Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable By 2050, over one million plant and animal species, 1/4 of all species = on earth, will have become extinct due to global warming, concludes a = new study conducted by leading biologists on four continents, published = in Nature. As the leader in greenhouse gas emissions, the U.S. is the = largest cause. The Bush administration has halted or reversed even minimal steps to = address this crisis. =20 Thanks for responding, Agarwal and Gelbspan provide to responses re = Cap and Trade of GHG emissions. "...We simply can't finesse nature with accounting = tricks." (McCain-Lieberman is essentially accounting tricks.) FPIF-PetroPolitics Special Report Ross Gelbspan January 2004 www.fpif.org -- also in March/April 04 Dollars and = Sense-- --"Cap and Trade: Environmental Colonialism?: The global South = has long contended that the Kyoto cap and trade system is unjust. = Under Kyoto, each country's emissions cap is based on its 1990 emission = levels--but developing countries argue that only a per-capita allocation = of emission rights is fair. What's more, they argue, provisions in = the Kyoto Protocol allow industrial nations to buy limitless amounts of = cheap emission reductions in developing countries and to bank them = indefinitely into the future. As the late Anil Agawwal, founder of the = Centre of Science and Environment in New Dehli has pointed out, when = developing nations eventually become obligated to cut their own = emissions (under a subsequent round of the Kyoto Protocol), they will be = left with only the most expensive options. Agarwal considered this a = form of environmental colonialism." Dollars & Sense 4/04 (see more = below in Gelbspan's paper)--This requires Washington level action--What = can we do to "leverage" Washington? 1) unelect Bush, 2) do state = Initiatives--green taxing of vehicles re efficiency and alternative = fuels and more efficiency and renewables in electric systems--move away = from coal. =20 Toward A Global Energy Transition By Ross Gelbspan =20 =20 Foreign Policy In Focus =20 =20 This paper details a plan with a set of three interactive and = mutually reinforcing strategies designed to reduce the world's use of = carbon fuels by at least 70%, and at the same time, create millions of = jobs around the world, especially in developing countries. The plan is driven by concerns that global climate change is = progressing far more rapidly than scientists anticipated even a few = years ago. To control the escalating pace of change and to allow the climate = to re-stabilize, humanity has to cut its burning of fossil fuels by at = least 70% in a very short time. That is the consensus of more than 2,000 = scientists from 100 countries reporting to the UN-sponsored = Intergovernmental Panel on Climate Change in the largest and most = rigorously peer-reviewed scientific collaboration in history. The urgency of the threat is spelled out in two other recent = peer-reviewed studies corroborating the UN panel's findings. One focuses = on environmental impacts, the other on future energy consumption. In 2001, researchers at the Hadley Center, Britain's principle = climate research institute, found that the climate will change 50% more = quickly than was previously assumed. That is because earlier computer = models calculated the impacts of a warming atmosphere on a relatively = static biosphere. But when they factored in the warming that has already = taken place, they found that the rate of change is compounding. They = project that most of the world's forests will begin to turn from sinks = to sources-dying off and emitting carbon-by around 2040. The other study is equally troubling. Eleven researchers found = several years ago that unless the world is getting half its energy from = non-carbon sources by 2018, we will be locked into an inevitable = doubling-and possible tripling-of pre-industrial carbon dioxide (CO2) = levels later in this century. A follow-up study by many of the same = researchers, published in Science in November 2002, calls for a crash = program to develop a carbon-free energy economy. Using conservative = projections of future energy use, the researchers found that within 50 = years humanity will need to be generating at least three times more = energy from non-carbon sources than the world currently produces from = fossil fuels to avoid a catastrophic build-up of atmospheric CO2 later = in this century. The science is taken very seriously outside the United States. In = other countries, hardly anybody debates whether human activities are = seriously affecting the climate. The debates are about policy choices, = such as how to change energy delivery structures without wrecking = national economies. The agreement on the urgency of the climate threat = is evident in the responses in Europe. Holland has completed a plan to = cut emissions by 80% in the next 40 years. The United Kingdom has = committed itself to 60% reductions in 50 years. Germany is planning for = 50% cuts in 50 years. By contrast, the White House has become the East Coast branch = office of ExxonMobil and Peabody coal, and climate change has become the = pre-eminent case study in the contamination of the U.S. political system = by money. Two years ago, U.S. President George W. Bush reneged on a campaign = promise to cap carbon