Indian Environment Minister–Climate Denier or Savvy Negotiator?

The Financial Times reports today on remarks by Indian Environment Minister, Jairam Ramesh whereby he critiqued scientific assessments about the role of climate change in shrinking glaciers in the Himalayas.

According to a press release from the Indian government Ramesh “said we have to get out of the preconceived notion which is based on western media” that retreating glaciers are due to climate change. He also stressed the scientific uncertainty about the causes of glacial decline in the Himalayas.

Of course there is “scientific uncertainty”–the whole project of science is based on uncertainty. The real issue is how we use the knowledge gained from science to assess risk and develop policy accordingly.

This is why Ramesh’s remarks may be more accurately interpreted as a political move to deflect pressure from Western countries (and the US in particular) that India agree to greenhouse gas emissions cuts at this year’s UN negotiations in Copenhagen.

A look at the Indian press shows that Ramesh’s understanding of glacial science may be more complicated. The Hindu reports on Ramesh acknowledging a .5 degree rise in India’s temperatures over the past century and the Times of India indicates that the government is supporting long-term research on glacial change in the Himalayas.

There are other indications that India is taking measures to deal with the problems with a carbon-dominated economy. In Calcutta, a transport strike is underway after West Bengal proposed to ban commercial vehicles older than 15 years from operating on the city’s streets. The main reason for the ban is to try and solve the horrible air pollution problem.

Although the ban in Calcutta is unrelated to Ramesh’s position, there is a demonstrated concern–however contentious–that environmental problems need to be solved in this rapidly growing industrial economy. Perhaps using emissions reductions strategies as a justification for helping to deal with public health could change the dynamic of India’s position in international negotiations.

Problems With European Emissions Trading Scheme

The British climate change campaigners, Sandbag, released a report yesterday critical of the European cap-and-trade scheme.

The problem is relatively straightforward: too many emissions permits were allocated during the early phase of the scheme.  A surplus of permits, coupled with the global recession, the ability to hoard permits for future years, and the ability for European polluters to fulfill obligations by purchasing cheap offsets in the developing world, has Sandbag speculating that many big emitters won’t actually be forced to reduce their own emissions until 2015.

The Sandbag report hasn’t dissuaded the British government from continuing to support cap-and-trade.  Just yesterday, Labour MP Mark Lazarowicz released a report calling for expanding the cap-and-trade model globally.

In the US, I won’t be surprised to see climate skeptics reference the Sandbag report as the US Senate starts to debate its own cap-and-trade bill in the next few weeks.  The problem, however, isn’t so much that there is an inherent problem with a cap-and-trade–rather, as the Sandbag report discloses, the problem is in not having a serious emissions cap and relying upon too many loopholes that can militate against significant reductions.

Unfortunately the House version of the cap-and-trade bill is chock full of these loopholes–the most egregious being that most of the permits will be given away to polluters, thus reducing the incentives for action.  Given the fact that the Senate requires 60 votes to defeat a filibuster, it is likely that any legislation they pass will be even MORE watered-down than Waxman-Markey.  Such a scenario does not bode well for the effectiveness of cap-and-trade.

Clinton Gets an Earful on Emissions Reduction in India

US Secretary of State Hillary Clinton met with Indian officials over the weekend to discuss a number of issues, including climate change. India–along with China–is one of the main developing countries insisting that the United States and the developed world get its low-carbon economy in order before asking developing countries to reduce their greenhouse gas emissions.

While it was not likely that Clinton would announce a breakthrough agreement with India during her trip, the US press is reporting that the US delegation was struck by the forcefulness of India’s position. Environment Minister, Jairam Ramesh said that there is “no case” for requiring emissions reductions from India.

India believes that it has a strong moral argument given the fact that its per-capita emissions are extremely low and that the West is historically responsible for the problem. After this month’s Major Economies Forum in Italy where Indian Prime Minister Manmohan Singh endorsed a document stating that global temperatures should be capped at 2 degrees above pre-industrial levels, one of his own negotiators blasted Singh, arguing that the international community will inevitably point to the agreement to demand emissions reductions.

Given the internal strife in India over the issue, Ramesh’s comments could be seen as an effort to placate domestic dissenters. Clinton herself tried to put a positive spin on the meetings, indicating that the discussions in general were “fruitful.”

