But is it new (extremely alarming as a possible sign of climate change), impossible to know how long it’s been going on (still worrying), or might it have been happening for a long time (less alarming)? Even the scientists involved seem unsure. 

In the worst case, the leaks are recent and caused by global warming — a thaw of the seabed permafrost linked to rising sea temperatures that could go on to release vast buried stores of the heat-trapping gas that would further stoke global warming. In the best case, it may have been going on for thousands of years in an inaccessible area where no one has taken measurements before.

Either way, it’s worrying because a projected rise in temperatures could further erode the permafrost that had previously been considered an impermeable cap and so lead to more releases of methane.

The article in the journal Science  makes clear that you can’t tell whether it’s new or not –more monitoring is urgently needed. 

The University of Alaska, where some of the scientists are based, put out two embargoed press releases. The original said the seabed is “starting to leak” (very alarming)

The second one, which replaced the first about a day before the embargo was lifted, changed the second paragraph to drop the word “starting” and merely say the seabed “is leaking” (worrying):

So let’s hope it’s been going on for ages.

(Photo top: The Advanced Microwave Scanning Radiometer, a high-resolution passive microwave Instrument on NASA’s Aqua satellite shows the state of Arctic sea ice on September 10, 2008)

-Bernd Debusmann is a Reuters columnist. The opinions expressed are his own-

The project involved more than 2,500 scientists. It cost $ 10.5 billion between 1983 and 2009 and it included one of the most bizarre scientific tasks of all time: evaluate whether nuclear waste stored deep inside a Nevada desert mountain would be safe a million years into the future.

That was the safety standard set in September, 2008, by the Environmental Protection Agency (EPA) as a condition for allowing nuclear waste to be stored deep in the belly of the Yucca Mountain, 95 miles (155 km) from Las Vegas, long the subject of political debate and a fine example of nimbyism (not in my backyard).

The vastly complex computer models and simulations experts launched to figure out whether Yucca Mountain would be a safe environment in the year 1,000,000 and beyond ended before there was a scientific conclusion.

President Barack Obama has pulled the plug on the entire Yucca Mountain enterprise, million-year safety study and all, by writing it out of his financial year 2011 budget, which begins in October.

Yucca Mountain's death by budgetary axe defies logic. It coincides with Obama's stated support for expanding nuclear power. More reactors mean more waste, now piling up above-ground at sites scattered around the country.

In February, Obama announced $8.3 billion in government loan guarantees for two nuclear reactors in Georgia. They would be the first new plants since the 1979 nuclear meltdown at Three Mile Island in Pennsylvania, an accident that caused no casualties but became a rallying symbol for the anti-nuclear movement.

Citizens Against Government Waste, a Washington watchdog group, described abandoning Yucca Mountain without figuring out what to do, long-term, with the toxic nuclear waste produced by new (and existing) reactors as "patently illogical," a "politicized and short-sighted decision."

The group is right.

This is a matter of politics trumping science and it involves a president who pledged, in his inaugural address, to "restore science to its rightful place" from where, in the eyes of many Obama partisans, it had been dislodged by the administration of George W. Bush, routinely accused (and often with good reason) of "politicizing science."

Yucca Mountain, which rises 4,950 feet (1,510 metres) from the Mojave desert, on the edge of a nuclear test site, was meant to be the central burying ground for radioactive waste now stored at 121 sites in 39 states, some 150 million pounds (68 million kg) of toxic stuff and more piling up. The material is initially submerged in pools of water and then sealed in steel and concrete casks.

The idea of shipping them all to a remote site in the desert has had wide appeal - except for most people in Nevada, where Senator Harry Reid, now the leader of the Democratic majority in the Senate, has been waging a relentless campaign against using Yucca.

"I am proud that after two decades of fighting the proposed Yucca Mountain nuclear waste dump, the project is finally being terminated," Reid writes on his website. "(It) is simply not a safe or secure site to store nuclear waste."

That's his opinion. There's no shortage of scientists who disagree.

AN INSULT TO INTELLIGENCE?

During Nevada stops in his campaign for the presidency, Obama came out strongly against Yucca Mountain, a position that helped him beat his Republican rival John McCain and win the hotly-contested state's five electoral votes.

McCain has called closing the mountain while encouraging new plants "an insult to intelligence."

Reid is running for re-election in November and he will no doubt hold up the decision on Yucca Mountain as a triumph of his persistence. His poll numbers have not been good recently and it remains to be seen whether Yucca will lift them. Some Republicans are convinced that Obama's nuclear waste decision was taken purely for the benefit of Reid.

