Exciting news from here in the Heartland: Six Midwestern governors and a Canadian premier have signed a climate change agreement that will increase renewable energy use, increase energy efficiency, and cut global warming emissions.

Illinois, Iowa, Michigan, Minnesota, Kansas, Wisconsin, and the Canadian province of Manitoba all signed onto the agreement at the Midwestern Governor’s Association (MGA) Energy Summit that was held in Milwaukee, WI earlier this month. Wisconsin Governor Jim Doyle (D) and Minnesota Governor Tim Pawlenty (R) co-chaired the summit. The governors of Indiana, Ohio, and South Dakota signed on as observers to the process but did not commit to the accord.

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Minneapolis Mayor R.T. Rybak may be the first mayor in the nation to drive a plug-in hybrid vehicle as his official city car.

Since he was first elected in 2002, Mayor Rybak’s official car has been a Toyota Prius. But the dramatically superior gas mileage of a plug-in hybrid vehicle prompted him to make the switch: he had his hybrid converted to a plug-in hybrid electric vehicle, from which he expects to get about 70 miles per gallon (mpg) compared to his average 40 mpg with the Prius.

A plug-in hybrid electric vehicle (PHEV) is like a regular hybrid with a cord. That is, its battery can be recharged by plugging it into a regular 120-volt outlet.

Typical of many PHEVs, Mayor Rybak’s car can travel about 30 miles solely on battery power if the speeds are 30 mph or less. If he drives further or needs to go faster, the car automatically switches over to using the gas engine. But for local city driving — when speeds are low and distances are shorter — he could go days without using any gasoline to power the engine.

Although most of Minnesota’s electricity comes from coal power, powering a vehicle with the electric grid is still cleaner than gasoline. But the Mayor and other city officials want to make it even cleaner: Minneapolis has applied for a state grant to install solar panels on some city buildings so that future plug-in cars could charge up using solar power instead of fossil fuels. Rybak told the Minnesota Daily:

It became clear to me that the two big things we had to do were convert to plug-in hybrids and find a way to have them use electricity from non-coal sources … I become very frustrated with people saying we need to do years of research on all these issues. Research is great, but the technology is there right now.

Last year, Minnesota became the first state in the nation to pass legislation promoting plug-in hybrids. The law instructs the state to buy plug-in hybrids on a preferred basis when they become available and encourages Minnesota State University - Mankato to develop flex-fuel plug-in hybrid vehicles (plug-ins that can run on an ethanol blend).

Minneapolis has about 100 government vehicles that are either hybrids or use E-85 fuel (an 85 percent ethanol, 15 percent gasoline blend). Leadership from the city and supportive government policies could make plug-in hybrids a more common occurrence on Twin Cities roads.

BIOconversion Blog
Cal Cars
City of Minneapolis
Minnesota Daily

Photo Source: City of Minneapolis

Findings from a new report examining insurance companies’ responses to climate change were released at the International Association of Insurance Supervisors last week. The study found that an increasing number of companies are implementing initiatives to reduce the risk of climate change’s impacts and reduce the emissions that cause the problem.

"From Risk to Opportunity 2007: Insurer Responses to Climate Change" was commissioned by Ceres, a U.S. group of investors and clean energy supporters that also directs the Investor Network on Climate Risk, which manages more than $4 trillion in assets. Mindy S. Lubber, President of Ceres, explained the report’s findings:

Insurers are beginning to respond to global warming – and not just by withdrawing from coastal markets with high financial exposure. We’re seeing a rapid proliferation of products that will reduce climate-related financial losses, as well as the pollution causing global warming. Yet, insurer responses to date are not nearly sufficient given the scale of the challenge. We need more insurers, especially U.S. insurers, to step up.

Indeed, Europe’s largest insurer, Allianz, said that climate change may increase insured losses from extreme events in an average year by 37 percent within a decade. Karolinska medical university in Sweden predicts cardiovascular health problems to rise along with global temperatures.

