news20100113reut1

[Top News] from [REUTERS]

[Green Business]
LONDON
Mon Jan 11, 2010 12:48pm EST
UK's first wind farm in 12 mln stg overhaul

LONDON (Reuters) - Britain's first commercial wind farm will be repowered, replacing its aging turbines with more efficient ones under an 11.8 million pound ($19.1 million) deal announced by Good Energy Group plc on Monday.

The Delabole wind farm, which sits on the outskirts of one the highest villages in Cornwall, south west England, began generating electricity in 1991.

The package includes 9.6 million pounds in debt finance from the Co-operative Bank and 2.2 million pounds in equity from Good Energym, and will see the installation of four more effective Enercon turbines to replace the 10 Vestas ones, which are nearly 20 years old.

The project is expected to be completed by the end of 2010.

Upon completion, the wind farm's capacity is expected to rise some 2.5 times to around 9.2 megawatts, enough to power over 7,800 homes.

Good Energy shares were up 3 pence or 5.5 percent at 58 pence late on Monday.

(Reporting by Michael Szabo; Editing by Sue Thomas)


[Green Business]
Kevin Krolicki
DETROIT
Mon Jan 11, 2010 5:14pm EST
GM confirms plans to build Volt-based Cadillac

DETROIT (Reuters) - General Motors Co will build a Cadillac version of its highly anticipated battery-powered Chevy Volt sometime in 2013 or later.

The Cadillac Converj will be the second GM vehicle built on the automaker's system combining a lithium-ion battery pack with a traditional engine as backup, GM Vice Chairman Bob Lutz said late on Sunday.

The rechargeable or plug-in Cadillac is "heading for production" and will be designed, like the Volt, to be driven for 40 miles on battery power alone, Lutz said.

The Volt is expected to be priced near $40,000. The Cadillac variant will use technology developed for the Volt and will be aimed at consumers "who don't mind paying a large price for a luxury vehicle," Lutz said.

He said production plans for the Converj had yet to be determined but that it would not go on sale before 2013.

The comments from Lutz, who was speaking at an event organized by the Society of Automotive Analysts in Detroit, marked the first indication of the next step in GM's plug-in hybrid development efforts since the shake-up in the top leadership of the automaker late last year.

GM showed off a version of the Converj at last year's Detroit auto show but it had been uncertain when or whether the vehicle would move forward under the new management team headed by Chairman and acting Chief Executive Ed Whitacre.

The Volt is scheduled to go on sale in November this year but will be limited to 50,000 or 60,000 units of production on an annual basis at a maximum, Lutz said.

GM executives have said that they expect to lose money on the Volt because of its high development costs and the cost of its battery, estimated near $15,000 each.

For that reason, GM has said it intends to build a range of vehicles that will be based on the "Voltec" plug-in hybrid system to offset its costs over time.

The Volt, which GM has branded as an extended range electric vehicle, will be rechargeable at a standard outlet overnight. On longer trips, a small gas engine will kick in to send power to the battery to keep it from being depleted.

"First-generation vehicles are hard to make profitable," Lutz told reporters.

Lutz said that despite the relatively high price expected for the Volt "near $40,000," tax credits and other incentives from employers would make the cost closer to $30,000 for many consumers.

"We will have no trouble disposing of 40,000 to 50,000 units per year at those prices," Lutz said.

The Volt has been the centerpiece of GM's effort to reinvent its public image and show that it can compete with rivals led by Toyota Motor Corp on the next generation of hybrid technology.

GM went through a fast-track bankruptcy last year with financial backing from the Obama administration and over $50 billion in government aid.

(Additional reporting by David Bailey; Editing by Muralikumar Anantharaman)


[Green Business]
MADRID
Tue Jan 12, 2010 9:08am EST
Spain's hydro, irrigation reserves soar after rain

MADRID (Reuters) - Spain's capacity to generate hydropower and irrigate crops rather than having to import gas and grain has soared to well above average levels, according to the latest official data on Tuesday.

Hydroelectric reservoirs held enough water to produce 11,860 gigawatt-hours, up 860 GWh from last week, the Ministry for the Environment and Rural Affairs said in a weekly bulletin.

With total demand for electricity logged by national grid operator REE running at 252,000 GWh a year, that would be enough by itself to supply the country for 17.2 average days.

Spain suffered a drought for most of 2009, but heavy rain since December has filled reservoirs to 15.8 percent above average levels for the past 10 years and boosted hydropower's share of the generation mix.

Gas-powered generators have meanwhile been producing less, which combined with slow demand for electricity has undermined consumption in Spain, which needs to import more than 99 percent of its gas.

