Monthly Archives: December 2009

Copenhagen Prediction Market (COPPM)

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Despite the general optimism in the lead-up to the conference, the chances of such deal still look to be at long odds. But if you want to play the climate change market, in the absence of our own ETS, there is a way. The UNSW Centre for Energy and Environmental Markets and legal firm Baker & McKenzie have set up a Copenhagen Predictions Market, in which participants using “experimental dollars” (E$s) can bet on a range of outcomes, such as deadlines for legally binding agreements, aggregate reduction targets, and the long term stabilisation target.

You can bet on an outcome of less than 10 per cent, between 10 and 15 per cent, between 15 per cent and 20 per cent, and so on. UNSW expects the price of these shares to vary as new information about negotiating positions becomes available. You can even bet on individual country reduction targets, including for Australia, and the design of REDD mechanisms (reducing emissions from deforestation and degradation) and the future of the CDM (clean development mechanism) market. There are no fees, and no real money at stake, but the three winners in each category will each get a prize.

via COPENHAGEN CALLING: Rudd’s cool reception – Giles Parkinson – News – Business Spectator.

Do we need to change behaviour at all?

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I have been writing about how Kevin Rudd’s plan to introduce carbon trading included payments to millions of households on the increase in expenses. I suggested that was the wrong thing to do and that we need to change behaviour of consumers to solve this.

What about the other side? What if the emissions reductions are possible through large systemic changes in electricity production, energy efficiency at the business level etc and leave the consumers out of it directly. Consumers will still pay for the increased business costs through increases in product costs however, that is dependent on the market (which is somewhat free in Australia).

In a way the business guys are better at doing this than each individual consumer. Let them sit back and have fun and pay a bit more in product expenses.

What say?

Let Australia’s carbon reform begin

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Given that if the Americans go for an emissions trading scheme then Abbott is on board, these are sums that are going to dominate any serious carbon debate in Australia.

To illustrate what we are talking about I want to take you through the existing ’5 per cent from 2000′ cut that the government is talking about and show that if we become serious instead of political and get down to the task there are some big decisions ahead on our use of fuels.

Australia’s 2000 emissions were 553 million tonnes – note the difference to the US level.

Now to cut that by 5 per cent does not look that hard. We merely go down to around 525 million tonnes. The trouble is that we are growing and by 2020 the ball park estimates are that our emissions will rise to around 664 million tonnes even after counting the renewable energy program.

So we have to cut emissions by 139 million tonnes to 525 million tonnes by 2020 on our criteria and much more than that if the American criteria are used.

The most straight forward way of quickly cutting emissions is to shut down Victorian brown coal generation and close the high-emitting South Australian station Playford B. The ill-conceived Rudd/Turnbull scheme has Australia possibly guaranteeing the brown coal power stations’ $7 billion debt. If we replace that with a sensible policy it would cost about $5 billion to eliminate and replace two Latrobe Valley generators with gas. Yallourn and Hazelwood are the two obvious ones. If we replace them with gas fired turbines we save about 26 million tonnes of carbon or about 19 per cent of the 2020 target. Remember that Rudd and Turnbull were going to raise $114 billion by selling permits so that looks good value and it could be funded by a 1.6 per cent lift in power prices over 10 years.

So why not do it again and spend another $5 billion shutting the other two brown coal generators? We would reach 40 per cent of our target by spending less than 10 per cent of the Rudd/Turnbull money.

via Let Australia’s carbon reform begin – Robert Gottliebsen – News – Business Spectator.

Kevin Rudd pledges to repay ETS costs to consumers

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How will you change behaviour if the costs do not increase? Most absurd. If you look at the numbers million of people are going to get more than the increased costs. Income distribution.

FAMILIES will pay little or nothing for Labors emissions trading scheme, Prime Minister Kevin Rudd pledged yesterday. Full or partial compensation for rising costs would be available for couples with children on an income up to $160,000, as well as for singles on $30,000 a year or less.

via Kevin Rudd pledges to repay ETS rise | News.com.au.

100 Best Blogs for Socially-Minded MBAs

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Just found out this good list of blogs which includes the widely read and popular blog WorldisGreen.com!

Some of the recent news stories have given those in the business world a bad rap, insinuating that ethics and business don’t necessarily go hand-in-hand. You, as a socially-minded MBA student, know those allegations are not true. So do these bloggers and their readership. The following blogs provide insight and thought-provoking posts on environmental and social justice topics that are relevant to all future business people.

via 100 Best Blogs for Socially-Minded MBAs | Online Classes.org: Find the Right Online Class Match.

The best camera business model

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Well, Chase has just shown the way forward. Raised the bar a skyscraper’s height, but still, he has shown how to take the new media of social networking  and create something financially rewarding AND actually meaningful because people responded, en masse, to participate. And anytime you can create a community around something you have shown that you are doing something worth doing.

We all need to pay attention to this development. I mark it as the most significant synthesis of new media thinking and action within the photo community since… Photoshop?? Well, you can decide if I’m smoking something or not for yourself, but please check out what Chase is doing, it’s truly groundbreaking.

via DOUG MENUEZ 2.0: GO FAST, DON’T CRASH.