Some specific initiatives offered by companies around the globe include:

• Green building credits
• Drought protection
• Incentives for investing in renewable energy (London-based Willis Holdings will cover potential underproduction of wind power)
• Clean transportation (The Japanese company Sompo gives premium discounts to policyholders who drive low-emitting cars)

All in all, the report found 422 examples from 190 insurers, reinsurers, brokers, and insurance organizations from 26 nations. That’s more than double the number of products found in a similar report barely over a year ago. I was surprised to learn that forty percent of the initiatives are from U.S. companies, although not surprisingly only a small minority of companies overall are exploring how climate change may affect business or are offering products to mitigate it.

With billions of dollars lost this year from unprecedented flooding and windstorms in Europe and wildfires in the U.S., some are nervous that climate change threatens the entire industry’s long-term viability. While the products from a handful of companies certainly won’t slow the consequences on their own, they must multiply to be part of the global solution that includes private sector involvement, government leadership, and consumer response.

Depending on whom you ask, emissions from air travel make up 2-6 percent of the planet’s total CO2 emissions (as a whole, the transportation sector makes up about a quarter of those emissions). But airlines in particular have been getting a bad rap among some in the environmental community because of it, and a recent conference of European airline industries debated how to brighten their image.

One British strategic communications firm argued that the airline industry essentially needs a PR makeover. Steve Dunne of the Brighter Group went so far as to say that the industry risks sliding into a reputation akin to that of cigarette manufacturers in the U.S.: "The aviation industry is just not representing itself properly or effectively to put the lobbying efforts of the eco-warriors into some kind of perspective."

I’m not convinced the risk is that dramatic — at least here in the U.S. While there are certainly efficiency measures airlines should be considering — such as being towed to a starting point on the runway instead of burning fuel to get there – advocating a total ban on air travel as some do (or even very high taxes) is a losing cause (by the way, I want to hear a convincing argument as to why flying on a commercial plane isn’t public transportation, like taking the bus).

But the pollution problems for the industry could take off: The United Nations’ Intergovernmental Panel on Climate Change (IPCC) says that while the CO2 emissions per passenger kilometer have decreased, the increased number of passengers overall has negated that efficiency. Furthermore, the World Wildlife Fund predicts airlines to make up 15 percent of all global CO2 emissions by 2041.

So while the airlines may not be likened to cigarette manufacturers yet, they should consider some reputation management now. And there are good things happening: The International Air Transport Association says they saved 6 million tons of CO2 by shortening routes worldwide. Virgin’s Richard Branson just announced that he’s planning a 747 biofuel test flight for early next year, and Northwest put together a taskforce of employees and managers that came up with ways to cut inefficient fuel use by 31 million gallons per year. To keep up with the increasing number of passengers and the increasing concern about global warming (including carbon regulation), however, the airlines industry will have to continue decreasing their contribution to the problem and keep telling the public about it. Telling their side of the story — while performing real, meaningful leadership — will keep their reputation from taking a nose dive.

Cross posted on Maria Energia

International Herald Tribune

For the first time ever, a U.S. regulatory agency denied a coal plant permit solely on the basis of its carbon dioxide emissions. Carbon dioxide (CO2) is a main contributor to global warming.

The Kansas Department of Health and Environment (KDHE) denied permits to two large, 700-megawatt plants proposed by Sunflower Electric Power. The plants would have cost about $3.6 billion and spewed 11 million tons of CO2 into the air each year. That’s almost the same amount of CO2 that the Northeastern states planned to have saved by 2020 with their cap-and-trade program. The attorneys general of those states had petitioned Kansas officials to deny the coal plants that would have effectively negated their efforts.

Interestingly, while the KDHE staff recommended that the plants be permitted, state law also allows the KDHE secretary to deny a permit if there is an unregulated emission that threatens public health or the environment. And that’s what happened here: Secretary Roderick L. Bremby disagreed with his staff because of the unregulated CO2 emissions that pose a threat to global warming. He wrote in his news release: "I believe it would be irresponsible to ignore emerging information about the contribution of carbon dioxide and other greenhouse gases to climate change and the potential harm to our environment and health if we do nothing."

Kansas also has a goal of getting 10 percent of its electricity at peak period from wind power. The electric cooperatives will meet that goal by the end of the year — two years ahead of the deadline.