In an op-ed in the Washington Times late in February, Mark Sanford, the Republican governor of South Carolina, home to a nuclear complex holding 36 million gallons of liquid radioactive waste, said that the Obama administration was "walking away from a $10 billion investment and starting all over because of one man's race for office in Nevada."
Starting all over?

That process is meant to be initiated by a 15-member Blue Ribbon Commission, a device not infrequently used in Washington to give the appearance of action while actually delaying it. As Citizens Against Government Waste put it: "The administration is kicking the nuclear can down the road, into the next administration and onto the shoulders of future taxpayers."

The commission, heavy on Washington insiders and relatively light on scientists, has two years "to provide recommendations for developing a safe, long-term solution to managing the nation's used nuclear fuel and nuclear waste." Looking for an alternative site to Yucca Mountain, another deep-underground storage facility, apparently is not part of the commission's brief.

So then what? Start from scratch? Perhaps a return to the dawn of the nuclear age? The options under discussion then included burying radioactive material in the ocean floor, placing it in polar ice sheets -- and even blasting it into space.

Reuters file photo shows the remote Nevada site of Yucca Mountain in 2002. REUTERS/STR New

(You can contact the author at Debusmann@Reuters)

This year a group of filmmakers in newly modernised, consumption-happy Taiwan is going to the densely populated western Pacific island’s public with an hour-long alarmist movie showing the world’s second-tallest building Taipei 101 as an island in a flood that has drowned the capital after a reservoir collapses in a freak super-strength typhoon.

The free film with an obvious mission titled “Plus or Minus 2 Degrees Celsius” began showing in late February, reaching at least 11,000 people so far and with dates to screen for more audiences later in the year.

 It also shows footage from snowstorms, droughts and other real natural disasters around Asia to rub in its point, which has set off critical debate among Taiwan academics.

“A lot of people know about climate change but don’t understand what its impact would be,” said Lu Yu-rou, media specialist with film promoter the Taipei-based Plus or Minus 2 Degrees Campaign Alliance. And after watching the film? “A lot of people actually think it’s pretty shocking. They never expected that such as severe situation could develop.”

Asher Miller is executive director of think tank Post Carbon Institute. Any opinion expressed here is his own.

It should come as no surprise to anyone paying attention to the politics of climate legislation to hear Senator Lindsey Graham pronounce, “the cap-and-trade bills in the House and Senate are dead.” The truth is that they’ve been dead for quite some time. It’s just that now we finally have the coroner’s official report.

Many proponents and opponents of climate legislation have had one thing in common for some time now—they hate the American Clean Energy and Security Act (the Waxman-Markey bill which passed in the House by a narrow margin back in June).

So an unlikely assembly of hardcore climate activists and equally hardcore climate deniers likely greeted Graham’s announcement with some measure of satisfaction.

The opponents’ argument against the bill is stunningly simple: They don’t believe in human-caused climate change.

The arguments on the other side are, not surprisingly, more numerous and more complex, not to mention more valid. The reason why so many climate activists like myself have opposed ACES is that the 1,400-page House bill was riddled with so many giveaways to polluters, and set targets so low and so slow, that folks were honestly debating whether or not it would be better to have no legislation at all than this piece of… paper.

Keep in mind: with a much narrower majority in the Senate, the bill was likely going to get watered down even further.

So is Graham’s pronouncement good news? Yes, and for two reasons:

First, at least Senator Graham is being honest. This is an election year and the healthcare debate is now going into extra innings. How likely is it that the Obama Administration and Congressional Democrats are up for a doubleheader, when game two is far less of a guaranteed win in terms of public support than game one was supposed to be?

Lack of progress in Copenhagen and doubts sewn by coordinated campaigns to discredit climate science only serve to make the outcome of any debate on Capitol Hill all the more uncertain.

It’s no surprise, then, that Congressional leaders are looking for new approaches. And that’s a good thing.

Which gets to the second point: If this is indeed a new ballgame, Senator Graham’s pronouncement could actually open the way for more meaningful legislation.

Graham is busily crafting a new bill with Senators John Kerry and Joseph Lieberman. Who knows what it will actually contain? But there is already another alternative out there that could be a clear (pardon the pun) game changer.

In the months since ACES stalled, slow but steady momentum has built for an alternative approach called cap and dividend. In late 2009, two Senators, Maria Cantwell and Susan Collins—from opposite ends of the country and opposite sides of the aisle—introduced the Carbon Limits and Energy for America’s Renewal (CLEAR) Act.

