A row over the future of the European Union‘s pioneering greenhouse gas trading system is threatening to upset Europe’s bid to win the global clean technology race.

Two powerful European commissioners are at loggerheads over whether to strengthen the emissions trading system, in order to maintain Europe’s leadership on climate change. The row surfaced on Thursday at a conference in Brussels where the president of the European commission, José Manuel Barroso, lauded the EU’s efforts on cutting emissions and called for stronger action in the future.

Next week, the EU’s energy chief, Guenther Oettinger, will unveil an ambitious new energy efficiency directive, aimed at forcing businesses to cut the amount of energy they waste. But, while backing the push for efficiency, clean technology experts warn that if the directive goes ahead in its current form, it could destroy the emissions trading market. Under the trading scheme, businesses are awarded a quota of permits to produce carbon, and cleaner companies can sell their spares to big emitters.

The problem is that if companies meet the new energy efficiency targets – which will apply to heavy industry as well as the building and construction sector – they will find themselves with large quantities of unused carbon permits. That in turn will drive down the price of carbon and render the emissions trading system useless.

For this reason Connie Hedegaard, the EU climate chief, favours cutting the number of permits available to businesses, for instance by setting aside a small portion of the permits due to be released from 2013. That would prop up the carbon price and ensure that businesses invest in clean technology as well as energy efficiency projects.

Many businesses are alarmed, arguing that they should be allowed to keep their permits as compensation for the stiff new efficiency regulation. Oettinger is known to be sympathetic to their pleas.

Barroso refused to step into the row publicly yesterday, but in a lively speech – in which the normally sombre statesman wowed his audience by quoting liberally from The Kinks – he insisted that the EU must go further than its current obligations.

He said: “It is clear to us that our current ambitious policy is working. But now it needs to be backed up over the long term. I will be working with my colleagues in the commission and across the [European Union] institutions to ensure we match our words with actions.”

Brussels insiders are betting that Hedegaard will win the emissions trading argument, which must be settled by next Wednesday when the new efficiency directive is launched. A compromise would allow a provision in the statement for “adjustments” to the emissions trading scheme, which could include setting aside permits.

Oettinger also made a key public concession to Hedegaard on Thursday, by acknowledging the need to set new targets for renewable energy beyond 2020 when the current 20% target expires. When Hedegaard floated the idea in the Guardian last month, Oettinger insisted that it was too early to think of such longer term targets.

On Thursday he quoted estimates that a 45% renewable target would be needed for 2030.

Barroso also indicated that longer term targets were firmly on the agenda, as he welcomed the latest report from the Intergovernmental Panel on Climate Change (IPCC), which found that as much as 77% of the world’s energy could come from renewable sources by 2050, if the right government policies are pursued.

He said: “It was the combination of science with leadership that drove the smog from our cities, reduced acid rain, and closed the hole in the ozone layer. It is also the evidence of science combined with leadership that has helped us fight diseases such as HIV/Aids.We need that powerful combination to swing into action again. Let us use this IPCC report to help fill the gap between our 2020 targets and our 2050 objectives.”

Barroso then delighted the conference by going off his scheduled remarks to quote an entire verse from the 1968 track The Village Green Preservation Society, nearly bursting into song as he explained the parallels between the commission and a preservation society.

The IPCC report, first published just over a month ago, has attracted criticism this week from climate change sceptics, who have complained that a scientist from Greenpeace was one of more than 120 authors of the study. They claim that this makes the study biased.

Rajendra Pachauri, chair of the IPCC, dismissed the claims, pointing out that the Greenpeace scientist was one among a large number of voices from across the scientific spectrum, including some who are sceptical of the role of humans in climate change, invited to take part in the IPCC process. He also remarked that he had frequent contact with businesses without attracting accusations of bias.

Executive director of Greenpeace UK, John Sauven, said: “Exxon, Chevron and the French nuclear operator EDF also contribute to the IPCC, so to somehow paint this expert UN body as a wing of Greenpeace is preposterous. Indeed, we’ve criticised the IPCC for being too conservative over the years. On this occasion our advice was given weight, but that’s hardly surprising given that it was developed with the German Aerospace Centre, while Imperial College, Oxford Economics and McKinsey have also outlined the vast potential of renewable energy.”

The IPCC report on renewable power is a rare interim study between the landmark comprehensive reports on the state of scientific knowledge on climate change, the last of which was published in 2007 and the next not expected until 2014.

For the curious, Barroso’s unscheduled Kinks riff in full went as follows:

“I don’t know if many of you will remember a song from 1968 called ‘The Village Green Preservation Society’ by Ray Davies from The Kinks. The song goes:

“We are the Village Green Preservation Society

God save Donald Duck, Vaudeville and Variety

We are the Desperate Dan appreciation society

God save strawberry jam and all the different varieties”

Sometimes I feel that the commission is like a village green preservation society. But this is not just about preserving the planet we have inherited, it is about what we can do to make this a better place for living.”

