A Graph of Rising Investment in Renewable Energy

I am amazed that solar power has fallen in enough in cost to be competitive with fossil fuels.   It would not take much more of a drop to make solar cheaper than this will reduce the demand for fossil fuels.

Can BC use the lack of a carbon tax as an unfair trade practice?

As long as countries have to agree to voluntarily put restrictions in places, the multi-national negotiations like the Copenhagen Summit of 2009 are doomed to failure.   We have to use some way within the existing multi-lateral relations between nations to force things to happen.  One of the few truly global systems we have are the trade agreements such as the World Trade Organization.

BC should take leadership in climate change and use WTO or NAFTA as a way to claim that not having a carbon tax is an unfair trade practice.  It would not have to only be BC but other jurisdictions with carbon taxes that could go and make the same claim, but someone has to start.  

Allowing the unlimited dumping of CO2 into the atmosphere reduces the costs for industry which gives them an unfair advantage over industry elsewhere.   Climate change is a global problem but suffers from the tragedy of the the commons - countries benefit in the short term by not acting.   The economies of countries that do act now are slowed by the actions.   It seems to me there is a clear case for a claim of unfair trade practices.

A successful case in relation to carbon pricing would force countries to either enact some form of pricing or face serious countervailing duties.  Either way the problem of tragedy of the commons is lessened and it becomes possible for more action on climate change.

So if this approach were not to work or would take too long, there is no reason BC could not apply a carbon tax on all products coming into BC based on the fuel they would have used to produce the product.  It would mean products from China would be more marginally more expensive but this should help BC based producers of goods a small improvement.

Why do I feel like I do not do enough?

• I compost and have done so for years.
• I have done what I can to keep the house warm with less heating and I heat from an very low CO2 source
• I take the bus some of the time, not all the time but a lot more than most people I know
• I rarely fly in a plane
• I have three rain barrels
• My food is almost all unprocessed and this means I bake my own bread most days.
• I grow some of my own food.

But it all really does not feel like enough even though I know it is a lot more than most people would do without cost being the primary reason.

I feel like it is not enough because I have a sense of the scale of the problem we are facing.  As nice as small changes are, they really are not enough.   What I am doing on an individual level is not going to make a difference.

Do I need to change the focus of my life to make global solutions to climate change the focus of it?

Metro Vancouver considering producing power from water system

Metro Vancouver is seeking a a consultant to do a feasibility study to investigate developing power from the water transmission system.   I am very interested to see that they are doing this as all over BC we have water systems that could be producing power.

The energy of the water could turn turbines and produce electrical power.   The sale of this power would help defray the costs of the water system and would offer another source of green power.

Generating power from municipal water systems or from irrigation systems is the lowest hanging green power generation possible.    The water system is already in place, all that needs to be done is adding some form of a turbine at an appropriate spot in the system.

At the moment the only municipal water system that I know of that is producing power is Lake Country from their Eldorado resevoir.  It is a very small system, but provides Lake Country with about $250,000 to $300,000 a year in revenue.  I am not certain, but I think there are three systems connected to ranch irrigation systems.

We have about 200 other municipal water systems that could produce power.   My quick estimate is that they could bring us about 1000-2000 GWh of power per year.    This is on the order of 1/4 to 1/3 of what Site C on the Peace would produce.   This would also be around $10 million a year for local water systems in electrical power sales.

Municipal water systems would have consistent flows year around, there would be not slow times as people are always showering and washing.

If we look further at irrigation systems, there is a potential for something on the same order of power production per year, though they would be on average much smaller.

It is these easy small solutions with no negative impacts that should be pushed.

Will it make any difference?

One of my rain barrels

Saanich is offering a series of free lectures on topics related to climate change and what people could do at home.   The first one is on rainwater management and is this coming Saturday.

The cost to hold these lectures and the impact they will have are not likely going to be worth it.  The municipality would have a much bigger impact if it spent more money on building good sidewalks than holding these lectures.  They would also have more of an impact if they made some changes to streets to allow buses to move a bit faster.

The whole set of pages for Saanich on climate change are simplistic.   As an example, the carbon calculator, it has various problems.  

It assumes all vehicles in a class and how you drive them are the same, if you want to calculate the CO2 emissions you just need to know the number of litres you use in a year.   The CO2 emissions for electrical power is constantly fluctuating based on what power source we are drawing on.   If you use power in the middle of the night, you have a higher CO2 impact because that power is in part coming from coal fired plants in the US or Alberta.

Air travel is also not as simplistic as the calculator suggests.   Much depends on the number of passengers on the plane, how old the plane is and the speed it is flown at.   If you fly WestJet, your CO2 emissions will be lower because they have very new planes and have more passengers than average.  If you fly Harbour Air you have zero CO2 emissions since the airline is carbon neutral.

The calculator misses out a major source of greenhouse gases, the eating of meat.

It also misses out the impact of what I do that might reduce CO2.

The Saanich pages feel like "flavour of the month".   There is no real thought or rigorous academic backing for what is being done or what is suggested people do.   Lots of resources are going into project work that will have no impact.

