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Climate Change Month : September 2007
The past month has been significant for the high profile events that have focussed attention on the effects of climate change:
- Global investment bank Lehman Brothers published The Business of Climate Change II, which focussed on business implications of climate change
- UN secretary-general Ban Ki-moon hosted a climate change conference in New York: The Future in our Hands: Addressing the Leadership Challenge of Climate Change (US President, George Bush, only turned up for the post-conference dinner; he hosted his own conference later the same week)
- White House ‘summit’ of all the major emitters of green house gases including India and China.
What has this outpouring of human energy produced in the way of a blueprint for the way ahead? If you are thinking of installing a home solar power system, is there anything you should be aware of? Well, yes, but there is a lot of context to work through. The points of most interest to you are highlighted.
 The UN Conference
The UN conference was convened in an effort to forge a coalition to accelerate a global response to climate change and build international momentum for the United Nations Climate Change Conference to be held in Bali, Indonesia, in December
“Today I heard a clear call from world leaders for a breakthrough on climate change in Bali,” Mr. Ban said in his closing remarks at the day-long event, which drew top officials from over 150 nations, including 80 heads of State or government. “And I now believe we have a major political commitment to achieving that.”
The Bali meeting seeks to determine future action on mitigation, adaptation, the global carbon market and financing responses to climate change for the period after the expiration of the Kyoto Protocol – the current global framework for reducing greenhouse gas emissions – in 2012.
Regarding the upcoming Bali meeting, Indonesia’s president Mr Susilo Bambang Yudhoyono said “there is a public demand for concrete and bold action. Thus, we are looking forward to their principal outcome: bold global decisions addressing climate change without significantly jeopardizing development efforts.”
Pointers to what might come up at Bali included:
- Reducing disaster risk and bolstering community resilience to extreme weather events through planning and capacity-building, especially in the most vulnerable nations
- Legally binding emission targets, called for by many participants
- Effective policy frameworks and cooperation mechanisms to accelerate the deployment of technological solutions between and within the North and the South
- Ways to improve energy efficiency must be sought out, including new technologies – such as carbon capture and storage
- An enhanced carbon market in developed nations that offers flexibility, allows for a cost-effective transition to low-emissions economies and ultimately provides incentives to developing countries
Lehman Brothers Report
In my view, this is the report that really unfolds the way ahead. At 92 pages in length, it is about half the size of the report that preceded it, but it is packed with the results of extensive consultation with a wide variety of sources.
The earlier report saw climate change “as a slow but powerful force that, like globalisation, technological change, or population ageing, inexorably stands to shape, possibly quite fundamentally,
the economic environment in which companies operate.” (p 2)
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The Business of Climate Change ll
Policy is accelerating, with major implications
for companies and investors
Lehman Brothers |
While business has been looking to governments to give a lead, in many cases that lead has been absent or weak, and policy development has been marginalised to less important departments of government. The report believes that in due course, decision-making will move to finance ministries. “And when these ministries take over responsibility, policymaking will acquire a harder edge: the objective of policy design will be not only to reduce greenhouse gas emissions, but to reduce them at the lowest possible cost.” (p 2)
Some interesting figures emerge from the research. Compare the differing costs of saving a tonne of carbon emissions under methods (pp 21-22):
The cost to save a tonne of carbon emissions |
Method
|
Cost
|
Hydro electricity
|
Nil |
On-shore wind turbines
|
Negligible |
Energy efficient light bulbs
|
$10 |
Draught-proofing a house
|
$130 |
Off-shore wind turbines
|
$150 |
Solar Thermal electricity
|
$500 |
Reducing automobile emissions
|
$700 - $2,300 |
Solar photo-voltaic cells
|
$6,300 |
While the cost of solar photo-voltaic cells may be disguised by government assistance, the above figure represents the cost to society.
