Thinktanks seek funds to back green technologies in poor countries

New financial mechanisms to ensure the transfer of low-carbon technology to emerging economies will help achieve a meaningful breakthrough at the Copenhagen climate change conference in December, according to a report by an alliance of some of the world's leading thinktanks.

The recently formed Global Climate Network, which includes the UK's Institute for Public Policy Research, the Center for American Progress led by John Podesta, head of Barack Obama's presidential transition team, and the influential Research Centre for Sustainable Development from China, is gathering in London this week to establish a policy to fund action to fight global warming using solar power, wind, carbon capture and energy efficiency.

These include harnessing the cheap borrowing facilities available in rich countries to be targeted at low-carbon energy in poorer countries. Encouraging pension funds to finance schemes and adopting proposals that would see a proportion of countries' carbon permits auctioned off with the proceeds specifically going to developing countries are other measures being considered.

The US is unlikely to fund poor countries' efforts to introduce low-carbon technologies so financial innovation will be required, argues the network.

Podesta said: "Reaching an agreement on the transfer of low-carbon technology will be critical to the success of the global climate talks in Copenhagen later this year. Developing countries are right to call for more help with it. However... the absence of strong national policy frameworks, standards and incentives is the single greatest obstacle to the creation of markets for low-carbon technologies in developing countries.

"That situation needs to be reversed for real progress to be made in reducing emissions there. In exchange, developed countries need to do far more to help developing ones, who are still struggling to lift millions out of extreme poverty, to meet the cost of low-carbon technology policies. That's the sort of deal we need to see."

Source - The guardian

Obama focuses on green economy in speech before Congress

Barack Obama raised the development of a green economy to the top of America's agenda tonight, calling on Congress to pass a law cutting the carbon emissions that cause global warming.

The president, in a rousing speech to both houses of Congress, tried to put to rest fears that the economic recession would force him to scale back ambitious plans for energy reforms.

Instead, he made it clear that he sees a direct link between America's long-term economic interests and the development of clean energy, budgeting additional funds for research into wind and solar power.

The president also pressed Congress to push ahead on a new law to cut greenhouse gas emissions, defying critics who say cap-and-trade measures could be a brake on economic recovery.

"To truly transform our economy, protect our security and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy," the president said. "So I ask this Congress to send me legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America."

Barely a week after the passage of his $787bn economic rescue plan, Obama came back to Congress with plans for further green investment.

The recovery plan devoted more than $100bn to making private homes and government buildings more efficient, developing wind and solar power and spending money on public transport.

But the president promised even more tonight, saying his budget, which will be announced on Thursday, would allocate $15bn a year to develop wind and solar power and more fuel-efficient cars.

"We are committed to the goal of a re-tooled, re-imagined auto industry," he said. "The nation that invented the automobile cannot walk away from it."

Obama also set out a plan to modernise the electric grid.

He said America needed to re-establish its leading role in the development of solar and other renewable energy technologies, after losing ground to China, Germany and Japan.

"I do not accept a future where the jobs and industries of tomorrow take root beyond our borders – and I know you don't either. It is time for America to lead again,"

The direct appeal for climate change legislation could re-energise efforts to produce legislation before global climate change talks get underway in Copenhagen next December.

White House officials admitted on Monday it was increasingly uncertain such legislation could pass in time, and that the deadline might slip to 2010.

Source - Theguardian

Obama's revolution on climate change

Barack Obama ushered in a revolution in America's response to global warming yesterday when he appointed one of the world's leading climate change experts as his administration's chief scientist.

The president-elect's decision to make Harvard physicist John Holdren director of the White House Office of Science and Technology Policy reveals a new determination to draw a line under eight years of US policy that have seen George Bush steadfastly reject overwhelming evidence of climate change.

News of the appointment was hailed by scientists around the world, including former UK chief government scientific adviser Sir David King. "This is a superb appointment," he told the Observer. "Holdren is a top-rate scientist and his position on climate change is as clear as you could get. This is a signal from Barack Obama that he means business when it comes to dealing with global warming."

Obama also used his weekend radio address to announce that respected climatologist Jane Lubchenco is to head the National Oceanic and Atmospheric Administration. The appointments follow Obama's selection of Steven Chu, a Nobel prizewinner, to the Department of Energy, where he has been directed to lead the development of alternative energy sources.

