Indonesian palm oil industry tries disinformation campaign

Rhett A. Butler, mongabay.com
November 8, 2007

Officials from the Indonesian ministry of agriculture and the palm oil industry are distributing materials that misrepresent the carbon balance oil palm plantations, according to accounts from people who have seen presentations by members of the Indonesian Palm Oil Commission. Ministry of agricultural officials are apparently arguing that oil palm plantations store and sequester many times the amount of CO2 as natural forests and therefore converting forests for plantations is the best way to fight climate change. In making such claims, these Indonesian officials are ignoring data that show the opposite, putting the credibility of the oil palm industry at risk, and undermining efforts to slow deforestation and reign in greenhouse gas emissions.

A pamphlet distributed last week by the Indonesian Palm Oil Commission (IPOC) states "Compared to tropical forest, oil palm plantations possesses several environmental advantages, it consumes more carbon dioxide (CO2) and releases more oxygen (O2) than tropical forest, which is beneficial to the environment" (sic) citing figures from Environmental Characteristics of Oil Palm Plantations (Henson 1999) that show CO2 fixation of tropical forest at 9.62 ton/year and oil palm plantation at 25.71; respiration of tropical forest at 121.10 ton/CO2/ha/year and of oil palm plantation 96.50; O2 production of tropical forest at 7.00 ton/ha/year and oil palm at 18.70.

Carbon storage of oil palm plantations versus natural forests, based on various sources.

The pamphlet then goes on to contradict itself stating, "However, there is also a concern on the increasing demand of palm oil for biodiesel, three European countries: the Netherlands, Germany and the UK, has created a set of criteria which will become a major concern for the producer as these criteria are hard to implement and have little tolerance. The criteria where producers will find it hard to comply are with CO2 emission and biodiversity." (sic)

Grammatical errors aside, few serious scientists would support the claim that oil palm plantations store more carbon than natural tropical forests. In fact, several recent studies show that oil palm plantations produce more greenhouse gas emissions relative to natural forests. If the use of fertilizer and emissions from processing are factored in, the climate impact of converting natural forests for oil palm is even greater.

Carbon sequestration rates versus carbon storage

As is the case with any plant, oil palm trees do sequester carbon sequester carbon as they grow -- carbon is a basic building block of plant tissue. Nevertheless, the process of clearing forest in order to establish a plantation releases more carbon than will be sequestered by the growing oil palms. So while a new oil palm plantation may grow faster -- and sequester carbon at a higher annual rate -- than a naturally regenerating forest, in the end the oil plantation will still store less carbon (50-90 percent less over 20 years) than the original forest cover. The carbon losses are even greater when the plantation is established on peat lands, which store vast amounts of carbon but release it as they are drained (upon exposure to air, peat rapidly oxidizes, decomposes, and releases carbon dioxide).

"The emission from forest conversion clearly exceeds the potential carbon fixation of oil palm plantings. Forest conversion on mineral soils to promote continued oil palm mono cropping causes a net release of approximately 650 Mg carbon dioxide equivalents per hectare, while the emission from peat forest conversion is even higher due to the decomposition of drained peat and the resulting emission of carbon oxide and nitrous oxide," wrote Germer and Sauerborn in a paper published earlier this year in the journal Environment, Development and Sustainability. "The conversion of one hectare of forest on peat releases over 1,300 Mg carbon dioxide equivalents during the first 25-year cycle of oil palm growth. Depending on the peat depth, continuous decomposition augments the emission with each additional cycle at a magnitude of 800 Mg carbon dioxide equivalents per hectare."

Meine van Noordwijk, Regional Coordinator for Southeast Asia and Principal Ecologist for the World Agroforestry Center (ICRAF) says that industry claims of carbon superiority for a plantation fall short when one looks at the big picture.

"This is the classical debate on flows versus stocks, of plant physiology versus systems ecology -- currently the pulpwood as well as the oil palm plantation sector are fighting the battle with claims that they improve the C sequestration rates from something like 0.5 t C/ha/yr for maturing forest to values of 3-5 t C/ha/yr for fast growing plantations -- while the world should care about the release of about 250 t C/ha of existing stocks before this increase in rates can be realized," van Noordwijk told mongabay.com. "It will take 50-100 years before [carbon storage at this sequestration rate] equals 250." Meanwhile the average life on an oil palm plantation is less than 25 years.

"You can vary the numbers, but qualitatively the story remains that the release of forest carbon stock to the atmosphere takes a very long time to be offset by whatever the claims are for plantation growth rates," van Noordwijk added. "The simplest concept to avoid the need to account for all photosynthesis, respiration, decomposition, removal of plant products etc is to look at the 'time-averaged carbon stock' of the system -- this allows direct comparison at systems level, and suggests that there is a substantial difference between oil palm and pulpwood plantations on one hand, and natural forest on the other, with logged forests in between. This is the story for mineral soils."

On peat soils, the carbon balance is even less favorable for oil palm plantations due to emissions from drainage.

"The belowground carbon stocks in peat land can be thousands of t C/ha, and the rates of release may be 30-50 t C /ha/yr -- so the aboveground capture by fast growing pulpwood or oil palm is only 10% of the concurrent losses from the peat -- it is, indeed, a huge experiment in CO2 fertilization if you grow trees on a peat that has been drained to 80 cm depth as is standard practice in Indonesia."

Wetlands International, an prominent environmental group that has released a widely-cited study on emissions from peat lands degradation and destruction, agrees.

"In a good year approximately 3 to 6 tons of palm oil is produced per hectare, causing emissions of 70 to 100 tons of carbon dioxide [19 to 27 metric tons of carbon] per year per hectare," Susanna Tol, a researcher with Wetlands, told mongabay.com. "The production of one ton of palm oil results in carbon dioxide emissions of up to 33 tons [9 tons carbon]" -- roughly ten times that of ordinary diesel.

"At least 1.5 million ha of palm oil is planted on peat in Indonesia alone and will contribute some 100 to 150 Mt CO2/annum, or about 27 - 41 Mt carbon losses directly in these plantations and only from drainage," added Marcel Silvius, a senior scientist at Wetlands. "The use of fertilisers and methane emissions of the palm oil production process add still more emissions... not to mention the initial loss of the tropical rain forest and its carbon sequestration potential."

Palm oil can be part of the solution

While the data show that oil palm plantations are no match for natural forests in terms of storing carbon, palm oil can still play a role in efforts to reduce greenhouse gas emissions. Oil palm is one of the world's most productive oilseeds -- on a per-unit-of-area basis, biodiesel yields from oil palm far outstrip those from conventional biofuels like corn, soybeans, sugar beets, rapeseed and sugar cane. In other words, using oil palm as a source of biodiesel will require the conversion of less land for bioenergy feedstock than other sources, allowing more land to be set aside for other uses, including conservation. The key to maximizing the potential benefits of palm oil is to establish plantations on Indonesia's tens of millions of hectares of already deforested and abandoned wastelands, while protecting the country's remaining peat lands and natural forests for biodiversity, carbon storage, and other ecosystem services. To make this a reality, the Indonesian government, palm oil producers, and palm oil consumers will need to work together to develop a robust and verifiable supply-chain tracking mechanism for palm oil. The palm oil industry's best interests lie in leading these efforts rather than attempting to scam the public. Such underhanded tactics will only come back to hurt them in the future.

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Palm oil and poverty alleviation?

Another argument used by the palm oil industry is that oil palm plantations play a significant role in poverty alleviation. However a new study using data from neighboring Malaysia found that these claims may be overstated. Examining poverty rates and oil palm expansion in the Malaysian states of Sarawak and Sabah on the island of Borneo, researcher Marc D. Bowden found that despite substantially lower coverage of oil palm plantations, Sarawak saw a greater reduction in poverty rates over the past three decades than neighboring Sabah. In Sarawak, where oil palm plantation cover expanded from 0.12 percent of the land area in 1976 to 4.08 percent in 2004, the proportion of the population living below the poverty line fell 85 percent from 51.7 percent to 7.5 percent in the same period. Meanwhile in Sabah, where oil palm plantation cover grew from 0.95 percent in 1976 to 15.81 percent in 2004, poverty rates dropped 55 percent from 51.2 percent to 23 percent.