If your objective in considering solar power for your home is to help combat climate change, you might want to turn your attention to energy efficient light bulbs as a more effective – and cheaper - way to go! Several countries have already enacted legislation that will require the substitution of energy saving light bulbs for incandescent light bulbs in the next few years.
In a discussion on renewable power generation (see p 74), the point is made that not all renewable energy sources are economically efficient. “Wind seems to be the main beneficiary of climate change policies: at present, onshore wind is, along with hydropower, the only renewables technology that does not require subsidy to be cost effective. . . . Other options are still too expensive to be commercially viable: solar in particular is still uneconomic, except in extremely sunny parts of the world: even if the cost of solar energy were halved, it would still, in many of the largest economies, be twice as expensive as traditional sources of energy.” The table below illustrates this point. Remember – this information relates to commercial production of electricity, but is relevant to home generation as well.
Figure 28. Renewable energy costs
Renewable |
Current energy cost (2001
US$ cents/kWh)
|
Potential future energy cost
(2001 US$ cents/kWh)
|
Biomass energy
|
1 – 12 |
1 – 10 |
Wind energy
|
4 – 8 |
3 – 10 |
Solar photovoltaic electricity
|
25 – 160 |
8 – 25 |
Solar thermal electricity
|
12 – 34 |
2 – 10 |
Hydro energy – large
|
2 – 10 |
2 – 10 |
Hydro energy – small
|
2 – 12 |
2 – 10 |
Geothermal energy (electricity)
|
2 – 10 |
2 – 8 |
Wave energy
|
10 – 30 |
5 – 10 |
Source: United Nations Development Programme (2004).
The White House Summit
With the title of Major Economies Meeting on Energy Security and Climate Change, this meeting gathered representatives of the 17 countries that are the biggest CO2 emitters, plus the UN.
The two day meeting fulfilled a pledge that President Bush had made earlier in the year and he turned up to make a speech.
He recounted what his administration had done, but seemed to rule out meaningful cooperation with other countries – each had to develop its own strategy, he said. |
![President Bush speaking at the Major Economies Meeting on Energy Security and Climate Change [AP Photo Sept 07]](images/clip_image004_000.jpg)
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This seemed to conflict with the views of most of the delegates who were looking to the UN Bali Conference (see above) to introduce legally binding emission targets. At least this was acknowledged in the summing up by the conference chair.
After seven years of Bush walking away from all the developments taking place in other venues and for most of the time even denying there was any such thing as climate change or global warming, many delegates were sceptical about the purpose of the meeting, as became clear in comments after the event by some delegates reported by the media. Was it an exercise in PR? On that score, it failed. Was it to demonstrate leadership? On that score, it failed, too. Was it an attempt to derail the UN conference in Bali in December which will set the ground for a successor to the Kyoto protocol? Only time will tell.
Some delegates were scathing in their comments - the BBC reported one delegate as saying "This is a total charade . . . It's a total humiliation". Others thought the president was due some recognition for finally acknowledging there is a problem -"This here was a great step for the Americans and a small step for mankind," German Environment Minister Sigmar Gabriel told journalists in Washington. "In substance, we are still far apart."
Conclusion
This was an interesting month for setting forth a large agenda. The conference in Bali can only be considered the beginning of a political process. The Lehman Brothers report provides a very detailed set of policy options that need to be considered. Bush’s speech makes clear that he will not consider any mandatory scheme. The Lehman report (p 82) recognises that the Bush White House will not progress the world agenda in this regard but is optimistic that whichever candidate wins the next US presidential election (and no candidate seems to favour the Bush policy), climate change will become a significant preoccupation for him or her in 2009 – 10.
Useful references:
http://www.un.org/apps/news/story.asp?NewsID=23944&Cr=climate&Cr1=change
http://www.lehman.com/press/pdf_2007/TheBusinessOfClimateChange.pdf
http://www.lehman.com/who/intcapital/pdf/TheBusinessOfClimateChangeII.pdf
http://www.state.gov/g/oes/climate/mem/
Jack Callon
3 October 2007 |
