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Climate Change Initiative Newsletter
February 2003 (32)

Table of Contents

Ukraine Climate Change Activity

1. National Climate Change Conference

2. Waste makes electricity in Luhansk

3. New Energy Technologies

U.s. Climate Change Activity

4. Voluntary Industry Scheme - Bush Plan for Climate Change Mitigation

5. Non-bright Future of Renewable Energy

6. CO2 Offsets in the US - Largest than Ever

7. US Contributes to international fusion research

International Climate Change News

8. British GHG Market Seen Low in Activity

9. Considerations for Russia Ratification

10. Canada Industry Association Studies Kyoto Risks

11. German Nuclear for CO2 Emission Reduction

12. More Hydro Power for Netherlands

13. Austria acts on Kyotos flexible mechanisms

14. UK Government Optimistic about Near Zero Carbon Future

15. British Scientists Say 2002 was Warm

16. Carboncredits.nl Gets More Project Proposals


Ukraine Climate Change Activity

1. National Climate Change Conference

A National Conference on Climate Change was held at the Kiev House of Scientists of the National Academy of Sciences of Ukraine on February 27-28, 2003. One hundred sixty eight participants from different regions of Ukraine have attended the Conference.

Mr. Lysun, Chairman of the Organizing Committee, First Deputy of State Secretary of the Ministry of Ecology and Natural Resources of Ukraine welcomed the conference participants with opening remarks followed by welcoming speeches from Gennadiy Rudenko, Peoples Deputy, Chairman of Ukraines Verkhovna Rada Committee on Environmental Policy, Nature Management and Chernobyl Catastrophe Liquidation; Yuriy Solomatin, Peoples Deputy, Secretary of Ukraines Verkhovna Rada Committee on Environmental Policy, Nature Resource Management and Chernobyl Catastrophe Mitigation; and Serhiy Fedorynchyk, Chairman of the Working Group of the Ukrainian Climate Change Ngos. During the two days of the conference representatives of Ukraines central, regional and local authorities, Ngos, and academic institutions had the opportunity to discuss wide rage of issues ranging from the ratification by Ukraine of the Kyoto Protocol to the United Nations Framework Convention on Climate Change to development of national and local climate change action plans. The conference participants expressed various opinions on the discussed issues, however the overall consensus was reached with regard to the necessity of the Kyoto Protocol ratification by Ukraine. At the end it was agreed that summary of the conference results is going to be forwarded for comments to the conference participants, then finalized by the NGO Working Group and presented at the next meeting of the Inter-ministerial Commission on Climate Change.

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2. Waste makes electricity in Luhansk

A Ukrainian-american project aimed at reducing greenhouse gas emissions through landfill methane utilization is presently being implemented at the City of Luhansk landfill. A system installed under the project collects and flares landfill gas from three wells earlier drilled at the landfill. The collection and further utilization of biogas allow reducing air pollution while improving the regional environmental situation. In addition, the project implementers plan to construct 2000 kw mini-electric power plant running on landfill gas. Upgrading the biogas quality indicators to those of natural gas will allow using landfill gas for domestic gas supply purposes and also as transport fuel.

(Golos Ukrainy, February 18)

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3. New Energy Technologies

A Draft Law On Combined Heat and Electricity Production and Utilization of Waste Energy prepared by Mr. Petro Cabashuk, Peoples Deputy of Ukraine, Subcommittee Chairman of the Ukrainian Verkhovna Radas Committee for Fuel-energy Complex, Nuclear Policy and Nuclear Safety, was submitted for review to the above Committee.