In contrast to ACES, wherein a large number of permits would be given away to polluters, CLEAR would auction off 100 percent of the carbon permits. And rather than create a complex market for trading these permits, CLEAR would send 75 percent of revenues to the American people in the form of monthly checks (the other 25 percent would be invested in clean energy, energy efficiency, and conservation programs). That’s right—actual checks that Americans can put in their savings accounts or use as they see fit. And it’s not like this is a new idea or would bankrupt the energy industry. Just ask Alaskans how they like their Permanent Fund, which has been sending them checks since 1976.

In this economic climate, cap and dividend makes a lot more political sense than cap and trade (cue images of Wall St. fat cats getting fatter) or a carbon tax, however more substantive the latter may be.

Which is why cap and dividend could actually work if positioned right. Positioned as a climate bill, it will fail. Positioned as a means of putting money in every American taxpayer’s pocket while reducing our dependence on foreign oil and creating jobs, it may just succeed.

Here’s hoping it does. The stakes of this game couldn’t be higher.

Photo shows The Boston Red Sox bat boy holding baseballs for the home plate umpire before the MLB Inter-League baseball game between the Red Sox and the New York Mets at Fenway Park in Boston, Massachusetts May 22, 2009. REUTERS/Brian Snyder

This article by Beth Hodgson originally appeared in GlobalPost.

Over the last few months, we’ve seen serious discussions taking place globally as countries and cities pledge to go green.

Some cities have made greener strides than others, which puts them at the top of the list for sustainability goals.

The five greenest cities in the world aren’t necessarily those that are nothing but green space, but they’re on the right track to improving their footprints.

5. Vancouver, Canada

Vancouver has been recognized for trying to make the Winter Olympic games sustainable, but it’s their day-to-day focus that really allows this Canadian city to earn its ranking. Ninety percent of Vancouver is powered by hydroelectricity.

Wind, solar, wave and tidal energy all help ensure that this city remains green. Plus, they’ve got even greater goals for the future.

4. Malmo, Sweden

This is one international city that is focused on green space. They are well-known for their parks, but also upon sustainable urban develop. It’s one of the largest cities in Sweden and it’s truly urban. They’ve been transforming neighborhoods to make them environmentally friendly.

3. Curitiba, Brazil

This Brazilian city focuses upon maintenance using green methods, for example, parks that are trimmed by sheep. They are also known for one of the best transit systems, so commuters are encouraged to leave their cars at home.

2. Portland, Oregon, United States

Although many U.S. cities are now jumping on board, this was the first to focus upon alternative transit with light-rail and extensive bike path networks to encourage people to leave their cars in the driveway! It was also one of the first to pledge to reduce emissions and start transitioning buildings to use sustainable materials.

1. Reykjavik, Iceland

This city is run entirely on green power, including geothermal and hydroelectricity. Their transit system also uses hydrogen buses and it’s motivated to become Europe’s cleanest city.

More from Global Post.com:

Global Green Guide: Most harmful sports to the environment

Money persuades Americans to embrace green gadgets

Global Green Guide: Five great green online shops to visit on Cyber Monday

Global Green Guide: Bike-sharing programs from around the world

Olympic flower bouquets: Does green describe more than their color?

Photo shows a lifeguard dressed against the chill watching over bathers at Iceland’s Blue Lagoon hot springs just outside Reykjavik, as a thermal electricity plant looms in the background on Sept. 13, 1998.  REUTERS/Bob Strong

Among their denunciations of widely-accepted truths regarding global warming, greenhouse gases, melting glaciers and rising sea levels was the assertion that a change in attitude was afoot; the public may have been duped into believing the mainstream scientific assessment of climate change, but not for long.

There was something in the air, the sceptics said, and soon people would begin to question their trust in the majority view.

I’m no scientist and am in no position to comment on the validity of any of the evidence on show; as journalists we were there to make sure both sides of the argument were being heard. This group of climate outcasts were in every sense on the fringes of COP15, but after a series of controversies in recent weeks it seems they were right about one thing at least -- the public conviction about the threat of climate change is slipping.

Well, it is in Britain anyway. An Ipsos Mori poll of over 1,000 UK adults found that the proportion of people who believe climate change is definitely a reality dropped from 44% to 31% in the past year.

Meanwhile, 31% said the threat was exaggerated, up 50% on last year – worrying statistics for the government and charities trying to convince the public to change its behaviour and to accept higher priced energy and goods as a small price to pay for saving the planet.

Why the sudden drop off? The poll follows weeks of suggestions that mainstream climatologists have, in the past, manipulated data and that an influential study by the U.N.’s main climate science body contains inaccurate information.

The arguments of sceptics were fuelled late last year by the incident dubbed "Climategate", when hundreds of emails and documents passed between leading climate scientists were leaked online. The deniers claimed this was evidence that some climatologists were colluding to distort data and mislead the public on climate change.