Spain is also the world's third-largest importer of liquefied natural gas, via six regasification plants.

Abundant supplies of hydro together with booming output from wind parks have recently helped drive down wholesale electricity prices to all-time lows.

HEAVY RAIN

The Ministry meanwhile tallied rainfall that was 83 percent above the historical average (1930-96) at 26.6 millimeters.

That in turn was enough to fill reservoirs for consumption, including agricultural use, to 57.3 percent from 53.0 percent last week.

Crops such as maize need irrigation to grow in Spain's harsh climate and rain helps replenish ground water needed for non-irrigated wheat and barley.

Even with a bumper domestic crop, Spain needs to import at least 10 million tonnes of grain from origins as far afield as Argentina and Ukraine to meet demand.

Farmers say recent rain has been very good for crop growth and green shoots are now visible in the country's grain belt, but they estimate plantings may have dropped by 5 percent from last year due to low farm-gate prices.

Rice, cotton and alfalfa -- which is used in animal feed -- also need irrigation.

(Reporting by Martin Roberts; Editing by Keiron Henderson)


[Green Business]
LONDON
Tue Jan 12, 2010 9:12am EST
EU carbon dips in investor selling drive

LONDON (Reuters) - European carbon emissions futures dipped on Tuesday as investors sold permits to entice industrial companies into selling to drive prices lower, traders said.

The benchmark contract for Dec-10 EU Allowances fell 13 cents or 0.90 percent to 13.05 euros a tonne at 1150 GMT, after dipping to an intra-day low of 12.78 euros in early trade. Volume was heavy at 4,358 lots.

"Players pushing up prices yesterday are now selling some of it. Support is 100 percent financial. There are no utilities buying -- they are waiting to see if they can sell at a better price," an emissions trader said.

EUA prices had been on the rise since last Thursday, due to prolonged cold weather in Europe, firmer UK gas prices and financial institutions covering short positions.

Prices have rebounded by 6 percent from an almost six-and-a-half month low on January 6.

"It's purely technical play. Some players want to see if they can spark selling from industrials but so far they have been much more subtle," the trader said.

Industrial companies with surplus EUAs due to reduced output during the economic downturn are expected to sell those permits heavily in the coming weeks.

"Just because you don't see them doesn't mean (industrial selling) is not happening. They are less under strain than last year and have more time to plan what they are doing," the trader added.

Prices fell to nearly 8 euros last February when cash-strapped industrials sell EUAs heavily.

A German EUA auction on the European Energy Exchange cleared at 12.71 euros a tonne on Tuesday. A futures auction will be held on Wednesday at 14.45 CET.

German Calendar 2011 baseload power on the EEX fell 50 cents or 0.97 percent at 50.85 euros. U.S. oil slid below $82 a barrel as a milder weather forecast in the U.S. Northeast signaled lower fuel consumption.

British gas prompt prices slumped by 5.88 percent to 36.00 pence per therm as Norwegian supply recovered, milder temperatures and lower U.S. prices.

Certified emissions reductions were down 14 cents or 1.22 percent at 11.35 euros with light volume at 192 lots.

(Reporting by Nina Chestney; Editing by xxx)

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[Top News] from [REUTERS]

[Green Business]
Pete Harrison and Darren Ennis
BRUSSELS
Tue Jan 12, 2010 10:37am EST
EU trade chief-designate rejects carbon border tariffs

BRUSSELS (Reuters) - The European Union should not impose border tariffs on goods from countries that fail to cut back their climate-damaging emissions, the EU's trade commissioner-designate said on Tuesday.

"I don't think that's the right approach myself," Karel de Gucht told members of the European Parliament, which will vote whether to approve the European Commission line-up on January 26. "It's an approach that will run into many practical problems."

Europe has pledged to cut its emissions of carbon dioxide, which are blamed for climate change, to a fifth below 1990 levels over the next decade.

But manufacturers worry that the cost of cleaning up factories and power-generators will make their products more expensive and less attractive than cheap imports from rivals in India and China.

Steel industry body Eurofer urged the new commissioners on Tuesday to secure a level playing field for EU industry.

"This is more urgent than ever before, given the failure of the Copenhagen climate change negotiations," said Eurofer director general Gordon Moffat.

Some politicians, particularly in France, have said that imposing border tariffs on goods from carbon-intensive manufacturing regions would help redress any imbalance. But De Gucht disagreed.

"The big risk is that there will be slippage into a trade war with people outbidding each other on such measures," said De Gucht. He called on politicians to stay within market laws while protecting the environment.

ENERGY TAXATION

He also told the European Parliament he supported the abolition of tariffs on environmental goods, such as wind turbines and solar panels, but did not envisage an agreement on the issue at the World Trade Organization.