An accompanying justification note to the draft emphasizes that the proposed law is aimed at encouraging investors and enterprise managers to invest sufficient funds in energy efficient cogeneration production. Mr. Petro Sabashuk, the author of the draft stresses that the proposed law focuses on reforming legal, organizational and economic frameworks that currently govern the relationship between electricity production enterprises and non-system electricity generators that utilize cogeneration technologies and waste energy from production processes to supply electricity to the grid. The use of cogeneration technologies could increase the fuel efficiency to 90-92% and reduce the electricity production cost in 2-2.5 times, said Mr. Sabashuk. Potential co-generation electricity capacity in Ukraine amounts for 16 million kw. Preliminary studies of the Institute of Thermal Physics of the NAS of Ukraine proved that the showed that by 2010 the application of cogeneration technologies will allow commissioning of 5-7 million kw electric capacities that have 2-3 times lower specific fuel consumption indicators comparing to those that are characteristic of the existing Tpps. Reported by the VR Information Department.

(Golos Ukrainy, No. 23 2003)

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U.s. Climate Change Activity

4. Voluntary Industry Scheme - Bush Plan for Climate Change Mitigation

WASHINGTON -- President George W. Bush has decided to launch new program aimed at reducing the emission of greenhouse gases through measures to be taken voluntarily by major companies in the United States, sources close to the administration said.

The "Climate Energy Partner" program is one of the ways for Bush to attain the goal of reducing the so-called "greenhouse gas intensity" -- the ratio of greenhouse gas emissions to gross domestic product (GDP) -- by 18% by 2012. Bush called for limiting greenhouse gas emissions in relation to economic growth in announcing last February an alternative to the 1997 Kyoto Protocol, which he rejected in March 2001. The Department of Energy and the firms taking part in the program are expected to announce the scheme shortly, the sources said.

Environmental protection groups are likely to criticize the new program as it does not come with binding power and would not lead to direct quantitative reduction of overall emission of carbon dioxide and other gases that cause global warming.

According to the sources, the program will have each participating company declare its own target and make public the measures to be taken to reach the goal, with the ultimate aim to attain the 18% reduction of greenhouse gas intensity. The companies will be in charge of running their own programs to reach their respective goals, and most of them are expected to announce plans to reduce the intensity, while only few will declare to cut outright the amount of gas emission, the sources said.

The government is promoting participation in the program by companies, and so far some 150 firms and business groups, including International Business Machines Corp. (IBM) and chemical manufacturer Dupont, have agreed to take part.

(Kyodo, January 26)

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5. Non-bright Future of Renewable Energy

As coal-fired plants come under increasing scrutiny and regulation, use of renewable energy sources is receiving more attention. But report in Regulation magazine says the case for renewable energy is far from promising.

Solar, wind, geothermal, and biomass energy are currently used in about 2 percent of total U.s. electricity generation and are projected to produce only 2.8 percent by 2020. The use of renewable energy and forecasts of its growth are low because it costs more. Regulation magazine reports that despite polls offering strong public support for government-funded renewable energy, very few consumers will opt for it due to that high cost. The report finds:

Renewable energy is not likely to gain significant market share in the foreseeable future without significant increase in government subsidies or mandates.

Rationales for subsidies for renewable energy and other preferences are without sound economic foundation.

The threat of global warming is speculative, and such warming is not necessarily deleterious from an economic perspective. Even if restrictions in greenhouse gas emissions were necessary, replacing conventional energy would be more costly and less efficient than other emission abatement strategies.

Advocates of renewable energy have argued that the demand for renewables would rise if conventionally-generated electricity were priced to reflect its pollution costs. But the report finds that the additional cost of further pollution reduction would exceed the additional health benefits. Even if current regulatory costs are insufficiently reflective of true environmental costs, "Getting prices right' will not significantly affect consumer choices of fuel. The report points out that reducing emissions of nitrogen oxides and sulfur dioxide by 75 percent below 1997 levels would increase electricity prices by only about 1 percent, too little to trigger shift from coal or natural gas to renewable energy.

As the report makes clear, there is no magic bullet in the form of clean, alternative fuel source sufficient to meet demand. Every major renewable energy source has drawn criticism of some sort: hydroelectric for river habitat destruction, wind generators, for avian mortality, solar for desert over-development, biomass for air emissions, and geothermal for depletion and toxic discharges. Environmental concerns aside, renewable energy plants have proven, on average, twice as expensive to operate as fossil-fuel plants.

