3E Intelligence

The so-called “leaders” of the eight biggest economies have done it again: glorious declarations with little substance in a diplomatic language which allows all of them to spin their “global” commitment and responsibility.

Not only were there no concrete mid-term targets set but the 50% reduction promise has no binding character, lacks any base reference year against which the reduction should be measured and is all focused on finding solutions through technological innovations. Of course, political leaders with lack of vision see no need to change the unsustainable lifestyles which hundreds of millions of new middle class Chinese and Indian citizens are now starting to imitate. The declaration also still clings to the fallacious premise that the necessary climate/energy revolution can take place without questioning the current “economic growth addiction”.

Don’t take my word for it, just read the excellent “annotated climate declaration” by Andrew Rivkin in the New York Times’ Dot Earth blog.

According to the Wall Street Journal’s Environmental Capital blog, “clean” coal is the big winner of the G8 Hokkaido summit.

As G-8 leaders start their 3-day talking circus on the Japanese island of Hokkaido, four new reports confirm that our race towards economic and ecological collapse continues at an increasing speed:

• The Australian government published its long-awaited Garnaut report (over 500 pages), sort of a Stern report for the country down under. Economist Garnaut’s (not very original) proposal: use the market to solve the climate crisis. Was it not Stern who called climate change “the biggest market failure ever”? What did Einstein say about trying to solve a problem with the instrument that created the problem in the first place? For a good analysis of the Garnaut report, read Geoff Well’s excellent comments.
• Lester Brown’s Earth Policy Institute issued a new Plan B study calling for an 80% reduction of greenhouse gas emissions by 2020 (yes, 2020, not 2050) and indicating how it can be done. This reduction target is what “is needed” not “what is politically feasible”, says the report. See the problem?
• WWF and Allianz presented G-8 climate scorecards measuring the performances (or better lack of it) of the participant countries at Hokkaido. No real surprises here, but good to demonstrate the gap between climate rhetoric and real action.
• Last but not least, an interesting report published today by the UK’s DEFRA (department for environment, food and rural affairs) looks at the embedded carbon emissions in products and services imported into the country. The study shows that we are just exporting our carbon emissions to China and India (where we buy our cheap products) and that the Kyoto-based national reduction strategies are bound to fail. It demonstrates that real climate solutions will have to start structurally from regulating our individual consumer behaviour. Which politicians will have the courage to address this?

The future of tourism in an age of climate change was the subject of an exciting conference organised by the Greens in the European Parliament on 3 July. How can the global tourism industry be greened and which countries will be the winners and losers from global warming in terms of tourism?

The growth of mass tourism (or “democratic tourism”) over the last thirty years can be seen as a blessing or a curse. A blessing as shrinking distances have brought more awareness, understanding and tolerance for other cultures and tourists have enjoyed exotic places which they could only dream off in the past. But also a curse as this mass tourism has produced its own environmental stress and has contributed considerably to global warming and resource depletion. The Greens’ conference tried to answer the question how the ecological footprint of the world’s tourists can be made as small as possible without undermining the positive aspects of being able to travel.

In the opening session three climate experts sketched a bleak picture of the global warming trends and their effects on tourism (retreat of glaciers in the Alps, increasing droughts, forest fires or flooding in Southern Europe). Only one of them (Professor Helga Kromp-Kolb of the Vienna University of Natural Resources and Applied Life Sciences) connected the climate crisis with peak oil and future energy scarcity.

The Benelux countries, Denmark, Germany and the Baltic countries will be the big winners when global warming starts shifting holiday destinations, according to a report by Deutsche Bank Research presented by Philipp Ehmer. Spain, Greece and Turkey could be some of the biggest losers.

In the afternoon the conference heard presentations of good and bad practices of making tourism more environmentally friendly and listened to the plans of the French EU Presidency and the European Commission to tackle the climate-tourism challenges. In October 2007, the Commission presented its Agenda for a Sustainable and Competitive European Tourism. On 7 October it will organise an EU Day on Tourism. During the French Presidency of the EU, a special Forum Européen du Tourisme will be held in Bordeaux from 18-19 September 2008.

Overall, I felt that the conference was too exclusively focused on climate change thereby forgetting the implications of increasing oil prices and the new energy scarcity. The global tourism explosion of the last thirty has only been made possible because of extremely low oil prices and the availability of cheap flights and even cheaper gasoline. With the rising “scramble” for oil, the end of long-haul mass tourism seems to be inevitable. Maybe a topic for another conference: “the future of post-oil tourism”?