Good piece from George Monboit

George Monboit writes in the Guardian and outlines the problem with climate change in this article.   We have to reduce the use of fossil fuels and the biggest replacement will have to come electricity, specifically electricity with low carbon emissions.   It is the need to replace the dirty the power with clean power that leads us to the problem.

Read his piece, he really does outline the dilemma well.   Here are some of my comments in relation to it.

• Global energy use is going to rise for at least the next thirty to fifty years, likely for longer than that.  We have the majority of the global population going to go through the point in their economic development in which energy needs will be dramatically rising.
• To reduce demand the price of energy will have to rise dramatically.   The one and only thing that has ever managed to reduce demand has been a rise in price.   If the goal is a net reduction of energy use over the next generation, there will have to be a 100% or more increase in all energy prices immediately and then a phase in over the next 30 years an annual increase several times that of inflation.
• There are various green energy sources but as of yet many of them are not competitive with a coal fired power plant.   As we see here in BC, the subsidy of green power is seen as a bad thing - not that I would call the BC Hydro IPP contracts a subsidy as they will be hugely  financially beneficially in a few years.
• No government has the tiniest ability to deal with the situation.  People have to accept that any serious solution is going to come from the private sector that sees a buck can be made.
• Most of the public is in complete denial about what it will take to actually lower CO2 emissions.

Paint your roof white and save the world!

This is an interesting story from the CBC today

All new roofs would be white under a Montreal borough's proposed bylaw aimed at taking advantage of a white roof's cooling effects.

Mayor François Croteau of Rosemont-La Petite-Patrie wants to make white roofs mandatory on new buildings. Roofs requiring repairs would have to be painted white as well.

Croteau's idea is supported by a Concordia University engineering professor, who says all the world's roofs should be changed to cooling colours.

"Ten metres squared of white roof is equivalent, in cooling the globe, the equivalent to one tonne of [carbon dioxide]," Prof. Hashem Akbari says.

Akbari is trying to persuade 100 of the world's largest cities to switch to light-coloured roofs. Changing all the roofs in the world would be equal to getting rid of all the world's cars for 20 years, he says.

If Croteau gets his way, many of his borough's roofs will be white within about 15 years.

The bylaw would not apply to buildings with peaked roofs, which many residential houses have.

Croteau said making the switch to white roofs would be more expensive in the short term. But, he said, the cost would be offset eventually because white roofs are more durable.

Councillors in Rosemont-La Petite-Patrie will vote on the proposal in October.

In looking for this story I found some of the research that backs up the reasoning, I had no idea of the impact that changing the colour of the roof could have.   If there were a wholesale transition to white roofs, there would be a 33% reduction in the urban heat island effect.

Sarah Thomson, candidate for mayor of Toronto is backing this idea as well, though she is running a distant third of fourth.

You can even calculate the savings from moving to a light coloured roof from a dark one.

I like the idea of showing people that is saves money and not any sort of forced mandate.

Interesting Program to allow low income homes become more energy efficient

I found this on Craigslist today and thought it might be of interest to people:

The Government Wants to Help You Renovate!

The Energy Conservation Assistance Program (ECAP) provides BC Hydro residential account holders on limited budgets with a home energy evaluation, the installation of energy saving products, and personalized energy efficiency advice. All of this is free of change to the participant.

Every home is different. Your home evaluator will determine which energy efficiency upgrades your home is eligible for. The installation of some products may require multiple visits.

Eligibility

To qualify for this program you must be a BC Hydro residential customer with moderate to high electricity consumption (more than 8,000 kWh/yr, which is approximately an electricity bill exceeding $500 per year) living in the Lower Mainland, on Vancouver Island, or the Southern Interior.

Applicants must provide proof of income for every member of the household 18 years or older by providing a Notice of Assessment from the Canada Revenue Agency. Your combined household income must be below the Low-Income Cut-Off (LICO) as published by Statistics Canada. Low-income cutoffs vary by where you live (population) and by the number of people in your household.

You can view the LICO table on the Energy Conservation Assistance Program application form. This can be found on www.citygreen.ca/bc-hydro-energy-conservation-assistance-program-ecap

Contact Information

Glenys Verhulst ecoenergy@citygreen.ca (250) 381 9995 x11

Eligibility: If you do not qualify for the ECAP program, you can order an Energy Saving Kit, sign up for a home energy assessment for LiveSmart BC grants, or check out the Affordable Warmth incentive database for other programs to help you make your home more energy efficient.

The Tar Sands

Energy sources are really all about the price it costs to get the energy needed to do something.  The economics of supply and demand are big feature of energy prices.   A low supply means a high price, a high price means more people looking for supply to meet that demand.

There are constant concerns about the idea of peak oil, that we will run out of available oil and that society will suffer for it.    This analysis ignores several important factors.

As the price of oil rises the amount of oil in the ground that is economic to recover rises - an increase in supply
As the price of oil rises, other energy sources become more affordable - a change in energy source
As the price rises more people spend more money on finding cheaper ways to extract more oil.

A rising price of oil will make the market conditions for the globe to use less oil.