These types of internal disputes should not be discounted–especially in the case of India where the argument that any binding emissions reductions on their part are inequitable runs deep.

Obama clearly sees India as a major player on a number of issues, including climate. One positive that came out of Clinton’s trip was the scheduling of a visit to the US by Prime Minister Singh on November 22–two weeks before the international climate change negotiations get under way in Copenhagen. It will be the first state visit of the Obama Administration.

Forbes Writer Contemplates $20 Gallon Petrol

Forbes has posted an excerpt of a new book by one of its writers, Christopher Steiner.  The excerpt from $20 Per Gallon: How the Inevitable Rise in the Price of Gasoline Will Change Our Lives For the Better, seems to retread ground covered by the peak oil crowd a couple of years back.

Nevertheless, it is always interesting to remember the likely impact that will accompany the inevitable rise in petrol prices.  Steiner’s excerpt takes aim at the Big Box retailers and–not surprisingly–thinks the prospects for such retailers as Wal-Mart, Target, Home Depot, etc… are dim.

The reasons he highlights are important. First, there is the problem of where the big boxes are located–low density suburban areas that are only accessible  by automobile.  With petrol at $20 gallon, the volume of traffic that these places count on for customers will diminish.

The second reason he cites is the vast global transport network that undergirds the products that are stocked in the stores.  Raw materials from the other side of the planet are moved to factories in other countries similarly far away.  Commodities are assembled in places like China and then shipped to massive distribution centers in the US where the “just-in-time” stocking system insures that goods move in and out of the store quickly.

This whole system of distribution, manufacture and consumption is fossil-fuel intensive making its sustainability, according to Steiner, questionable.

Chu in China

US Energy Secretary Stephen Chu was in China yesterday to discuss climate change with governmental officials.  The New York Times reports that he raised the rhetoric somewhat in the persistent disagreement between the two countries on how the world should respond to climate change.

According to the Times, Chu emphasized that China and other developing nations could make the problem of climate change “much worse” with their emissions while acknowledging the West’s historical role.  He also presented a set of powerpoint slides [.pdf] emphasizing all the problems that can befall China in the absence of any action on climate change

Chu was accompanied by Commerce Secretary Gary Locke who took a similar theme.  In a speech to business leaders, Locke said: “Fifty years from now, we do not want the world to lay the blame for environmental catastrophe at the feet of China.”

China’s position is that their per-capita emissions are quite small, they have not emitted nearly as much historically as the West and that the persistence of “old” greenhouse gases is part of the current problem, and that the West is better equipped financially to make large reductions.

Thus, having Chu and Locke lecture the Chinese on their own emissions is unlikely going to be received well.

The two countries did agree on some partnership programs to increase efficiency and develop clean energy technology.

It’s difficult to speculate on the effect that these types of speeches will have on international negotiations, but more positive dialogue coming from US and China officials would make for a more optimistic outcome in Copenhagen later this year.

It should be noted that Chu told a group of reporters after meeting with Chinese officials that he feels optimistic about Copenhagen.

UK Divulges Low-Carbon Transition Policy

UK climate minister, Ed Miliband, released the UK Low Carbon Transition Plan today.

I haven’t had a chance to read it in its entirety, but the Guardian has a good rundown of its proposals.

The main goal is to reach a midterm (2020) target of a 34% reduction below 1990 levels of greenhouse gas emissions.  Half of the reductions are to take place in the electricity sector, which will mean that 40% of power will be generated in a low-carbon fashion (which includes nuclear).

Other tools used to reach the goal will be to increase energy efficiency in buildings and strive to have at least 1.5 million households produce energy.

Also given significant focus is the transportation sector, which is scheduled to cut its emissions by 14% through various policies.   One component that stuck me as interesting is a proposed $47 million competition for a “Sustainable Travel City” which would fund improvements in a British metropolitan area to serve as a national showpiece.   Putting significant money behind a best-practices model could spur other cities to emulate successful low-carbon transport policies.

This type of mid-term commitment will give the UK influence at the Copenhagen talks later this year–particularly given the slow and relatively unambitious efforts going on in Washington.  There is a lot that leaders in other developed countries can learn from this plan–particularly the US Senate as it deliberates over the American Clean Energy and Security Act.

Obama's Climate Negotiator: Don't Expect Much from Copenhagen

Platts and Cleanskies are reporting that lead US climate change negotiator, Jonathan Pershing told a National Academy of Sciences panel yesterday that this year’s UN-sponsored climate talks are likely to be “inadequate.”