Washington, D.C., 14 June 2011 (PAHO/WHO) – Greener investments in transport, housing and household energy policies can help prevent significant cardiovascular and chronic respiratory disease, obesity-related conditions and cancers.

These are among the findings of a new global World Health Organization series that looks systematically, for the first time ever, at the health ‘co-benefits’ of investments in climate change mitigation reviewed by the Intergovernmental Panel on Climate Change (IPCC).

Overall, sustainable development policies in housing, transport, and household energy may benefit health right away – even if the broader climate gains are realized over years or decades.

The new WHO series, Health in the Green Economy, finds that the health sector needs to become stronger advocates for those green economic investments that prevent disease at the outset.

On the other hand, climate experts, including the IPCC, which is the leading international body for the assessment of climate change, need to put health at the center of mitigation efforts, the series also recommends.

“Some climate change mitigation measures yield broader health gains than others,” says Dr Maria Neira, director of WHO’s Department of Public Health and Environment.  “Potential health benefits — as well as certain risks — should be considered more systematically in climate assessments. And if that is done, we can identify strategies that are truly win-win.”

In the case of more climate-friendly housing, the immediate savings in health care costs from home energy-efficiencies and home insulation programmes may be so large that they could rapidly repay investments made – even if savings in greenhouse gas emissions take longer to realize. The report on housing, the first full report of the series to be issued, was released on 14 June at the annual meeting of the Global Health Council in Washington, DC.

Many forms of asthma and allergies, as well as heart disease and strokes related to increasingly intense heat waves and cold spells could be addressed by more climate-friendly housing measures, the report finds.

However more weather-tight housing can introduce some new health risks – unless adequate fresh air ventilation is assured.  The report also found that not enough attention is being paid to the housing risks of rapidly growing developing cities, and how more climate-friendly housing and urban design could improve the health of the poor, as well as reduce climate change.

WHO’s Health in the Green Economy series is looking at climate change mitigation and “green growth” strategies in five economic sectors: transport, housing, health care facilities, household energy in developing countries, and agriculture.

As other examples of “best buys” for health, initial findings from reviews of other sectors  identify considerable evidence that:

• Investments in, and use of, safe walking/cycling and public transport networks are strongly associated with more healthy physical activity, lower rates of premature mortality, and less obesity. However, the last IPCC report focuses on better fuels and engines as mitigation measures, giving little attention to the much wider benefits offered by policies that favour walking cycling and public transport.  This neglects the broader range of health and social benefits that can be derived from adopting more sustainable transport.
• Deaths of more than 1 million people annually from chronic obstructive pulmonary disease (COPD) due to indoor air pollution from traditional biomass and coal-fired stoves are largely avoidable with more energy efficient stoves. An estimated 15% of this burden in Latin American and Sub-Saharan African could potentially be averted in less than a decade if more  advanced biomass or biogas stoves were introduced at a pace compatible with UN targets for achieving universal  access to modern energy services by the year 2030.

“This series explains why green housing and home energy, transport, and urban environments can improve our health – and why the health sector can prevent much disease, at very little cost, by advocating for healthier investments in some key sectors,”  says WHO’s Dr Carlos Dora, an epidemiologist and coordinator of the series.

“The bottom line is that people can try to practice healthy diets and healthy lifestyles. But we also need a supportive environment,” says Dr Luiz Galvao, Manager, Sustainable Development and Environmental Health, of the Pan American Health Organization/WHO.

“In our busy lives, not everyone has time or money to go to the gym. But if we live in a healthy house and in a city where we can easily and safely walk or cycle to work, and get regular exercise just by moving around outdoors, this can make an enormous difference to our lifestyle and our overall health.”

Currently, the health care sector is beset with soaring health care costs for cardiovascular disease, hypertension, stroke, cancers and a range of other obesity and non-communicable disease conditions.

And 80% of such chronic disease is now occurring in lower income countries, where urban growth is driving rapid slum expansion, soaring traffic volumes, air and water pollution and rates of traffic injury.

“People really cannot make healthy lifestyle choices – unless they have a healthier environment,” Dora observes. “So we, as health professionals, need to promote basic environmental measures that cost the health sector very little, and can avoid many subsequent years of treatment. And these health savings an be captured immediately – while the climate benefits accumulate for the future.”

Other key findings:

• About 4% of the annual ischaemic heart disease (IHD) disease burden among African and Latin American adults over 30 could be avoided by 2020 with introduction of more advanced biomass or biogas stoves in pace with the same UN universal energy access target. Here, too, many health benefits will be realized over a course of several years, due to the chronic nature of the disease.
• By 2020, close to 17% of the annual pneumonia deaths among African and Latin American children under the age of five could be avoided, if more advanced biomass or biogas stoves were introduced at a pace compatible with the UN target for universal energy access.
• Emissions of climate change pollutants also could potentially be reduced by as much as a billion tons of CO2-eq between 2010 and 2020 as a result of the uptake of new, very-low emission biomass stoves or other clean fuel technologies in sub-Saharan Africa and Latin America at a pace compatible with universal energy access goals. This translates into distribution of about 13.5 million stoves a year between 2010-2020.