The Tar Sands in Canada are the one major source that increases constantly.   As the price rises the amount oil they can afford to recover increases.   Also each year through innovations the cost to extract oil goes down.   Canada's oil reserves are going to grow ever faster.   As they grow, investment win the tar sands will rise.

The only answer to the demand for the tar sands oil is for other energy sources to become significantly cheaper and reduce the global demand for oil.   The idea that one can stop it through boycotting or regulation is not realistic and takes time and energy away from the real solution.

The change will come when motor vehicles are driven by electrical power and electricity is produced from green sources.   Society was dependent on biomass (wood, peat, charcoal) as a primary energy sources for thousands of years, the only other one available was human and animal energy.   When coal came about these older energy sources no longer provided the main energy for human society.

Oil will fade when we adopt something cheaper and better, that is when the tar sands will fade away

The Green Energy Taskforce Report

I have to say underwhelmed is the best I can muster for the Green Energy Taskforce Report.   They had a mandate to provide recommendations on all aspects of green energy production in BC and they produced a document that is more platitudes and motherhood statements than any sort of detailed recommendations.

Here is one of the recommendations:

2. Increase Clean Electricity Demand in B.C.

Growing a low-carbon economy means attracting new investment to B.C. that can be supplied by B.C.’s clean electricity. Clean technology industries, like data centers, could be incented to locate in B.C. to take advantage of data networks.

Recommendation 4: Bring the load/business/jobs to the electrons–actively recruit and attract new low-carbon industry (such as server farms for the Interior).

Where does one start with this?   First of all the recommendation is "Increase Clean Electricity Demand in BC" and not attract greener industries.   The two parts do not connect.   The only way to increase the demand for clean electricity is to remove the BC Hydro monopoly of sales of power so that consumers can choose where they get the power from.    The short paragraph and recommendation there make no sense in the context of green energy.  They do not say who should attract these business to locate in the interior BC or the other impediments to being there.

There are very few clear concrete recommendations within the taskforce report.  A number of the ones verging on having a clear direction are things that are already going on.

 Here is a list of the somewhat more clear recommendations I could find are:

• Complete Revelstoke and Mica dam capacity for power generation
• Move forward on Site C and Site E
• Move procurement, generation operations, and export outside of BCUC regulation.
• Develop a Lowe Carbon Transition Plan (though dates for when)
• By September 30, 2010, and using existing data and information layers, develop a renewable energy zoning map for the Province that identifies where development of renewable energy and transmission is appropriate and inappropriate.
• Direct BC Hydro to amend bioenergy electricity purchase agreements (EPAs) to transfer the biomass fuel price risk through to BC Hydro so that if biomass fuel prices increase, BC Hydro will correspondingly adjust the purchase price of electricity. (I do not like this one)
• Establish a B.C.-owned Biomass Fuel Aggregator to access and aggregate woody biomass from provincial forest land, and supply fuel to bioenergy project developers.
• Increase the Innovative Clean Energy (ICE) Fund from $25 million to $50 million with a commitment to review funding levels every two years. Restructure the ICE Fund with an expanded team of investment professionals and consider moving it outside of government as a separate, stand-alone organization.
• Implement a royalty credit and/or tax credit program to provide the necessary incentives to industry to use clean energy technologies at remote installations in B.C., such as mining, natural gas operations and communities.
• The Province should develop a regional green energy planning process
• The Province should expand the current revenue sharing model to include the sharing of revenue collected by the Province with First Nations on all types of green energy.

Even this list find is full of statements that are really not offering much.   What I was looking for was something with a lot more specifics.   I was looking for detailed background on each recommendation including deadlines and how the recommendation should be implemented.  All in all, the report is short enough on details that it could be used to justify almost any action in relation to green energy in BC.

There are other recommendations that many will say have specific actions for government, but I would argue they are too vague or they are not realistic in BC.

The submission I made to the taskforce had some very specific recommendations with details of what should be achieved and by when.  It also contained a lot more details with respect to scope and scale of power production now and in the future, prices for power here and elsewhere, specific issues with the grid, and where new green power could accessed without building any significant infrastructure.   I am only one person and working on that on the side of my desk.  They taskfroce report does not impress me.

Where we sit one third of the way through 2010

I have to say that I am convinced that there is clearly something going with respect to climate, that there is a warming trend happening that is occurring very quickly. I am also convinced that human activity is having an impact on this and that if there were a reduction in green house gases the warming trend would be slowed and the climate would be more stable.

I did not jump on this bandwagon in some sort of fear of an impending Armageddon. What ever happens, the world will survive, it has survived much worse in the past. The issue really is what will it cost to mitigate climate change and is that expense worth it? Can we afford to make changes? Can we afford not to?

Climate change has been in the headlines for two decades now. There is clear evidence of the rising CO2 levels and the source of the CO2. But the world is acting as if it is not happening or freaking out as if the world is going to end. There is very little serious long term thought and planning happening with respect to the issue. The issue has also been high-jacked by the left as a way to attack the capitalist system and by the right as a way to galvanize their supporters against the left.

I am going to look at the social and economic aspects of climate change in the context of where we are now and what is likely to happen. I am not going to focus on the environment as the majority of the public shows over and over again that in financial terms they are unwilling to part with much money for the environment.