A Sunflower Electric Power spokesman pointed out that the company could build natural gas plants that emit half the amount of CO2, but they also have a much higher fuel cost than coal. So once again we’re back to the business problem of not having a price on CO2 emissions (such as through a cap-and-trade or carbon tax policy). Without a price on CO2, there is no "common yardstick" for determining whether the additional fuel cost of natural gas is offset by the less CO2 emitted. While the Kansas decision may set a precedent for other regulatory bodies around the country, the federal government also needs to spell out the CO2 rules for businesses and utilities.

Kansas City Star
Kansas Department of Health and Environment
New York Times
Washington Post

While General Electric announced structural changes to compensate for increased business in its energy-efficient lighting sector, BP is planning to restructure itself to emphasize…more petroleum.

Once self-dubbed "Beyond Petroleum" because of its increased focus on clean energy — and even considered to be one of the friendlier oil companies by clean energy supporters — BP is now folding its gas power and renewables division into its two exploration and refining segments. But despite the de-emphasis on renewables, it will continue to use the "Beyond Petroleum" moniker (still good for business I suppose) and build wind turbines and solar cells.

Why the change? Simple business: The company’s new CEO, Tony Hayward, is frustrated with its performance compared to rivals like ExxonMobil. While Exxon and BP produce nearly the same about of oil each day (4.2 million barrels from Exxon compared to 3.8 million from BP), the stock market "values" BP’s barrels at $59 and Exxon’s at $122. So Hayward wants to realign BP with its core mission to boost profits: find oil and gas and make it into fuel. As James Harding of the The Times (London) put it, "Mr Hayward is setting out to make BP resemble Exxon, not The Body Shop."

But is this a "brutal reality check" for clean energy supporters, as Harding opines? Or did BP never really leave its oily roots in the first place? Should we be surprised that an oil company — that commits to a hardly-a-drop-in-the-oil-bucket investment of $8 billion in the next 10 years on clean energy — goes back to emphasizing fossil fuels?

I don’t think so. But nor should we discount the fact that they are investing in wind and solar. However, I do wonder whether this restructuring also alters BP’s plan for operating in a carbon-constrained marketplace.

Back in June, Hayward addressed policymakers in Berlin about climate change and how efficient and clean technologies – combined with a price on carbon emissions — will help slow global warming. While BP is talking the talk and making some overtures to clean energy, consumers – backed by a supportive marketplace and policymakers — will still need to be the driving force behind a clean and efficient energy future.

British Petroleum
The Times
Earth2Tech

Coal and nuclear plants may not be dropping like flies, but the business climate and the planet’s climate have caused some utilities to think twice about investing in them.

Tampa Electric of Florida has announced that it won’t build a coal plant to meet future energy needs, as originally planned. The coal plant was going to be an integrated gasification combined-cycle plant, or IGCC, which means that the coal is broken down into different gases that make it easier to pull out and store the carbon dioxide (CO2) so it doesn’t get released into the atmosphere. It’s still a very expensive technology and has yet to be tested on a very large scale, but because the U.S. is so reliant on coal power, many believe sequestration is the only way to cut emissions fast enough to slow global warming.

Tampa Electric cited the uncertain future regulation of CO2, the challenge of carbon capture and sequestration, and the associated costs. Although the utility sees IGCC as playing a significant role in future energy needs, the economic risks were too high and too uncertain at this time to proceed. Instead, the utility will look at other technologies like renewables, natural gas, and efficiency. Florida has also had a slew of new clean energy laws, including limits on global warming emissions and requiring utilities to get 20 percent of their electricity from renewables.

Likewise, Xcel Energy says it can delay the need for new baseload generation in Minnesota because of its diversification into new, cleaner energy (particularly wind power and efficiency measures). Xcel argued that more hydropower from Canada — not considered “green” by many because of its destruction to native communities there — and upgrades to nuclear plants are not needed because of the aggressive energy bills passed during the last legislative session. Those laws direct Xcel to get 30 percent of its energy from renewable sources and to begin cutting energy use 1.5 percent annually beginning in 2010. Xcel’s own analysis concluded: “[C]learly there will be periods when available wind energy will supplant base-load resources to meet our customers’ energy needs.”

