic management.

* A late 2010 election would also allow the government to run a major tax debate throughout 2010. The head of Treasury is due to report options for tax change later in December. A late election would allow the government to consider its options and to go an election with an offer of vote-winning tax cuts or major reforms.

news20091202reut7

[Top News] from [REUTERS]

[Green Business]
Australia carbon laws fail, election possible
Wed Dec 2, 2009 1:35am EST
By Rob Taylor

CANBERRA (Reuters) - Australia's parliament rejected laws to set up a carbon trading scheme on Wednesday, scuttling a key climate change policy of Prime Minister Kevin Rudd and providing a potential trigger for an early 2010 election.

Acting Prime Minister Julia Gillard said the government would re-introduce the carbon trade bills in February to give the opposition Liberal Party one more chance to support the scheme, adding the government was not looking at an early election.

"Today the climate change extremists and deniers ... have stopped this nation taking action on climate change," Gillard told reporters.

"This nation is one of the hottest and driest continents on Earth. We are going to be hit particularly hard and early by climate change," she said. "We are determined to deliver the Carbon Pollution Reduction Scheme, we are determined to deliver real action on climate change."

The second rejection of the carbon-trade legislation by a hostile Senate on Wednesday gave Rudd a legal trigger to call an election that could come as early as March or April 2010, and to then ram his laws through a special joint sitting of both houses of parliament if he was returned to power.

But Gillard played down early election speculation.

"The prime minister has made it very clear that it is his intention to have the parliament go full term," she said.

The prime minister, who is overseas, had hoped to take his carbon-trade scheme to next week's global talks in Copenhagen, where world leaders will seek a new agreement to curb greenhouse gas emissions.

The emissions trading scheme (ETS) would have been the biggest outside Europe, covering 75 percent of Australian emissions and starting in July 2011.

The Senate rebuff throws the future of carbon trading in Australia into confusion, creating new uncertainty for business, which had sought clarity from the political debate.

"From the point of view of a lot of businesses in Australia they're now back in the dark. No one knows what is coming next," said Tim Hanlin, chief executive of the Australian Climate Exchange.

"For a lot of companies that are going to make investment decisions as we come out of recession, it will be more difficult with no certainty about the carbon price."

Australian electricity prices fell after the Senate rejected the legislation, with the 2011 contract falling 3.7 percent to A$44 per megawatt hour in thin trade.

The "cap and trade" carbon scheme would have forced big polluters, particularly in the coal and electricity sectors, to buy carbon emission permits. Rising permits prices would act as an incentive to reduce greenhouse gases.

The scheme was defeated in the Senate, by 41 votes to 33, by opposition climate skeptics and Greens who wanted tougher emission reduction targets. Two Liberals voted for the laws. The government only needed seven opposition votes to pass the laws.

The Liberal Party last week agreed to back the carbon laws, but climate change skeptics forced a leadership and policy change on Tuesday. "We won't have an ETS as part of our policy going to the next election...," Liberal leader Tony Abbott said Wednesday.

MARCH ELECTION?

Senior opposition lawmaker Christopher Pyne said he expected a dissolution of both houses of parliament and an election early in the new year, ahead of polls due around late November.

"I think the election will be on March 6," Pyne said.

Political scientist Dr Rick Kuhn, of the Australian National University, said reintroduction of the bills would maintain pressure on the Liberal Party while keeping open the option of calling an early election.

"It's more likely that they are keeping the pressure up on the Liberals, driving a wedge further inside the Liberals," he said. "I don't think the government's bluff has been called. I think they are in a very, very strong position."

Bookmakers Centrebet said the odds of a Rudd victory at the next election lengthened for the first time in several months after the carbon laws were defeated, to A$1.22 from A$1.15 -- meaning a A$1 stake would win A$1.22 -- while odds of an opposition win shortened to A$4.10 from A$5.00.

Market analysts believe defeat of Australia's emissions trading plans could temporarily dent political momentum ahead of next week's U.N. climate talks, but the impact is unlikely to affect global carbon prices until at least 2013. [nSYD445124]

European emissions traders told Reuters that regardless of whether some opposition rebels backed the government's bill or it failed completely, an Australian scheme in its proposed form would have little immediate impact on carbon prices.

Australia's population of 21 million has the rich world's highest per capita carbon emissions. It is heavily reliant on coal, shipping and motor transport, so its environmental policies and carbon-cutting potential are closely watched.

(Additional reporting by James Grubel in CANBERRA and Jonathan Lynn in GENEVA; Editing by Michael Perry and Alex Richardson)


[Green Business]
Global warming threatens China harvests: forecaster
Wed Dec 2, 2009 3:46am EST
By Chris Buckley

BEIJING (Reuters) - Droughts and floods stoked by global warming threaten to destabilize China's grain production, the nation's top meteorologist has warned, urging bigger grain reserves and strict protection of farmland and water supplies.

Extreme weather damage can now cause annual grain output in China, the world's biggest grain producer, to fluctuate by about 10 to 20 percent from longer-term averages.

But with global warming intensifying droughts, floods and pests, the band of fluctuation in annual production could widen to between 30 and 50 percent, Zheng Guoguang, head of the China Meteorological Administration, wrote in a new essay. He did not say how long it might be before that could happen.

A stretch of especially bad weather for farming conditions could be disastrous for the world's most populous nation, Zheng wrote in the latest issue of Seeking Truth (Qiushi), the ruling Communist Party's main magazine, which was published on Tuesday and reached subscribers on Wednesday.

"If extreme climatic disasters occur twice or more within five years -- for example, major drought over two or three years -- then the impact on our country's economic and social development would be incalculable," wrote Zheng, who plays a role in developing China's climate change policies.

Zheng's warning appeared days before governments gather in Copenhagen seeking to forge the framework of a new agreement on fighting global warming.

As the world's biggest greenhouse gas emitter, China will be a crucial player in those talks. Last week the government announced emissions goals for the next decade.

Zheng's blunt words underscored the hard choices facing Beijing, as both a big polluter and a vulnerable victim of global warming. He is a member of a "leading small group" charged with developing the government's policies on climate change.

FARMING POPULATION

A vast developing country with a farming population of some 750 million, China is also one of the nations most vulnerable to global warming, wrote Zheng. He urged greater attention to adapting to unstoppable shifts in temperatures, rainfall and extreme weather.

China should make a priority of "reducing the impact of global warming on the country's food security, and strengthening the capacity of agriculture to withstand climatic risks," wrote Zheng.

China's grain production has recently reached record levels, despite damage from droughts, floods and frost. In 2008, China enjoyed a fifth straight year of bumper harvests, with grain output at a record 525 million tonnes. U.S. output over the 2007-08 growing year was 412 million tonnes.

Citing previously published research, Zheng wrote that by 2030, China's crop productivity could be 5 to 10 percent lower than it would be without global warming.

While rising temperatures may extend potential growing times and areas for some crops, especially in northeast China, the accompanying rise in evaporation rates is likely to reduce water supplies, undercutting any increases in crop yields, wrote Zheng.

Without adequate adaptive measures, in the second half of the century wheat, rice and corn production could fall by as much as 37 percent of recent averages, he wrote, citing earlier research.

But China "cannot depend on the international marketplace" to make up for these potential shortfalls, because global warming would also erode farming productivity in many parts of the globe, Zheng wrote.

Instead, the government should focus on expanding domestic grain reserves, protecting farmland, developing water-saving technology for farms, and boosting farmers' productivity, he wrote.

(Editing by Ken Wills and Alex Richardson)