So here in early April 2010 where can go?
Do nothing - this would seem to indicate increased temperatures and over time some major economic and social dislocation. It is survivable and ultimately the most dislocation would be felt in regions near the equator. In the case of Northern Europe, Russia and Canada, for generations to come the net impact of global warming will be positive for the economy. Ultimately there is no way this direction will be allowed to happen.

Dramatically restrict parts of the economy - Prying people out their cars is not going to happen. Getting people to own less stuff is not going to happen. Adding large costs to industry is not going to happen. The anti-capitalist left approach to the issue is doomed to failure as an approach and will mean a delay of action of any sort.

Government regulation - This is what we seem to be doing the most of at the moment and the law of unintended consequences is hard at work. Cap and Trade is not having any effective impact on CO2 levels being emitted, in fact I would argue it is slowing the movement in the direction of any success in dealing with CO2 levels. The bio-fuel bonanza caused food prices to skyrocket.

The IPCC - they exist, but they remind me of the worst aspects of committee decision making. The reports they issue leave a lot to desired and take much too long to write, though they have been the source of much good data. There are areas that the IPCC is not looking at that it should be considering, biggest of these is economics. The IPCC needs to have their reports include the economic costs of actions and no action. The central question that no one is answering - is it economically better to act now or in the future?

To date there has been very little done to actually reduce CO2, and other green house gas, emissions. There may have been some slowing, but there is no reduction in green house gases. What we have been doing for the last 20 years has not been working, it has been effectively a waste of time and energy.

In a rational world we would make long term goals and create plans to meet them, but the problem with this is that there is that tendency to put off to tomorrow. Goals are not the right direction, there needs to be some other mechanism. Ideally any mechanism would be a price based mechanism that need little or not government regulatory input. The simplicity of a market based price seems to be the only way something significant could happen.

The goal of cap and trade is to set a price for CO2, but it is much to heavily influenced by government regulatory mechanisms and a lack of ways to monitor if it is really working. The pricing mechanism has to be one that is clearly included early on in the decision making process of any business venture. The simplest method would seem to be a carbon tax.

Carbon taxes are being resisted in many places and the political backlash has been severe enough to make governments think twice before going down that path. A tax the public can see is unpopular even if it is cheaper and better than an alternative pricing mechanism. The problem is how do you get the public to demand a carbon tax?

As we are going at the moment, there is almost zero chance that any concrete reduction of emissions will occur within the next ten to twenty years. Being able to change this is going to hard and is not served at all by people saying we should not drive, we should live in a smaller house, we should not aspire to be wealthy. Change will happen when we can show businesses will make more money through being carbon neutral, that the public will be able to travel more cheaply in the future, and that more goods will be available at a lower cost.

Change is also not served by ignoring the rising emission levels in Asia and Africa. BC could build all of the planned, proposed and possible green energy projects in the province and it would still not equal what China is adding each year in coal power. Why should Canada bother if Asian economies will not reduce their green house gases as well?

I would say the UN needs to deal with the issue, but I have little faith in them being able to do anything quickly or effectively. There needs to be some sort of statement of values from the largest economies with respect to climate change, things like setting a price for emissions through taxes or affirming higher wealth and consumption by the public. They need to be statements that allow the public to understand there are ways to manage climate change and be better off for doing it. The public needs to know that they have a brighter future and are not going to have to do with less and flagellate themselves.

Non-Storage Hydro aka Run of the River

Non storage hydro is also referred to as run of the river and micro hydro. It is the best term to describe how the power is generated. The main aspect of non storage hydro is not size of the project but the fact there is no way to store water for production of power. The use of the term microhydro is not an accurate term and neither is run of the river.

Storage hydro facilities work on the idea that a large reservoir can store water for year round consistent power production on a large scale. The spring run off will take the reservoir to full pool and then the level is drawn down over the year as needed. The reservoir acts as a system to store the power until it is needed.

Non storage hydro has no capacity to retain water for later dates, it has no capacity to store power. This means that at the moment non storage hydro can not by the sole source of electrical power as the amount of power that can be generated varies during the year. When looked at in isolation, a specific project could have periods when it can not produce energy and therefore can not be considered firm supply on an ongoing basis. This all changes once there are a large number of sites throughout different parts of BC.

Non-Storage Hydro is the Internet of Electrical Production
The internet functions well not because any one part of this global network can carry all of the traffic all of the time, but because it is a system with thousands and millions of different nodes and routes and thereby allowing the internet to function well even if parts of it are down. This is the analogy one needs to think of when considering non storage hydro in BC. The overall generating capacity of non storage hydro in BC evens out as the number of generating sites operating increases. With more generating sites the electrical system can rely on more non storage hydro as firm capacity over the whole year.

BC has an abundance of locations on the coast for non storage hydro and the consistent year round rain fall to ensure year round generation in the vast majority of locations. Spring run off can occur from late March through to mid July in different areas of the province. Some people are concerned that non storage hydro sites can only provide power for part of the year. The data does not back this up.