Diversifying our energy sources and emphasizing efficiency measures have started impacting how utilities do business and how their customers power their lives. While there is no silver bullet for a clean energy future, changes like these are all part of the “silver BB” approach to get us moving towards a smarter energy system in the 21st century.

Cross posted on Maria Energia

The Energy Blog
Wind Energy Weekly

Canadian and U.S. officials are respectively discussing impending regulation to cut down carbon dioxide (CO2) emissions. Businesses in both nations are slowly getting the message and working together to prepare for – and perhaps help mold – the change.

The Canadian Council of Chief Executives reached an “unprecedented consensus” last week when they officially called for action that included “absolute” emissions cuts. A national strategy is needed, they argue, rather than the patchwork of provincial regulations that have cropped up. Furthermore, they acknowledged that government regulation may be needed to raise fossil fuel costs, drive efficiency measures, and instigate greater cuts.

Being open to regulation and the need to fight global warming also opens the door for the business community to be involved in the policy planning. The Globe and Mail explained that a “key goal” in the group’s declaration is to stop any measure that would hurt the economy or penalize certain sectors.

Canadian Prime Minister Stephen Harper and his administration are still piecing together a national global warming strategy. In addition to government regulation, the business group recognized its customers and consumers for also driving the message that the private sector needs to change for the greener in order to slow global warming.

In the States, large businesses have made similar declarations as the Canadian coalition, and small businesses are also taking the lead. With 26 million small businesses in the U.S., they make up half of the economy and about half of all energy used for commercial and industrial purposes. This means that huge strides could be made in efficiency and emissions cuts if they work together.

A recent example is the National Automobile Dealers Association’s (NADA) Energy Stewardship Initiative: About 500 auto dealers have pledged to cut energy use by 10 percent, thereby saving about $193 million and cutting more than a million tons of global warming pollution every year. The National Small Business Association is working with the Energy Star Small Business program and has issued a similar efficiency challenge to its members.

Businesses large and small will be needed to fight global warming, and they’ve begun doing just that. Now, with pressure from voters and the business community, it’s time for Canadian and U.S. policymakers to take decisive steps and implement national policies to curb CO2.

Globe and Mail
CNN

Every year, Gustavus Adolphus College in tiny St. Peter, MN holds a Nobel Conference, authorized by the Nobel Foundation of Stolkhom, Sweden. The conference brings together renowned experts to discuss timely issues, like aging or globalization. This year, it was “Heating Up: The Energy Debate.”

I attended the two-day event, which delivered in its round-up of impressive energy and global warming experts: Nobel Laureate in Physics Dr. Stephen Chu, biofuels expert Dr. Lee Rybeck Lynd, peak oil expert Ken Deffeyes, economist Paul L. Joskow, polar explorer Will Steger, hydrogen expert Joan M. Ogden, and James Hansen, Director of NASA’s Goddard Institute for Space Studies.

While at times the science got a bit thick, the message from all of the lecturers was clear: Global warming is urgent, we need to do something NOW, and many different solutions will get us there.

I was most interested to hear from Paul L. Joskow, an MIT economist who discussed the best methods for regulating carbon dioxide (CO2), a major contributor to global warming. Many politicians favor a cap-and-trade policy, in which a limit on CO2 is determined and then tradable/sellable permits to pollute are issued to utilities and industry. Economists, on the other hand, generally prefer a carbon tax that simply taxes CO2 at a certain rate.

Although an economist himself, Joskow argued that a cap-and-trade policy is the best way to create a market for CO2 and drive down emissions. First of all, a cap-and-trade policy is politically feasible, and making sure it actually has a chance of passing Congress in our lifetime is the most important thing to slowing global warming. Secondly, a cap-and-trade plan links the U.S. with other nations (and other states) that have already started down this path, thus creating a global solution to a global problem.

While economists favor a carbon tax that the feds could ideally use to cut taxes in another area, like income, Joskow said “perfect the enemy of good.” Sure, in a perfect world we would tax bad stuff and never tax good stuff (like working). But the urgency of global warming calls for a good system that is feasible now and gets us in sync with the rest of the planet. And the best system for that is a cap-and-trade policy.