Read more: Are the economic benefits of palm oil exaggerated?

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Nations Share Blame for Indonesia Deforestation - VP

JAKARTA - Foreign nations share the blame for the destruction of Indonesian forests and should pitch in to help restore them, Vice President Jusuf Kalla said on Friday.

Indonesia, host of a UN climate change conference in December, has been a driving force behind calls for rich countries to compensate poor states that preserve their rainforests to soak up greenhouse gases.

"Those foreigners keep harping on our country's high emissions. Our emissions are high, but don't forget who created this. Where did our timber go?" Kalla told reporters.

Kala said developed countries such as Japan and the United States had been major consumers of Indonesian timber, much of which was logged illegally.

"It means they have to pay," he said.

According to global environmental group Greenpeace, Indonesia had the fastest pace of deforestation in the world between 2000-2005, destroying an area of forest the size of 300 soccer pitches every hour.

The Indonesian government says it must be given incentives, including a payout of US$5-$20 per hectare, to preserve its forests. It also wants to negotiate a fixed price for other forms of biodiversity, including coral reefs.

Indonesia has a total forest area of more than 225 million acres (91 million hectares), or about 10 percent of the world's remaining tropical forests.

But the Southeast Asian country -- whose forests are a treasure trove of plant and animal species including the endangered orang-utan -- has already lost an estimated 72 percent of its original frontier forest.

Participants from 189 countries are expected to gather in Bali in December to discuss a new deal to fight global warming. The existing pact, the Kyoto Protocol, runs out in 2012. (Reporting Muhammad Al Azahari; Writing by Ahmad Pathoni; Editing by Sugita Katyal)

Story Date: 12/11/2007

All Contents © Reuters News Service 2007

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FAQ: Palm oil, forests and climate change

Greenpeace, Forest Campaign

Forested peatlands cleared for oil palm plantations in Riau, Indonesia © Greenpeace/Oka Budhi

Why is palm oil a problem?

The global palm oil industry is expanding rapidly: it's used in an increasing number of food and cosmetic products, while demands for its use in biofuels like biodiesel are set to soar in the near future. Tropical rainforests and peatlands, in South East Asia are being destroyed to make way for oil palm plantations. Not only is this a disaster for biodiversity and local communities, it will also release vast amounts of greenhouse gases into the atmosphere, accelerating climate change.

What does Greenpeace want?

We want to see the Indonesian government establish a moratorium on clearing forest and peatland areas and to help achieve that, we're asking supermarkets and food companies to cease trading with palm oil suppliers that are involved in this environmental destruction. We also want to see deforested and degraded peatlands being restored, preventing yet more emissions from these areas.

International funds also need to be made available so tropical forest countries can reduce their greenhouse gas emissions from deforestation. This should also be a core element of the second phase of the Kyoto Protocol on climate change, but it needs to happen alongside massive cuts in emissions from richer nations as well.

Are you anti-palm oil?

We're not against palm oil or the palm oil industry. What we are against is any palm oil that comes from plantations converted from forest and peatland areas. However, at the moment it's impossible to determine where palm oil comes from, so companies should stop trading in palm oil from suppliers known to be involved in forest conversion. We also want to see them immediately support a moratorium on further forest and peatland destruction.

What's so important about peatland?

Peatland is one of the most concentrated stores of carbon around. Clearing the forest on top, draining the peat and burning it releases vast amounts of greenhouse gases into the atmosphere. Indonesia's peatlands represent just 0.1 per cent of the Earth's land mass, but contribute a staggering 4 per cent of global emissions.

What is the Roundtable on Sustainable Palm Oil?

The RSPO was established in 2001 as a market-led initiative to reform the way palm oil is produced, processed and used, with clear standards on the production of sustainable palm oil. Members include companies all along the supply chain, from big name companies such as Unilever, Cadbury's, Nestle and Tesco, to suppliers such as Cargill, ADM and Indonesian-based Duta Palma.

Why won't the RSPO work?

As it currently stands, even though member companies are paying lip-service to forest and peatland protection, the reality is very different. The existing standards developed by the RSPO will not prevent forest and peatland destruction, and a number of RSPO members are taking no steps to avoid the worst practices of the palm oil industry. Some like palm oil processor Duta Palma, an RSPO member, are directly involved in deforestation. Worse still, at present the RSPO itself is creating the illusion of sustainable palm oil, justifying the expanding the industry.

Aren't biofuels meant to reduce emissions?

They could make a small contribution to reducing emissions, but their role has been greatly over-exaggerated. Using biofuels containing palm oil to tackle climate change is like using a can of petrol to put out a fire and would produce more carbon emissions than burning conventional fossil fuels.

So why are governments increasing the amount of biofuels being sold?

It's seen as an easy quick fix to cut emissions from transport, but as a result of deforestation and land conversion overall emissions could actually increase. In addition, the growth of crops for biofuels looks set to increase food prices and reduce global food reserves. This hasn't stopped several governments setting biofuel targets: by 2012, 20 per cent of diesel in India will be biodiesel, while by 2020 the EU and China want their biofuel levels to rise to 10 and 15 per cent respectively. We're lobbying governments to devise strict sustainability criteria to ensure they don't include products directly or indirectly responsible for deforestation.

Is this just a problem for Indonesia?

No, it's a global problem. The international trade in palm oil means companies in the UK can have a huge influence on how suppliers operate, and by refusing to deal with those they know to be destroying forest areas they can change industry practices. Governments also need to wake up to the relationship between deforestation and climate change, and provide funding to prevent deforestation, as forest destruction is responsible for a fifth of all greenhouse gas emissions.

How does this fit into the Kyoto Protocol?

The next phase of the Kyoto Protocol is being discussed in Bali in December, and reducing emissions from deforestation has to be a key part of any agreements. The solution we and many others propose is a funding mechanism to transfer money for forest protection from rich countries to poor ones, including Indonesia, and this needs to happen alongside deep cuts in emissions in the UK and other developed nations.

What effect will a moratorium have on the livelihoods of Indonesians?

As in many other forest areas around the world, local communities often get a raw deal. Many are totally dependent on the forest for everything they need to survive and although in theory indigenous people have the right to control development on their customary lands, their rights are frequently violated by the government and companies. They are often cheated out of their land, and farmers who sell their forest areas can become trapped in a cycle of debt, effectively becoming slaves on their own land. It's also worth remembering that most players in the palm oil industry are major international companies, so the profits and associated benefits don't filter down to the majority of Indonesians.

People have been talking about palm oil for years, so why is Greenpeace campaigning about this now?

It's not a new issue, but the palm oil industry is expanding rapidly and the rush for biofuels will only increase demand. In Riau province, home to one-quarter of Indonesia's oil palm plantations, a further 3 million hectares are planned and soon half of the province will be covered in oil palms. If this expansion goes ahead it will release vast amounts of carbon dioxide into the atmosphere, accelerating climate change.

What can I do?

Because there's virtually no way of telling whether the palm oil in any particular product has been grown on deforested land, we can't offer any practical steps you can take right now. It's also difficult to avoid palm oil, as in the ingredients it's often listed as 'vegetable oil'. However, as our campaign develops over the coming months we will be asking for your help. Subscribe to our ebulletin to receive campaign alerts or make a donation to help us continue our work in Indonesia and around the world.

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Asia: Peat fires rage as Indonesian farmers burn forests for better crops

By Daisuke Sudo, The Asahi Shimbun -  11/08/2007

PANGKALANBUN, Indonesia--As the world looks for ways to cut back on CO2 emissions caused by the use of fossil fuels, another issue continues to burn.

Peat, the highly organic carbonized plant matter found at the bottom of marshes and wetlands, continues to burn in deforested areas of Indonesia.

In tropical regions like Indonesia, many forested areas are in wetlands, the base of which is often formed from the deposits of plant matter.

As the deposits are covered by the wetlands, they are usually protected from fire.

Since around the 1980s, however, the development of farmlands has drained the groundwater, causing the wetlands to dry up. As a result, fires from the primitive slash-and-burn agriculture technique have spread easily to the dried peat and continued to burn.