Non Storage Hydro has very low CO2 Emissions
Non storage hydro has a very low carbon footprint, the lowest of any of the electrical production options available. The ongoing production of power from the facility has a very low CO2 output, mostly to do with the movement of people to and from the facility resources needed to maintain it. In some cases increased plant growth around the head pond may be enough to offset the ongoing CO2 contributions. The largest contribution of CO2 emissions comes from the construction of the facility.

The nature of the coast of BC and the needs of non storage hydro are well suited. Non storage hydro needs a decent year round water flow and steep inclines to provide a good head for the turbines. By their nature, the best sites for non storage hydro projects are in locations that are of lower values for wildlife and fish. In many cases, there are no fish near the project locations and the impact of the facility is not measurable downstream.

Energy Payback - Nothing is Better than Hydro
An important aspect of all energy production to be considered is the energy payback ratio – how much energy is generated for each unit of input energy. All hydro has a very high energy return rate, by far the best of any electrical generation. For a large scale storage hydro system the energy payback ratio is about 240 times as much energy is produced as was used to build and operate the facility. For non storage hydro this ratio is about 220 times. For fossil fuels it is only 1 to 7 times as much energy is produced as what is needed to build and operate. After hydro, the next best energy source is wind power at about 20 times the output when compared to the input. These numbers come from a July 2005 Hydro Quebec report by Luc Gagnon, there are other sources out there that confirm these numbers.

An energy payback of less than 1.5 means the system uses almost as much energy as it generates. Conventional coal fired power plants with CO2 capture and sequestration can be as low as this. This fact alone makes the idea that there will be a move to CO2 capture and storage by the coal fired power plants in North America unrealistic in the next 15 years.

BC has an Abundance of Sites
In 2007 there was a report by Kerr Wood Leidal on potential non storage hydro locations in BC. The report identified numerous ones with a combined annual generation of 50,000 GWh/yr. The report is a a useful ballpark to allow us to see what may be possible but it should not be taken as the final word on what is out there. The report missed out on many sites that are currently either in the planning stage or under development, the biggest example of this is the Plutonic Power Bute Inlet project.

The report was an overview of the province and made some assumptions that have not are not realistic, chief among them being that projects would not cluster and share infrastructure costs. The report was not able to make detailed and through design plans for each location and thereby missed many potential sites that are now under consideration.

As an example, Hawkeye Energy Corporation has identified and applied for 350 MW worth of sites for non storage hydro in less than one year. These sites have a potential for 1310 GW/h of generation. Many of their sites are located close to the Plutonic Power Bute Inlet project. As more projects are built and more infrastructure is there for them, the easier it is for smaller projects to piggy back on the infrastructure.

What we can take from the report and other sources is that BC has the capacity to develop more than 50,000 GWh/yr of non storage hydro over the next 15 years.

Non storage hydro has one more major advantage over almost all other green electrical generation technologies. Non storage hydro is economically viable now without any sort of market distorting government subsidies.

Our low electrical rates cause more CO2 emissions

The power we generate in BC is low in CO2 emissions, but the grid we are part of, the Western Interconnection, is not. As long as we have electrical rates that are artificially low, we will use more power than we need. In recent years BC has normally used more electricity than we generate. The extra power we need comes from gas or coal fired power from elsewhere in the west.

Building more capacity is one way to reach electrical self sufficiency by 2016, but reducing demand would achieve this as well. Once we produce more electrical power than we consume we can export the excess green power to others in the west.

If BC were to charge higher rates for power, the public will be much more motivated to conserve power. Higher rates will also mean that more green energy sources will become economically viable without needed market distorting government subsidies.

The current price BC Hydro residential customers pay is $0.0591 per KWh for the first 1350 KWh in a two month period and then rising to $0.0827 for any power used over that amount. This is an average cost for a suburban home of about $0.065 a KWh. People in the BCFortis service area pay $0.07627 per KWh. These rates are the lowest any residential customers pay in the Western Interconnection.

BC should have a policy that the price of electricity in BC reflect rates in neighbouring markets. A mix of rates from Washington, Alberta, Idaho and Montana would make for a good basket

• Washington – $0.086
• Alberta – $0.089 average
• Idaho – $0.086
• Montana – $0.099

Average of the four = $0.09 per KWh

It is not unreasonable for BC to want to retain a competitive advantage, so reducing the cost by 10% of the average makes sense. Doing this gives us a price of $0.081 cents per KWh. This is still the cheapest power in the Western Interconnection but significantly higher than what we pay now. This higher price will quickly make conservation measures economical by making pay back times for the work less than three years.

The higher price should actually reduce demand for power in BC over a period of several years as people adjust to the higher price and change their habits to save money. We should see a leveling of total provincial demand for several years and then see a slower rate of increase than what has occurred in the last twenty years.

If we consume less power in BC there is more green power available for the rest of the Western Interconnection. By 2025, this should allow for BC to be using 10,000 to 15,000 GWh/yr less than it would without the price increase. That is enough power for between 750,000 and 1,250,000 people in California

Carbon Credits - The Modern Indulgences

I have looked a carbon credits for about ten years now. On a first glance I thought they were an interesting way to finance projects that would improve the environment, but the more I looked into them, the more I was uncomfortable with how they work and how they are measured.