De Gucht, who is Belgian, promised to try to convene a "coalition of countries" to eradicate taxes on green goods as part of the global fight against climate change.

In another hearing in the European Parliament, Algirdas Semeta, the nominee for tax commissioner in the new EU executive, underlined the importance of pushing through new rules on energy taxation within the EU.

"The energy taxation directive will be one of my first priorities in my future job," Semeta said. "I think in the future, if we would move forward with green taxation it would allow us to decrease taxation on labor."

Several EU countries such as Sweden and France favor the use of internal carbon taxes to persuade consumers to reduce their climate impact.

But some countries including Britain have always fiercely guarded their sovereignty on tax issues, suggesting any pan-European rules would be difficult to push through.

If approved by parliament, Semeta's team would write the new energy taxation rules from scratch. But he appeared to suggest they would mirror themes in a draft prepared by his predecessor that was never completed. That draft proposed taxing fuels according to their carbon dioxide content.

"CO2 tax...splits the energy taxation between the energy element and the CO2 element," said Semeta. "That will help us to establish clear pricing signals."

(Reporting by Pete Harrison, Darren Ennis and John O'Donnell; editing by Keiron Henderson)


[Green Business]
Christoph Steitz - Analysis
FRANKFURT
Tue Jan 12, 2010 10:45am EST
Cracks to show in SMA's solar inverter dominance

FRANKFURT (Reuters) - Solar shooting star SMA Solar, by far the world's No.1 maker of inverters, will face stiffer competition this year as industry outsiders are expected to take market share from the company.

For some, investing in Germany's SMA Solar has resulted in lavish returns, with its share price rising almost 150 percent in 2009, making it easily the top solar performer in the euro zone's largest economy and the world's biggest solar market.

With about half of the world's inverter market in its hands and through unmatched flexibility in production, SMA has been able to steer through the industry's oversupply and financing crisis much more effectively than module and cell makers.

Inverters are a key component in the solar industry, converting direct current generated from solar modules into alternating current.

At a time when peers are piling up massive losses, SMA hiked its outlook twice in 2009 and is set to become Germany's second-biggest solar company by revenue, compared with a ranking of fifth in 2008, surpassing Q-Cells and Conergy.

At a market capitalization of 3.4 billion euros ($4.94 billion), it is already Europe's second-biggest solar player behind Norway's Renewable Energy Corp's 28.4 billion Norwegian crowns ($5.07 billion), according to Thomson Reuters StarMine.

Most analysts remain bullish on the stock and think investors can still bet on a strong performance in 2010. But some see the first signs that the company's supremacy of the inverter business may be challenged by industry outsiders.

"Companies from the semiconductor industry are moving in such as Advanced Energy Industries. In addition, several huge corporations in various industries used to dealing with power are attacking the sector, such as General Electric -- which is already big in wind inverters and is now addressing solar -- ABB and Siemens," said Jon Sigurdsen, fund manager at Carlson, a DnB Nor unit.

Big industrial conglomerates are already flexing their muscles in the growing area of renewables, with Siemens taking over Israel's Solel Solar last October, shortly after Germany's Robert Bosch acquired Aleo Solar.

"Add to this big capacity expansion from existing players Sanyo, Schneider Electric and Satcon and it is clear why SMA Solar's leading position will at least be tarnished," Sigurdsen added.

SMA Solar in November said it had increased its share in the global market for solar inverters to 45-50 percent, far ahead of Kaco new energy GmbH, the global No.2, with a market share of less than 10 percent.

BofA Merrill Lynch analysts even put SMA's share for 2009 at 55 percent. However, they expect this share to decline by 7 percentage points in the current year.

EASY TO ENTER

The argument, analysts say, goes that it would be easy for big conglomerates to enter the inverter market -- estimated to grow to more than $4 billion in 2013 from $2.5 billion in 2008, according to research company IMS Research -- as the technology is seen as mature, minimizing potential development costs.

"The current inverter products on the market already have an efficiency typically in the 97-98 percent range, some even higher. Hence this figure is already very close to 100 percent, so there is only a certain amount of improvement that can be made," Carlson's Sigurdsen said.

But even if SMA's market share declines, 2010 still promises to be a winner for the company.

According to Thomson One Analytics, 2010 sales for SMA are expected to come in at 1.064 billion euros, which would still mean an increase of 15-25 percent based on the company's 2009 sales target corridor of 850-900 million euros.

In addition, the company's flexibility is seen as unique in giving it the competitive edge.

One analyst, who spoke on condition of anonymity, said about half of SMA's employees in the production area are part-timers, giving it an unparalleled advantage of being able to adjust capacity swiftly.