Consequently, a massive amount of carbon dioxide (CO2) has been produced by burning peat. The annual amount of CO2 emissions from peat in Indonesia is more than the entire volume emitted in Japan in a year.

The international community is now moving to reduce the emissions.

Peat deposits cover about 3 percent of all land on the Earth. The carbon contained in peat is equivalent to the amount of carbon emitted through the use of fossil fuels in the entire world over 70 years.

Of the peat located in tropical regions, about half is said to exist in Indonesia.

Forest fires frequently burn in Indonesia, especially in the dry season from June to September. According to Indonesia's Forestry Ministry, fires were observed by satellite at 1,200 sites across the country on Oct. 2.

A report released late last year by Wetlands International, a nongovernmental organization (NGO) based in the Netherlands, said that about 2 billion tons of CO2 is emitted annually from peat in Indonesia.

The annual figure is larger than the 1.3 billion tons of CO2 that is emitted from Japan each year, and is equivalent to 8 percent of the total amount of CO2 produced through the use of fossil fuels worldwide.

Of the 2 billion tons produced from peat, 1.4 billion tons come from the fires. The remaining 600 million tons are produced when microorganisms break down peat.

When peat becomes drier, microorganisms break it down faster. The process is called "cold burning."

In late September, smoke could be seen rising from forests around a village in Pangkalanbun in the Kalimantan region of Borneo island. Though it was the daytime, the sunshine was blotted out by the smoke.

Afterward, charred trees could be found over a wide area. Meantime, smaller fires continued to burn, spreading to peat in the earth. On occasion, such fires can last for several months.

Fires caused by forest developers or local farmers continue from around June every year. Developers and farmers first cut down trees, leave them for several days to dry, and then burn them.

One of the farmers, Munir, 33, said, "Crops that are planted on land burned by fire grow well. After using the land for two to three years, we'll burn the next forests."

Many of the charred trees look like they are floating in midair. That is because peat around the trees was burned to ashes while the roots remained. Peat burns at a lower temperature compared with the roots of trees.

Originally, peat in tropical regions was difficult to burn because it was protected by wetlands. But in order to develop farmlands, small waterways were constructed to transport farmers and agricultural products.

Construction of roads on wetlands is difficult. Logs to be exported to Japan are also transported through those waterways.

As a result, water from wetlands flowed into the waterways, causing the groundwater level to lower and the wetlands to dry up.

In Indonesian forests, small-scale slash-and-burn agriculture has continued. Due to the increase in population, however, people have also begun to settle in wetland areas and develop farmlands.

The development has led to the frequent occurrence of fires in the forests. Especially in years when the amount of rainfall was small, smoke soon spread to neighboring countries, becoming an international problem.

In recent years, the plantation of oil palm has spread rapidly due to growing demand for the product, used in detergents and other products.

According to an Indonesian NGO, Sawit Watch (Oil palm watch), the total area covered by oil palm plantations in Indonesia increased 20 times to 5 million hectares in 2005 from 250,000 hectares in 1978.

As palm oil could be also used as a biofuel, the Indonesian government is eager to expand production.

In fact, its oil palm production is approaching that of Malaysia, now the world's largest oil palm producer.

The Indonesian government banned the burning of forests in 1999 and has since been engaged in the creation of firefighting organizations. But its control over those who burn forests has not been strict.

If the government cracks down on farmers, it could face strong opposition.

According to a local Indonesian newspaper, when the Central Kalimantan provincial government in August issued a notice that prohibited slash-and-burn agriculture, farmers repeatedly held demonstrations.

Of the total amount of CO2 produced worldwide, about one quarter is believed to be related to the decrease of forests. The burning of peat is part of this.

While Japan and some other countries have called for halving CO2 emissions by 2050, the destruction of forests is regarded as a major problem for the international community.

The Kyoto Protocol has largely failed to stop the destruction of forests due to a lack of support from the richer countries toward developing countries.

Also, developing countries, which are not obliged to reduce CO2 emissions, receive no benefits even if they take measures to protect forests.

Consequently, the destruction of forests has been a major theme of international negotiations.

At the 13th Conference of the Parties (COP13) of the United Nations Framework Convention on Climate Change, to be held in Indonesia next month, participants are expected to discuss measures that lead developing countries to protect their forests.

One of the measures is for developing countries to be awarded financial benefits if they curb the destruction of forests. The benefits would come from a fund set up by developed countries.

At the COP13 conference, Indonesia will aim to secure support from developed countries for ways to protect peat bogs and restore forests.

In September, the host country formed a group with about 10 other countries with tropical rain forests to work out measures for the protection of forests. It will present them to the COP13 conference.

Some European countries as well as Australia have also started to support developing countries. The countries have helped with initiatives such as the construction of dams to prevent peat bogs from drying out.

Assistance for the planting of trees and the purchase of firefighting equipment has also been offered.

Mitsuru Osaki, professor of plant nutrition at Hokkaido University's graduate school, plans to issue an appeal in the COP13 and the Group of Eight summit meeting to be held in Hokkaido next year.

The appeal will read that it is necessary to make a financial mechanism for the protection of peat bogs.

"Fires in peat in tropical regions can be stopped by humans," Osaki said.

* * *

Eiki Yano in Jakarta contributed to this article. (IHT/Asahi: November 8,2007)

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China launches government fund to finance efforts to fight climate change

Friday November 9, 2007 - MYT 12:45:10 PM

BEIJING (AP): China, one of the world's leading producers of greenhouse gases, launched a government fund Friday to channel money from the sale of emission-reduction credits into environmental projects. 

China has resisted adopting emission reductions under international agreements but says it is committed to curbing climate change. 

The new fund is to receive a portion of the money paid Chinese companies under a global system that allows industry in developed countries to offset their pollution by paying companies in developing economies to reduce their emissions. 

China is expected to overtake the United States shortly as the world's largest emitter of carbon dioxide and other gases that scientists say are raising global temperatures, with possibly far-reaching environmental effects. 

"The establishment of this clean development fund is a very important activity by the Chinese government to address the global problem of climate change,'' Finance Minister Xie Xuren said at a ceremony to inaugurate the fund. 

"It will support our efforts to encourage energy-saving measures and protect the environment,'' he said. 

China has approved 885 emission-reduction projects as of the end of October, making it the world's largest source of pollution credits, said Xie Zhenhua, a vice minister of the National Development and Reform Commission, China's top economic planning body. 

If all of the projects are successfully completed, they would bring in US$15 billion to Chinese companies, with US$3 billion going to the environmental fund, he said. 

The fund will give out loans and grants to support conservation projects and public education programs on the environment, said Xie, the finance minister, without giving any details. 

The announcement comes before environment ministers from 80 countries will meet on Indonesia's Bali island to discuss a replacement for the 1997 Kyoto Protocol. 

Under that agreement, nations agreed to cut their carbon dioxide and other heat-trapping gases to below 1990 levels by 2012, but the U.S. and Australia did not sign up, worried about the effect it would have on their economies. 

This time the U.S. insists that China needs also to be included in the pact. But China, whose staggering economic growth has helped lift millions out of poverty, is worried too that binding emissions limits could hinder growth. 

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Deforestation may trigger 'climate bomb'

By Gillian Wong, AP - Friday, November 9, 2007

SINGAPORE -- Industry-driven deforestation in Indonesia could "detonate a climate bomb" if not brought under control, the environmental group Greenpeace said Thursday.

A report by Greenpeace, launched in Singapore, said the burning of Indonesia's rainforests and peatlands to build palm oil plantations releases massive amounts of greenhouse gases into the atmosphere. Every year 1.8 billion tons of emissions are released by the practice, accounting for 4 percent of global emissions.

"Trade in palm oil by some of the world's food giants and commodity traders is helping to detonate a climate bomb in Indonesia's rainforests and peatlands," the report said. "Efforts to prevent dangerous climate change will not succeed unless this and other industries driving forest destruction are brought under control."

The report honed in on the Indonesian province of Sumatra, home to a quarter of the country's oil palm plantations. Some 3 million hectares (7.4 million acres) of forest are set to be slashed and burned over the next decade.

The burning of Sumatra's peatlands -- which store 14.6 billion tons of carbon -- would result in the release of greenhouse gas emissions equivalent to a year's total around the globe, Greenpeace said.