The complete Housing report and other briefs from the Health in Green Economy series can be found on WHO’s website.

How climate change affects you depends on more than just how it affects your local weather. It also depends on how much the weather matters to your livelihood, and how well you can cope with the changes.

Philip Thornton, with the International Livestock Research Institute, is one of the authors of the new report, a joint effort by a group of international agricultural research centers. Thornton and his colleagues wanted to find what they called “hotspots” of future food insecurity: places with the greatest exposure to climate change, highest sensitivity to its impacts, and the least ability to cope with them.

Other studies have looked at the effect of climate change on growing conditions in certain regions. But Thornton says figuring out how that interacts with other factors affecting food security is a challenge.

“It’s very difficult to look directly at things like sensitivity of the food systems to climate change impacts, or even the coping capacity of populations to address the impacts. And so we used proxies.”

They used a region’s cropland area as a proxy for sensitivity to climate change because changes in the weather would have bigger impacts on areas with more farmland. To examine coping capacity, they looked at national data on the prevalence of children stunted by malnutrition.

They combined this data with climate change models that predict the impacts on temperature and rainfall by 2050 to come up with maps of the most vulnerable areas of the tropics.

For example, higher temperatures are expected to shorten growing seasons in the tropics. The report looks at areas expected to lose more than 5 percent of the growing season and finds about 370 million people highly vulnerable to this impact.

That area includes much of South Asia, especially India; Nigeria, Niger, Mali and other parts of West Africa; and parts of Sudan, Ethiopia, Uganda, Zambia and other areas of East and Southern Africa.

These are regions, Thornton notes, where hunger is already a problem. “It’s almost like a double-whammy, if you like.”

Other criteria give smaller impacts. But the basic outlines are the same.

Kansas State University professor Chuck Rice was a member of the 2007 U.N. Intergovernmental Panel on Climate Change. He notes that some of the countries most sensitive to climate change and least able to cope with it, also have among the highest rates of population growth, which puts yet another strain on their food security.

“I think that really pushes the need for increasing funding, not only for research but for outreach efforts to develop mitigation, but also adaptation strategies.”

Experts say those strategies include switching to more drought- and heat-tolerant crops, better water management techniques and insurance for crops and livestock to help farmers cope with the climate changes expected during the coming decades.

Gas is likely to make up about one-quarter of the world’s energy supply by 2035, according to the study, but that would lead the world to a 3.5C temperature rise. At such a level, global warming could run out of control, deserts would take over in southern Africa, Australia and the western US, and sea level rises could engulf small island states.

Nobuo Tanaka, executive director of the IEA, told a press conference in London: “While natural gas is the cleanest fossil fuel, it is still a fossil fuel. Its increased use could muscle out low-carbon fuels such as renewables and nuclear, particularly in the wake of Fukushima. An expansion of gas use alone is no panacea for climate change.”

Governments are likely to come under pressure to reduce support for low-carbon energy and opt for gas instead, as oil and gas companies have been urging, in a move that could imperil the fight against climate change, the IEA warned.

Fatih Birol, chief economist of the IEA and one of the world’s foremost authorities on energy and climate, said: “If gas prices come down, that would put a lot of pressure on governments to review their existing renewable energy support policies … We may see many renewable energy projects put on the shelf.”

He said some renewable technologies, such as onshore wind, would continue to prosper but the worst affected projects were likely to be offshore wind and solar energy.

Birol said the world must continue to invest in renewables, energy efficiency and carbon capture and storage, in order to stave off climate change. If the world fails to invest in renewables, a new generation of gas-fired power stations would have a lifetime of at least 25 years, effectively “locking in” billion of tonnes of carbon emissions a year.

The Guardian recently revealed the extent of lobbying by the gas industry, which senses a unique opportunity to re-brand itself as green. Previously inaccessible sources of gas, known as “unconventional” gas, are predicted to create a “golden age of gas” with lower prices and plentiful supply.

When burned for power, gas produces half the carbon of coal. However, a recent study from Cornell University suggested that this might not be the full story, as using shale gas – one of the chief forms of “unconventional” gas, derived from fracturing dense rocks – could create more emissions than coal because of difficulties in its exploitation. The IEA’s estimates put the associated emissions much lower.

Along with a supply glut – the IEA estimates there are at least 250 years of recoverable resources at today’s demand levels – gas is benefiting from market turmoil surrounding some of the alternatives. “Gas is a fortunate fuel because all its competitors have some problems,” said Birol.

Coal suffers high emissions, renewables can be expensive, and there are safety fears over nuclear after the Fukushima disaster in Japan.