This view is shared by others.

"There is competition, but I would describe it as rather 'lethargic' since those companies have not reacted to market developments as flexibly as SMA," said LBBW's Anja-Katharina Bohlen, rated as the top analyst for SMA Solar by database StarMine, which weights analysts' projections based on their track record.

"In my view, SMA will be further able to reduce costs next year in connection with the launch of new products, and thus also reduce pricing," she added.

Youri Vorobiev, manager of Vontobel's Global Trend New Power fund, sees further upside to SMA's shares, and current share price development seems to confirm this view with SMA shares up about 10 percent in the year to date.

"In the short term, we might see some consolidation in SMA share price. However, given the fact that the management of SMA has raised FY2009 guidance twice already, it is equally conceivable that there will be further upside in the share price if SMA can deliver," he said.

($1=.6879 Euro)

($1=5.601 Norwegian Crown)

(Reporting by Christoph Steitz; Editing by Jon Loades-Carter)

[Green Business]
BRUSSELS
Tue Jan 12, 2010 2:21pm EST
EU trade chief nominee seeks green goods coalition

BRUSSELS (Reuters) - The European Union's trade chief nominee said on Tuesday he supports the abolition of tariffs on environmental goods, but does not envisage an agreement on the issue at the World Trade Organization.

Karel de Gucht told members of the European Parliament before they vote on his appointment that he would try to put together a "coalition of countries" to eradicate taxes on green goods as part of the global fight against climate change.

(Reporting by Darren Ennis; editing by Pete Harrison)

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[Top News] from [REUTERS]

[Green Business]
QUITO
Tue Jan 12, 2010 10:32pm EST
Ecuadorean minister resigns over Amazon project

QUITO (Reuters) - Ecuadorean Foreign Minister Fander Falconi quit on Tuesday after President Rafael Correa criticized the way he was negotiating a project to protect the Amazon rainforest and set a June deadline to close the deal.

"Falconi presented his resignation," a government statement said. He had served as the Andean country's chief diplomat since December 2008.

Under Correa's Yasuni initiative, OPEC-member Ecuador would leave 850 million barrels of oil, worth $6 billion, underground in its Amazon region as a contribution to countering climate change.

In return for not extracting the oil, Ecuador is looking to donor countries to pay it $350 million a year.

Falconi headed Ecuador's effort to get international support for the initiative, but Correa said on Saturday the negotiations with donor nations were being handled "shamefully."

The president said the committee headed by Falconi was not tough enough in negotiations and potential donors such as Germany and Belgium were attempting to dictate terms.

"We are not going to accept their conditions," Correa said late on Tuesday, hours after Falconi's resignation. "They can keep their money."

Correa said on Saturday the committee negotiating the Yasuni initiative has until June to strike a deal or his government will go ahead and exploit the oil reserves.

In his resignation statement, Falconi objected to placing the six-month time limit on the talks.

Ecuador says not touching the oil would avoid creating 410 million tonnes of carbon dioxide.

(Reporting by Alexandra Valencia, Writing by Hugh Bronstein)


[Green Business]
MILAN
Tue Jan 12, 2010 1:06pm EST
Italy's solar power capacity rises to 796 MW -GSE

MILAN (Reuters) - Italy's total capacity of the photovoltaic (PV) installations that turn sunlight into power has risen to 795.6 megawatts from 700 MW at the end of November, the state energy management agency GSE's data showed on Tuesday.

The number of PV installations on stream in Italy, a major solar power market in Europe, rose to 60,963 at present from 56,285 at the end of November, according to GSE's regularly updated data on its Web site www.gse.it

GSE would publish a consolidated data for 2009 in February which is likely to show the total capacity reaching 900 MW as was previously expected, a GSE spokeswoman said.

Last minute updates of the data on grid connections in December may bring the total 2009 figure close to 1,000 MW, Italy's PV association GIFI said in a separate statement.

PV installations mushroomed in Italy from about 22 MW in early 2007 after the government launched a new incentive plan that was among the most generous in Europe.

The government has been working on a new incentive scheme because a 1,200 MW cap on capacity to be covered by incentives under the current regulations is expected to be reached next year. It intends to cut incentives to ease the budget burden.

GIFI has proposed the government to raise the cap on incentives to 8,000 MW in the 2011-2015 period and to 15,000 MW until 2020 and improve permitting procedures, it said.

(Reporting by Svetlana Kovalyova)


[Green Business]
Charles Abbott
SEATTLE
Tue Jan 12, 2010 8:24pm EST
U.S. farm group: Stop EPA on greenhouse gases

SEATTLE (Reuters) - The largest U.S. farm group called on Congress on Tuesday to prevent the government from regulating greenhouse gases if lawmakers kill climate change legislation.