Looking back at the first half of the year, I can only conclude that my doom-and gloom predictions for 2008 were unfortunately spot on. With stock markets continuing their dive down and oil prices exploding upward, this year could indeed turn out to become the “annus horribilis” I feared. To be honest, things look even a bit more gloomy than I expected (who would have believed me if I would have predicted a 140 dollar price for the oil barrel?).

The “climate fatigue” I foretold has also gone further than I expected and is turning into a possible “energy counter-revolution”. When prices of gasoline and heating oil will not go down in the next months (and I do not foresee so), we might see the recent street protests of the truckers becoming a full-fledged citizens’ movement against rising oil and food prices. As l mentioned yesterday during a debate in Brussels, is it so surprising that consumers do not want to pay for solving the energy/climate crisis when the political and economic elites keep sending messages that we can solve this mess with the necessary technological innovations (be they biofuels, carbon capture, or nuclear). When will these “leaders” have the courage to lead and warn their constituencies that “the party is over“.

And even my prediction that the words “crisis of the EU” would be spoken again was on the money although that was not really a difficult one. Unfortunately our EU leaders continue to whistle in the dark and pretend all is well with the Union. Even sarcasm is no longer appropriate to describe this lack of leadership.

Last but not least, the most dark scenario (an Israeli attack on Iran) seems to come closer every day. The final Bush legacy?

The world needs a tenfold increase of carbon productivity between now and 2050 says a new climate change study by McKinsey’s Global Institute. This is comparable to the historic increase of labour productivity since the beginning of the industrial revolution, only it needs to be done over 40 years instead of 150. That said the interesting report “The Carbon Productivity Challenge” starts from the assumption that keeping below the 500 ppmv CO2 equivalent level is enough to prevent significant risks to our climate (for another view, see www.350.org ). So the challenge is probably even more dramatic.

One of the most fascinating finds of the study is that the world sustainable level of per-capita emissions lies at 2.2 tonnes CO2e per year (or 6 kg of CO2e per day). Currently per-capita emissions in the EU-27 are at 9.6 tonnes (US 21.5 tonnes). This daily “emission budget” (which we need to reach if we want to stick to “safe” levels according to McKinsey) would mean we would have to choose between the following alternatives: doing a 20-40 km car ride, 10-20 hours air conditioning, buying two new T-shirts (not including the drive to the shop) or eating 2 meals a day. Challenging enough for you?

Another report presented this week and written by McKinsey for German industry giant Siemens highlights the leadership role of cities for reducing greenhouse gases. The study “Sustainable Urban Infrastructure” focuses on London and concludes that the city can reduce its greenhouse gas emissions by 44% in 2025 with existing technology solutions which mostly pay for themselves.

• It is often assumed that climate and energy security policies are complementary and that therefore measures in one area are also good for the other. This assumption might be correct in certain cases (driving less will be good for climate and will make us less dependent on imported oil), but there are more and more signs that, in the long run and under particular political pressures, worries about energy prices and energy supply might undermine our climate mitigation policies. The Economist has an excellent comment on this trade-off. Just imagine what will happen to our climate policies when prices will go even higher (which they will) and governments start introducing energy rationing or lights start going out.
• The Jeddah meeting of oil producers and consumers clearly failed to convince energy traders that OPEC will be able to bridge the growing gap between demand and supply driving up prices on Monday 23 June. For a good analysis of why we should indeed be cautious about Saudi pledges to increase production, read the Oil Drum’s article “The devil is in the production details of Saudi Arabia“. In the same online publication, Jerome à Paris lists the past broken promises of the oil cartel. I guess Andris Piebalgs will have to wait a long time for his “two-digit” oil prices.
• We all have our scapegoats.It is so much easier to be able to point our fingers to others than to change our own behaviour. High oil prices: just blame the speculators or the OPEC leaders. Climate scepticism: go after Big Oil’s chief executives. With all the admiration and respect I have for US climate expert James Hansen, I suspect his call to put some oil chiefs on trial for crimes against humanity will not really help much in our war against climate chaos.

As Ireland is getting ready for a crucial referendum on 11 June, climate change policy is being used as an argument to say “yes” to the new Lisbon Treaty. But does the EU’s “Constitution light” really help in tackling global warming? Is the current EU part of the problem or part of the solution?