But Birol pointed to evidence that exploiting unconventional gas could bring severe environmental damage. In the US, there are many reports of contamination in the water supply near shale gas sites, and dangerous leaks of natural gas. In the UK, two small earthquakes have taken place near sites where a company is using “fracking” – the process of releasing gas from dense shale rocks by blasting it with water and chemicals. Fracking operations have been halted while investigations take place to establish whether there is a link.

Birol said that the concerns around fracking should lead companies to adopt more stringent safety and environmental measures.

“If gas companies want to see a golden age of gas, then they need to stick to golden standards,” he said.

Cities from Johannesburg to Los Angeles are changing street lights, insulating buildings and promoting bicycling to slash carbon emissions as envoys at United Nations talks bicker about binding greenhouse-gas goals.

“While national governments continue their excruciatingly frustrating dialog on climate change, we in the cities are acting,” Portland, Oregon Mayor Sam Adams said in an interview. “It’s sheer common sense. Becoming more efficient with your city’s energy needs means you’re also more economically secure.”

Wracked with budget deficits and economies recovering from recession, municipal leaders are looking for cheap ways to curb energy consumption and help governments meet pollution targets. General Electric Co. (GE) and Siemens AG (SIE), which make power generation equipment, and energy management tool-makers Johnson Controls Inc. and Honeywell International Inc. (HON) are winning contracts from cities to work on efficiency projects.

Global annual spending of $300 billion to $1 trillion on efficiency could slash energy use a third by 2050, according to the UN Environment Program. Former U.S. President Bill Clinton and New York Mayor Michael Bloomberg this week are spearheading a gathering in Sao Paulo of the C40 group of mayors to address topics from tree-planting to hydrogen-powered buses.

‘Lowest-Hanging Fruit’

“The lowest-hanging fruit is in the area of energy efficiency and conservation,” UNEP Executive Secretary Achim Steiner said. “If you look at much of the urban infrastructure that has been built up over the last 100 years, and even in the last 20 to 30 years, it’s extraordinarily inefficient.”

While cities take up just 2 percent of the Earth’s land mass, they contain more than half the global population and generate over 70 percent of its carbon emissions. That makes them central to achieving national targets, such as Brazil’s goal to cut greenhouse gases by more than a third by 2020.

“The target will be met by cities, where there’s more energy consumption,” said Hamilton Moss de Souza, director of energetic development at the nation’s Federal Ministry of Mines and Energy.

The work of the mayors may prod envoys at UN talks in Bonn next week aimed at drawing up an agenda for an annual gathering in December in South Africa. Those talks are aimed at setting new carbon-emission limits for industrial nations for when current targets under the 1997 Kyoto Protocol expire in 2012.

While the UN talks stalled in Copenhagen in 2009, the city itself is pressing ahead with efforts to curb emissions. Copenhagen is working with Seoul-based Hyundai Motor Co. (005380) to test hydrogen-fueled cars, and with Bagsvaerd, Denmark-based Novozymes A/S to make fuel from waste, Mayor Frank Jensen said.

Talk Versus Action

“Ministers and heads of state talk a lot about climate change, but we in the cities are the ones who have to act,” Jensen said. “We want Copenhagen to be an international green laboratory, and we have made a catalog of green solutions to take to other cities in the world.”

A district heating system has helped Copenhagen cut emissions by 20 percent in a decade, Jensen said. Dong Energy A/S and Vattenfall AB are working on a 1.3 billion kroner ($250 million) plan to convert three plants that provide the heat to burn biomass rather than more polluting coal, Jensen’s office said.

Portland’s Adams said he’s in Brazil to tout “green” loans that allows householders to install insulation and heat pumps, paying back the borrowings through their energy bills.

Portland, Oregon Initiatives

The city is working on the home loans with Portland General Electric Co. (POR), Northwest Natural Gas Co. (NWN) and Pacific Power Group Inc., according to Adams’s office.

The Oregon city also is working to contain a $41.9 million deficit, caused by a slump in tax revenue from businesses, especially hotels, according to Moody’s Investors Service Inc.

Clinton’s initiative in April joined with the C40, led by Bloomberg, to bolster efforts by cities to slash emissions. The New York mayor is founder and majority owner of Bloomberg LP, the parent of Bloomberg News.

During three days of meetings that begin today in Sao Paulo, C40 city leaders will swap notes on their experiences of fighting climate change. Attendees include representatives from cities including Addis Ababa, Athens, Berlin, Buenos Aires, Delhi, Hong Kong, Lagos, Lima, Moscow, Paris, Rome, Santiago, Chile, and Yokohama, Japan.

“Many of the things you can do to increase the efficiency of buildings, such as improving lighting and insulation have a very competitive investment return,” said Arah Schuur, director of the Clinton Climate Initiative’s building retrofit program. “That’s good for business as well as the environment.”

Honeywell, Schneider Electric

Among the program’s projects is a collaboration with Morris Township, New Jersey-based Honeywell to retrofit 21 municipal buildings in Johannesburg with more efficient lights and solar- heated water, Schuur said. In Houston, Munich-based Siemens and France’s Schneider Electric SA (SU) are refitting 271 city buildings to cut energy use by more than 30 percent.