I have thought about writing about them from time to time over the last couple of years, but watching the Carbon Hunters on CBC today pushed me to move forward on the idea.

Carbon credits feel more like the indulgences the Catholic church sold in the past. The idea was that if you paid cash ahead of time, you could sin. Carbon credits means you can emit carbon but feel like a non-sinner about it. The medieval system was inherently corrupt and did nothing to convince people that living a moral life was a good idea. Carbon credits are much the same.

Carbon Trade Watch covers many of the issues I have with carbon credits, though they seem to come from anti-market point of view.

Carbon Credits May Not Reduce Emissions

There are various carbon credit ideas out there that are all about not doing something. As an example paying people not to cut down trees. Company X offsets Y tonnes of CO2 because someone is choosing not to cut down a set of trees. The level of emissions is no lower, but the company can claim to be carbon neutral.

The crazy thing is that these same trees that do not get cut can get carbon credits each and every year. Farmers that practice no till farming can get annual carbon credits.

If someone buys land in the Amazon and does not log it, they can get carbon credits. This ignores the fact that there has been reduction in the demand for more land to cleared in Brazil. There is no way this can be counted as a benefit, but it is. There is no net reduction of CO2, just a transfer of money from one business to another for a green washing.

At the end of the day the total global emissions has not been reduced, only the potential for more emissions.

Carbon Credits are Hard to Monitor

Much of the carbon offset business is based on the idea of someone doing something, but there is not a very rigorous audit and compliance system in place. If someone plants some trees, there is an assumption of the carbon credit value. It is rare to have anyone actually quantify the amount of carbon that has been captured by the trees.

On small projects it is all done on the basis of trust that the people will do as they promised. There is no consistent monitoring. In many developing countries the legal and business infrastructure is fundamentally corrupt and untransparent. In these countries there is no way to monitor what is happening. The best example is China, the nation is well known for not having any effective monitoring of anything. It is also well known as being impossible to enforce a contract. The government is one that spends huge energy on a fake image and does not allow scrutiny of actions. I highly doubt that third party monitoring will be possible.

The buying and selling of carbon credits moves people and businesses a long way away from the actions they are taking. They are not taking a personal responsibility for their actions.

Many Carbon Credit Projects Would Happen Anyway

The idea of a carbon credit project is that is either removes or avoids green house gas emissions. How do you deal with projects that would happen anyway? As an example, no till farming in Saskatchewan is better for long term farming the than the status quo, a smart farmer is already using no-till farming.

Micro-hydro in BC will dramatically reduce CO2 emissions in North America by displacing coal fired power, but these micro-hydro projects will go ahead without the money from credits because it makes financial sense to do so.

Large Scale Carbon Credit Projects are Dangerous

One of the reasons climate change is an issue because we are doing too much the global environment. If we take on some truly huge carbon projects that use natural systems to make them happen, we have a strong potential for unintended consequences. When messing with the global climate through plants or grandious for algae die offs in the ocean, we have too many unknowns in the equation.

Carbon Credits Will be a Disaster as Part of Cap and Trade

I will post about cap and trade in the future, I have no faith that cap and trade will make any difference to emissions. Carbon credits are an integral part of cap and trade. The idea is company A reduces their total emissions below their cap and they can sell the 'extra' as a carbon credit to company B.

Cap and trade has been a corrupt nightmare where it has been used. The carbon credits coming from this source are worthless hot air.

How Can You Make Carbon Credits Work?

Simple, you physically capture CO2 or methane and sequester it. You do not capture it through a natural process such as growing trees unless there is a plan to long term harvest and sequester the timber. Ideally you would strip the CO2 out of the air and have an actual measurement of the CO2 captured. There are industrial processes for this and the more of a demand there is for this, the cheaper the process will get.

I would like to ideally see a carbon tax that uses the proceeds to pay for industrial extraction of CO2 from the air. This sort of connection will create a clear price that a carbon tax needs to be at.

It is also important that certified carbon credit projects occur in countries with a free press, democratic government and transparent processes.

The Stern Review on the Economics of Climate Change

I have some strong reservations about the Stern Review primarily because the economic assumptions within it are not realistic. You can read the whole report here,

1) Economic projections that go out more than one generation are little more speculation. If someone had told us in 1979 that we would see low inflation, long term strong global growth, the decline of Japan or the rise of China, I suspect no one would have taken it seriously. I have this great Omni book from 1979 that predicts where we will be in the future. Suffice it to say they got most of it wrong for 2009.

To think that we can know what will be the driving factor in the global economy in 2050 or later is hubris. We can make some broad assumptions based on past experience: more free trade, more and consistent economic growth, lower use of energy per dollar of global GDP produced, and fewer poor people. How we will achieve these things is not something we can see.

The Stern Review looks out not only over a generation, but out to 2200. Within the review's projections, there are few economic impacts till 2070 or 2080. That is two generations out.

The Stern Review projections are based on one major assumption - nothing will change from the current world. No new technology, no change in consumption rates, no change in governance, no change in anything from today. The report feels like what 2005 would look like if we had a much warmer planet and nothing else is changed. This is simply unrealistic.