Labour leader Eamon Gilmore stated on 7 June that the inclusion of climate change in the Treaty by giving it a legal basis is an indication of the EU’s leadership on the issue. Problem is that much more than a legal statement of intention is really needed for a climate change U-turn. If we want to reach any of the (moderate) IPCC targets, we will have to make radical changes to our taxation systems and this is precisely the weakest link of the European Union’s institutional structure.

Because of the unanimity rule on taxation policy (still part of the Lisbon Treaty), the Union has never been able to agree on the necessary carbon tax which would be a much better instrument than the unconvincing Emission Trading Scheme. It will also never be able to instigate the necessary shift from taxing labour to taxing declining natural resources.

This is why I would vote “No” if I were allowed to have a say on the Lisbon Treaty. This Treaty does not provide any real answer to the climate and energy crisis and should therefore be rejected.

This week’s UN summit on biodiversity ended with some hopeful results but there is still a lack of full awareness that protecting the planet’s eco-systems is much more than a moral obligation.

“We have a moral obligation to be careful stewards of the planet for future generations”, said EU Commission President Barroso in his speech to the Bonn biodiversity conference on 28 May. I disagree, Mr. President, morality as you know quite well  risks being quickly forgotten in times of crisis. “Erst kommt das Fressen und dann die Moral”, remember. When governments have to choose between economic growth and biodiversity protection they will still make the wrong choices.

They should not, as biodiversity and our eco-systems are essential to the development of our economies. No successful Lisbon agenda without a strong and decisive ecological sustainability basis, Mr. Barroso. You might want to “re-review” your Gothenburg Sustainable Development strategy to confirm this basic economic truth.

We don’t even need valuation studies such as the excellent report “The Economics of Ecosystems and Biodiversity” which was presented in Bonn this week. According to this report, the economic benefits generated by the worlds’ protected areas are worth more than $5 billion annually. This is probably even a gross underestimation if you would take into consideration all the eco-system services our planet provides.

So strong ecological policies are just pure economic self-interest, Mr. President. Maybe you should visit your own Green Week next week to learn more

Further reading:

• Deutsche Welle: Interview with Pavan Sukhdev, the author of the biodiversity report.

After EU policymakers’ disenchantment with biofuels (see EurActiv: MEPs seek reduced biofuel commitments), it is time to find the new “silver bullet” to tackle the climate and energy crisis. During two conferences held in Brussels this week, lobbyists for carbon capture and storage (CCS) pulled out all the stops to convince us that governments should invest big time to speedily develop this “inevitable” solution. The question is: is it inevitable and is it a solution or a false hope?

During the roundtable organised by Friends of Europe moderator Giles Merritt tried to focus on the question “who will pay?” (business or the public sector, so basically us the taxpayers) and “how much will it cost?”. I heard no clear answers on both questions.

With an over-representation from pro-CCS speakers (Shell and BP top managers, the Hydro-sponsored NGO Bellona Foundation, speakers of the EU Technology Platform for Zero Emission Fossil Fuel Power Plants - ZEP for short -  and the UK Carbon and Storage Association), the main message of the roundtable was loud and clear: fossil fuels (and in particular coal) are the future and CCS will have to clean up the mess so that we can continue to live our current lifestyles. “I hate CCS” said European Parliament rapporteur Chris Davies, “but I hate coal even more”.

No big arguments of course about the coming oil, gas and coal peaks or the environmental uncertainties surrounding CCS (more water use, less efficient power plants, so even more coal use, and the dangers of stored CO2 leakage in the future) . A lonely Greenpeace speaker seemed to be a bit overwhelmed by the heavy fire from his other speakers and was therefore not really capable to highlight enough the arguments of the excellent report the environmental organisation published recently (BTW I disagree with this report’s optimism about the potential of renewable energy but that’s for another blog post).

Although all of the CCS panelists called upon the EU and member states to open their purses for big financial support, none was willing to put an exact figure on how much governments would have to put up for the 10 to 12 demonstration plants which need to be built asap if CCS needs to be really commercially operational by 2020. In that context, a very ideological and neo-liberal intervention by a Deutsche Bank speaker in favour of letting the “pure free market” deal with climate change looked a bit out of touch with reality. He also probably never read Nick Stern’s report ;).