A U.S. plan to cut energy costs in public buildings known as the energy performance contract already generates $3.5 billion of work for companies, according to Tom Rowlands-Rees, an efficiency analyst at Bloomberg New Energy Finance. If projects like that were rolled out globally, the market could be more than 25 times bigger, he said.

“Energy efficiency has huge potential to help us reduce emissions globally,” Rowlands-Rees said. “If the energy performance contract concept could be scaled globally we’d go from a $4 billion industry to a $100 billion one.”

Lights in London

Landmark buildings are among those targeted for retrofits. New York’s Empire State building, once the world’s tallest, is remodeling to cut energy use by 38 percent and bills by $4.4 million a year, according to the Clinton initiative. Johnson Controls Inc. (JCI) and Jones Lang LaSalle Inc. (JLL) are working on building at the request of the owner Tony Malkin. The city’s deficit is projected to reach $4.1 billion, according to the Independent Budget Office.

In London, city authorities are working with General Electric Co. and Electricite de France SA to replace lights with more efficient light-emitting diodes on Tower Bridge in time for next year’s Olympic Games, which the U.K. capital won the right to host after making a virtue of sustainability in its bid. Mayor Boris Johnson last week announced plans to roll out 1,300 electric-vehicle charging points in the city by 2013.

“City governments have the opportunity to be a crucible for low-carbon innovation with the combined clout to influence national governments and international policy,” said Johnson’s environment adviser, Kulveer Ranger. “Boris Johnson has made greener transport a top priority for his administration, which will be a key theme for us in Sao Paulo.”

L.A. to Rio

Los Angeles is also looking to LEDs to replace 140,000 street lights, a $57-million project that’ll pay back the cost with energy savings over seven years, according to the Clinton initiative. Los Angeles combined budget shortfalls of $895 million from fiscal years 2013 to 2015, after closing a $457 million hole for the budget year 2012, which begins July 1.

While Brazil describes its national greenhouse-gas target as voluntary, the City of Rio de Janeiro has a law requiring it to reduce emissions by 8 percent in 2012 and 20 percent in 2020, from 2005 levels. Even so, nations must strive to reach an international agreement, or “none of these measures will mean anything,” said Sergio Besserman, president of Cadegom, Rio’s sustainable development chamber.

“Any real movement will have to come through a global agreement,” Besserman said. “Carbon must be priced, it has to be internalized in the global economy.”

The European Union is unlikely to propose a deepening of the bloc’s greenhouse-gas reduction target before the next global climate summit, due to start in November, Polish Environment MinisterAndrzej Kraszewski said.

The EU, which wants to lead the global fight against climate change, is on schedule to meet its binding goal of cutting emissions by 20 percent in 2020 compared with 1990 levels. It has said it’s ready to move to a 30 percent target if other countries follow suit.

Kraszewski, who met with EU Climate Commissioner Connie Hedegaard in Brussels yesterday before Poland adopts the rotating EU presidency in July, said Europe will keep its options open during the international climate talks in Durban, South Africa, scheduled from November 28 to December 9.

“I don’t expect a proposal from the European Commission on a deeper target before Durban,” he told reporters today. “The Polish government has repeatedly highlighted its negative opinion about a stricter goal. The conditions for it, namely comparable efforts by other countries such as China or the U.S., haven’t been met.”

Carbon-dioxide allowances under the EU emissions trading system, a cornerstone of the bloc’s climate initiative, traded 1.5 percent higher at 16.59 euros a metric ton on the ICE Futures Europe exchange as of 11:52 a.m. in London. The contract has gained 17 percent this year.

Kyoto Expiry

Global talks to iron out a climate-protection framework after the expiry of the Kyoto Protocol in 2012 have stalled amid differences between developing and industrialized countries.

While envoys from more than 190 nations at the last United Nations climate summit in Cancun, Mexico, agreed in December to send as much as $100 billion a year to vulnerable nations by 2020, protect forests and outline methods to verify cuts in fossil fuel emissions, disagreements have kept the negotiators from crafting a new binding agreement.

As China, India, Brazil and South Africa pressed developed nations to make pledges of bigger cuts, Japan, Russia and Canada said they don’t want to extend the Kyoto treaty to the so-called second commitment period unless the two biggest emitters, China and the U.S., accept the agreement.

“The world is recovering from a crisis and certain countries are not willing to make long-term commitments,” Kraszewski said. “But I still think that the second commitment of the Kyoto Protocol is possible under certain conditions.”

‘Scale Up Efforts’

The EU urged governments and businesses in March to make energy efficiency a higher priority to help the bloc surpass its current carbon-reduction goal and achieve a 25-percent cut in pollution, reduce reliance on fossil fuels and boost security of energy supplies.