Elsewhere, the Intergovernmental Panel on Climate Change (IPCC) admitted its claim that Himalayan glaciers  could melt by 2035 was unsubstantiated. The U.N. has since announced it is setting up an independent board of scientists to review the IPCC's performance.

Meanwhile a 2009 report which claimed sea levels would rise by as much as 82 centimetres by the end of the century has been withdrawn by its author, who now says the true estimate is in fact unknown. At the sceptics conference in Copenhagen I spoke to Nils-Axel Mörner, an expert in sea levels, who questioned the general conception that sea levels are rising -- in the video clip below he explains why, in his opinion, they are in fact falling.

And, of course, the failure of world leaders at COP15 to agree a successor to the Kyoto Protocol didn’t help matters either.

If this trend continues, the climatologists, politicians and activists who subscribe to the mainstream view may find that the real challenge now isn’t getting the public to change their behaviour, it’s getting them to trust their evidence.

Has your faith in mainstream climate science been knocked by recent controversies? In your view, how much of a threat is global warming?

John Laforet is president of Wind Concerns Ontario, a coalition of 42 grassroots organizations aiming to curtail development of wind farms in the central Canadian province of Ontario.  He is also running for municipal public office.

Governments around the world are actively seeking private development of renewable energy projects by offering generous feed-in tariffs that often see developers paid many times the market rate for the power they produce.

This has encouraged a surge of applications, but the volume of applications and other challenges associated with these projects present potential risks to prospective investors.

Projects require transmission capacity to carry their energy to market, but the agencies accepting applications for a given jurisdiction often aren’t responsible for managing transmission systems.

In the Czech Republic, a boom of renewable projects has caused considerable challenges to the transmission system and has caused the grid operator to block future wind projects, while threatening to disrupt grid connections for existing renewable energy projects.

In Canada, Ontario’s inventory of projects under development, approved or in the proposal stage, does not consider existing grid capacity.

While individual proponents compete for feed-in-tariff agreements without guaranteed access to grid capacity, a multi-billion dollar investment by the government into the grid would be required to facilitate many of these projects getting off the ground.

In a time of plunging tax revenues and mounting deficits, and growing community opposition to these projects, this creates instability for investors.

Weak regulations designed to streamline approval processes and silence community opposition have resulted in legal action against proponents worldwide.

Developers are being sued in many jurisdictions, and in at least two notable examples, either lost in court or settled for millions of dollars.

A French court ordered the turbines in Cast and Châteaulin to be turned off between 10pm and 7am, thereby generating zero revenue or electricity during that time.

In Ontario, Canadian Hydro Developers settled a number of legal actions at a cost of $1.75 million as a result of individuals who complained of negative health effects. These include Barbara Ashbee-Lormand who says she and her husband found it intolerable to live in their home in Amaranth, a rural township that is host to 22 industrial wind turbines.

A growing number of American municipalities have banned on the installation of industrial wind turbines in response to community opposition, including in North Carolina, and Liberty, Illinois.

Offshore, lake-based proposals in Ontario have faced two moratoriums in three years, and projects in Australia have seen endangered species legislation used to halt approvals.

While a feed-in tariff agreement may make investments in renewable energy look attractive, the lack of control project investors have over their ability to reach the market should give investors pause.

With potential for liability for negative health impacts, lawsuits from communities and growing interest from the courts, in addition to other instability built into the approval process, this is one “green” sector that could quickly turn red, at least for investors.

Photo shows Barbara Ashbee-Lormand’s mailbox in Shelburne, Ontario, with wind turbines in the background after the home was vacated in 2008. REUTERS/Handout

The blogosphere is rumbling with anticipation of the  “Bloom Box”, a pint-sized “power plant” that could change the way we power our homes and offices forever.

The buzz began Sunday when 60 minutes aired an exclusive profile of the alternative energy fuel cell developed by startup Bloom Energy and its CEO K.R. Sridhar (a former rocket scientist) in Silicon Valley. After eight years in the making, the power plant in a box is set to be released Wednesday with California governor Arnold Schwarzenegger and former Joint Chiefs of Staff chairman Colin Powell on hand.

“You’ll generate your own electricity with the box and it’ll be wireless. The idea is to one day replace the big power plants and transmission line grid, the way the laptop moved in on the desktop and cell phones supplanted landlines,” reports CNet News.

What makes this claim to the perfect, zero-emission energy source different? For starters, backing from Walmart, eBay, Google, Staples, FedEx, and hundreds of millions of dollars in investments.

The World Economic Forum names Bloom Energy as one of 26 top 2010 Technology Pioneers: Energy and Environment.