Audi clean diesel sedan wins ‘Green Car’ award beating the Prius

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Audi’s latest clean-diesel sedan, launched in the United States just last month, was named Green Car of the Year at the Los Angeles Auto show on Thursday, upsetting Toyota's popular Prius hybrid for the award.

The Audi A3 TDI, a premium hatchback that gets 42 miles (67.6 km) to the gallon on the highway, is the second clean-diesel vehicle in a row to claim the prize bestowed each year by Green Car Journal magazine. Last year's winner was the Audi A3's corporate cousin, a Volkswagen Jetta. Volkswagen AG (VOWG.DE) owns Audi.

Other finalists for this year's award included the Volkswagen Golf TDI clean-diesel, the Honda Insight hybrid, Ford's Mercury Milan hybrid and the Prius.

via Audi clean diesel sedan wins ‘Green Car’ award | Reuters.

India offers to cut carbon intensity 25 pc by 2020

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“We are telling the world that India is voluntarily ready to reduce emission intensity by 20-25% in 15 years from 2005. The Planning Commission has, on the basis of historical experience, concluded that a 20-25% cut in emission intensity between 2005 and 2020 is possible. India will not be taking a legal undertaking and this will not be a law,” minister of state for environment and forests Jairam Ramesh told the Lok Sabha.

Via – India offers to cut carbon emissions 25 pc by 2020- Politics/Nation-News-The Economic Times.

Following on the heels of China India does the right thing to suggest voluntary carbon intensity cuts. The interesting thing is how many people confuse carbon intensity with carbon emissions. Even, Economic times has the headline with carbon emissions.

Nir Shaviv on Global Warming

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Andrew Bolt points to the astrophysicist Nir Shaviv and his work on cosmic rays.

Shaviv refuses to get worked up: “The hysteria surrounding the concept of ‘global warming’ will fade over the years,” he says. “People will see that the apocalyptic forecasts are not coming true. Today there is no fingerprint attesting that carbon dioxide emission causes a rise in temperature. A Grad missile that falls in Sderot should be more cause for concern.” Back to the Ice Age Last Wednesday, Shaviv was featured in a documentary broadcast on Channel 8, “The Cloud Mystery,” alongside Danish scientist Henrik Svensmark, a physicist whose pioneering experiments conducted in Copenhagen revealed how changes on the sun’s surface and cosmic rays are what affect climate, and not the polluting gases from manmade sources.

[...]

While he was living in Toronto, one of his colleagues asked him how supernovae (the explosion of massive stars) affect the earth. Shaviv examined the question seriously; his conclusions reinforced the argument that charged energy particles called cosmic rays, which are affected by the sun’s activity, are what affect the earth’s climate. Shaviv explains it as follows: “The sun’s activity is cyclical. When it’s more active, the wind that blows from it is stronger and then fewer cosmic rays reach the earth. Cosmic rays cause ions to be produced in our atmosphere, which are one of the factors required for the creation of the surface upon which clouds form, primarily above the ocean’s surface. When there are fewer ions, the clouds that are formed are composed of large drops. Clouds of this type are less white and refract less of the sun’s rays outward, and so the heat is preserved and the earth gets warmer.”

[...]

“The Milky Way is a spiral galaxy with arms,” Shaviv continues. “We traverse one of these arms every 145 million years. If the sun’s cyclical changes translate into a shift of one degree on earth, then the changes when we traverse such an arm, close to supernovae, will be on the order of 10 degrees, which is a huge amount. When you look at the geological record of the earth, you see that in the past 100 million years, there were periods with ice at the Poles and periods without ice. I demonstrated in the article that the Ice Ages correlate chronologically with our traversing the arms of the Milky Way. In other words, every 145 million years there is an Ice Age. The conclusion is that cosmic rays affect the earth’s temperature on long time-scales, too.”

An example of what he is talking about,

Gaming the CDMs and carbon trading

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Under the CDM, the United Nations awards carbon credits to emissions-reducing projects in the developing world. When credits are sold on to rich countries, the buyers can count them towards their Kyoto emissions targets. Supposed to kill two birds with one stone – reduce emissions and transfer money and technology to the poor – this was, however, never likely to work.

The CDM inherits the UN’s suffocating bureaucracy, so smaller projects struggle to gain approval. But more important than what it keeps out is what it lets in. The criterion of “additionality” is supposed to rule out projects that would not be undertaken without CDM payments. Not only is this counterfactual approach utterly unverifiable; it is also an ideal target for gaming.

The Chinese wind farms are a case in point: Beijing allegedly lowered their subsidies to make them eligible for CDM. The accusation plays right into the hands of the opposition to emissions cuts in the US. Congress threw out Kyoto because China and India were let off without obligations. A US public convinced that poor countries game the system would kill any prospect for a Copenhagen deal.

via FT.com / Comment / Editorial – Anticlimatic policy.