2) The discount rate Stern uses is remarkably low. Discount rate is how much you reduce the value of something in the future to measure its value today. Stern uses a rate of 1.4%, in no other economic projections I have seen anyone use a number that low. A low discount rate means you are assuming a high degree of risk. Stern also assesses a risk premium in his review. You can not both have a discount rate and a risk premium, it is double counting. He is effectively assuming a discount rate over a generation of 0.8%.

A discount rate should reflect something roughly comparably to what the expected average rate of return of an investment would be over the same term. Looking at long term bonds, something in the order of 3% is a realistic conservative discount rate or risk premium.

3) The Stern Review assumes the cost of mitigation is based on the current day costs of actions to be taken. This is not realistic. Mitigation becomes cheaper as technologies change. A simple example is the LED light.

A few years ago there were very few of them and they were very expensive for lighting. Now I have seen LED lightbulbs for about $10 a piece. I assume that in a couple of years LEDs will displace all other lighting. This will dramatically reduce electrical usage. We could not have predicted this was coming as a specific change, but we can assume there will be other reductions in mitigation costs.

The cost of ending oil use will be nothing, actually it will be an economic benefit to society as we will be replacing oil with a cheaper and cleaner fuel.

Spending money now to have an ineffective impact on CO2 levels makes no sense. We need to wait till have the tools that can allow us to reduce CO2 levels at no cost to the economy. This is within our reach, within a generation we will have the tools to make this happen and not bankrupt us.

Stern also assumes that if there is no mitigation action taken now, none will be taken in the next 100 years. The Stern review is missing any model that assumes we take action in 10 to 20 years with tools that not only do not cost us anything, but give us positive economic impacts.

4) Stern does not include any useful measure of the impact of improving technology on climate change. I think it is realistic to assume that fossil fuels will not be a major part of the energy mix in a generation. This is not because we will run out, it is because it will be cheaper to obtain energy from other sources through technological changes.

We can look back at the last 150 years and see multiple energy crisis's that were solved because we moved from a scarce and more expensive fuel to a cheaper and more plentiful fuel. It is reasonable to assume this pattern will continue into the future because people will be able to make money from new and cheaper energy. Any company that is not looking at how to make its energy use lower and cheaper will be out of business quickly.

We do not know what will be driving the economy in 30 years, but it is safe to assume that there will be changes in technology that will create new jobs that no one has ever thought of and done with little or no energy. Who would have thought people in China would have jobs playing online video games to make advancing in levels easier for people in the first world? These "Gold Farmers" in China earn a better income more than 60% of the population.

The Stern Review is alarmist and puts forward an apocalyptic view of the future. The IPCC report is the bulk of the New Testament of Climate change. The Stern Review is Revalations, an odd depature from the rest of the narrative that only serves to get people caught up in worry. I view Bjorn Lombrog as a climate change Gnostic if I were to continue the analogy.

All in all the Stern Review has been a huge red herring in the climate change debate and has dramatically harmed work towards solutions to climate change. People need to forget it and get on with rational debate and action on climate change.

Just some thoughts on where we are at

It is clear that when it comes to climate change issues there are several clear camps of people:

• The Armageddon crowd - the world is coming to an end and we have to end modern life as we know it now. These people really are the zealots that want to see an end of the world come because they are glass half empty group. Y2K and the rapture are some other events that have the same sort of believers
  
• Time to change crowd - there is a crisis and we need to do something about rising levels of greenhouse gasses and this is best done through efficiency, market mechanisms, and targeted government regulation. This is were most of the rational environmentalists and scientists fall.
  
• It is not happening crowd - this group believes that there is no climate change underway and nothing needs to happen.
• It is happening but do not worry crowd -this is the second largest group in the scientific community, but they are very, very quiet as they have become pariahs in the world.
  

The group that is missing from the above groups is the mass of the public. It seems that the mass of the public is convinced that there is some sort of climate change going on but it is not real for them. Most people are not taking any action because the effects and impact of climate change are too far off to seem like anything urgent to people.

When the mass of people do not change their behaviour, it is unrealistic to think change will happen. It is because of this that carbon taxes are crucial so as to have any impact on CO2 emissions. A rise in the price of fuels will cause people to vote with their wallets. It will also raise the funds needed to be able to allow CO2 to captured and stored.

The typical family car in Canada uses about 3000 litres of fuel and this costs about $3000 a year. At $2 a year this rises to $6000 and at $4 it becomes $12 000. These costs are clearly enough to make people rethink the fuel economy of their car. At the moment the majority of the cost of car is the price paid to buy it. One can assume about a $5000 a year in loan payments and a total cost of having that car of about $9000 a year.

At $4 a litre this same vehicle would cost $18 000 a year, twice as much as today. This is high enough to have people change to a much more fuel efficient vehicle. It is realistic to be able to buy a suitable family vehicle that uses about 40% of the fuel of the typical family car at the moment - many people with small families buy minivans or SUVs and could easily live with a sedan. This change would bring the annual cost down to about $10500, not that much more than now. It also means that even with gasoline at $4 a litre, for many people the cost of fuel will still not be the majority of the cost of operating a vehicle.