But the Bloom Box isn’t cheap. The Daily Tech reports: “Well, $700,000 to $800,000 will buy you a ‘corporate sized’ unit… To get a view of the cost and benefits, eBay installed 5 of the boxes nine months ago. It says it has saved $100,000 USD on energy since.”

The hype is not new. Since at least 2006, tech industry watchers have kept an eye on Bloom — which has been working on the fuel cell box for more than 8 years.

60 Minutes also ran this Skeptic’s video.

Watch CBS News Videos Online

Is it really too good to be true?

Top image shows K.R. Sridhar (L) speaking with CBS reporter Lesley Stahl on Feb 20, 2010. REUTERS/Handout/CBSNews/60Minutes

Bottom image shows an HD frame grab showing the inside of a Bloom Box that appeared on 60 Minutes, Feb 20, 2010. REUTERS/Handout/CBSNews/60Minutes

The data comes from StarMine, a Thomson Reuters company, using the 12-month forward SmartEstimate, a measure that selects estimates from only the most accurate analysts.

StarMine Intrinsic Value is a variation on the dividend-discount model methodology that adjusts for biases uncovered in analyst forecasts.

– Richard Heinberg is the author of eight books, including “Peak Everything”, “Blackout: Coal, Climate and the Last Energy Crisis” and “The Party’s Over”. He is also a senior fellow with the Post Carbon Institute. The views expressed are his own. –

Recent shale gas projects, including those involving the massive Marcellus Shale in several northeastern states, have been yielding significant quantities of fuel. Reserves of the stuff are enormous. But drilling costs and per-well decline rates are high, so producers can make a profit only if gas prices are near historic highs.

Where are oil prices headed in 2010? Forecasts for the year are all over the map, from more than $100 a barrel to under $50.

The difference hinges mostly on assumptions about whether the economy will recover or relapse. Yet it may be that price volatility has become an inherent feature of the oil market—and fossil fuel markets in general—for reasons that can perhaps best be explained with the help of a little history and an old children’s story.

Once upon a time (about a dozen years past), oil sold for $12 a barrel and a lot of people thought it would get even cheaper because the market was glutted.

But instead the price rose: many big oilfields were aging and yielding less, and it was getting harder to find new ones—especially in places easy and cheap to drill.

So the glut eroded and petroleum prices rose. Seeing a perfect opportunity (a necessary commodity with stagnating supply and growing demand), speculators drove the price up even further.

As prices lofted, oil companies and private investors also saw opportunity and started funding expensive projects to explore for oil in remote and inconvenient places, or to make synthetic liquid fuels out of lower-grade carbon materials like bitumen, coal, or kerogen.

But then in 2008, as the price of a barrel of oil reached its all-time high of $147, the economy crashed. Airlines and trucking companies downsized, motorists stayed home, and demand for oil plummeted. So did the price, bottoming out at $32 at the end of 2008.

But with prices so low, investments in hard-to-find oil and hard-to-make substitutes began to look tenuous, so tens of billions of dollars’ worth of projects got canceled. Yet the industry had been counting on those projects to maintain a steady stream of liquid fuels a few years out, so worries about a future supply crunch began to make headlines.

By mid-2009 the oil price had settled within a Goldilocks range—not too high (so as to kill the economy and, with it, fuel demand), and not too low (so as to scare away investment in future energy projects and thus reduce supply). That just-right price band appeared to be between $60 and $80 a barrel.

How long prices can stay in the Goldilocks range is anybody’s guess, but production declines in the world’s old super-giant oilfields continue to accelerate and exploration costs continue to mount, which means that the lower boundary of that just-right range will inevitably continue to migrate upward.

Meanwhile the world economy remains frail, so that even $80 oil could strain the recovery.

When discussing the increasing perils of the current oil supply-demand-price balancing act, some commentators opine that the world supply of oil has peaked; others say it is demand that has peaked. It is a distinction without a difference.

There are similarities with U.S. natural gas. Current shale gas projects are tapping into an abundant supply of fuel, and there is plenty more where that came from. But the costs of getting it out combined with the per-well decline rates are high, so gas prices need to be very high to turn a profit.

Nearly everyone believes that U.S. coal supplies are virtually endless, but the Goldilocks syndrome is coming into play there, too. Coal prices just about doubled in the two years leading up to the economic crash of 2008, and high-quality coals from the eastern region of the country are depleting fast.

We will never run out of coal, oil, or natural gas—in the absolute sense. The Industrial Revolution started in British coalfields, and there is still an enormous amount of coal in Britain; but the coal that’s left there is prohibitively expensive to mine, so that nation’s coal industry is virtually gone.

