- Cap and Trade Dead?? Carbon Under 8 Euros!!
- Arctic to be the Center of a New World by 2300
- Africa at the Energy Crossroads: Ethiopia Launches 6 Wind, 1 Geothermal Power Project
Posted: 26 Nov 2011 09:05 PM PST
The financial papers this week are reeling, simply reeling, at the plummet in the EU carbon markets. The idea is that the European Trading Scheme is a failure, because the price of carbon in the European cap and trade market has bottomed at a very low price: just 7.68 euros.
But, aside from the European financial turmoil – reducing power needs – the fact that the price has dropped so low in Europe is a mark of success. It reflects the fact that it was surprisingly inexpensive to switch to clean energy to meet targets, add energy efficiency projects, and invest in clean energy projects in the developing world with the Clean Development Mechanism.
To correlate a low carbon price with failure is to misunderstand the purpose of cap and trade. It is not designed to make fossil energy more expensive, but to reduce greenhouse gas emissions by forbidding the emission of carbon, by capping the allowed amount, and then each year, steadily ratcheting down the allowable carbon emissions. In the ETS, the overall supply of tradable allowances to emit carbon dioxide is fixed at a pre-agreed cap that was set in 2008 before the recession kicked in.
While the alternative approach, a carbon tax, discourages use of fossil fuels by making them more expensive, but does not prevent them from being used more, cap and trade is the opposite. A carbon cap will guarantee the certainty of a specific reduction in carbon emissions, while trade does nothing to prevent the price of permits from bobbing up and down, depending on how difficult and expensive it is to switch.
The low price is bad for investors, but it does not raise the allowed limit on carbon emissions.
When it gets more expensive to reduce emissions, the scarcity of permits will cause that price to rise again. Worldwide, clean energy investment may move from Europe to countries and states where the carbon costs are higher.
The UK is considering putting a floor price, below which the permit cost may not go below, to protect investors. The carbon markets that began after the European one, have mostly included a floor price in their cap and trade legislation, at least for the early years. The Regional Greenhouse Gas Initiative (RGGI) price floor is negligible at under $2, New Zealand has none, California will have a floor of $10, and the newest, Australia’s is initially set at $15.
But a look at RGGI success, suggests that the lack of a real price floor does not prevent success in the mission – which is lowering carbon emissions.
Just like Europe has already succeeded in meeting and exceeding its 2012 carbon targets – lowering the demand for permits and thus the price, RGGI states have already met and surpassed their 2018 target, according to Foley and Hoag’s Amy Boyd at Law and Environment.
As in the EU, RGGI has not cost consumers. Quite the opposite.
And, although one Republican Governor thought the income could be used for other purposes, (Call for NJ Governor to Repay $65 Million to Carbon Fund | Reuters) and absconded from RGGI with the state’s carbon auction income, all those states got an income boost to pay for these energy efficiency and clean energy investments that lowered their residents’ energy costs and carbon footprints.
Posted: 26 Nov 2011 10:23 AM PST
If climate change continues along the business-as-usual path, the 24th century’s new world will be in some ways more like the world of Ancient Greece – with what’s left of the world’s inhabitants trading around a single sea.
For the Ancient Greeks, it was the Mediterranean Sea. For those of our descendants that survive, it will be what is now the Arctic circle.
A view of the globe like the one above might make more sense and be in more common use by then, instead of the familar globe that we are used to now, placing Europe and Africa on the left – Asia in the middle, and the North and South Americas to the right, on an equator-centered globe.
The countries that will remain habitable after 300 years of climate change are centered on the now nearly empty lands around the Arctic Circle: clockwise this shows Siberia, Finland, Sweden, Norway, Iceland, Greenland, Canada, Alaska.
That is the conclusion of a paper that studied how global warming will affect the northern areas of Europe as two-thirds of the world becomes uninhabitable by 2300, that finds that the effects of climate change will redraw the map of the main influence centers of civilization. Eaarth – as Bill McKibben denotes our climate altered future will center on an open sea over what is now the Arctic.
In The North: The New European Frontier with Global Warming, Professor Trausti Valsson of the University of Iceland Faculty of Engineering argues for the inclusion of ”Iceland, Norway and Russia (because of Siberia) in the European Union, because the importance of these areas in the future, economically, militarily and as a future living space for the European community.” None of the three nations are currently members of the EU.
