The Arctic sea ice has begun its autumn freeze after setting a new record for a summer low – a million square kilometres less than the previous record, set in 2005. The NSIDC updates are very interesting, while scientists working in the field described the summer as “remarkable
Tag: ice
The business of climate change
New York-based merchant bank Lehman Brothers have produced an excellent overview of the business and economics of climate change (PDF). If you have any interest in the economics of dealing with climate change, and want an informed overview of the drivers of political and commercial change, this is a very good place to start. I don’t agree with everything they have to say (they’re far too dismissive of electric vehicles, for instance – I reckon EVs have the potential be a disruptive technology), but the sectoral and country by country analysis of investment opportunities is fascinating, and their general take on the issue is very close to my own. From the conclusions:
The size of the carbon market globally, as measured by the value of permits issued, could, on a conservative estimate, be over $100bn by 2020 or thereabouts. This assumes that the United States, Japan, and China join the EU in moving to an emissions trading scheme covering around 50% of their total emissions. Annual turnover would be a multiple of that figure. This compares with the US Treasury market which currently stands around $2 trillion.
They put the chances of an international deal including China and India at 75% (up from 50% in an earlier report), and expect share prices to begin to track relative carbon intensity – with carbon-light companies doing better. Recommended reading.
Cranky about the ETS
Our little band of climate cranks couldn’t let an opportunity as big as the NZ Emissions Trading Scheme announcement pass by unremarked. And they didn’t. First out of the blocks was Bryan Leyland, “€œchairman of the economic panel of the New Zealand Climate Science Coalition”, pre-empting the ETS announcement to complain about the government buying offsets for ministerial travel with a press release headed “€œIs your carbon tax really necessary?”
“€œIf there is no evidence of man-made warming in New Zealand – and in the world – this whole charade of cap and trade, and offsetting ministerial travel emissions, should cease forthwith before any more damage is done to our internationally fragile economy.”
Leyland’s views were echoed a couple of days later by a release from Owen McShane, “€œchairman of the policy panel of the New Zealand Climate Science Coalition” (the NZ CSC appear to have enough panels to decorate a small stately home)…
The presenter, the author, and the crank
Marcus Lush rang me up this morning for a chat about the emissions trading scheme on his Radio Live breakfast show (podcast and stream available here). Nice plug for the book, too, but my bit was followed by a “dissenting
NZ emissions trading scheme announced
Details of the government’s planned emissions trading scheme (ETS) have been announced. Scoop has all the government speeches and press releases. I’m reading them at the moment, and will comment more later, but here are some highlights:
- Foresters will receive the full value of carbon credits on new growth (from 1/1/2008) in post-1990 forests.
- Agriculture will not be brought into the scheme until 2013.
- NZ emissions units will be Kyoto-complaint and internationally tradeable (subject to some limits).
- Some units will be allocated free, others auctioned.
- Forestry will be first into the scheme in Jan 2008.
- Transport’s next, in 2009, basically through fuel prices
- Stationery energy (power generation) and heavy industry will enter in 2010, with no free allocation for electricity generators.
- Farmers will get free allocation of units based on 90% of 2005 emissions, but details to be worked out
The government hopes that 90% of power generation will be from renewable sources by 2025. In transport, they want to cut per capita emissions in half by 2040, and encourage the wide use of electric vehicles. Goals for agriculture are more nebulous: to be the world leader in emissions reduction research, and to lead the world in agricultural emissions reductions. In forestry, they would like a net increase of 250,000ha in forest area by 2020.
The government has also released an update on our expected Kyoto deficit – up to 45.5 millions tonnes from 41.2 mT, mainly from increased dairy production. In the absence of any emissions reduction policy, the government projects this could rise to 65mT, but believes the ETS will cut the 2008-12 deficit to 25mT.
My first thought? Politically astute. By getting foresters on board with what amounts to a taxpayer subsidy, they get enough trees planted to offset a large chunk of the Kyoto liability, and buy time to bring agricultural emitters in to the scheme. More later.