The EU may cut pollution by 25 percent domestically in 2020 as long as it steps up energy-saving measures, according to an analysis by the commission. The most cost-efficient scenario to reach the EU aim of reducing carbon discharges by 80 percent in 2050 is to cut emissions by 40 percent in 2030 and 60 percent in 2040, the commission said.

“We’re looking into the possibilities of how we can scale up efforts,” said Isaac Valero-Ladron, climate spokesman for the commission. “We’re still in a debate on going to 30 percent and in the coming months we’ll come up with a breakdown of costs at national level for EU member states.”

A decision by the 27-member EU to adopt a more ambitious emissions-reduction target would have to be backed by national governments and the European Parliament.

In ‘The Critical Decade’ report released this week, the Climate Commission, which is headed up by Tim Flannery, outlines that “unless effective action is taken, the global climate may be so irreversibly altered we will struggle to maintain our present way of life.”

It is a view that is yet to be fully adopted across Australian political parties, however.

Climate change and its mitigation through carbon taxes and emissions trading schemes are topics that continue to fuel fierce debate around private dining rooms, parliament sittings and boardroom tables.

The Liberal Party is yet to sign up.

While opposition leader Tony Abbott acknowledges the world’s climate is changing, and that human activity plays some part in this, he is sceptical of the threat posed by anthropogenic global warming.

Policy change

Former prime minister John Howard may have flagged the development of a carbon trading scheme and the goal of reduced emissions in 2006, but he was swept from office by Kevin Rudd before he got the chance to put any policy into effect.

He did develop the Mandated Renewable Energy (Electricity) Target in 2001, which set an initial target for electricity retailers and wholesalers to source 9,500 gigawatts of electricity from renewable sources by 2010.

That figure was extended by Mr Rudd’s Labor government in 2009, which renamed the scheme the Renewable Energy Target and increased it to 45,000GW by 2020.

In government, Labor has arguably been the more proactive party in developing policy to mitigate climate change.

Mr Rudd couldn’t ratify the Kyoto Protocol fast enough and attempted to get a carbon pollution reduction scheme through parliament three times, with the opposition using its numbers in the Senate to block the proposed legislation.

Prime Minister Julia Gillard this year announced plans to introduce a carbon tax, details of which are expected in July.

Stunting growth

Sustainable Energy Association of Australia chief executive Ray Wills believes politicians’ lack of acknowledgment that climate change exists makes it difficult to develop policies that reduce carbon emissions, increase renewable energy sources and help to develop cost-competitive renewable technologies.

“The nature of politicians is they are far more uncertain about this than the rest of us. That then fails to drive a willingness within the bureaucracy to create change,” Mr Wills said.

He said climate change policy, reform and proposed legislation hit a brick wall in Treasury.

An example of this was the changing of fuel excise policies by the Howard government in 2004, when the government imposed fuel excises on biofuels, which had previously been exempt.

“We were at that stage building, with federal National Party support, a biofuels industry. Treasury wrote a paper that said it was more economically rational to import fuels at a lower price than it was to pay and support the production of biofuels within Australia,” Mr Wills said.

“Those decisions were taken in 2004, when the price of oil was at $25 and $30 a barrel. As a consequence of that, when the spike started in about 2007 we weren’t in any position to be an industry that could have, in that three-year period, grown up and met some of the challenges of increased fuel prices.

“Treasury made an economic rationalist decision, not an ‘in the best interests of the community’ decision that considered where biofuels might grow, how much employment that might generate and what that might mean for a community.”

Such decisions are thwarting the development of renewable technologies in Australia, according to Mr Wills.

Horizon Power operates 40 independent systems that generate and supply electricty in regional WA, currently with a 10 per cent renewable component, and acting managing director Frank Tudor said foresight and certainty in federal government policy was a primary concern.

“Having certainty in legislation at a federal level going forward I think is important,” he said.

“Many of the investment decisions that are made span 20-plus years when we are talking about power generation. As those investments are made it is important to ensure the policy is clear, it has got a clear path for price trajectory and if we need to account for transitional assistance for sectors of the industry that is provided for.”

“The balancing act is to make sure that we don?t create a massive exodus of power generators through the implementation of such policies.”

He refers to federal government support for the development of renewable technologies as ‘reasonably modest’.

While the state government is providing marginal support for technological advancement by companies such as Carnegie Wave Energy and with projects including the $750 million Collgar wind farm in Merredin, Mr Wills said more could be done.

“We are talking 20, 30 and 40 million [dollars] in a state government budget worth $20 billion; anything less than $100 million really is small change,” he said.

“If you seriously want to see policy change, if you seriously want to see a change in the way we generate energy, then you should be spending a serious amount of money to do it.”

Carnegie Wave Energy chief executive Michael Ottaviano said state and federal governments needed to be convinced that investment in renewable technology was worthwhile.

He said moving the headquarters of Carnegie offshore to a base where the government was more supportive of the development of cost-competitive renewable energy was possible.

“How long we can mount the case to stay in Australia depends on the support,” Mr Ottaviano said.