Valsson’s argument is that, combined with the uninhabitability of the rest of the planet as the world warms, that the shorter and more secure transportation routes across the Arctic Ocean between Europe and north-western Canada and the USA will make a completely different center to the world.
Valsson includes this map below showing the region that climate scientists projected to be become uninhabitable by 2300. Because of the scarcity of continental land below this region, the world’s population will have to concentrate towards the top of this map within three centuries, because of limits to human tolerance of heat.
Temperatures here are expected to range beyond what humans and most animals can comfortably make a living in by as soon as just 300 years away – about as long as US settlement by Europeans. While a thin strip at the coasts will still support life, the interiors in the shaded regions will become gradually devoid of human beings (and presumably the animals and plants suited to current temperatures).
Last year McMichael and Dear published Heat, Health and Longer Horizons at the National Academy of Sciences, sounding the alarm on long term climate change scenarios, referencing, among others, Sherwood and Huber’s Adaptability Limit to Climate Change Due to Heat Stress and determining that more than half the world we occupy today will be almost uninhabitable by 2300 due to temperature increase beyond what we can tolerate.
Posted: 26 Nov 2011 08:04 AM PST
Ethiopia isn’t a country that comes up often when discussing renewable energy, but the Ethiopian Electric Power Coroporation (EEPCO) this past week announced it’s starting construction of six wind power projects and one geothermal power plant. In total, electricity generation capacity for the renewable energy projects totals more than one gigawatt (1 GW), Ethtiopian news service NewsDire reported.
The renewable energy projects are part of EEPCO’s plans to increase national electricity generation capacity five times by 2015, from a current 2000 megawatts (MW) to about 10,000 MW. Increasing electricity generation, in turn, is key to the government’s broader economic development plans.
Emerging Renewable Energy Powerhouse
Ethiopia’s considers itself a “powerhouse of Africa.” Comprising three climate zones, it ranks second in Africa in terms of hydropower potential, after the Democratic Republic of Congo, and exports significant amounts of electricity to its East African neighbors. Ethiopia’s Water and Energy Minister in March announced a plan to add 5,250 MW of electricity generating capacity by building the Grand Millennium Dam of Ethiopia, which would dam the Nile River near the border with Sudan.
EEPCO views wind power as a clean energy complement to its hydropower generating capacity. Ethiopia has substantial wind power resources. Wind power potential in the East African country totals some 10,000 MW, EEPCO has estimated, which has noted that wind energy is higher in the dry season, when hydropower resources are at their lowest.
The six wind power projects announced this past week include the 300 MW Aysha Wind Farm near the Djibouti border, the 100 MW Debre Birhan Wind Farm north of Addis Ababa, the 100 MW Assela Wind Power Project southeast of the capital, and the 153 MW Adama II Wind Power Project. Also slated to start construction are the 250 MW Galema I Wind Power project 42 MW Mesebo Harena Wind Farm and the 42 MW Mesebo Harena Wind Farm.
Ethiopia’s electric utility also intends to start construction of the 70 MW Aluto Langano Geo Thermal project. Rich in geothermal resources, the East African Rift Zone runs through eastern Ethiopia, though the country has thus far been much less active in exploiting it than has neighboring Kenya, which in September announced its intention to generate 30% of its electricity needs from geothermal resources by 2030.
Wind Power Project Development
The wind farm projects will be built and come on-line in phases in partnership with a mix of international companies.
Initial power production from the 300 MW Aysha Wind Farm Project is expected this year, with the first 60MW and full production expected by November 2012. In June, German finance company, Deutsche Unternehmensfinanzierung, announced it would raise $120 million to finance construction of the first 60 MW of capacity, made up of 60 wind turbines.
In addition to the launch of these projects, EEPCO announced that the first 30 MW of the 120 MW Ashegoda Wind Power Plant was brought on-line. The project’s being built by France’s Vergniet S.E.
In mid-July, a Chinese joint venture comprising CGCOC and Hydro China, with financing provided by the Export-Import Bank of China and consulting services being provided Addis Ababa University Technology faculty, began construction of the 51 MW Adama I wind farm. Located about 95 kilometers (km) east of the capital, an initial 15 MW is due to come on-line by the end of the year, according to NewsDire’s report.
* Photo courtesy: Shutterstock
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