emissions from coal-burning power plants. He then = unveiled his administration's energy plan, which is basically a shortcut = to climate hell. In a truly Orwellian stroke, the White House excised = all references to the dangers of climate change on the EPA's website in = mid-2003. Finally, Bush withdrew the United States from the Kyoto = climate negotiations, and the administration's chief climate negotiator = declared that the United States would not engage in the Kyoto process = for at least 10 years. Ad Hoc Group's Plan Offers First Ray of Hope However, there may be an approach that could address our = increasingly inflamed atmosphere and our reluctant political leadership = as well. It is provisionally called the World Energy Modernization Plan. This plan was developed by an ad hoc, informal group of about 15 = energy company presidents, economists, energy policy experts and others = who met at the Center for Health and the Global Environment at Harvard = Medical School. Since its development three years ago, the plan was presented at = side conferences to the climate negotiations in Buenos Aires and Bonn. = It has been endorsed by a number of developing countries' = non-governmental organizations (NGOs). It received a very positive = reception from the former CEO of Shell-U.K. who was also director of a = Group of Eight (G-8) Task Force on Renewable Energy. It was the subject = of a briefing with a group of oil executives in Cairo. It attracted the = interest of a small number of senators and congress members two years = ago. Most recently, it was endorsed by a former British ambassador to = the United Nations. The plan addresses a stark reality: The deep oceans are warming, = the tundra is thawing, the glaciers are melting, infectious diseases are = migrating, and the timing of the seasons has changed. All that has = resulted from only one degree of warming. It is expected that the earth = will warm another three to 10 degrees later in this century, according = to the UN-sponsored Intergovernmental Panel on Climate Change (IPCC). Against that background, we are offering this set of regulatory = strategies. While they have been reviewed by a number of economists and = energy policy experts, they are still provisional. Some elements may = require major revamping. Although we happen to think this proposal is = elegant, we are not dogmatic about its particulars. We believe very strongly that these strategies present a model of = the scope and scale of action that is appropriate to the magnitude of = the climate crisis. To date, we have seen no other policy = recommendations that adequately address either the scope or urgency of = the problem. The plan involves three interacting strategies. One is a subsidy = switch, in which industrial countries would eliminate government = subsidies for fossil fuels and establish equivalent subsidies for = renewable, non-carbon energy technologies. Another is a clean energy = transfer fund, which entails creating a pool of money on the order of = $300 billion a year to provide renewable energy technologies to = developing countries. The last one is a progressively more stringent = fossil fuel efficiency standard that rises by 5% per year; its adoption, = perhaps within the Kyoto framework, could be complemented with the = emissions trading mechanism to help nations meet it. While each of these strategies can be viewed as a stand-alone = policy, they are better understood as a set of interactive policies that = could speed the energy transition far more rapidly than if they were = implemented in piecemeal fashion. If the subsidy switch in industrial nations were implemented in = tandem with the progressive fossil fuel efficiency standard, we believe = those two policies alone could jumpstart an energy transition in the = North. But, as we know, the problem is global in scope. The transfer = fund addresses the fact that even if the countries of the North = dramatically reduce emissions, those cuts would be overwhelmed by the = coming pulse of carbon from India, China, Mexico, and Nigeria. Subsidy Switch Could Lead to Fuel Switch The United States currently spends more than $20 billion a year to = subsidize fossil fuels. The aggregate subsidies for fossil fuels in = industrial countries has been estimated at $200 billion a year. We are proposing that in the industrial countries those subsidies = be withdrawn from fossil fuels and equivalent subsidies be established = for renewable energy sources. A small portion of the U.S. subsidies must = be used to retrain or buyout the nation's approximately 50,000 coal = miners. But the lions' share of the subsidies would still be intended = for the major oil companies to retrain their workers and re-tool to = become aggressive developers of fuel cells, wind farms, and solar = systems. In other words, we envision the subsidies as a tool to help oil = companies transform themselves into renewable energy companies. Fund to Help Poor Countries Go Green The second element of the plan involves the creation of a new = $300-billion-a-year fund to help transfer renewable energy resources to = developing countries. Virtually all poor countries would love to go = solar; virtually none can afford it. Among them are countries with the = smoggiest cities in the world today, such as China, Mexico, Thailand, = and Chile. The late