Back to business

Amid all the political posturing over climate change and the carbon tax, business remains in limbo.

Sustainability consultancy and technology service provider Greensense’s managing director, Derek Gerrard, said this led to tension within businesses.

“For business and government there is a lot of uncertainty in terms of the cost impact to business; whether that is direct cost of paying a carbon tax or eventually trading carbon permits, or whether there is a downstream supply chain issue because of pricing increases,” he said.

But according to Mr Gerrard, questions about the existence or otherwise of global warming shouldn’t affect the drive for change.

“Regardless of how that legislation plays out, one of the core issues is about needing to live in a world where there is cleaner energy and we need to find ways to develop cleaner energy sources and more efficient ways of doing what we do,” Mr Gerrard said.

“Outside of the climate change debate, it is the right thing to do, whether you believe in that science or not. Better that we make the changes and find we got the science wrong than not make the changes and find the science was right.”

Costly change?

With most climate change reporting suggesting energy generation is a major factor in climate change, many politicians and sustainability spokespeople are pushing for the development of cost-competitive renewable energy sources.

Mr Gerrard said while changes could be made to use resources more efficiently, investment in the development of those sources was crucial.

“The investment is significant; innovation required is significant as well. It is not going to all be solved by solar, there is going to be a mix of other renewables. The dollars are high and investment of businesses is high,” he said.

According to Mr Wills, policies that push market-led technology development are crucial to renewable sources becoming cost competitive, which will drive the uptake of renewables.

“The challenge is how you create a more competitive and innovative market that allows renewable energy to come in and compete for that energy provision,” Mr Wills said.

“Prescriptive solutions lock the innovation out of a market. Market tools are better than direct action. Government grants are direct action. Government procurement is truly market based. That provides a constituent price back to the project proponent. That is a market mechanism.”

Multilateral lending agency Asian Development Bank (ADB) today said it will invest USD 60 million in three venture capital funds targeted at companies combating the impact of climate change and promoting clean energy in India and China .

“Climate change will hit Asia hard in coming decades. Investing in these venture capital funds will help channel finance into innovative and affordable technologies that tackle the challenge of climate change in ways that are suited to developing Asia,” the Director General of the ADB’s private sector operations department, Philip Erquiaga , said in a release.

The ADB is injecting USD 20 million each into the three funds — Aloe Environment Fund III, Keytone Ventures II and VenturEast Life Fund III — which are likely to leverage an additional USD 600 million to USD 700 million of private sector investment.

The funds will invest in new technology companies involved with climate change mitigation and adaptation or environment protection.

Mitigation costs in developing countries are estimated to reach over USD 100 billion per year by 2030, depending on the scale of long-term greenhouse gas emission reduction targets.

Adaptation costs for the Asia-Pacific region are expected to reach USD 40 billion per year between now and 2050.

The 2007 Bali Action Plan, the Copenhagen Accord and subsequent climate change agreements have all identified technology innovation and transfer as the key to tackling the challenges put forth by climate change.

However, companies working in these areas have often struggled to access sufficient private capital to get off the ground, the ADB said.

Climate change and widespread deforestation is expected to cause warmer and drier conditions overall, reducing the resistance of the rainforest ecosystem to natural and human-caused stressors while increasing the frequency of extreme rainfall events and droughts by the end of this century. While climate models show that higher temperatures resulting from global climate change will threaten the resilience of the Amazon, current deforestation is an immediate concern to the rainforest ecosystem and is likely driving regional changes in climate. Augmented by both global and locally-driven climate change, forest degradation is likely to have serious consequences for the region’s inhabitants, the Amazon’s vast diversity of species, and the global carbon budget.

The INPE-Hadley Centre’s Dangerous Climate Change in Brazil project emphasizes that regional climate change caused by deforestation in the Amazon will almost certainly be amplified by global climate change. But a reduction in deforestation in the Amazon would help mitigate climate change because forests act as sinks for atmospheric carbon, which is stored in forests as vegetation grows, but released into the atmosphere when they are cleared or burned. Reducing deforestation would also boost the resiliency of the Amazon rainforest to stresses related to tree mortality such as wind, fire, and increased temperature from regional warming under climate change.
However, if widespread deforestation continues, the news is bleak. According to the study, if forty percent of the Amazon were to be deforested, the rainforest ecosystem would pass a ‘tipping point’ that would trigger a feedback loop between forest loss and climate impacts. Warming of three to four degrees Celsius in the Amazon region would likely engage a similar tipping point. Such a point may not be far off.

Climate models predict possible warming in the Amazon between two and nine degrees Celsius by the end of the century. Any warming is expected to decrease rainfall in the Amazon, particularly in eastern Amazonia. Climate model projections for 2080 suggest that if global temperature were to rise 1.8 degrees Celsius, rainfall in the Amazon would decrease by eleven percent. Should world temperature rise to 4.8 degrees Celsius, Amazonian rainfall would decrease 32 percent. Rainfall in the Amazon could decrease 41 percent if global temperature were to rise just over six degrees Celsius.