It would seem that the best way to achieve energy affordability, environmental benignity, and resource security is to simply allow the market, itself, to determine the outcome.

(Timesnews, January 23)

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6. CO2 Offsets in the US - Largest than Ever

Largest Transaction to date in the Climate Trusts Partnership Program

The Climate Trust of Portland, Ore. today will transfer the rights of up to 52,500 metric tons of carbon dioxide (CO2) to Seattle City Light (SCL) of Seattle, WA at cost of $102,375 or $1.95 per metric ton. The transaction is the largest to date under The Climate Trusts recently launched "Greenhouse Gas Offset Partnership Program" and will be consummated with the approval of Seattles City Council.

Under the agreement, The Climate Trust and City Light, Seattles municipal electric utility, will share in the costs and benefits of an innovative blended cement project that will reduce CO2 emissions over the next six years. The project is part of The Climate Trusts recent $6 million offset solicitation and acquisition effort. The project is managed by the Civil Engineering Research Foundation (CERF) based in Washington, DC and will deliver total of 350,000 metric tons at total cost of $682,500.

Cerfs work will increase the use of low-carbon cement alternatives in concrete, commonly known as "blended" cements. The manufacturing of conventional cement is extremely CO2 intensive; one ton of cement results in approximately one ton of CO2 released into the Earths atmosphere. Industrial byproducts that posses the same binding properties of cement can be partial substitute for conventional cement in concrete mixes, and can reduce the amount of CO2 released by nearly one-half. Because substitutes for conventional cement are often readily available, blended cements can also bring real savings to the construction industry.

"The Climate Trust is very pleased to provide high quality CO2 offsets in support of the leadership position Seattle City Light has taken on combating global climate change", said Bill Edmonds, Board Chair of The Climate Trust. "Its win-win for the environment and the economy", said Seattle City Light Superintendent Gary Zarker. "Waste substitutes can make superior cement product at low cost, conserve raw materials, and reduce greenhouse gas emissions."
Blended cements are already widely used in Europe and Japan. "This project will begin to transform the U.s. construction market by creating market demand for blended cement", said Mike Burnett, executive director of The Climate Trust. "The potential to mitigate CO2 emissions from concrete production is substantial since cement production accounts for 7 percent of worldwide anthropocentric caused greenhouse gas emissions."

(E-wire, January 21)

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7. US Contributes to international fusion research

WASHINGTON - The United States will join an international research project aimed at harnessing the power of fusion and turning it into clean and safe source for energy, President George W. Bush said.

ITER, the International Thermonuclear Experimental Reactor, is fusion research project that is already joint operation of Britain, other European Union nations, Russia, China, Japan and Canada.

Bush said he would like to see fusion energy turned into source for clean, safe, renewable and commercially available energy by the middle of the century. "Commercialization of fusion has the potential to dramatically improve Americas energy security while significantly reducing air pollution and emissions of greenhouse gases", Bush said. Bush drew fire from Europeans for withdrawing the United States from the Kyoto treaty aimed at taking steps to reduce greenhouse emissions blamed.

At home, environmentalists have questioned his commitment to the environment because he wants to open Alaskas Arctic National Wildlife Refuge to drilling. Fusion is the energy source that powers the sun. It occurs in the sun when the intense heat and pressure within the suns core cause light atoms to collide and fuse together. This creates heavier atoms and releases energy. But fusion energy has been hard to make on commercial scale. ITER plans to build demonstration fusion power plant. Bush directed Energy Secretary Spencer Abraham to represent the United States at ITER meetings in February in St. Petersburg, Russia.

(REUTERS, February 3)

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International Climate Change News

8. British GHG Market Seen Low in Activity

LONDON - The voluntary UK carbon emissions market has seen only six million pounds ($9.71 million) of trade since its start in April last year, industry sources said.

Volume traded has reached 1.2 million tonnes of carbon dioxide equivalent, though most trades are still small parcels of under 1,000 tonnes, brokers said.