Dr. Stephen Bernow, assistant director of The Tellus = Institute in Boston, came up with the estimated need for $300 billion = per year for up to a decade to transfer non-carbon energy technologies = to developing countries. One attractive source of revenue to fund the = transfer lies in a so-called "Tobin tax," named after its developer, = Nobel prize-winning economist Dr. James Tobin. This tax is levied on = banks and other agents that conduct international currency transactions. Tobin conceived his tax as a way of damping the volatility in = capital markets by discouraging short-term trading and encouraging = longer-term capital investments. But it would also generate enormous = revenues. Today the commerce in currency swaps by banks and speculators = amounts to $1.5 trillion per day. A tax of a quarter-penny on a dollar = would, for technical reasons, net the $300 billion a year, which could = go for wind farms in India; fuel-cell factories in South Africa; solar = equipment assemblies in El Salvador; and vast, solar-powered = hydrogen-producing farms in the Middle East. Since currency transactions are electronically tracked by the = private banking system, the need for a large, new bureaucracy could be = avoided simply by paying the banks a fee to administer the fund. That = administrative fee would, to some extent, offset the banks' loss of = income from the reduction in currency trading that would result from the = imposition of the tax. The involvement of the private banking system in = administering the fund would also help in minimizing corruption in = recipient countries by the banks' establishment of clear benchmarks for = payment to contractors.=20 The system, moreover, would give recipient countries latitude in = negotiating contracts with renewable energy vendors. That way they could = ensure domestic ownership of new energy facilities and require = substantial employment of local labor in their construction and = operation.=20 Several developing country commentators have suggested that = corruption could be further reduced by requiring recipient governments = to include representatives of ethnic and indigenous minorities, = universities, NGOs, and labor unions in making decisions about the = procurement and startup of new energy installations. The only additional bureaucracy would be an international auditing = agency to monitor transactions to ensure equal access for all energy = vendors and to review contracting procedures between banks, vendors and = recipient governments. If a Tobin tax proves unacceptable, a fund of the same magnitude = could be raised from a tax on airline travel or a carbon tax in = industrial countries, although both these sources are more regressive. = Florentin Krause, of the IPCC's Working Group III, and Stephen DeCanio, = former staff economist for the Reagan Council of Economic Advisers, = estimate that if carbon emissions were taxed at the rate of $50 a ton, = the revenue would cover the cost of transferring clean energy = technologies to developing countries. (At this point, we have not calculated what would happen to = transitional prices of carbon fuels if subsidies were removed and a = carbon tax imposed simultaneously. That may, or may not, cause too large = an economic shock in the short term.) Regardless of its revenue source, the fund would be allocated = according to a United Nations formula. Climate, energy use, population, = economic growth rates, and other factors would be used to determine each = developing country's annual percentage. Individual countries would decide how to utilize their share. For = example, if India were to receive $5 billion in the first year, it could = pick its own mix of wind farms, village solar installations, fuel cell = generators and biogas facilities. In this hypothetical example, the Indian government could then = entertain bids for these clean energy projects. As contractors reached = specified development and construction benchmarks, they would be paid = directly by the banks. And the banks, as noted, would receive fees for = administering the fund. As developing countries acquired technology, the fund could simply = be phased out, or the money in it could be diverted to other global = needs. The fund would not be a conventional North-South giveaway. Rather, = it is envisioned as a transfer of speculative, non-productive resources = from finance sector transactions to the industrial sector for intensely = productive, wealth-generating, job-creating investments. The fund also could be a critical investment in U.S. national = security by improving developing nations' economic wellbeing. The global = climate envelops us all. What is needed is the kind of thinking that = gave rise to the Marshall Plan after World War II. The plan converted = impoverished and dependent European nations into prosperous and robust = trading partners. We believe a clean energy transfer fund of this sort = would have a similar impact on developing and transitional economies. Equitable International Emission Standards The third and unifying regulatory strategy of the plan calls on = the parties to Kyoto to subordinate the ineffectual and inequitable = system of international emissions trading to a simple and equitable = fossil fuel efficiency standard that becomes 5% more stringent each = year. This mechanism, if incorporated