The 6-million-member American Farm Bureau Federation (AFBF) also underlined its firm opposition to legislation to reduce emissions of carbon dioxide and other gases blamed for boosting global temperatures.

In their first item of policy work, delegates at the AFBF annual meeting voted to support "any legislative action" to suspend authority of the Environmental Protection Agency to regulate greenhouse gases under air pollution laws.

The EPA cleared the way for such regulation a month ago by ruling that greenhouse gases endanger human health.

It offered a route to control greenhouse gases, if Congress does not pass a climate law. AFBF staff say the Senate is unlikely to pass a "cap and trade" climate bill this year.

At least one bill is pending in the House to prohibit EPA regulation of greenhouse gases. Senators say they may offer amendments to do the same thing.

Delegates applauded after Phil Nelson, president of the Illinois Farm Bureau, read a 1-1/2-page critique of climate legislation, which included a warning that EPA regulation "would significantly burden all sectors of the economy" as well as drive up food prices.

Nelson's resolution was adopted on a unanimous voice vote.

"I think the delegates wanted to send a strong message by passing it," he said afterward.

"They don't have enough lipstick to put on that pig (climate legislation) to make it look good," said Missouri Farm Bureau president Charles Kruse.

While opposing a mandatory cap-and-trade system, the AFBF backs voluntary carbon credit trading, development of alternative energy sources and incentives to industries trying to reduce emissions.

Four dozen climate scientists asked the AFBF in a letter last week to divorce itself from "climate change deniers."

Farmers are dubious of Obama administration analyses that say higher fuel and fertilizer costs resulting from climate legislation would be outweighed by revenue from contracts to offset greenhouse gases by planting trees and crops that capture carbon.

Higher production costs are certain, but many farmers will not see any income from carbon sequestration, Nelson said.

An Agriculture Department study says up to 8 percent of crop and pasture land, or 59 million acres, would be converted to woodlands by 2050 because carbon-capturing trees would be more profitable than crops.

The USDA is taking a second look at its analysis because of complaints about the economic models that were used.

Delegates also voted to "strongly support" creation of a stopgap disaster aid program for losses due to bad weather in 2009. Arkansas Farm Bureau president Randy Veach said a disaster program created by the 2008 farm law probably would not provide payments for another year.

Bills pending in Congress would release $2.2 billion in payments, $1.3 billion of it to growers who have land in areas with a disaster declaration. Critics say money could go to farmers who did not suffer a loss under that approach.

Bob Stallman, a Texas beef and rice grower, was elected to his sixth two-year term as AFBF president.

(Reporting by Charles Abbott; Editing by Ted Kerr)


[Green Business]
LOS ANGELES
Tue Jan 12, 2010 12:02pm EST
Suntech solar panels sold out through early 2010

LOS ANGELES (Reuters) - Suntech Power Holdings Co Ltd's solar panel is sold out through at least the second quarter of 2010, a company executive said on Tuesday.

"We were basically in a sold-out situation in Q4 and we're in a sold-out situation at least through Q2," Steve Chadima, vice president of external affairs at Suntech, said at a conference hosted by Needham and Co in New York.

"We're basically selling anything we can produce and I know we're not alone," Chadima said.

Demand for solar power products has rebounded after a difficult 2009, when the global credit crisis dried up financing for new projects and panel prices plummeted.

Chinese players such as Suntech, Trina Solar Ltd and Canadian Solar Inc have seized on rising demand, turning their low-cost structures into sales, and several plan to boost production capacity in 2010.

As the market picks up, Suntech is seeing demand from more countries, Chadima said.

Germany, the world's top solar market, accounts for less than half the company's sales. Japan, which recently introduced incentives to spur solar power adoption, is "coming back very strong," he said.

China's solar market, which many expect to grow massively, needs another nine to 18 months to take off because the Chinese government's proposed aid for the sector is low, Chadima said.

With stable prices for panels and efforts to cut other costs, the Suntech has maintained gross margins for its panels at about 20 percent, Chadima said.

Suntech shares were down 2 percent in trading on the New York Stock Exchange.

Suntech's shares have gained about 250 percent since falling to a low of $5.09 in March.

(Reporting by Laura Isensee. Editing by Robert MacMillan)

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[Top News] from [REUTERS]

[Green Business]
DETROIT
Tue Jan 12, 2010 2:14pm EST
Toyota accelerates next-generation battery R&D

DETROIT (Reuters) - Toyota Motor Corp has set up a division to accelerate developing next-generation batteries, a company executive told reporters at the North American Auto Show on Tuesday.