The group named consumer products makers Unilever NV and Nestle, and U.S. commodity trading giant Cargill as among many large corporations that are fueling demand for palm oil from deforested land in Indonesia.

Unilever spokesman Nick Goddard in Australia said his company was involved in international efforts to "ensure that sustainable palm oil can be made available, and that no high-value conservation forests are destroyed for palm oil plantations."

Calls to Nestle in Japan and Cargill's offices in Asia rang unanswered Thursday.

Indonesia is the biggest global emitter of greenhouse gas emissions through deforestation, putting it third behind the United States and China in terms of total man-made emissions, the report said.

Palm oil is a primary ingredient in food and cosmetics, and in recent years its derivatives have caught on as a source of renewable energy, spurred by subsidies in many European Union countries.

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Voluntary Carbon Market to Boom in Asia, US

Story by Annika Breidthardt

SINGAPORE - Trading in voluntary carbon markets is booming as companies, in top customer the United States but also in Asia, rush to offset their impact on global warming outside a regulated Kyoto protocol scheme.

Trade in the voluntary carbon market, until now a tiny part of a global carbon market worth at least US$60 billion this year, occurs outside the UN's Kyoto Protocol, which sets mandatory emission limits on developed countries that ratified the pact.

"I see the voluntary carbon market dividing about 50/50 between Asia and America," Anne-Marie Warris, the head of global greenhouse gas initiatives of verification firm Lloyds Register, said on Wednesday in Singapore.

That would be a shift from the current distribution, where companies in the United States, which lacks mandatory limits on the gases and pulled out of the Kyoto Protocol, made up almost 70 percent of the unregulated carbon market's customers.

"The emissions of big organisations here are not capped because their emissions are not part of any system," Warris said.

"I can see them beginning to want to do something about their carbon footprint."

Global voluntary greenhouse trade hit 23.7 million tonnes of carbon dioxide (CO2) equivalent, worth about US$91 million, in 2006. Warris said she expected that to grow to some 1.2 billion tonnes by 2012.

Credibility Gap

Because it is a voluntary market, emission cuts outside the Kyoto trading scheme are not always verified and projects have suffered from a lack of credibility.

Many companies now "offset" their emissions by investing in projects elsewhere such as burning methane from landfills, mainly to enhance their image of environmental stewardship and corporate social responsibility, not traditionally values associated with Asian companies.

Fewer European customers participate in the voluntary market because companies there mostly trade carbon on the regulated EU emissions trading market to meet their countries' mandatory Kyoto Protocol targets.

But some have said that current uncertainty over the future of the UN-led scheme, after Kyoto obligations expire in 2012, as well as delays in the project approval process, will lead to an influx of capital into voluntary trades.

The types of projects in the voluntary market differed fundamentally from the regulated United Nations-administered market and would continue to do so.

"You'll see a lot of replacing light bulbs and those sorts of projects, which are currently very hard to deal with in the CDM (clean development mechanism). They tend to think about much bigger investment projects," Warris said on the sidelines of a carbon market conference in the city state.

Various performance standards are being developed to meet criticism that the voluntary market is plagued by investment in questionable projects that may not actually cut emissions of the gases scientists link to global warming. (Editing by Anthony Barker)

Story Date: 8/11/2007

All Contents © Reuters News Service 2007

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Scientists Enhance Mother Nature's Carbon Handling Mechanism

ScienceDaily (Nov. 8, 2007) — Taking a page from Nature herself, a team of researchers developed a method to enhance removal of carbon dioxide from the atmosphere and place it in the Earth's oceans for storage.

Unlike other proposed ocean sequestration processes, the new technology does not make the oceans more acid and may be beneficial to coral reefs. The process is a manipulation of the natural weathering of volcanic silicate rocks. Reporting in Nov. 7 issue of Environmental Science and Technology, the Harvard and Penn State team explained their method.

"The technology involves selectively removing acid from the ocean in a way that might enable us to turn back the clock on global warming," says Kurt Zenz House, graduate student in Earth and planetary sciences, Harvard University. "Essentially, our technology dramatically accelerates a cleaning process that Nature herself uses for greenhouse gas accumulation."

In natural silicate weathering, carbon dioxide from the atmosphere dissolves in fresh water and forms weak carbonic acid. As the water percolates through the soil and rocks, the carbonic acid converts to a solution of alkaline carbonate salts. This water eventually flows into the ocean and increases its alkalinity. An alkaline ocean can hold dissolved carbon, while an acidic one will release the carbon back into the atmosphere. The more weathering, the more carbon is transferred to the ocean where some of it eventually becomes part of the sea bottom sediments.

"In the engineered weathering process we have found a way to swap the weak carbonic acid with a much stronger one (hydrochloric acid) and thus accelerate the pace to industrial rates," says House.

The researchers minimize the potential for environmental problems by combining the acid removal with silicate rock weathering mimicking the natural process. The more alkaline ocean can store carbon as bicarbonate, the most plentiful and innocuous form of carbon in the oceans.

According to House, this would allow removal of excess carbon dioxide from the atmosphere in a matter of decades rather than millennia.

Besides removing the greenhouse gas carbon dioxide from the atmosphere, this technique would counteract the continuing acidification of the oceans that threatens coral reefs and their biological communities. The technique is adaptable to operation in remote areas on geothermal or natural gas and is global rather than local. Unlike carbon dioxide scrubbers on power plants, the process can as easily remove naturally generated carbon dioxide as that produced from burning fossil fuel for power.

The researchers, Kurt House; Daniel P. Schrag, director, Harvard University Center for the Environment and professor of Earth and planetary sciences; Michael J. Aziz, the Gordon McKay professor of material sciences, all at Harvard University and Kurt House's brother, Christopher H. House, associate professor of geosciences, Penn State, caution that while they believe their scheme for reducing global warming is achievable, implementation would be ambitious, costly and would carry some environmental risks that require further study. The process would involve building dozens of facilities similar to large chlorine gas industrial plants, on volcanic rock coasts.

"This work shows how we can remove carbon dioxide on relevant timescales, but more work is be needed to bring down the cost and minimize other environmental effects," says Christopher H. House.

The Link Energy Foundation, Merck Fund of the New York Community Trust, U.S. DOE and NASA supported this work.

Adapted from materials provided by Penn State.

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38 key global environmental indicators worsen - report

Worldwatch Institute
September 14, 2007

Consumption of energy and many other critical resources is consistently breaking records, disrupting the climate and undermining life on the planet, according to the latest Worldwatch Institute report, Vital Signs 2007-2008.

The 44 trends tracked in Vital Signs illustrate the urgent need to check consumption of energy and other resources that are contributing to the climate crisis, starting with the largest polluter, the United States, which accounted for over 21 percent of global carbon emissions from fossil fuel burning in 2005. Europe, already feeling the effects of climate change, should pressure the U.S. to join international climate negotiations, according to Erik Assadourian, Vital Signs Project Director.

Vital Signs

“The world is running out of time to head off catastrophic climate change, and it is essential that Europe and the rest of the international community bring pressure to bear on U.S. policy makers to address the climate crisis,” said Assadourian, who spoke at the Barcelona launch of Vital Signs. “The United States must be held accountable for its emissions, double the per capita level in Europe, and should follow the EU lead by committing to reducing its total greenhouse gas emissions by 80 percent by 2050.”

This summer, the European Union has become a showcase for how the world will be transformed by climate change, including tragic fires in Greece and the Canary Islands, dramatic floods in England, and heat waves across the Continent. Assadourian urged European leaders to push the U.S. to engage more constructively with the international community on climate change, starting at the United Nations late this month and in the Bali Climate negotiations at the end of the year.