Goldilocks grew dissatisfied with her options, got up, and left. The same has been gradually transpiring in the U.S. oil patch over the past four decades, and the same will happen wherever useful non-renewable resources are found.

Economic theory says the market will always find a substitute for whatever resource is depleting to the point of scarcity. When it comes to fuels, the substitutes are alternatives to coal, oil, and gas—primarily, renewables like wind and solar. Investing in them should be a no-brainer.

But, during the Goldilocks interval, increasing price volatility for oil, gas, and coal can make all energy investments dicey. That means that, as a society, our main strategy for navigating the energy transition will almost certainly have to be conservation.

The lesson of the parable: If you’re an investor, beware—oil prices are going to be increasingly hard to predict over the longer term.

And if you make energy policy, don’t get any more hooked on non-renewable resources than you already are. If you do, you’ll eventually be spending much of your time chasing fickle Goldilocks—and in the end, she’s a bear.

Image shows a gas drilling site on the Marcellus Shale is seen in Hickory, Pennsylvania February 24, 2009.  REUTERS/ Jason Cohn

The data comes from StarMine, a Thomson Reuters company, using the 12-month forward SmartEstimate, a measure that selects estimates from only the most accurate analysts.

StarMine Intrinsic Value is a variation on the dividend-discount model methodology that adjusts for biases uncovered in analyst forecasts.

-- John Kemp is a Reuters columnist. The views expressed are his own --

California is set to auction all or almost all allowances under its emissions trading programme, and rebate up to 75 percent of the proceeds to households through a lump sum payment or reductions in income and sales taxes.
The proposals, contained in a draft recommendation from the Economic and Allocation Advisory Committee (EAAC) to the California Air Resources Board (CARB), are in sharp contrast to the proposed federal programme, stalled in Congress, which would give away most permits to utilities and other energy intensive industries.
Since California's proposed programme is one of the most advanced, and would be the largest and most comprehensive in the country, with links to other states through the Western Climate Initiative (WCI), the decision gives significant impetus to proponents of the cap and refund approach, now emerging as a credible alternative in Congress.
ADVISORY COMMITTEE MANDATE

California's Global Warming Solutions Act 2006 (AB 32) requires the state to reduce its greenhouse gas emissions back to 1990 levels by 2020. CARB has developed a "Scoping Plan" detailing how the state will achieve this using a mix of direct regulations and an over-arching cap and trade programme.
In May 2009, CARB established an Advisory Committee, consisting of technical experts, to make recommendations on two key elements: (a) how to put allowances into circulation (via auctions, free distributions, or some combination of the two); and (b) how to allocate free allowances or the revenues from permit auctions.

In making recommendations, the Advisory Committee must take account of various statutory objectives, among them to "ensure no disproportionate impact on low-income communities" and design the regulations "in a manner that is equitable, seeks to minimise costs and maximise the total benefits to California". The draft recommendations therefore carry weight as an expert opinion of which system best meets both equity and efficiency criteria.

ALLOCATING PERMITS BY AUCTION

The Committee reviewed a range of auction designs (single or multiple rounds, uniform or discriminating price) as well as mechanisms for free distributions (fixed allocations based on historical emissions, or allocations updated in line with changes in relative output).

In the end it recommended all or almost all permits be sold through uniform price, single round (sealed bid) auctions. Permits would be given free only to energy-intensive and trade-exposed industries at risk of a real competitive disadvantage, and only where the problem of "emissions leakage" cannot be addressed by other means such as a border adjustment.
The Committee admitted free allocations have some advantages. They compensate emitters for compliance costs in the most direct and expedient manner.

Free allocation returns allowance values directly to emitters and links them to the cost of making reductions. If the cost of compliance rises, so does the value of the allowances.

An auction system can also provide compensation by distributing revenues. But it involves two steps (auctioning and revenue distribution) rather than one (simple allocation of free allowances). "Because the auction process involves two steps, [emitters] might feel that obtaining allowance value through the recycling of auction revenue carries greater risk than obtaining value in one step through the receipt of free allowances."

In the end, the Committee decided auctions were superior because they bring "price discovery in the market and transparency in the assignment of allowance value". They would also make it easier to deal with sources entering and exiting the market, creating a level playing field, and avoiding giving incumbents monopoly power. The Committee noted nearly every objective of free allocation can be achieved through an appropriate distribution of auction proceeds.

Its recommendations would establish the boldest environmental market yet. The Environmental Protection Agency's (EPA) pioneering Acid Rain Program, which is often cited as a model for carbon markets, auctioned only a small number of allowances at first, distributing most to emitters on a historic basis.