into the Kyoto Protocol, would = harmonize and guide the global energy transition in a way that emissions = trading cannot. The system of international emissions trading at the heart of the = Kyoto Protocol is based on the concept that a country that exceeds its = allowed quantity of carbon emissions can buy emission credits from a = country that emits less than its allowed quantity. Under this system, = the United States, for instance, can pay Costa Rica to plant more trees = to absorb carbon dioxide and subtract the resulting reduction from its = own allowance. This system of international "cap and trade," as it is called in = the jargon of the Kyoto negotiators, has significant failings. Emissions trading can work relatively well within nations. = Domestic cap-and-trade programs can help meet the goals of a = progressively more stringent fossil fuel efficiency standard because = they are easy to monitor and enforce. However, internationally, the cap-and-trade system breaks down on = several counts. It is not enforceable and is plagued by irreconcilable = equity disputes between the countries of the North and South. Industrial and developing countries are at odds over allocating = emission rights. The industrial nations participating in the Kyoto = process determined that each country's emission rights would be based on = its 1990 levels to protect their economies. By contrast, developing = countries contend that only a per capita allocation is fair. But if the = emission quota for each U.S. citizen were the same as for each citizen = of India, that would decimate the U.S. economy. Another equity issue was articulated by the late Anil Agarwal, = founder of the Centre for Science and Environment in New Delhi. Agarwal = criticized the provisions in the Kyoto Protocol that allow industrial = nations to buy limitless amounts of cheap emission reductions in = developing countries and to bank them indefinitely into the future. This = means that when developing nations eventually become obligated to cut = their own emissions (under a subsequent round of the Kyoto Protocol), = they will be left with only the most expensive options. This clearly = constitutes a form of environmental colonialism. International carbon trading cannot be the primary vehicle to = propel a worldwide energy transition. Even if all the problems with = monitoring, enforcement, and equity could be resolved, it could at best, = be used as a fine-tuning instrument to help countries meet the final 10 = to 15% of their obligations. We simply can't finesse nature with accounting tricks. Instead, the parties to the Kyoto talks should increase their = fossil fuel energy efficiency by 5% every year until the global 70% = reduction is attained. That means a country would either produce the = same amount of goods as the previous year with less carbon fuel or = produce more goods with the same amount of carbon fuel use as the = previous year. Since no economy can grow at 5% for long, emissions reductions = would outpace long-term economic growth, benefiting the environment. Every country would begin at its current baseline for emission = levels, which would eliminate the inequities inherent in the = cap-and-trade system. In tandem with the fund, this would ensure the = participation of developing countries. During the first few years under the proposed efficiency standard, = most countries would likely meet their goals by implementing low-cost = improvements to their energy systems. After a few years, however, more = expensive technology would be required to meet the progressively higher = standard, making renewable energy sources more cost effective in = comparison to fossil fuel solutions. The demand would create the mass = markets and economies of scale for renewables. This approach would be far simpler to negotiate than the current = protocol, with its morass of details involving emissions trading, = reviews of the adequacy of commitments, and differentiated emission = targets for each country. It would also be easier to monitor and = enforce. A nation's compliance would be measured simply by calculating = the annual change in the ratio of its carbon fuel use to its gross = domestic product. That ratio would have to change by 5% a year. The approach has a precedent in the Montreal Protocol, under which = companies phased out ozone-destroying chemicals. That protocol was = successful because the same companies that made the destructive = chemicals were able to produce their substitutes with no loss of = competitive standing within the industry. The energy industry must be = restructured in the same way. Several oil executives have said in = private conversations that they can, in an orderly fashion, decarbonize = their energy supplies. But they need the governments of the world to = regulate the process so all companies can make the transition in = lockstep without losing market share to competitors. A progressive = fossil fuel efficiency standard would provide that type of regulation. On economic grounds, this plan makes perfect sense. Recently, = Swiss Re-Insurance said it anticipates losses from climate impacts to = reach $150 billion a year within this decade. Munich Re, the world's = largest reinsurer, estimates that within several decades, losses from = climate impacts will reach $300 billion a year. They will affect the = banking and insurance industries; cause property damage; raise health = care costs; ruin crops; and destroy energy, communications and = transportation infrastructures. Last year, the largest re-insurer in = Britain said that unchecked climate change could bankrupt the global = economy by 2065. By contrast, the dramatic expansion of the overall wealth in the = global economy from a worldwide energy transition would create new = markets and significantly invigorate existing ones. Development economists agree that energy investments in poor = countries create far more wealth and jobs than equivalent investments in = any other economic sector. We believe a plan of this magnitude would = create millions of jobs in developing nations. It would raise living = standards abroad without compromising ours. It would allow developing = countries to grow without some of the budgetary burdens of importing = oil. And in a very short time, it would nudge the renewable energy = industry into the position of leading global economic growth. A global energy transition requires governments to regulate some = of the worlds largest corporations. On the record, corporations = reflexively resist any move toward new regulation. But history indicates = that if regulations are non-discriminatory, industry-wide and = predictable, then corporations can depend on them in formulating their = strategic plans, and business leaders will accept them. These strategies = provide a viable option to the multinational oil majors: Submitting to = new regulations, they will gain a $300-billion-a-year market. When it comes to the issue of sustainable development in a rapidly = deteriorating biosphere, many commentators have observed that changes in = values frequently follow changes in technology. It is hoped that the = very act of addressing the true proportions of the climate crisis will = bring home to everyone the realization that we are living on a planet = with limits-and that we are now bumping up against those limits. Ultimately, a crash program to rewire the world with clean energy = would hopefully yield far more than a fuel switch. It could very easily = lead to closed-loop industrial processes, smart-growth planning, far = more recycling and reuse, the adoption of environmental accounting in = calculating national GDPs, and, ultimately, a whole new ethic of = sustainability that would transform our institutions, practices and = dynamics in ways we cannot begin to imagine. Energy Transition Could Be Global Pilot Project The realization that we are all part of a larger and increasingly = vulnerable community could engender a new sense of common purpose. We = could all keep very busy for years to come by applying energy transition = strategies and then forging the effort into a global project for = redesign of the entire human enterprise. This perspective may well be overly ambitious. But the = alternative-given the escalating instability of the climate system and = the increasing desperation caused by global economic inequities-is truly = too horrible to contemplate. A meaningful solution to the climate crisis could potentially be = the beginning of a much larger transformation of our social and economic = dynamics. A solution that is appropriate in scale and magnitude also = could serve as a pilot project that could begin to democratize the = global economy. Just as we are seeing the globalization of the economy, we are = also seeing the globalization of communications among activist groups. = NGOs can use the UN Framework Convention on Climate Change to influence = the energy transition process. In the long run, they cannot only help = step up the pace of emissions reductions, but they also can intervene in = other areas of global economic governance. It is just possible that the act of rewiring of the planet could = begin to point us toward that optimal calibration of competition and = cooperation that would maximize our energy, creativity, and = productivity. Ross Gelbspan is a former reporter for the Boston Globe and the = author of The Heat Is On: The High Stakes Battle over Earth's Threatened = Climate (www.heatisonline.org) His latest book, Fevered Planet, is = scheduled for publication in 2004 (Basic Books). introduction | politics | climate | war | development | = alternatives | resources FACT SHEETS: industry | greenhouse gas producers | oil & war | oil = & poverty | subsidy shift=20 =20 Published by Foreign Policy In Focus (FPIF), a joint project = of the Interhemispheric Resource Center (IRC, online at = www.irc-online.org) and the Institute for Policy Studies (IPS, online at = www.ips-dc.org). =A92003. All rights reserved. Recommended Citation Ross Gelbspan, "The Global Record," Foreign Policy In Focus = (Washington, DC & Silver City, NM: Interhemispheric Resource = Center/Institute for Policy Studies/SEEN, January 2004). Web location: http://www.fpif.org/papers/03petropol/alternatives.html Production Information Writer: Ross Gelbspan Editor: Miriam Pemberton, IPS=20 Layout: Tonya Cannariato, IRC =20 =20 =20 -- Binary/unsupported file stripped by Ecartis -- -- Type: image/jpeg -- File: icon_fpif_25.jpg You are subscribed to AZ-LEADER. To post to this mailing list, simply send email to az-leader@xxxxxxxxxxxxxx To unsubscribe, send email to az-leader-request@xxxxxxxxxxxxx with 'unsubscribe' in the Subject field.