This high and radical price of gasoline would be a great market signal for the general public and will fuel the demand for smaller and more efficient cars. You could not get there quickly, it would have to be phased in over years. To be able to do this you need a carbon tax.

The same can be done with home heating fuel and for non-green electrical power. Do this and you will see people figure out how to keep their homes warm and cool without using as much energy.

The reason we still use as much non-green energy in our society is because it is still rather cheap to use.

Another carbon sequestration solution, maybe.....

I was reading Clean Break by Tyler Hamilton, energy reporter for the Toronto Star, and he latest post is about "biochar", a process by which you turn carbon containing material into a charcoal like material.

I find this another interesting way to capture CO2 and store. The higher the demand is for solutions, the more interesting ideas are going to come out of the woodwork. Some of these ideas will become economic and be able to take green house gasses out of the atmosphere fast enough and large enough quantities to make a difference.

When there is a problem and there is some way for people to make a gain out of it, the forces of innovation work very, very quickly. Once someone figures out how to make money getting GHGs out of the atmosphere, there will be a flood of people trying to do the same. Very quickly the costs will come down and come down dramatically.

If we see the sort of advances we have seen in things circuits on a chip, or the cost to sequence DNA, or various other new technologies, we are likely to see some very inexpensive solutions for capture and storage of CO2 within ten years.

I look around at how well innovation works when there is a market demand for the service or product, I have no strong worries about the future. Frankly I see us reaching a steady state for GHG emissions within five to ten years and I see us being able to reduce the levels of CO2 in the atmosphere by 2025. The bigger problem between 2025 and 2050 is going to be complaints from the cold nations that things are going too quickly with respect to stopping the greenhouse effect.

The people calling out for us to use fewer resources, to consume less, to not have the first world lifestyle we are used to are going to be in for a surprise when the clear solution for global warming will be through capture and storage. The goal of the people seeking for us to use less is often their core political belief and global warming has become their tool to attack the status quo.

The future is going to have us having more cars, bigger houses and more toys. It is this global desire that will make it very attactive for people to figure out how to capture the carbon so that we do not have to give up the good life we are used to.

Thursday June 18: Dr William Calvin - Solutions to Climate Change

Thursday June 18: Dr William Calvin - Solutions to Climate Change

7pm

UVic, Bob Wright Centre, Ocean, Earth and Atmospheric Sciences Building

VICTORIA, B.C. - We all know about the problem of global warming, but what can we do about it? On Thursday, June 18th Sierra Club BC brings Dr William Calvin to the University of Victoria to deliver a lecture about solutions to climate change over the next 20 years.

Dr Calvin is a respected neuro-physiologist at the University of Washington School of Medicine affiliated with the Program on Climate Change. He is widely known for his work linking abrupt climate change with human evolution. In his 2008 book, Global Fever: How to Treat Climate Change Dr Calvin delivers both a clear-eyed diagnosis and a strongly worded prescription.

Tickets are $15 or $5 for students from Sierra Club BC by calling 250-386-5255 Ex 237.

Lecture begins at 7 pm at the Bob Wright Centre, Ocean, Earth and Atmospheric Sciences Building, University of Victoria.

Since 1969 Sierra Club BC has played a leading role in environmental stewardship in British Columbia. BC's spectacular wilderness and wildlife make our province a global ecological treasure. Sierra Club BC is passionately committed to safeguarding BC's wild places.

For more information, please contact:

Moira Campbell, Sierra Club BC: (250) 386-5255 Ex 237

A very interesting approach to producing green power

I am across this interesting post at Tyler Hamilton's blog Clean Break. He is a reporter with the Toronto Star.

The company Riverbank Power has come up with an innovative pumped-storage hydro system, though they call it Underground Alternative Energy Production. The idea is to effectively use the movement of water into and out of an underground storage facility to produce electrical power. You let water run in during peak hours and peak demand and then you use the excess power, which is cheap, at off peak hours, to pump the water back out.

The technology to do this is clearly there, my question would be if the business case is there to do this. Is the differential between peak and off peak rates high enough to pay for the capital costs and cover the energy lost in the process?

I wonder if there are issues with storing the water underground in a created cavern and then returning it to the surface? What would the impact be on fish and wildlife? Would the water change in temperature and would that then be a problem?

I love it when people come up with interesting and innovative solutions, it is so much better than being opposed to everything and generally be negative and gloomy.

If climate change is happening, let us embrace it in the hope that it will bring us more and great wealth through the development of new technologies and new companies.

The scale of what needs to happen

At the moment the US produces a bit more than 2 000 000 GWh of power from coal fired power plants. If there is any serious thought to reducing CO2 emissions, then these plants need to be replaced.

If this is to be done over 20 years, this 100 000 GWh of new green energy each and every year. This means we need 30 Bute Inlet projects each year for 20 years just to replace US existing coal fired power.

I have not considered Canadian coal or and oil and gas power production.

BC can go a long way toward providing that power. 400 000 GWhs of green power over the next 20 years is possible here in BC. 800 000 is in theory possible. And this is all green power.