The European Union's Emissions Trading Scheme (ETS) has so far allocated more than 95 percent of allowances free, giving recipients massive windfall profits, though the share auctioned will rise sharply from 2013.

DISTRIBUTING THE POT OF GOLD

No one knows for certain how much revenue auctions would raise. Based on a literature review, the Committee indicates allowance prices "are most often estimated to be in the range of $20 to $60 per metric ton of emissions in 2020" (in 2007 dollars). But it admits the full range is from $8 to $214 (depending on assumptions about the availability of offsets and other design features).

Under most scenarios, however, the programme will produce a substantial pool of revenues. Assuming real prices of $35 in 2020 (about the middle of the range) auction revenues would rise from $4.4 billion (2012) to $11 billion (2016) and $12.8 billion (2020).

The Committee examined three main options for using these revenues: (a) financing investments especially in clean technologies and to create jobs for disadvantaged communities; (b) returning the proceeds to the public through a rebate programme; (c) or cutting other state taxes.

MOST REVENUES TO BE REBATED

There are complex legal issues surrounding how revenues from the programme may be used; the State Legislature may need to approve further changes to the law, possibly by a difficult-to-achieve two-thirds supermajority, to comply with the State Supreme Court's ruling in "Sinclair Paint Co v State Board of Equalization".

But abstracting from the legal problems, the Committee recommends foregoing a small share to give free allowances to firms at risk from leakage; placing another small share in a contingency fund for environmental remediation and clean up; and reserving another one to finance transfers to low income households most affected by rising energy prices.

The Committee cites estimates showing emissions pricing will be regressive, raising costs for households in the lowest income decile by 2.09 percent of their income, sliding to 0.66 percent of income for households in the highest category. Direct transfers to low income households would meet the statutory objective of avoiding a "disproportionate impact" on these communities.

But the lion's share of auction revenues would be devoted to financing investments related to emissions reduction, or returned to households through lump-sum payments or cuts in individual income or states sales taxes. The proportions would vary over time; the Committee shows a strong preference for investments in the early years. Ultimately the Committee recommends distributing 75 percent of the revenues as rebates/tax cuts and 25 percent for investment projects.

The Committee specifically recommends against using proceeds to prop up profits in industries hit hardest by rising energy costs, or to subsidise rising electricity bills for businesses and households, to avoid blunting the incentive for curbing energy use and reducing emissions.

The Committee's recommendations remain provisional and subject to change. There is no guarantee they will be adopted by CARB, and there are doubts about whether a trading programme will be introduced at all.
But this is a detailed report prepared under the direction of 16 influential experts and consultants from economics, finance and environmental policy; consummate insiders in the debate. The proposals therefore carry a lot of weight, adding intellectual respectability and political momentum to the cap and refund proposal at national level.

(1) EAAC Allocation Report
(2) EAAC Presentation

a) 60 percent

b) 55 percent

c) about half

d) 26 percent

It sounds like a trivia quiz but it’s part of a scientific controversy about the environment. The worrying thing is that a lot of people who should know don’t.

If you reckon it’s 60 percent, you can point to a report by the Dutch Ministry of Transport, Public Works and Water Management, or an article in the journal Nature discussing the Netherlands’ vulnerability to flooding after Hurricane Katrina.

If you think it’s 55 percent, then you can back up your argument with page 547 of an influential 2007 report by the U.N.’s Intergovernmental Panel on Climate Change (IPCC).

And if you reckon that it’s about half, try showing off the European Commission’s report listing “facts and figures” about the Netherlands and its maritime policies.

But the Netherlands Environmental Assessment Agency , the source of the IPCC’s number, says all the above are in fact wrong — it’s 26 percent, and another 29 percent of the country is vulnerable to flooding from rivers such as the Meuse and the Waal in regions above sea level.

In this Dutch version of Chinese whispers, the problem seems to be that 26 plus 29 equals 55 which might also be ‘about half’ or ‘60 percent’.

The IPCC, under fire for exaggerating the melt of Himalayan glaciers in its 2007 report that wrongly said that they might all be gone by 2035, said that it probably made a mistake by saying 55 percent. It said that its report should probably have read that 55 percent of the Netherlands is “at risk of flooding”.

But just as worrying is that the Dutch government, the EU Commission and scientists writing in a top journal apparently get it wrong too.

Somewhere along the line this sort of number is used to decide how much money to spend on coastal or flood defences. If you reckon that 60 percent of your country is below sea level, building coastal levees probably gets a bigger share of the cash than defences against river flooding than if the right number is 26 percent.

(Picture: An excavator moves sand at the new beaches in front of the Dutch coastal village of Monster August 31, 2009. REUTERS/Jerry Lampen)

Flying high over Venezuela’s southeastern territories, a plane banks and fires into a mass of clouds.