The world's biggest carmaker and a leader of gasoline-electric vehicles has adopted nickel-metal-hydride batteries for the current Prius hybrid and decided to use more energy-efficient lithium-ion batteries for the plug-in hybrid car which will be launched in 2012.

"We believe a key to the electrical mobile technology lies in innovation of battery technology," said Koei Saga, Toyota's managing officer who is in charge of developing batteries. "Lithium-ion batteries will already be a step forward, but we need batteries that offer far superior performance," he added.

The new division was established in January and about 50 engineers are studying production processes for the next-generation batteries. Saga did not elaborate on what the new batteries will be like or when they will come out.

Saga also said Toyota has eyed the possibility of procuring some batteries from outside the company although the carmaker will mainly keep on using its own batteries. Toyota has developed its batteries together with Japan's consumer electronics maker Panasonic.


[Green Business]
Michael Kahn
PRAGUE
Tue Jan 12, 2010 9:50am EST
Pacific islanders bid to stop Czech coal plant

PRAGUE (Reuters) - A small pacific island state's challenge to a Czech coal-fired power plant extension some 6,000 km away on grounds it could harm its environment could open a new front in the fight over global climate change.

Micronesia has filed a plea with the Czech environment ministry using a measure designed originally to settle disputes between near neighbors but which could spur others to do the same when opposing power plants, environmental advocates said.

"This is part of a new phase in environmental law," said Tim Malloch, a climate and energy lawyer at London-based ClientEarth.

Micronesia noted CEZ's coal-fired plant at Prunerov in the north of the republic was the 18th biggest source of greenhouse gases in the European Union, emitting about 40 times more carbon dioxide than the entire Pacific island federation.

The Transboundary Environmental Impact Assessment request also argued that Prague has failed to provide and asses all potential impacts and possible alternatives to minimize adverse affects of power plants -- something Micronesia said was required under Czech law.

"The Federated States of Micronesia is seriously endangered by the impacts of climate change, including the flooding of its entire territory and the eventual disappearance of a portion of its state," Andrew Yatilman, director of Micronesia's Office of Environment and Emergency Management wrote.

"...The commissioning or retrofit of any large coal power plant could play a relevant role in the destruction of the entire environment of our state."

DISAPPOINTMENT WITH COPENHAGEN

The request also underscores disappointment developing nations have over a weak United Nations climate deal agreed in December that for states like Micronesia did not go far enough.

More importantly, it could offer a legal weapon for environmental advocates and developing nations looking to mitigate the future impact of climate change, Malloch said.

"The Micronesia request is really important coming so close after the disappointment of Copenhagen," he said. "This is the first confrontation you are going to see between the developing and developed world. It goes right to the heart of what was the problem at Copenhagen."

The accord -- weaker than a legally binding treaty and even weaker even than the 'political' deal many had foreseen -- set a target of limiting global warming to a maximum of 2 degrees Celsius over pre-industrial times.

This is seen as the threshold for dangerous changes such as more floods, droughts, mudslides, sandstorms and rising seas. Carbon dioxide is blamed for fuelling global warming.

A spokeswoman for the Czech environment ministry said it received the request late into the assessment process but would take into account Micronesia's concerns.

One hurdle for Micronesia is that it is not party to a U.N treaty on environmental impact assessments signed by 30 countries, including the Czech Republic, said Jan Rovensky, who is tracking the case for Greenpeace in the Czech Republic.

And while CEZ will likely receive a green light to extend the plant, Micronesia's example may spur a nation that has signed the treaty to use the same tactic and take the fight to an international court, he added.

"It is quite a good precedent that shows other countries can try to influence decisions in other nations that might affect them," Rovensky said. "That is quite important."


[Green Business]
Sunanda Creagh
JAKARTA
Tue Jan 12, 2010 6:48am EST
Graft threatens Indonesia's carbon offset billions: report

JAKARTA (Reuters) - Billions of dollars set to flood into Indonesia under a U.N.-backed forest protection scheme are at risk because of graft unless the country puts strong oversight mechanisms in place, a report released on Tuesday warned.

Indonesia has the world's third largest area of tropical forest and stands to gain billions of dollars every year from a proposed greenhouse gas offset scheme called reduced emissions from deforestation and degradation (REDD) that was formalized at recent global climate talks in Copenhagen.

REDD allows polluters to earn tradeable carbon credits by paying developing nations not to chop down their trees.

However, a two-year study by the West Java-based Center for International Forestry Research (CIFOR) warned that past and recent cases of corruption and financial mismanagement in Indonesia's forestry sector revealed systemic weaknesses that could scuttle REDD.