With a global population of 6.6 billion and growing, the ecosystem services upon which life depends are being stretched to the limit due to record levels of consumption:

• In 2006, the world used 3.9 billion tons of oil. Fossil fuel usage in 2005 produced 7.6 billion tons of carbon emissions, and atmospheric concentrations of carbon dioxide reached 380 parts per million.
• More wood was removed from forests in 2005 than ever before.
• Steel production grew 10 percent to a record 1.24 billion tons in 2006, while primary aluminum output increased to a record 33 million tons. Aluminum production accounted for roughly 3 percent of global electricity use.
• Meat production hit a record 276 million tons (43 kg per person) in 2006.
• Meat consumption is one of several factors driving soybean demand. Rapid South American expansion of soybean plantations could displace 22 million hectares of tropical forest and savanna in the next 20 years.
• The rise in global seafood consumption comes even as many fish species become scarcer: in 2004, 156 million tons of seafood was eaten, an average of three times as much seafood per person than in 1950.

The expanding world population’s appetite for everything from everyday items such as eggs to major consumer goods such as automobiles is helping to drive climate change, which is endangering organisms on the land and in the sea:

• The warming climate is undermining biodiversity by accelerating habitat loss, altering the timing of animal migrations and plant flowerings, and shifting some species towards the poles and to higher altitudes.
• The oceans have absorbed about half of the carbon dioxide emitted by humans in the last 200 years. Climate change is altering fish migration routes, pushing up sea levels, intensifying coastal erosion, raising ocean acidity, and interfering with currents that move vital nutrients upward from the deep sea.
• Despite a relatively calm hurricane season in the U.S. in 2006, the world experienced more weather-related disasters than in any of the previous three years. Nearly 100 million people were affected.

While U.S. carbon emissions continue to grow, the fastest growth is occurring in Asia, particularly China and India. But without a U.S. commitment to emissions constraints, persuading China and India to commit to reductions is unlikely. “The only hope for reducing the world’s carbon emissions is for the U.S. to begin reducing its emissions and cooperating with other nations immediately. The EU may be the only entity that can make that happen,” said Assadourian.

“With the U.S. Congress preparing to take up far-ranging climate legislation this fall, and with President Bush planning to hold an international climate change summit in Washington, now is the time to act. If the U.S. and other nations walk away without concrete plans to implement a binding agreement, the EU should not hesitate to use its diplomatic clout to press the issue,” suggested Assadourian.

Already, the window to prevent catastrophic climate change appears to be closing. Some governments are starting to redirect their attention away from climate change mitigation and towards staking their claims in a warming world. “Canada is spending $3 billion to build eight new patrol boats to reinforce its claim over the Arctic waterways. Denmark and Russia are starting to vie for control over the Lomonosov Ridge, where new sources of oil and natural gas could be accessed if the Arctic Circle becomes ice free—fossil fuels that will further exacerbate climate change. These actions assume that a warming world is here,” said Assadourian.

Selected facts from Vital Signs 2006-2007

Food and Agriculture

• For the second year in a row, the world produced over 2 billion tons of grain (more than at any other time in history). (p. 22)
• Since 1997, wild fish harvests have fallen 13 percent. Yet total fish production continues to grow—to 132.5 million tons in 2003—bolstered by a surging aquaculture industry. (p. 26)
• World exports of pesticides reached a record $15.9 billion in 2004. Pesticide use has risen dramatically worldwide, from 0.49 kilograms per hectare in 1961 to 2 kilograms per hectare in 2004. (p. 28)

Energy and Climate

• Oil use grew 1.3 percent in 2005, to 3.8 billion tons (83.3 million barrels a day). (p. 32)
• In 2005, the average atmospheric carbon dioxide concentration reached 379.6 parts per million by volume, an increase of 0.6 percent over the record high in 2004. (p. 42)
• The average global temperature in 2005 was 14.6 degrees Celsius, making it the warmest year ever recorded on Earth’s surface. The five warmest years since recordkeeping began in 1880 have all occurred since 1998. (p. 43)
• Economic damages from weather-related disasters hit an unprecedented $204 billion in 2005, nearly doubling the previous record of $112 set in 1998. (p. 44)
• Global wind power capacity jumped 24 percent in 2005, to nearly 60,000 megawatts. The growth in wind power capacity was nearly four times the growth in nuclear power capacity. (p. 36)
• In 2005, worldwide production of photovoltaic cells jumped 45 percent to nearly 1,730 megawatts, six times the level in 2000. (p. 38)
• Production of fuel ethanol, the world’s leading biofuel, increased 19 percent to 36.5 billion liters in 2005. (p. 40)

Economic Trends

• In purchasing-power-parity terms, the global economy reached another new peak, with the gross world product hitting $59.6 trillion in 2005. (p. 52)
• Global advertising spending increased 2.4 percent to a record $570 billion in 2005. Nearly half of this spending was in the United States, with $56.6 billion alone going to the production and distribution of 41.5 billion pieces of mail advertisements. (p. 54)
• In 2005, steel production reached a new record of 1,129 million tons while aluminum production reached a record 31.2 million tons. (p. 56, 58)
• Roundwood production hit a new record of 3,402 million cubic meters in 2004. (p. 60)
• In 2004, nearly 1,800 transnational corporations or their affiliates filed corporate responsibility reports, up from virtually none in the early 1990s. While this reflects growing transparency and commitment to social and environmental principles, 97.5 percent of the nearly 70,000 TNCs worldwide still do not file such reports. (p. 122)

Transportation and Communications Trends

• The world reached a new record in vehicle production, with 64.1 million cars and light trucks being manufactured in 2005. (p. 64)
• Air travel hit new records as well: in 2004, 1.9 billion passengers traveled 3.4 trillion kilometers. Yet only 5 percent of the world’s population has ever flown. (p. 68)
• Total membership in car-sharing organizations (CSOs) hit 330,000 in 2005, 2.5 times the number in 2001. Total vehicles used by CSOs reached 10,570. According to studies, sharing a car reduces the need for 4–10 privately owned cars in Europe and 6­–23 cars in North America. (p. 118)

Conflict and Peace

• The number of wars and armed conflicts worldwide declined to 39 in 2005, the lowest figure since the peak in the early 1990s. Yet at the same time, global military expenditures hit $1.02 trillion, the highest spending since the early 1990s. (p. 82, 84)

Health and Society

• World population added 74 million more people in 2005, reaching a record 6.45 billion. (p. 74)
• Five million more people were infected by HIV in 2005, while 3 million people died from AIDS-related illnesses. (p. 76)
• Infant mortality rates fell 7 percent over the last five years, from 61.5 deaths per 1,000 live births in 1995–2000 to 57 deaths per 1,000 live births in 2000–2005. (p. 78)
• Over half of the world’s 7,000 languages are endangered, and more than 500 are nearly extinct. (p. 112)
• One billion individuals, or one in every three urbanites, live in “slums,” areas where people cannot secure one or more of life’s basic necessities: clean water, sanitation, sufficient living space, durable housing, or secure tenure. (p. 114)
• As of 2002, 1.1 billion people lack access to an improved water supply, and some 2.6 billion are thought to lack access to improved sanitation facilities. (p. 116)
• Obesity now afflicts more than 300 million people, increasing their chances of contracting cardiovascular disease, diabetes, certain cancers, and other ailments.  (p. 120)

Environment Trends

• Humanity overdrew the natural capital it depends on by 23 percent in 2002. (p. 92)
• Between 2000 and 2005, global forested area shrunk by more than 36 million hectares (just under 1 percent of the total forested area). (p. 102)
• As of late 2005, an estimated 20 percent of the world’s coral reefs had been “effectively destroyed,” while 50 percent are threatened in the short or long term. (p. 94)
• Twenty percent of the world’s mangrove forests have been destroyed over the past 25 years. (p. 100)
• Twelve percent of all bird species were categorized as “threatened” in 2005. (p. 96)
• Three percent of all plant species are currently threatened with extinction. (p. 98)

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Oil and gas firms to get bigger shares of products

Ika Krismantari, The Jakarta Post, Jakarta

In another effort to help boost the country's dwindling oil production, the government plans to offer companies developing new oil and gas concessions in deep sea and frontier areas more favorable production splits.

Director general of oil and gas Luluk Sumiarso said at the International Investment Summit here Tuesday that under the planned production sharing scheme, oil and gas companies operating in deep sea and remote areas would receive 49 percent of the net production, while the government would take 51 percent.

This offer is far better than the government's current arrangements, under which investors receive 15 percent and 30 percent, respectively, from oil and gas production.