The sensitive hydraulic cycle of the Amazon could also be at risk if even 30 percent of the forest is cleared. The rainforest recycles up to half of its rainwater, and a positive feedback loop of forest loss and decreased rainfall would threaten the stability of Amazonian ecosystems. Additional warming from climate change would accelerate the process of ecosystem alteration and its warming, drying effects.

Stressors on the Amazon rainforest could impact the whole continent. The Amazon plays a crucial role in regulating the climate of South America through its influence on the regional water cycle; therefore, large-scale deforestation in the rainforest compounded by global climate change could decrease the forest’s ability to recycle rainfall and transport moisture to other parts of the continent.

By reducing the Amazon’s capacity to absorb carbon, modifying regional water cycles, and increasing soil temperatures, deforestation and climate change could cause the Amazon to die back and be replaced with savannah-like vegetation. Such ecosystem alterations could drive major economic distress in Brazil: more than 70 percent of Brazil’s energy is produced by hydropower, and reduced rainfall related to forest death would limit the electricity supply to industrial areas. Meanwhile, dry conditions would exacerbate wild fires, which would in turn send more carbon into the atmosphere.

Even more worrisome than changes in average temperature and rainfall is the increased likelihood and frequency of extreme weather events related to climate change and regional deforestation. The Amazon has experienced two droughts and record flooding within the last five years. The 2005 and 2010 droughts fit the analysis of some climate models that projected significant drying and warming of the Amazon by the end of the century. The INPE-Hadley Centre study estimates that drought years like 2005 are now a one in twenty year event, but they could be a one in two year event by 2025 and a nine in ten year event by 2060 given current trends of climate alteration. Droughts and floods are part of the natural climate variability of the Amazon, but the risk of severe weather is expected to increase with worsening climate change. The 2005 drought greatly reduced fish yields and had a negative impact on the transportation, agriculture, and hydropower sectors, while a 2009 flood displaced thousands and led to serious public health issues related to water-borne disease.

The Brazilian government has pledged to curb deforestation in the Amazon eighty percent by 2020. Deforestation in the region did fall from 27,000 km2 in 2004 to 6,500 km2 in 2010, but the Brazilian government reported this week that deforestation has increased almost sixfold in the last year. The INPE-Hadley Centre study estimates that if large-scale weather patterns continue to be altered by climate change while deforestation increases the frequency of Amazonian drought, 55 percent of the Amazon will be lost over the next twenty years.

Energy and Climate Change secretary Chris Huhne has reaffirmed that nuclear power will remain a fundamental part of the UK’s energy mix, after the industry was given the all-clear to press ahead with future plants by the Chief Inspector of Nuclear Installations.

Huhne commissioned Dr Mike Weightman to review the UK’s nuclear fleet in the wake of the crisis at Japan’s Fukushima power plant.

The disaster prompted calls from green groups to abandon plans for new nuclear reactors in favour of renewable energy, while surveys suggested that support for the technology had plummeted. Meanwhile, Germany closed seven of its oldest reactors over safety fears.

However, Weightman published interim conclusions of the Japanese Earthquake and Tsunami Report(PDF) today, finding that the improbability of UK reactors facing similar natural disasters means there is no reason to limit their operations.

“In considering the direct causes of the Fukushima accident we see no reason for curtailing the operation of nuclear power plants or other nuclear facilities in the UK,” the report said.

Weightman added that current safety measures were adequate, and that changing the siting of reactors or making immediate safety improvements was unnecessary.

“The extreme natural events that preceded the accident at Fukushima – the magnitude nine earthquake and subsequent huge tsunami – are not credible in the UK,” he said.

“We are 1,000 miles from the nearest fault line and we have safeguards in place that protect against even very remote hazards. Our operating and proposed future reactor designs and technology are different to the type at the Fukushima plant.”

However, Weightman that said, no matter the difference in design and operation, there was “considerable scope” to learn about people’s behaviour in severe accident conditions that could improve contingency arrangements and training in the UK.

Huhne maintained that the review’s findings cleared the way for new nuclear in the UK.

“I am pleased that today’s report confirms that the UK’s current safety arrangements are working. It provides us with the basis to continue to remove the barriers to nuclear new build in the UK,” he said.

“We want to see new nuclear as part of a low carbon energy mix going forward, provided there is no public subsidy. The Chief Nuclear Inspector’s interim report reassures me that it can.”

Weightman will publish a full report in September, but will now depart on a fact-finding mission to Japan for the International Atomic Energy Agency.

Workers at Fukushima are continuing their battle to cool the reactors, and may bring the units down to a stable temperature by January 2012, Tokyo Electric Power Company (TEPCO), which owns the plant, said yesterday.

TEPCO has been trying to cool the reactors by flooding them with water, but fears of contaminated water leaking into the sea or groundwater has forced the company to change tack.

Instead, water already inside the reactor will now be circulated to cool the melted fuel rods.