Climate Technology

European biodiesel industry being bankrupted by loophole

They call them U-boats because they pull into a port just long enough to do a U-turn and head off to Europe. They stop just long enough to blend a touch of fuel into the tank so they can claim the government subsidy. Let's say you have a million gallons on board from, say, a palm oil plantation in Indonesia, or a soybean operation in South America. An hour or two after your arrival, your pockets are bulging with just short of a million U.S. taxpayer dollars. From the Guardian:

... the European Biodiesel Board, has uncovered the trade as part of its investigation into why British, German, and Spanish producers are in financial trouble at a time when biodiesel prices remain high. The board will call for retaliatory action against the U.S. over subsidies for its leading biofuel.

...

"[P]eople are bringing boats of soy or palm-based biodiesel from Europe and then mixing it with a bit of local biodiesel -- or even fossil-fuel diesel -- and then shipping it back," [biofuel consultant Ian Waller] said.

This is perfectly legal and has been going on for years now. Our politicians are apparently cool with it because it lines the pockets of their campaign fund supporters (primarily the ag lobby). Some U.S. biofuel company is getting a big return on investment every time it happens. The American public is cool with it because we are unwitting idiots.

U.S. auto sales take a nosedive

Chrysler and General Motors sold 19 percent less automobiles in the U.S. this March than they did last March, according to new sales figures. Ford reported a sales drop of 14 percent in March 2008 compared to March 2007, and even Toyota, which has reported steady sales through other hard times, reported that sales dropped […]

Activists worldwide target coal plants and banks

Rainforest Action Network's Matt Leonard provides this roundup of Fossil Fools Day actions targeting coal plants, coal minings, and the banks funding it all. Rising Tide (North America, U.K., and International units) spearheaded these efforts and others.

Cliffside: 8 Arrested as North Carolina residents shut down construction at Cliffside coal plant
At 6:30 a.m., North Carolina residents locked themselves to bulldozers to stop the construction of Duke Energy's massive Cliffside coal-fired power plant being built 50 miles west of Charlotte, N.C. "In the face of catastrophic climate change, building a new coal plant is tantamount to signing a death sentence for our generation," said local farmer Matt Wallace while locked to a bulldozer. The concerned citizens also roped off the construction site with "Global Warming Crime Scene" tape and held banners that read "Coal Fuels Climate Change" and "Social Change, not Climate Change." (more)

Subsidies contribute to muddying of biodiesel instead of boosting the industry

The WSJ reports today:

The U.S. taxpayer forks over a $1 subsidy for every gallon of biodiesel that is blended in the U.S. for export later. The idea was to give a nudge to the U.S. biofuel industry. But it is boomeranging, as the Guardian reports today in the latest installment on biodiesel "splash-and-dash."

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Increasingly, traders ship biodiesel from Asia or Europe to U.S. ports, where it is blended with a "splash" of regular diesel, the paper reports. That qualifies the shipment for U.S. export subsidies. Then it is shipped back to Europe where it is also subsidized. European biofuels organizations talk about between $30 million and $300 million in U.S. subsidies being exported that way to Europe.

The result? Biofuel's already-tarnished environmental reputation comes under more fire, because round trips across the Atlantic add unnecessary transport emissions to the mix. And Europe's own biodiesel industry has been shutting plants, despite its own efforts to ramp up production to meet political mandates. Imports are undercutting local producers on price.

The Christian Science Monitor has more details:

When additionality always matters

Sean Casten and Adam Stein have been discussing when it is important that a carbon savings be additional -- that is, when it is important that we not pay for a saving that would have happened anyway. You guys are making this way more complicated than it needs to be.

Iron-clad additionality is critical when you're selling a permission for someone else to pollute. If you are reducing emissions, generating a financial instrument from that fact, and then selling it to someone else to use as a substitute for reducing their own emissions, your reduction had damn well better be additional. Otherwise, you are almost certainly increasing pollution.

You're welcome.

Thoughts on the newly announced ‘we’ campaign

So Al Gore announced a $300 million 3-year effort "aimed at mobilizing Americans to push for aggressive reductions in greenhouse gas emissions."

My question is, wouldn't it be better to spend that money on building grassroots organizations pushing for climate change legislation instead of spending it mostly, I presume, on advertising? If $100 million was spent each year on grassroots organizations in 30 major cities, that would work out to $3 million per each major metropolitan area, enough for a decent-sized effort to organize citizens to push their legislators.

Or how about setting up some think tanks and media outlets, as the conservative movement did? Or is raising money for ads much easier than raising money for grassroots organizing? Color me confused.

Farmworker Awareness Week is a chance to recognize the people whose labor means we can eat

This is Farmworker Awareness Week, a time to support the millions of farmworkers whose labor puts food on every American table, and who work and live in some of the worst environmental conditions in our nation.

It's estimated that 2 to 3 million farmworkers plant, tend, and harvest American crops every year. Many farmworkers in the U.S. are migrants who move from place to place following the harvest. Where I live, in North Carolina, migrant farmworkers are the majority. The average annual income for a farmworker in the United States is about $11,000, or about $16,000 for a farmworking family (though pay on the East Coast is lower than the national average). Farmworkers live in overcrowded housing and very few receive health care or unemployment benefits. Here in North Carolina, about half of our farmworkers cannot afford enough food for themselves and their families.

Measuring additionality has clear benefits — and also some obvious costs

The second in a series of posts on additionality.

In his post criticizing the design of carbon markets, Sean correctly notes that additionality is a pain to measure -- an ever more expensive pain, as the industry matures and quality controls become more stringent.

To take an example I know well, at TerraPass, we spend tens of thousands of dollars per project helping dairy farmers validate their methane digesters under the Voluntary Carbon Standard. It's a complex process, requiring a fair amount of domain expertise, outside consultants, site visits, and ongoing monitoring. The process is meant to ensure additionality, but the cost carries some clear downsides. For example, we can't consider any projects that are below a certain size. Even if they're great projects, they won't generate enough carbon reductions to justify the effort.

So Sean and I agree that additionality in the carbon world is expensive and tricky to measure, and that the cost of doing so drives some worthwhile projects out of the system.

Spots vs. strips

This is the fourth post in five-part series on the details required to get carbon policy right. See also parts one, two, and three.

We now get into an issue that will seem a bit arcane, because no one's talking about it, at least not explicitly. But it's a real choice, and in many conversations about carbon policy we are implicitly getting it wrong.

Should we price carbon in spots, or strips? Or, to take it out of financial jargon, should we:

1. set up markets such that people who are selling or buying emissions credits have to go to the market with each incremental ton to determine what the price will be (a "spot" market), or
2. set up markets such that buyers and sellers can enter into long-term contracts for the emissions they will produce/reduce (a "strip" market)?

Gore’s Alliance for Climate Protection unveils ambitious $300 million ad campaign

If you read Juliet Eilperin’s great rundown in the Washington Post, you know that today marks the launch of a massive PR effort from Al Gore’s Alliance for Climate Protection. Gore has concluded that U.S. politicians will continue to be timid on climate change until the public demands otherwise. “The simple algorithm is this: It’s […]