"The new production sharing scheme will be given to those willing to develop in oil and gas blocks located in deep sea and remote areas. We offer this new scheme as a form of incentive for them to start operations in areas where there is no supporting infrastructure," Luluk said.

Last month, the government invited bids for the development of 26 oil and gas blocks mostly located in deep sea and remote areas such as the Semai oil block in Papua.

In addition to this new production sharing scheme, the government also plans to apply the new cost recovery system in the new contracts, Energy and Mineral Resources Ministry Purnomo Yusgiantoro said.

"We will clarify some vague areas to avoid misinterpretation of the items that are recoverable. Until now, we are still discussing some issues. Even though we have agreed that the cost for corporate social responsibility is no longer included in the recoverable items," Purnomo said.

Under the production sharing scheme, oil and gas contractors are allowed to recover their operating costs. But some operators have included spending on activities not related to production, such corporate social responsibility projects.

Purnomo said the changes in the cost recovery assessment would not affect existing production sharing contracts.

Besides providing incentives in the oil and gas sector, the government also plans to offer incentives to investors engaged in the development of coal bed methane (CBM), a new alternative energy.

"We realize that the development of CBM is not easy as it requires a lot of time and budget. Therefore, we are thinking to provide the new players coming to this sector with incentives," Purnomo said.

Under the planned incentive formula, like the one in the oil and gas blocks in remote areas, the CBM investors will be given a 49 percent share of production, while the government will receive the other 51 percent.

With the country's oil production consistently showing a downward trend in the last five years, the government is seeking alternatives to secure its energy supply.

With total reserves of 453 trillion cubic feet, or about 81.5 billion barrels of oil equivalent, CBM is a promising energy source for the country, whose oil production has been slowly declining to 950 million barrels of oil per day from 1.3 million barrels per day in 2001.

Despite an effort to capitalize other energy resources, the government has also stepped up efforts to encourage oil companies to boost exploration projects.

Under the short-term goal, the government plans to increase its oil production by 30 percent to almost 1.3 million barrels per day by 2009.

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UN warns carbon market could collapse

BusinessGreen > News > Carbon Trading

Official says post-Kyoto agreement is essential for the burgeoning carbon market, as credit providers express concerns over UN accreditation process

James Murray, BusinessGreen, 07 Nov 2007

The emerging global carbon market received a dual blow yesterday after the UN warned the sector could collapse without progress at next month's Bali conference and one of the biggest developers of carbon offset credits cut its product pipeline by a fifth.

Speaking at the Carbon Forum in Asia, the UN's top climate change official Yvo de Boer warned that without a post-2012 international agreement to replace the Kyoto Protocol, the carbon trading market "could disappear more quickly than it appeared".

He added that progress at the UN conference on climate change in Bali next month was essential if an agreement was to be in place by 2012, insisting that as a bare minimum the negotiations had to be formally launched and a timetable for further talks agreed.

Trevor Sikorski, director of carbon market analysts Point Carbon, agreed that without real progess there was a danger the fast-growing market, estimated to be worth $60bn this year, would collapse post-2012.

"Europe has said its ETS [Emissions Trading Scheme] would keep going without a post-Kyoto agreement, but without an agreement we'd still see a massive reduction of interest in the market," he said.

De Boer's warning came as carbon credit provider EcoSecurities revealed that a bottleneck in the UN Clean Development Mechanism (CDM) process for accrediting carbon reduction projects meant it would not be able to generate as many Certified Emission Reduction (CER) credits as originally expected.

The company's share price fell 47 per cent on the news as the company also warned that annual sales and earnings would be lower than expected.

Bruce Usher, chief executive at the company, said that the CDM registration and issuance process – which assesses whether carbon reduction projects meet the UN's environmental standards and deliver genuine cuts in carbon emissions – had slowed down and was impacting the flow of new carbon credits into the market.

"We are seeking to mitigate the impact of these delays wherever possible by, for example, selling pre-registration credits into the VER market," he added.

The company said that it would also be expressing its concerns about the CDM approval process via national governments, industry forums and the forthcoming conference in Bali.

However, Sikorski warned that while some improvements in the accreditation process were likely, the firms running carbon reduction projects may have to get used to a lengthy certification process if they want CDM approval.

"The executive board [for accrediting CDM projects] is dealing with a wide range of different projects and it has to be very thorough because if just a few weak projects were approved, that would undermine the whole market – that means the process will be inherently slow," he explained.

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EU, China agree on climate change cooperation

(Xinhua)

Updated: 2007-11-07 23:40

The European Union and China should strengthen cooperation in the fight against climate change, but they still differ on binding caps on greenhouse gas emissions, said a European Parliament official on Wednesday.

Guido Sacconi, chairman of the parliament's Temporary Committee on Climate Change, said at the European Union's embassy in Beijing that he found after talks that China was ready to engage in the reduction of emissions of global warming gases, energy-saving, and energy-efficiency.

"One critical issue remains, however," said Sacconi. "The fact that, at this stage, China still considers that the current structure of the Kyoto Protocol should be maintained and developing countries, including emerging economies, should have no quantitative commitments."

Sacconi headed the committee delegation that discussed with Chinese officials an international agreement to succeed the Kyoto Protocol when it expires in 2012 as well as other climate change issues.

Sacconi said China "acknowledges the importance of cooperation with industrialized countries on technology and technology transfer and the need for financial assistance in this field".

A smart energy technology center would be established in Beijing by the European Union, Sacconi added.

Committee rapporteur Karl-Heinz Florenz said, "I got the impression that the Chinese authorities are adopting and implementing legislation to successfully start the fight against climate change."

Florenz said this year and next were "decisive" for climate change negotiations. "In view of the UN Climate Change Convention Conference in Bali next December, I was happy to learn that for China the United Nations is the forum for the international negotiations on climate change.

"It is in our mutual interest to succeed in the fight against climate change."

The delegation, which arrived on Monday, left China on Wednesday after talks with Chinese officials from the National Reform and Development Commission, Ministry of Science and Technology, Environmental and Resources Protection Committee of the National People Congress, and Ministry of Foreign Affairs.

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EU opens development days with focus on climate change

www.chinaview.cn   2007-11-08 00:42:58

BRUSSELS, Nov. 7 (Xinhua) -- The European Union opened its second development days on Wednesday, with the impact of climate change on developing countries on top of the agenda.

"This year's forum aims to focus on climate change issues and how to respond to the needs of already vulnerable countries hardest hit by the impacts of climate change," the European Commission said in a press release here.

The three-day event, to be held in the Portuguese capital Lisbon, will draw around 1,000 decision-makers and stakeholders on development issues, who were scheduled to address the linkage between climate change, poverty and migration and examine how developing nations can best adapt.

"Climate change is the greatest challenge of our generation. Developed countries have a special responsibility to take the lead in cutting emissions and pushing a comprehensive, global agreement on future climate action, in the U.N. framework," commission president Jose Manuel Barroso said.

Barroso said the EU is determined to help developing countries to face the impact of climate change on the environment and on human and social development.

In addition to other high-ranking officials, the EU Commissioner for Development and Humanitarian Aid Louis Michel would be present throughout the event.

"We are on track with scaling up development assistance, we are making it more effective together with the member states and we strive to ensure other EU policies like trade and environment more coherent with development goals," Michel said.

The EU is aiming to take the lead in the fight against global warming by adopting an ambitious target of cutting greenhouse gas emission for 2020 earlier this year.

In September, the European Commission proposed a Global Alliance specific to climate change, in order to encourage adaptation measures, reduce emissions from deforestation, take advantage of the global carbon market and help developing countries be better prepared for natural disasters.

Last week, the EU launched the International Carbon Action Partnership, an initiative to develop a global carbon market.

Climate change is "the biggest single challenge which we need to tackle together with our partners in developing countries," Michel said.

Editor: Yan Liang

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Carbon credit investors call for post-Kyoto clarity

Wed Nov 7, 2007 1:36pm GMT

By Annika Breidthardt

SINGAPORE (Reuters) - Billions of dollars set to be invested in projects to reduce carbon emissions could be withdrawn unless global environment leaders promise a successor to the Kyoto Protocol next month, carbon market traders said.