Joan M. Ogden lectured on a hydrogen economy, although her fellow panel discussion presenters were skeptical of using hydrogen as a fuel source, at least in terms of it being ready fast enough to fight global warming. Although no option should be taken off the table, hydrogen could play a more important role in bettering existing technologies (like ethanol production) rather than creating an entirely new infrastructure.

Dr. James Hansen – you may remember him from his accusations that NASA officials edited his global warming reports – said that if someone is seriously concerned about climate change, any elected official they vote for should agree on three principals:

1) A moratorium on traditional coal-fired power plants (until we can sequester the CO2, building more plants moves us backwards)

2) Policies that encourage more renewable energy

3) Incentives for energy efficiency.

With the clean technology here but the leadership lacking, the issue of urgency was paramount throughout the lectures. In fact, I thought the statistics and scenarios put forth more dire than those I normally read in the media. More than one expert prefaced a recommendation with something like, ‘A year ago I would’ve been laughed out of the room for saying this, but now I can say that what we need to do is…’ The extensive media attention on global warming, along with some serious dialogue and action by the business sector and politicians, have made it “safer” to talk about the true consequences and costs of global warming without immediately being labeled a nutcase.

For example, MIT economist Paul L. Joskow said that any sort of carbon regulation is going to raise our utility bills “and anyone who tells you otherwise is lying.” With a cap-and-trade policy that sets CO2 at $50 per ton (a price he thinks is likely), it could drive up utility bills 40-50%. But this would not happen over night: Any measure passed by Congress would give utilities several years to implement efficiency programs to soften the landing. But the message was still clear: This isn’t going to be easy, but we can do it.

Polar explorer Will Steger, who has been traveling and studying the arctic and Antarctic regions for 40 years, gave an eyewitness account of global warming’s effects at the poles (in May I interviewed him about his most recent trip). I’d heard his talk several times, but there was a big difference this time: He showed a slide of polar bear and then said in his quiet-but no-BS –sort-of-way, “This is our friend the polar bear. I’m afraid there’s nothing we can do for them – they will go extinct. I couldn’t say that 18 months ago to people, but now I am.”

Despite the wake up calls – no use in sugarcoating at this point – it was still uplifting to know that some of the planet’s smartest people are working on this and elected leaders are slowly getting the message.

Now, it’s time for the rest of us to get to work. For starters, check out Will Steger’s “Template for Action,” Lighter Footstep’s “10 First Steps,” or the Union of Concerned Scientist’s “How You Can be Involved.”

Former President Bill Clinton’s Global Initiative has been all over the news lately, working with nongovernmental organizations (NGOs) and big business to move the ball forward with clean energy solutions to global warming. Whatever you think of the guy, it’s hard to deny that his partnerships are impressive and the results could be revolutionary.

Besides the agreement by utilities to invest in energy efficiency, and besides Florida Power & Light’s major new commitment to solar energy, the Clinton Global Initiative is also partnering with the Joint U.S.-China Cooperation on Clean Energy (JUUCCCE) on efficiency efforts in China.

The China Lighting Conversion program will distribute 10 million free energy-efficient compact fluorescent light bulbs (CFLs) to customers. CFLs use one-third the energy of traditional bulbs, but are still cost-prohibitive to many Chinese. According to JUUCCCE, the CFLs would save about 3.7 million tons of CO2 over 4 ½ years — enough to avoid having to build one typical U.S.-size coal plant. While I tell myself it’s encouraging to see the start of another clean energy commitment in China, I’m still disheartened by the multiple coal plants they’re building each week. But change has to start somewhere.

The other JUUCCCE program is the Energy Efficient Urban Design Tools for Mayors. This is an interactive, multimedia curriculum to train hundreds of Chinese mayors on technology and best practices that can make their cities more energy efficient. Mayors will learn about green building programs, for example, and will connect with vendors, service providers and financial advisors to help them implement what they learn. The key with this program will be rigorous follow-up and support to ensure that the information learned isn’t forgotten or lost in the bureaucracy one the mayor returns to the city.

The first phase will begin with the CFL program in April 2008, with the training for mayors to start in October of next year.

Joint U.S.-China Cooperation on Clean Energy