"Investors should be looking very carefully at the financial governance conditions in the countries where they will be investing their funds. Like Indonesia, many tropical forest countries have long track records of mismanaging public financial resources, particularly in the forestry sector," said the report's co-author, Christopher Barr.

A spokesman from the Forestry Department said the government was committed to transparency.

"Everything is now transparent, measured and monitored. Not just in the REDD sector but in all our financial management, it's now very tight," said spokesman Masyhud.

"It's not possible to play around. Every institution has an inspector general and we also now have the Supreme Audit Agency and the Corruption Eradication Commission," two agencies which are involved in the fight against corruption.

PAST PROBLEMS COULD RETURN

Indonesia last year set up a legal framework for REDD. Several pilot projects are under way and the governments of Norway, Australia, Germany and the U.S. have promised millions of dollars in funding for REDD demonstration activities.

The CIFOR report recommended Indonesia set up new mechanisms to monitor the money flowing into the country for REDD projects and to strengthen existing oversight bodies such as the Corruption Eradication Commission, known as the KPK.

The report exposed details of mismanagement of the Reforestation Fund, which was established in 1989 under former president Suharto and which collected billions of dollars in levies from timber concessionaires to pay for reforestation.

The CIFOR study was partly based on a previously unpublished 1999 audit by Ernst and Young, seen by Reuters, which found $5.252 billion was lost from the fund through systemic financial mismanagement and fraud between 1993/94 and 1997/98.

Control of the Reforestation Fund has now been transferred to the Ministry of Finance and institutions such as the KPK and Supreme Audit Agency have helped improve the situation since the fall of Suharto in 1998, said Barr.

"But significant problems have continued through the post-Suharto period, many of which raise fundamental questions about how future REDD payment schemes will be managed," he said.

KPK spokesman Johan Budi said the agency is now investigating senior forestry ministry officials and lawmakers suspected of taking bribes for a radio communications system contract.

"The problems that have plagued the Reforestation Fund over the last 20 years are likely to reoccur" without further strengthening of oversight systems, Barr said.

Indonesia last week revealed an ambitious plan to create an extra 21.15 million hectares (52.26 acres) of forest by 2020.

(Editing by Sara Webb and Sanjeev Miglani)

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[Green Business]
WASHINGTON
Tue Jan 12, 2010 2:36pm EST
U.S. carbon emissions to rise next two years-EIA

WASHINGTON (Reuters) - U.S. carbon dioxide emissions from fossil fuels like coal and oil should rise this year and next as the economy recovers, making the Obama administration's goal to cut emissions by 2020 a tougher task, the government's top energy forecaster said on Tuesday.

U.S. emissions of the main planet-warming gas should rise 1.5 percent this year to 5.53 billion tonnes as "projected improvements in the economy" boost demand for the fuels, the Energy Information Administration said in its monthly short-term energy outlook.

Emissions of the chemical, which represent about 80 percent of overall U.S. greenhouse gas output, should rise another 1.7 percent in 2011, on expected increases in coal burning at power plants and slightly higher oil demand from transportation fuels.

"It does mean the U.S. target will be more challenging," said Kevin Book, an analyst at ClearView Energy Partners LLC in Washington. "Everyone expects that fossil fuel demand from transportation will eventually flatten out, but electricity demand only goes up, even with efficiency gains," he added.

President Barack Obama pledged at the U.N. climate talks in Copenhagen in December that the country would cut greenhouse gas emissions to 17 percent below 2005 levels by 2020.

Compared to 1990, the base year used by the European Union and many developed countries, the U.S. pledge corresponds to a 3 percent reduction in 2020.

The recession made Obama's pledge look easy to achieve.

U.S. carbon emissions fell 6.1 percent in 2009 to 5.45 billion tonnes as the recession cut driving and electricity demand, the EIA said. That was about 8.9 percent below the 2005 level of 5.98 billion tonnes.

But expectations of an improved economy will push industrial demand for electricity up 2.2 percent in 2010 and 2.5 in 2011, the EIA said. The burning of coal, which emits more carbon dioxide than any other fossil fuel, generates about half of the electricity in the United States.

(Reporting by Timothy Gardner; editing by Jim Marshall)


[Green Business]
LONDON
Tue Jan 12, 2010 2:04pm EST
Climate change to make icy UK winters rarer

LONDON (Reuters) - Severe winter freezes, like the one gripping parts of Europe over the last few weeks, will become increasingly rare because of the warming effect of climate change, the UK's official forecaster said on Tuesday.

Europe's deep winter freeze, partly due to the El Nino weather phenomenon, has shocked parts of northwest Europe that usually escape the coldest winter temperatures, driving heating gas demand to records in Britain and disrupting supplies of the fuel when it was most needed.