"Today, more than ever before, science holds the key to our survival as a planet and our security and prosperity as a nation," Obama announced. "It's time we once again put science at the top of our agenda and ... worked to restore America's place as the world leader in science and technology."

In one telling remark, he added that respect for the scientific process was not "just about providing investment and resources. It's about ensuring that facts and evidence are never twisted nor obscured by politics nor ideology."

Obama's appointments are outspoken proponents of the need for urgent action over climate change, and they come after eight years of inaction, during which the Bush administration resisted international emission-reduction accords and the introduction of US laws to protect threatened species.

Holdren, whose expertise runs from nuclear-weapons proliferation to global warming, recently warned in a speech at Harvard that he considered "global warming" to be a misnomer. "It implies something gradual, something uniform, something quite possibly benign, and what we're experiencing is none of those. There is already widespread harm ... occurring from climate change. This is not just a problem for our children and our grandchildren."

As he pointed out, new figures point to a rapid acceleration in the loss of Arctic sea ice, as well as dramatic acidification of the ocean.

With the international community looking to America for leadership, Obama has made it clear that, despite the global economic crisis, the success of his presidency will hinge on a revolution in America's use and production of carbon-based energy. The selection of marine expert Lubchenco underscores that. She has warned that even if the world abruptly shifts away from fossil fuels, the oceans will continue to soak up carbon dioxide and become more acidic. She recommends protecting marine life by reducing overfishing, cutting back on nutrient run-off and creating marine reserves to protect marine eco-systems.

"The Bush administration has not been respectful of the science," she said earlier this year. "I am very much looking forward to a new administration that does respect scientific information and considers it very seriously in making environmental policies."

In another signal of his determination to move on the environment, Obama appointed Carol M Browner as his climate tsar last week. She was quoted as saying: "Time and time again, when the nation has set a new environmental standard, the naysayers have warned it will cost too much. But, once we have set those standards, American ingenuity and innovation have found a solution at a far lower cost than predicted."

For Obama, the creation of this green team is part of a broader push toward economic and environmental self-enlightenment. He has expressed hope that engaging technology with environmental and energy policy will lead to significant job creation.

Source - The guardian

Barack Obama's choice of energy team signals climate change intent

Barack Obama has picked an energy team that includes a Nobel Laureate obsessed with fighting global warming and an acolyte of Al Gore — a clear sign that he intends to move quickly on climate change legislation despite the dire economy.

Mr Obama has chosen as his Energy Secretary Steven Chu, who won the 1997 Nobel Prize for Physics and who in recent years has devoted himself to the cause of inventing alternative fuels.

The President-elect has also created a new post, a White House overseer of energy, environmental and climate policy — already known as an "energy tsar" — who will be responsible for driving his agenda on Capitol Hill. For this, he has picked Carol Browner, a former legislative director to Al Gore.

The choices, and the fact that Mr Obama is intent on co-ordinating environmental policy from inside the White House, underscores his intent to push ahead with his hugely ambitions and expensive plan to create alternative fuels, and reduce carbon emissions, despite the fierce resistance that will inevitably come from US industry.

Mr Obama is in fact exploiting the economic crisis as a way to justify much of his legislative agenda. He is arguing that economic recovery is tied implicitly to big reforms in areas such as healthcare, the environment and schools, and he appears to have a Democratic-controlled Congress willing to fund much of it.

Yesterday, as he announced Tom Daschle, the Democrats' former leader in the Senate, as his Health Secretary, Mr Obama said: "Now, some may ask how, at this moment of economic challenge, we can afford to invest in reforming our healthcare system. Well, I ask a different question — I ask how we can afford not to."

Mr Chu, 60, the son of Chinese immigrants, has been director of the Lawrence Berkeley National Laboratory in California since 2004. On his website, he says it has been his "mission" to make the facility the world leader in finding alternative and renewable energy sources. He views a shift away from fossil fuels central to fighting global warming.

On Tuesday, Mr Obama had a meeting in Chicago with Mr Gore, declaring afterwards: "The time for denial is over." He added, referring to climate change: "This is a matter of urgency and national security, and it has to be dealt with in a serious way. That is what I intend my Administration to do."

Source - The times

Solar panels look brighter with Obama

The election of Barack Obama has put the wind back into the sails of the renewable energy sector, where investor confidence had been badly punctured by the credit crisis. Clean technology and green energy stocks have soared as City analysts predict a major boost from the incoming president.