As I mentioned during one of my own interventions, I felt that the whole argumentation used by the CCS groupies was built on two fatalisms: the China fatalism and the coal fatalism. Let’s have a closer look at them. “China is building two new coal power plants per week so we need CCS as soon as possible”. Good point, only, by the time CCS will be commercially available (2020) China will already have built around 5000 extra plants (and yes they might be “CCS-ready”, but that phrase is no more than PR spin - in most cases it means that some terrain is left for use later). Moreover, it is exactly our CCS rhetoric which will convince the Chinese that they can continue to construct these plants even if their environment is already suffering heavily as a result. The Chinese BTW will be one of the biggest losers of climate chaos.

And then there is the abundant and cheap coal which we will “inevitably” use when the lights start going out or when we do not get enough oil or oil becomes too expensive. Yes, another good argument for CCS. Problem here is: coal is no longer that cheap and the reserves (as with oil) are scandalously overestimated (see 2007 JRC report and a study by the German Energy Watch). Should we really invest billions in technology which uses rapidly declining energy reserves?

The best form of carbon sequestration already exists: just leave the coal (and the CO2) in the Earth!

CCS is basically a very smart technology fix promoted by the oil, gas and coal industries to extend the era of fossil fuels. If we are indeed “addicted to oil” (George W. Bush), we should get off of it as soon as possible, not develop new medicines to make sure marihuana smokers can safely move to heroin. We need a “fossil fuel cold turkey”.

That said (here comes my fantastic U-turn :)), I am also realistic and I fear that coal will indeed be used because our “overshoot” societies will postpone the really “inevitable” (big lifestyle and distribution changes) until it is too late. Look at how our “spoiled” societies are already protesting against the high oil prices. Imagine what will happen when prices go to 200 or more per barrel. Riots in the streets. Who really thinks our elections-driven political systems will be able to deal with these developments?

So here are my recommendations to policymakers:

• establish a moratorium on new coal power plants until CCS is ready;
• start a phase-out plan for old coal power plants;
• put pressure on China (and other BRICS) to stop building coal plants and help them move to other energy solutions fast;
• provide 100% financial coverage of the costs of 10 demonstration plants but invest at the same time 5 times more in sustainable energy solutions (decentralised energy systems, efficiency, renewables) - I know this will cost a lot but compared to other costs (resource wars, failed states, climate chaos) it will be peanuts;
• commit that we will not use CCS when it is ready if we see within the next ten years that other innovations and technology breakthroughs can put us on a more sustainable zero-fossil-fuel path. So develop CCS but only use it when all other options fail to deliver.

Most importantly: stop the denial and start telling people to hard truths about the unsustainability of our Western lifestyles even if they will not thank you for it. This is called REAL climate and energy leadership!

Eight years after the start of the new millennium, we live in a new world. Unfortunately this is not the world 60s futurologist Herman Kahn presented in his famous “The Year 2000″ but a world very much along the lines of the Club of Rome “Limits to Growth” scenarios which were ridiculed by the cornucopian economists in the last 30 years.

With more greenhouse gases being pumped into our life-supporting atmosphere every day, with oil price records being set on a daily basis and predictions of oil at 200 or even 500 dollars, with the intensifying food, water and biodiversity crises, the world is starting to wake up to the scary truth that we have bought our Western lifestyles by signing a diabolical pact with the Mephistopheles of cheap energy and resources. Only because of the planet’s gifts of finite fossil fuels and other natural resources (and mankind’s disturbing discovery of how to exploit these gifts rapidly over the course of 150 years) were we able to overcome the ecological limits which are we are now running into again.

Our European (and global) political elites have yet the understand the full depth of this global sustainability crisis. O yes, they have finally grasped the climate change issue and all will be seen lining up in awe when climate pope Al Gore visits Brussels, but deep down they all keep believing that miraculous new technologies (biofuels, carbon sequestration, hydrogen or fusion) will save the day or better protect our current Western lifestyles of over-abundance and greed (because not shared with millions of poor and starving people around the world). Business as usual is their only political ammunition.

Moreover, these same political elites keep clinging to the miracle cure of further unqualified economic growth. The latest example of this “growth utopia” is the Spence panel report on Growth and Development presented today to the European Commission. Although seemingly set to “bury the 1990s ‘Washington Consensus’ (quote the Financial Times), the report still sees economic growth as the answer to all societal evils. Climate crisis: solution more economic growth; species disappearing: more economic growth; declining energy resources: more economic growth. Hallelujah! The Lord is really a one-eyed economist!

Luckily these will be the last spasms of a losing paradigm. In less than twenty years, these kind of reports will be utterly forgotten, last remnants of a economic and political elite which still believed in fairy tales and Santa Claus.