The trading scheme enables companies that cut greenhouse gas emissions above government-agreed targets to sell credits to those unable to meet the reductions. Thirty-four companies directly entered the scheme, though only 12 of these have been actively trading, with energy major Shell (RD.AS) (SHEL.L) the main player. Another 6,000 companies are expected to enter trading as they risk losing tax rebate on energy use if they miss their reduction target, under the Climate Change Levy scheme, with the emissions verification period finishing in mid-february.

After price spike up to 12.50 pounds ($20.23) per tonne in October as companies rushed to buy credits to ensure meeting targets, prices have fallen back to around 4.50 pounds ($7.28) as demand has waned, brokers said.

(REUTERS, January 20)

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9. Considerations for Russia Ratification

It deems that President Vladimir Putin and Prime Minister Mikhail Kasyanov promised in summer, during the Earth Summit in Johannesburg, that Russia was about to sign the Kyoto protocol that limited the level of industrial discharge in the atmosphere of the planet. The world community applauded to that, the summit delegates went home, but Russia did not sign the protocol anyway. However, as Alexander Bedritsky, the chairman of the Russian Hydrometeorology Center said, Russia was about to ratify the Kyoto protocol in order to restrict and reduce the level of greenhouse effect gases emitted in the atmosphere.

As Alexander Bedritsky told reporters at press conference, the Russian government had already made up list of things to do in order to complete the documents for the ratification of the Kyoto protocol. Bedritsky stated that governmental experts did not find any restrictions or prohibitions for any kinds of industrial activity in the protocol. He said that it was up to every country to choose, how it was going to reduce and restrict the emission of industrial gases in the atmosphere. Furthermore, Russia has status of developing country in the Kyoto protocol. Alexander Bedritsky added that Kyoto restrictions were not going to bother Russia for long time because of that.

Mr.Bedritskys confidence is explained with pragmatic calculation that was made by Russian economists. They believe that Russia is going to remain an industrially weak country for long. According to experts estimates, Russia is not going to achieve the Ussrs development level of 1990 soon. The experts of the Russian Ministry for Economic Development and Trade calculated that the preservation of the current speed of the economic development will keep the industrial emission on the level of 80% in comparison with the one in 1990. As it seems, the government was happy to learn about that. The countrys budget does not stipulate any money for the development and implementation of environmental programs. In addition to that, it is extremely hard to make Russian oligarchs buy and install those technologies. That is, probably, why Mr. Bedritsky was so optimistic and kindhearted regarding ecological problems of the Kyoto protocol: The Kyoto protocol is an attempt to set up tool for the solution of global problems of the humanity", Bedritsky said. He added that the execution of the protocols obligations would not bring damage to Russia.

(PRAVDA.Ru, January 17)

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10. Canada Industry Association Studies Kyoto Risks

Despite an easing of energy-sector fears over the Kyoto Protocol, the costs and risks associated with implementing the environmental accord are far from gone, the Conference Board of Canada warned.

Ratification of Kyoto preceded solid analysis and planning, the Ottawa-based think-tank said, so developing long-term strategies are essential if Canada is to come up with workable Kyoto implementation roadmap. "Canada is only likely to start making substantial greenhouse gas reductions only by 2005, about the same time as international negotiations begin for post-2012 commitments", the Conference Board said in Kyoto analysis, adding that "...the uncertainty created by the lack of detailed implementation plans is one of the risks Canada faces on the road ahead of climate change."

The Conference Board forecast that Calgary and Edmonton will be two of the three leaders in economic growth among Canadian cities this year, sign that Kyoto fears are subsiding. While companies in the oil and gas sector have been complaining that the Kyoto accord to cut greenhouse gas emissions would cause irreversible damage and limit investment, recent developments such as statement by oil sands leader Suncor Energy that the impact of Kyoto will be "minimal" are casting doubt on the Kyoto-oil patch devastation theory.

The Conference Board said that Canada needs "Serious thought and debate" to create Canadian strategy before the next international round of climate change talks. "In the absence of detailed plan, arguments about Kyotos costs, benefits, and employment implications currently create more heat than light", it said. The Conference Boards report, Implementing Kyoto: Risks and Choices, outlines four risks facing this country.