The United Nations' clean development mechanism (CDM) scheme allows rich countries to meet domestic greenhouse gas emissions limits by buying carbon offsets from developing nations, investing in emissions-cutting projects.

Project developers and offset traders are calling for clarity ahead of a meeting of world governments in Bali, Indonesia, next month that aims to begin negotiations on mapping out a plan to fight global warming to succeed the Kyoto Protocol, which expires in 2012.

"The big problem with the system is its unclear future post-2012, so it's hard for us to convince project managers even though we ourselves know it is going to continue," said Dang Hong Hanh, deputy director of Vietnam Energy and Environment Consultancy, on Wednesday.

"We need some clear, official signal that it will," said Hanh, whose company has five approved projects in Vietnam, all hydropower, in its portfolio, and another 18 in the approval process. She was speaking at a carbon market conference in Singapore.

The 2012 cut-off has project developers rushing to get schemes up and running in time to turn a profit by then. One of these, EcoSecurities, said on Tuesday earnings would not meet expectations, blaming U.N. red tape for slowing its business.

Carbon trading under the CDM was worth $5 billion last year, part of a global carbon market that is expected to be worth at least $60 billion this year.

"Unfortunately I can only trade until 2012 because there's no pricing data available and there's no certainty beyond that," said Eric Boonman of Fortis Bank.

"Given the fact that the banks in the CDM and the EU carbon market are providing a lot of liquidity, it would be good if they got something, so we could get the market off the ground and start trading," he added.

The price of offsets, called certified emissions reductions (CERs), trade at about three times the price of carbon credits in a less regulated voluntary emissions reduction (VER) market.

Hanh said more capital would turn to the VER market, if officials in Bali did not send a clear signal.

U.N. climate chief Yvo de Boer said he was confident Bali could deliver on these goals.

"The market is beginning to get positive signals from statements from governments," he told the conference.

(Reporting by Annika Breidthardt)

© Reuters2007All rights reserved.

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China, India to drive coal demand surge by 2030 - IEA

Wed Nov 7, 2007 4:54pm IST

By Jackie Cowhig

LONDON (Reuters) - China and India will lead a 73 percent leap in world coal demand to 2030 to 4,994 million tonnes of oil equivalent (mtoe) from 2,892 in 2005, as it gains appeal due to costly oil and gas, the International Energy Agency (IEA) said on Wednesday.

"Higher oil and gas prices are making coal more competitive as a fuel for baseload local generation," the IEA said in its World Energy Outlook.

"China and India, which already account for 45 percent of world coal use, drive over four-fifths of the increase to 2030."

Demand for hard coal will grow in 2005-2030 to 7,173 million tonnes of coal equivalent (Mtce), the report said,

Coal use will grow only very slowly in the Organization for Economic Co-operation and Development countries, the report said. The IEA is the energy advisory body to the OECD.

Global inter-regional trade in hard coal is projected to grow 3 percent a year, more than doubling from 721 million tonnes in 2005 to 1.523 mt/yr by 2030. Most of this is steam coal, the report said.

In all regions, the outlook for coal use depends largely on relative fuel prices, government policies on fuel diversification, climate change and air pollution, and developments in clean coal technology in power generation, the IEA said.

Greater use of more efficient generation technology will cut the amount of coal needed to generate a kilowatt hour of electricity but is expected to boost the attraction of coal over other fuels, thereby leading to higher demand.

"Both China and India will remain heavily dependent on coal, mostly produced indigenously, to energise their economies," the IEA said.

Coal's share of China's energy demand will remain constant but in India coal's share of the energy mix increases, the report said.

China, which became a net coal importer this year for the first time, will import more for power generation. Chinese net coal imports are set to reach 133 million tonnes by 2030 -- 3 percent of global demand -- the IEA said.

India will see a marked increase in steam and coking coal imports, the IEA said. Total coal imports are set to rise to 54 million tonnes by 2015 and to 151 million tonnes by 2030 from 39 million tonnes in 2005.

India will have to rely on imported coking coal for steel production and for increased steam coal imports for power generation because domestic coal production will continue to lag demand, the report said.

Port capacity has grown to meet rising imports and domestic shipments, from 8 Mt in 1996/97 to around 70 Mt in 2007. Future imports are unlikely to be constrained by a lack of port capacity, the IEA said.

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CLIMATE CHANGE: Rich Must Cut GHGs Fast, Deep - UN Experts

By Imelda Abano

Inter Press Service - Tuesday, November 06, 2007

NEW DELHI, Nov 5 (IPS) - The world's richest countries must drastically reduce greenhouse gas (GHG) emissions to mitigate climate change impacts, says the lead author of a United Nations report, due for release later this month, that focuses on impacts of global warming on the developing world.

To have a realistic chance of avoiding dangerous climate change, rich countries need to make cuts of at least 80 percent by 2050, said Kevin Watkins, an author of the UN's Human Development Report 2007, during a climate change workshop for Asian journalists in the Indian capital, last week.

The report, entitled "Fighting climate change: Human solidarity in a divided world,’’ will be released a week before the U.N. Climate Change Conference in Bali, Indonesia from Dec. 3 - 14.

Establishing a framework or roadmap for future emission-cutting strategies is a goal of the Bali summit. The report, Watkins said, could become the rallying point for a fairer emission cut regime.

"Rich countries need to demonstrate leadership by making deep, early cuts. They need to put in place a framework for finance and technology transfer, providing developing countries with the resources they need to make a low carbon transition," Watkins said.

He, however, warned that even the deepest cuts in emissions today will not prevent temperatures rising for at least another three decades. While the rich world has the capabilities to protect citizens from the consequences, vulnerable populations in the developing world have to cope with their own meager resources.

"The window of opportunity for avoiding dangerous climate change is closing fast. It is a serious issue that must be tackled with a sense of urgency. Because it is a global problem with global causes and effects, it demands a global response with countries acting on the basis of their historic responsibility and capabilities," he said, adding that India and China should also undertake hard targets to take deep cuts.

Developing countries like India and China are emerging as major emitters but the Kyoto Protocol does not extend mandatory reduction targets for GHG emissions to these two countries. The Kyoto Protocol required industrialised countries to cut their output of six GHGs by about five percent from their 1990 levels by 2012.

While the HDR 2007 emphasises that both mitigation and adaptation need to be addressed in order to truly fight climate change and the threat it poses to humanity, Watkins warned that increased exposure to droughts, floods, storms and climatic uncertainties will reinforce the poverty trap affecting 2.6 billion people who are the most vulnerable.

"World leaders need to get real about the consequences of climate change. We urgently need stringent mitigation. If you delay action, the human cost will be enormous," Watkins said.

Rajendra Pachauri, chairman of the UN Intergovernmental Panel on Climate Change (IPCC) -- which shared the 2007 Nobel peace prize with former United States vice-president Al Gore -- supported the UN HRD report saying that the world's richest countries must do more to help the poorest nations curb GHG emissions. Established by the World Meteorological Organisation and the United Nations Environment Programme, to investigate global warming and its consequences for Earth, the IPCC has become an influential body in climate change negotiations.

Pachauri said climate change has an enormous impact on a range of sectors -- health, agriculture, access to water -- so clearly the poorest societies will have a difficult time. IPCC scientists predict that severe weather conditions will become more and more common over the next century, posing a particular threat for poor countries without the money and materials to cope with events such as floods, storms and droughts.

Pachauri said the cost to global economy in 2030 will be less than three percent if concentration of GHG is to be stabilised at a level that would limit increase in temperature to 2 - 2.4 degrees centigrade. He said that while sea level rose by 17 cm during the 20th century, predications for the end of this century indicate a further rise of between 18 - 59 cm.

"The wealthiest countries should make the biggest efforts to cut GHGs gases as rapidly as possible," Pachauri said adding that China and India likewise have to find a new development path for GHG emission limits. '’If we emulate the path that has been established by developed countries, it will be at our peril. ‘’We need leaders who can change' the current development model.’’

Pachauri said India is drafting a climate change strategy ahead of the Bali summit. In the strategy, they will examine other renewable sources and other alternative strategies to increase energy efficiency that will not impede economic growth.