The winter so far has been one of the coldest for nearly 30 years in Britain, but such icy weather was more common in centuries past and should become even rarer going forward.

"Winters like this are likely to become less of a feature as we head through the 21st century," John Hammond, a meteorologist at the UK Met Office said on Tuesday.

"Colder winters become less likely because overall the background warming will reduce the severity of them, certainly for our part of the world."

The Met Office expects Britain's already relatively mild and damp, on average, winters to become increasingly warm and wet as a result of climate change, with the effect particularly pronounced in the latter part of the century.

While this year's winter freeze seems particularly severe, in the "Little Ice Age" that preceded Britain's Industrial Revolution, the climate was cold enough in London for the River Thames to freeze over, allowing "Frost Fairs" to be held on it.

Most climate scientists now say the increase in carbon dioxide emissions, that began with the industrialization of Europe in the 18th century, has had a warming effect on the worlds climate.

Global temperatures may be 4 degrees Celsius hotter by the mid-2050s if current greenhouse gas emissions trends continue, according to some long term forecasts.

The World Meteorological Organization said last month that 2000-2009 was the hottest decade since records began in 1850, and that 2009 would likely be the fifth warmest year on record. WMO data show that eight out of the 10 hottest years on record have all been since 2000.

SHORT TERM

In the short term, the Met Office expects night-time temperatures just below freezing in many parts of Britain for the rest of the week, but expects temperatures to remain well above last week when parts of the country dipped below minus 20 degrees Celsius.

"It stays cold much of this week, but we are starting to see something of a transition to less cold air, something of an Atlantic influence for a time," Hammond said.

"It's a reluctant increase in temperatures as we go through the rest of this week and through the weekend in particular."

Britain usually escapes the winter freezes of continental Europe because of relatively mild weather brought by south westerly winds from the Atlantic.

The icy weather of the last two weeks has been brought by Arctic winds mixed with cold and dry easterly winds from Russia.

A low pressure system promises to spread across Britain from the Atlantic this weekend, pinning back the high pressure systems sitting over northwest Europe on Tuesday.

But colder air over Scandinavia and north east Europe could creep west again next week.

"It's very much a battle ground at the moment for the weather patterns," Hammond said.

(Reporting by Daniel Fineren; Editing by Keiron Henderson)


[Green Business]
Deborah Zabarenko, Environment Correspondent
WASHINGTON
Tue Jan 12, 2010 11:02am EST
Unusual Arctic warmth as north hemisphere shivers

WASHINGTON (Reuters) - While much of the Northern Hemisphere has shivered in a cold snap in recent weeks, temperatures in the Arctic soared to unusually high levels, U.S. scientists reported.

This strange atmospheric pattern is caused by natural variability and not by rising levels of greenhouse gases. However, it could affect Arctic ice which in turn may impact global warming, said Mark Serreze, director of the U.S. National Snow and Ice Data Center in Colorado.

"It's very warm over the Arctic, with air temperatures locally at 10 to 15 degrees F (5.6 to 8.4 degrees C) warmer than they should be in certain areas," Serreze said in a telephone interview on Monday.

This contrasts with record or near-record cold over much of the eastern United States and Canada, Europe and Asia for the last two weeks of December and the first days of January, the data center reported.

It's due to a large area of high pressure over the Arctic, and a big area of low pressure at the mid-latitudes, where much of the Northern Hemisphere's population is concentrated.

Usually these areas of differing air pressure would shift and mix in a phenomenon known as the Arctic oscillation. Instead, they've remained stationary in what scientists term a negative phase of the oscillation. A positive phase would have low pressure over the Arctic and high pressure over the mid-latitudes.

Serreze said that as of December, the oscillation was in the most extreme negative phase seen since modern record-keeping began in 1950.

"Normally the circulation of the atmosphere would mix these two (areas of varying air pressure) together, and it's not doing a very good job of that right now, so we have these blobs of warm air over the Arctic and these blobs of cold air over the mid-latitudes, just sitting there," he said.

The blobs appear to be starting to shift, a sign that the negative phase is weakening.

The extent of Arctic sea ice at the end of December remained below normal, some 350,000 square miles (920,000 square kilometers) below the average for December from 1979-2000. But it was above the 2006 record low for the month.

The low level of Arctic ice could accelerate climate warming because there is less light-colored ice to reflect sunlight and more dark-colored ocean water to absorb it.

However, the Arctic oscillation could have an opposite effect. With the blobs of pressure in place, the ice that now covers the Arctic is less likely to be moved south to melt. This could help build up the older, hardier Arctic ice, which means more ice to reflect the sun's warming rays.

(Editing by Alan Elsner)