Solar Integrated Technologies rose by 30% yesterday after increases of 22% by Renewable Energy Corporation and 16% by the wind turbine maker Vestas in the 24 hours before, when they were helped upwards by oil prices returning to above $70 a barrel.

Obama has promised to invest $150bn over 10 years in renewables as part of a wider plan to increase US energy security amid fear of oil shortages, while also reducing the country’s carbon emissions in a bid to tackle global warming - and create jobs during an economic downturn.

Kate Hampton, head of policy at Climate Change Capital, a UK-based investment manager, was one of many who welcomed the poll result as a massive step forward for renewables.

“We cannot overstate how divisive the Bush administration was, how far behind the US now is in the transition to the low-carbon economy and how high expectations are now that Obama is the president-elect,” she said.

Dean Cooper, alternative energy analyst with Ambrian Partners in London, predicted widespread change in the US with production tax credits for the wind industry increased from one year to seven years and a national renewable-energy guideline introduced alongside a cap-and-trade scheme to give more certainty on a carbon price.

The moves come as Britain has recently put more muscle into its low-carbon drive by creating a new government department to cover energy and climate change, while Spain, Germany and other European nations press ahead with their own plans to boost renewables.

The US election result has provided a much-needed boost at a critical time for an emerging investment sector that risked being crushed by the banking crisis and emerging economic recession. Some companies had seen their share prices halve in the turmoil that began in September.

“Since the onset of the most recent phase of the credit crisis, the European wind sector has been battered with an unweighted average decline of 45% compared to a decline of 23% for both the S&P 500 and FTSE Eurofirst 300 over the same period,” said Michael McNamara, analyst at Jefferies & Co, in a research note published at the height of the sell-off.

“Much of this has been linked to fears that wind power developers would see themselves cut off from access to financing due to a toxic combination of a potential global closure of the project finance market and a drying up of demand for tax equity investment in the US.”

Sentiment in the City and Wall Street has steadied since, but the dependence on project finance at a time when the cost of money has soared continues to cast uncertainty over a sector that is also nervous about rising costs and planning delays in countries such as Britain.

Peter Horsburgh, a manager of the Environmental Technologies Fund, said early start-up businesses were going to find it much harder to raise capital and those who had rushed early into a stockmarket listing could find it hard to win secondary tranches of cash.

“Rights issues are going to be incredibly difficult and yet neither is bank lending going to be easy for small and medium-sized firms,” said Horsburgh, who expects his own fund will look at less speculative, “later stage” companies that have defined revenue streams.

In fact, there is nothing new about volatility in the clean tech and green energy sector, with share prices being driven in the past to hugely inflated levels on the back of hyped euphoria that sucked in investors before being rapidly deflated as realism set in.

The dotcom boom surrounding internet stocks was followed in the US at the turn of the century by a bubble in solar and hydrogen companies that soon burst. A similar spike happened in Europe with Vestas among the companies whose future looked in doubt at one stage.

Global solar stocks have suffered since last Christmas over fears of an oversupply of modules and cells, while wind turbine makers have been hit since the highs of the summer by soaring input costs. Confidence in the offshore wind sector in Britain was also dented by Shell’s decision to sell up its interest in the huge London Array project.

Peter Fusaro, chairman of energy consultant Global Change Associates, said the green investment sector remained still relatively small but “fat with hype and fluff”.

But it is also growing. Whereas there were four hedge funds looking at the sector in 2004 there are more than 90 today, while an estimated 4,000 private equity funds are said to be targeting the sector, according to Fusaro.

But the profit margins in many of the renewable sectors are relatively small, making them particularly vulnerable to a serious global economic slowdown and rising inflation. However, Kevin Collins, chief operating officer at the specialist renewables insurer GCube, said he was confident of the long-term value in the sector. He also warned: “Are the banks and lenders going to be in a position to finance projects as they were? We don’t see a massive slow-up in demand yet, but its early days and while renewables will continue to grow it is difficult to say at what rate.”

Many of the pioneers of low-carbon energy are dependent on public subsidy to survive. There is a question over whether bank bail-outs will have drained the state coffers and lead to a slowdown in environmental grants.

France, Germany and Austria have already called for an easing of European Union climate goals to help industries cope better with the downturn. In Washington one Republican senator said, on condition of anonymity, that the green bubble had burst.

“There is a very large question mark hanging over the idea that Congress would take economy-wide action on global warming with the economy in such anaemic shape,” said Frank O’Donnell, president of Clean Air Watch.

Source - The Guardian