Canada currently falls short of emissions targets, possibly by as much as 60 megatonnes, which could lead to penalties in future agreements
Lack of detail surrounding implementation plans could depress investments in Canadas energy sector
Rising energy costs could shift new investment and production to other countries, costing Canada jobs and lost investment dollars
Focus on meeting current targets is getting in the way of developing long-term strategies

(Globe and Mail Update)

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11. German Nuclear for CO2 Emission Reduction

FRANKFURT - Germanys nuclear industry lobby said the use of nuclear power saves 165 million tonnes of carbon dioxide emissions year, equivalent to the total emissions from German road traffic.

The Berlin-based Deutsche Atomforum (Datf) gave the figure as part of set of production data for 2002. "Each kilowatt hour (kwh) of nuclear power avoids one kilogram of CO2 in the atmosphere which more polluting methods of generation would produce", said Datf spokesman Christian Wilson. "Using the latest primary energy mix and traffic statistics, we reckon German nuclear output helps avoid CO2 emissions the size of those produced by road traffic", he told Reuters.

Virtually emissions-free nuclear power output of 164.8 billion kwh contributed nearly third to Germanys production total last year, where CO2-emitting coal technology supplied half. Germany is well on course to meeting its national target under the United Nations' Kyoto protocol on climate change of cutting CO2 emissions by 21 percent from 1990 levels by 2012, having already cut them by 19 percent. But some nuclear operators still resent 1999 deal between industry and government to phase out nuclear energy by the 2020s in bid to eliminate perceived safety risks from aging plants and the problem of how to store dangerous radioactive waste. They say the national climate protection targets and the nuclear phase-out cannot be reconciled as the use of CO2-free renewable energy cannot grow fast enough.

(Alertnet, January 28)

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12. More Hydro Power for Netherlands

January 2003, energy company Nuon opened the largest wind-project in the Netherlands. This project, with capacity of 54 MW, will provide more than 41,000 households of Nuon Natuurstroom, one of their two renewable energy products.

In June 2002 Nuon and 23 farmers initiated this large project. Halfway this year all 32 wind turbines, with height of 80 metres, should be in operation. The total investment involves 65 million of euros. A subsidy of 3.26 million euros is being granted.

Nuon owns 545 MW of wind-energy. In the near future the Nuon wants to have 2,000 MW at its disposal and remain European market leader in the renewable energy market.

(Greenprices, January 27)

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13. Austria acts on Kyotos flexible mechanisms

The Austrian government has confirmed plans to offer financial support to companies that undertake projects aimed at cutting greenhouse gas emissions abroad, one of the central planks of its climate strategy announced last summer.

An annual 36 million euro has been set aside by the government to purchase emissions credits for reductions achieved abroad by Austrian companies involved in joint implementation and clean development mechanism projects, two of the flexible mechanisms permitted under the Kyoto Protocol.

Under joint implementation, which covers economies in transition, Austria has already signed memorandums of understanding with number of eastern European countries. Other deals are on the way, the environment ministry said in statement.

Greenpeace Austria criticized the governments programmed. It argues that encouraging Austrian companies to cut emissions abroad will shift the emphasis away from domestic emissions reductions. In addition, spokesperson Erwin Mayer told Environment Daily, lax government supervision of the projects would mean no guarantee of achieving the desired effect.

Meanwhile, the environment ministry has also announced progress towards its implementation of the proposed EU emissions trading scheme. A government proposal will be put out for consultation by the autumn.

(Pointcarbon, ENDS, January 30)

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14. UK Government Optimistic about Near Zero Carbon Future

Secretary of State for Environment, Food and Rural Affairs, Margaret Beckett visited Washington to meet the US Administration, Congress, business and Ngos. She also launched ground-breaking report which shows that it is technologically and economically feasible to move towards near-zero carbon future.