He said that they will not “fail,” but that more legwork will need to be done at next year’s UN meeting.

The context of Pershing’s remarks is not clear from the news reports, but any delay in forging a comprehensive global climate agreement will be not only expensive, but hazardous.

The Platts report did quote Pershing as saying a Congressional passage of the cap-and-trade bill will improve Copenhagen’s prospects, so perhaps he is trying to push Senate action. The Senate is scheduled to vote on their version of the House bill in September.

On a more positive note, Brazilian president Lula da Silva, expressed confidence yesterday that Copenhagen will produce an agreement.

Canada: Don't Expect Us to Hit G-8 Emissions Target

A day after G-8 leaders signed a declaration saying that the developed countries of the world had an obligation to reduce their greenhouse gas emissions by 80% from 1990 levels by 2050, the Canadian Environment Minister said that an 80% reduction would not be “practical” for his country.

Their 2050 commitment is a reduction between 60%-70% of 1990 levels.

With Bush off the scene, it appears that Canadian Prime Minister Stephen Harper is assuming the position of most recalcitrant world leader on climate change.  This comes on the heels of his refusal to join a new international organization designed to promote renewable energy strateiges and cooperation worldwide.

Florida Planned Community in Trouble with the IRS

A couple of years ago I published some research on a massive planned, retirement community located about 80 miles west of Orlando called “The Villages.”

I was interested in the question of suburban planning by private entities and the somewhat tenuous relationships between private developers, governmental officials, and residents.

One part of this nexus in Florida is a state-sanctioned giveaway to developers through the establishment of “Community Development Districts.”  Technically, these CDDs are public governments–like a city–which can perform certain municipal services and raise financing through tax-free bonds.  Developers seek to establish CDDs at the early stages of a community’s construction and use their municipal authority to raise money through bonds for infrastructure.

The bonds are serviceable over the long-term, making future homeowners liable for the debt.  CDDs are liked by developers since they don’t have to outlay all of the initial infrastructure costs.  Homeowners pay the costs through assessments after they buy the property from the developer.

One of the problems with the system is that it can be easily abused.  During the early years debt obligations can be racked up while the CDD is controlled by the developer. In the case of The Villages, one of the things I pointed out was that the CDD paid significant sums of money for “improved properties” that were owned by the developer and that there was some criticism that the CDD paid well over the market rate.

The New York Times today has an article discussing an IRS investigation into this very issue.  It is hard to get the actual legal angle from the article, but it appears that the IRS is saying that the CDD should have paid taxes on some bonds issued by a Villages CDD since the transaction was essentially benefiting the private developer.

I haven’t seen large studies of CDD financing, but I would guess that what was going on in The Villages is not unusual in other large developments in Florida.   If the IRS wins this battle, it could have a significant impact on how developers use this fiancing scheme.  Ironic, however, is the fact that any CDD found liable for back taxes is likely no longer controlled by the developer, but by the residents.  Thus, the CDD would have to increase its assessments on current property owners to satisfy their liability!

Major Economies Forum Ends with Weak Climate Declaration

The United States-led “Major Economies Forum” met today on the sidelines of the G-8 summit to discuss progress towards a global climate change deal scheduled to be completed by the end of the year. The Guardian has published a draft declaration from the meeting.

The major accomplishment was a recognition that average global temperature needs to be stabilized at 2 degrees centigrade by 2050. How the world is going to get there is still unresolved.

Particularly disappointing was the absence of an agreement on specific reduction targets to be met in the mid-term (by 2020). Major developed country emitters, the US, Canada and Japan have been unwilling to make any mid-term commitments, preferring to shift focus to 2050.

Developing countries–whose emissions levels are rising significantly–argue that the historic big emitters need to take steps immediately before they will agree to any of their own reduction targets.

This is one of the key issues to be worked out before a global deal can be reached. Unfortunately, there is little time. A more vigorous agreement would have pushed the UN negotiations forward. As it stands now, low-level negotiators will meet next month in Bonn to continue talks. In the autumn, UN Secretary General, Ban Ki-Moon is convening a meeting of world leaders prior to the opening of the General Assembly. If the stalemate between the US bloc and developing countries is not broken by then, the prospects for an effective agreement to come out of Copenhagen will begin to recede.