Earlier this year, China released its climate change strategy to mitigate its GHG emissions as well as its plans to support adaptation to the impacts it is likely to face from changing climate.

Pachauri, however, said that mitigation is going to be essential because adaptation alone is not expected to cope with all the projected effects of climate change.

He suggested that a mix of strategies be undertaken by all governments that includes further research on climate science, impacts, adaptation and mitigation; and technological development particularly in the fields of energy supply and infrastructure.

"The stability of human society could be destructed if we allow these impacts of climate change to continue unabated and emissions of GHGs remain unmitigated," Pachauri said. (END/2007)

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The other side of carbon trading

By Stephan Faris, Fortune Magazine
August 29, 2007

Planting trees in Uganda to offset greenhouse-gas emissions in Europe seemed like a good idea - until farmers were evicted from their land to make room for a forest. Fortune's Stephan Faris reports.

Planting trees in Mount Elgon National Park in eastern Uganda seemed like a project that would benefit everyone. The Face Foundation, a nonprofit group established by Dutch power companies, would receive carbon credits for reforesting the park's perimeter. It would then sell the credits to airline passengers wanting to offset their emissions, reinvesting the revenues in further tree planting. The air would be cleaner, travelers would feel less guilty and Ugandans would get a larger park.

But to the farmers who once lived just inside the park, the project has been anything but a boon. They have been fighting to get their land back since being evicted in the early 1990s and have pressed their case with lawsuits.

Last year, when the courts granted three border communities an injunction against the evictions, the farmers took it as permission to clear the land they consider theirs. Now a stubble of stumps all that's left of the trees meant to absorb carbon dioxide dots the rows of newly planted maize and budding green beans.

The project in Uganda is part of a growing trade in voluntary carbon offsets, in which environmentally concerned consumers pay to have others remove an amount of carbon equal to what they emit. Vendors earn carbon credits by planting trees, which capture carbon from the atmosphere, or by modifying existing factories to consume fewer fossil fuels.

Last year the worldwide market for such voluntary offsets reached $110 million, up 175 percent from 2005, according to ICF International, a Virginia consultancy that expects demand to grow to $40 billion by 2010. "It's just the takeoff point of the market," says Abyd Karmali, ICF's managing director for Europe.

But with the growth in demand HSBC (Charts), Google (Charts, Fortune 500), the World Bank, even the Super Bowl have all pledged to go carbon neutral has come a surge of criticism. Environmentalists worry that by providing a seemingly easy fix, carbon offsets delay the structural changes needed to prevent global warming.

"We can plant as many trees as we want," says Timothy Byakola of Climate and Development Initiatives, an advocacy group in Uganda, "but as long as people keep polluting as usual, keep their big vehicles, and keep consuming a lot of fossil fuels, it's not going to solve the problem."

Forestry projects, which ICF estimates account for 20 percent of the market, come in for especially strong criticism, in part because it's difficult to guarantee whether the trees will be around long enough to do what the sellers of carbon credits have promised. "Trees are a very insecure and volatile way of storing carbon," says Jutta Kill of SinksWatch, a British monitoring group.

In Ecuador, where the Face Foundation runs its largest project, unhappy community leaders told Kill that planting trees has cost them money. She also visited projects in Brazil and India involving land that was contested, as in Uganda. "The offset projects exasperate existing conflicts and make their resolution more difficult," Kill says, "and then the conflicts threaten the trees."

"They came in broad daylight and started firing," says Ezera Wandeka, a 72-year-old farmer who once lived inside what is now Mount Elgon National Park, recalling what happened 15 years ago when Ugandan forest rangers set fire to his home and evicted him and other farmers from their land. "We could only run away." Wandeka, who keeps his land title and other documents in a charred pink folder that he rescued from the fire, went from being one of the community's richest members, a parish chief and owner of 26 cows, to one of its poorest. The forest rangers were following government orders to clear the land and ready it for reforestation. The mountainous area, which straddles the border between Uganda and Kenya, was first declared a protected area in 1938 by the British, who set the forested highlands aside as a water-catchment area. Neighboring communities were allowed to forage for bamboo, mushrooms and medicinal herbs, but timber cutting was managed by the colonial government. When the area currently under dispute was surveyed in the early 1960s, wildlife officials say, all the parkland on Mount Elgon's slopes and much of the surrounding region was forest.

But the following decades were marked by explosive population growth, political chaos, and corruption. Uganda swung between dictatorships and kleptocracies, and in and out of civil war.

"We lost 90 percent of our wildlife during that period," says Sam Mwandha, director of field operations for the Uganda Wildlife Authority. When the park was resurveyed in the early 1990s, large strips had been cleared for farming.

The evictions that followed left a stretch of empty land running 130 miles along the park boundary, which the Face Foundation was brought in to reforest. The foundation began planting in 1994 as a way of offsetting the Dutch Electricity Generating Board's greenhouse-gas emissions and has since invested $4 million in the project, enough to pay for 3.4 million trees, about a third of what was initially planned. In 2002 the foundation turned to selling carbon credits as a way to fund its projects.

But resentment over the evictions festered. "They were respecting animals rather than human beings," says Yutuko Kimareni, who chairs the Namisindwa Landowners Association, a group of 433 families seeking recognition of their claims. It wasn't until national elections last year resulted in political promises to redraw the park borders that things heated up. That's when Wandeka and his former neighbors got their injunction. And that's when the machetes started flying.

More than half-a-million trees that the Face Foundation had planted were chopped down, and the conflict between the evicted farmers and the paramilitary Ugandan Wildlife Authority got ugly. Wandeka and other farmers allege beatings and torture.

In March a ranger was arrested after shooting a man who had chopped at his gun and his forearm with a machete. Johnson Masereka, the park's chief warden, keeps a photograph of another ranger with hack marks on the back of his head. "That's what we face as conservationists," he says.
In addition to angry farmers, his rangers fend off timber poachers inside the park, most of them locals trying to earn enough to survive. "The fact is, the population is growing, but the land we have is not elastic."

Masereka maintains that his predecessors acted properly in evicting the farmers, but he acknowledges that more could have been done to bring the park's neighbors onboard. The government reinvests 20 percent of park revenues in local projects. Of his 140 rangers, 96 come from local communities.

But tourism revenues for the out-of-the-way park can't make up for lost income from farming, and neither the Face Foundation nor the wildlife authority is able to hire more than a handful of full-time staff in this densely populated part of the country.

"At this stage we don't get any carbon credits for this project," says Denis Slieker, director of the Face Foundation, which has stopped planting trees in the park. "We do not plan to expand anymore in Mount Elgon before these matters are resolved."

However the conflict on Mount Elgon is settled, larger questions about reforestation projects remain. To its critics, tree planting essentially moves carbon naturally sequestered in oil, gas and coal deposits into wood that can burn, rot or, as in the Mount Elgon project, be chopped down. To sequester its full quota of carbon, a forest must grow for 100 years.

But it's difficult to guarantee that the trees will be around long enough to do what the sellers of carbon credits have promised. The trees planted in Mount Elgon "were supposed to sink carbon," says Byakola, the Ugandan environmental activist. "But as long as the conflict exists, you are not going to be sure that those trees are going to be there the next year, or in 20 years."

It's also difficult to monitor the self-regulated carbon-trading market. Last year Clean Air/Cool Planet, a U.S. environmental group, rated 30 offset providers and said it could recommend only eight of them with confidence. (The Climate Neutral Group, which markets the Face Foundation's credits, did not make the cut.)

"In the absence of an accepted standard," the group's report noted, "almost anyone can offer to sell you almost anything and claim that this purchase will make you carbon neutral."

None of that matters to the villagers on the slopes of Mount Elgon, where cows graze on alpine hillsides under big-leafed banana trees. They just want their farmland back. While they wait for a ruling from the courts or a decision from Parliament, they tend their seasonal crops of maize or green beans, planted for a quick harvest.

But here and there, farmers have begun growing trees of their own: passion fruit, avocado, banana crops that take years to bear fruit. It's a sign of confidence that they will be allowed to stay, and that the Face Foundation's trees will not. "Conservation cannot be done where you have isolated the people," says Masereka, the park warden. The tree planting, it seems, won't yield carbon credits until everybody feels like a winner.

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