Venezuela is not at war with the skies but with a severe drought that has caused an electricity crisis and forced the government to resort to unconventional methods to make it rain.

The government began “bombing clouds,” or cloud seeding, late last year after it emerged that the country was facing a dire water shortage.

Using technology borrowed from Cuba and Chile, the idea is to fire a mixture of silver iodide, dry ice and salt into vertically growing cumulonimbus clouds to encourage raindrops to join together.

“Where we have sewn it has rained,” said Jose Gregorio Sottolano, president of the National Institute of Meteorology and Hydrology. “What I can’t tell you, and it would be a lie, is how much water has fallen and if it has increased.”

Other countries have been using the technique for decades. China is reported to have fired rockets into the clouds above Beijing before the 2008 Olympic Games to reduce pollution. The U.S. has been cloud seeding since 1946 to make it rain in areas suffering from drought, to reduce the size of hailstones in storms and fog around airports, and occasionally to make it snow at large ski resorts. Eleven western states have ongoing weather modification programs.

Sottolano said Venezuela is suffering from the effects of El Nino, a climatic phenomenon that can drastically reduce rainfall. The Orinoco, one of South America’s largest rivers, has seen its water levels reduced to record lows in recent months.

And that’s a problem for a country that developed a national grid based on generating power from dams. Built in the 1960s, the grid aimed to take advantage of the country’s abundance of rivers and the efficiency of hydro-electricity.

But the Venezuelan government is plagued by inefficiency and several of its thermoelectric plants — which heat water until it turns to steam, then use the steam to power a turbine — are only partly operating or still under construction. In mid-January, Planta Centro, the largest thermoelectric plant in the country, only had one of its five generators in operation.

Meanwhile, water levels in Venezuela’s reservoirs continue to fall. It is now the height of the dry season, when skies are typically cloudless.

That makes the technology hard to utilize. “The clouds need to be between four and seven kilometers high in order to be seeded,” said Sottolano.

Not to mention that some meteorologists doubt whether cloud seeding works at all.

“The main problem is finding the right type of cloud at the right temperature — naturally, with the technique being very expensive, one needs to have an expert team with good cloud physics measurement equipment on board the aircraft, for any chance of a cost effective result being achieved,” said Roger Williams, former director of the Bermuda Weather Service.

“A seeding project in desert areas or during the ‘dry season’ is likely to be a waste of time and money,” he said.

And even if it works, it will have to rain a lot in the wet season if Venezuela is to overcome this crisis.

The hydroelectric dam at El Guri reservoir supplies 44 percent of national demand. But a report by Edelca, the state company that manages that reservior, revealed dangerously low levels.

As of Feb. 1, the reservoir was at 258 meters, 14 meters below its ideal level: If it falls below 240 meters, its turbines will cease working altogether. The report concluded that if desperate measures are not taken, Venezuela could see its national grid collapse by June.

On Monday, Chavez declared an electrical emergency due to what he claimed was the worst drought in 100 years. “We have done various studies and we’re ready to declare an electricity emergency, seeing as El Guri is falling by 13 centimeters every day,” he said.

Aside from bombing clouds, the government has also imposed water and electricity rationing, unpopular measures in a year when it faces a stern test in upcoming National Assembly elections in September.

In Caracas, rationing was suspended last month after the first day produced chaotic scenes in which a lack of functioning traffic lights caused bottlenecks and schools were not able to operate. President Hugo Chavez sacked the minister he had placed in charge of the newly created Electricity Ministry and appointed his long-serving finance minister instead.

The electricity crisis has prompted a debate about its causes. The government line: Blame the weather.

“Has there been a delay in some projects? Yes, that’s true. Has there been inefficient management in some areas? That’s true. But the only cause of electricity rationing is the drought,” Chavez said recently.

His critics say underinvestment during an oil boom that saw consumption increase by 28 percent in seven years is the primary cause.

“Part of the problem is due to the drought — that’s undeniable,” said Daniel Varnagy, director of the Economic and Administrative Sciences department at Caracas’ Simon Bolivar University. “But the drought is affecting us because the recommendations for planning for growth in the electricity sector were not followed.”

For now, Chavez will rely on any solution he can find to fix what is a critical situation in an election year.

More from Globalpost:

Venezuela converts tourist areas into farmland

The coming war for water

China grows thirstier

Venezuela bans violent video games

Chavez: U.S. troops invading Haiti

Image shows an aerial view of the Orinoco River in Santa Maria del Orinoco, about 700 kilometres south of Caracas May 6, 2006. REUTERS/Jorge Silva