Prime Minister, Tony Blair has expressed his support for technological solutions, particularly to reduce green house gas emissions. In the context of seeking reduction in greenhouse gas emissions worldwide to stop further damage from climate change, Tony Blair said: "Economic growth and protecting the environment can be compatible, but we need step change in our understanding of the science and technology capable of doing it." While the UK remains committed to the Kyoto Protocol, the similarity in approach to tackling environmental problems offers good opportunities for the UK and the US to continue to work closely together.

US President, George Bush demonstrated his support for technological solutions to environmental problems in his State of the Union speech on the 28th January 2003.

George Bush said: "In this century, the greatest environmental progress will come about - through technology and innovation." He subsequently announced $1.2 billion 'Freedom Fuel' initiative to help develop the technology needed to make hydrogen powered vehicles commercially viable.

The ICCEPT (Imperial College Centre for Energy Policy and Technology) report, which Margaret Beckett launched, was commissioned to analyse the potential of low carbon technologies for delivering deep cuts in greenhouse gas emissions in the next 50 years. It highlights the technologies available now, or in the pipeline, and assesses the capacity of each to contribute towards climate change mitigation.

The main conclusion is that it would be technologically and economically feasible to move to low carbon emissions path, and achieve virtually zero carbon energy system in the long term, if we used energy more efficiently and developed and used low carbon technologies. This is of significant importance and should be key in informing and driving the climate change policy process forward as we begin to consider what would be appropriate post-2012.

(Hukenmews, February 4)

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15. British Scientists Say 2002 was Warm

LONDON - Global temperatures have kept rising and 2002 was one of the warmest years on record while many greenhouse gases reached their highest ever levels in 2001, British government report said this week.

Data analyzed by the UK Meteorological Offices Hadley Centre for Climate Prediction and Research found that last year joined 2001 and 1998 as the top three warmest since records began in 1860.

"This report does show that the UK is making good progress to tackle its greenhouse gas emissions, but much more needs to be done if we are to stabilize greenhouse gas concentrations in the atmosphere at safe level", Environment Minister Michael Meacher said in statement.

Meacher said in statement that Britain was on track to exceed its target under the United Nations Kyoto Protocol of cutting greenhouse gas emissions by 12.5 percent below 1990 levels by 2008-2012.

The report said the UK could still achieve its own higher target of 23 percent cut.

A government paper on the future of the energy sector is due in the next couple of months. A report last year advocated increasing energy from renewable sources to 20 percent by 2020 as way of meeting climate goals.

Climate change scenarios for the UK by the Hadley Centre suggest future of hotter, drier summers and warmer, wetter winters.

(REUTERS, February 13)

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16. Carboncredits.nl Gets More Project Proposals

The third tender for Joint Implementation, Erupt-3, solicited interest from companies from many ANNEX-I countries. Erupt-3, which closed on January 30th, 2003, received 31 Expressions of Interest representing 40 million tonne Co2e. The total amount of claims on Erus offered is approximately 33 million tonne Co2e, and on Aaus it is 7 million tonne.

The projects are geographically well distributed, including, for the first time, from Russia. Russian companies submitted total eight projects, which were all endorsed by the Russian government. Other countries include Romania, Hungary, Czech Republic, Slovakia, Bulgaria, Estonia, Ukraine, and New Zealand. The reduction per project ranges from 260,000 to 6.3 million tonnes of Co2e. The average price per tonne of Co2e is in the range of EUR 3 to 5.

The type of projects represents good variety of reduction technologies. Energy efficiency tops the list with 30 percent of the projects. The remaining projects include landfill gas recovery, biomass, wind, district heating, as well as fuel switch, hydro, biogas, CHP, and gasification technology. Total capital investment for all of these projects is more than EUR 1 billion.

The Carboncredits.nl team will now assess the quality of the submissions. The basic criteria in this stage are that companies must have experience with the types of projects, and must financially be sufficiently strong. Only in the second stage the formal proposal itself, including the baseline study and the price of the carbon credits, will be assessed. Senter expects to announce in early May which companies will be invited to submit the formal proposal.

(Carboncredits, February 13)