How To Achieve Chinese Emissions Cuts

09.2011

Original Article On Copenhagen Insider

By Graciela Chichilnisky

Director, Columbia Consortium for Risk Management, and Professor of Economics and Statistics, Columbia University 

A success in Copenhagen - in particular bringing China to the table on emissions reductions - can change the domestic debate in the US. It is crucial to achieve a positive vote of the 2009 Markey  - Waxman Energy Bill when it goes to the Senate. To pass this bill through Senate, one needs a simple and truthful response to the sound - bite "Why are we limiting our emissions if China does not"? This sound-bite is right. China and the US are the world's two largest carbon emitters, and without serious cuts from both the world cannot avert climate change risks. To address the threat of climate change and simultaneously to address domestic concerns about the economic consequences to the US -- requires China's commitment to reduce its emissions. 

 
Recently China offered to reduce the carbon intensity of its economy. But this offer reflects increases in energy efficiency that China has been achieving over the last 12 years  -- a period in which Chinese carbon emissions have nearly doubled. 
 
Recently President Obama offered a 17% cut in emissions -- an auspicious beginning for the climate summit that needs US leadership. But our 17% uses as base year 2005, while the rest of the world uses 1990. Comparing apples to apples, therefore, the US offer is a mere 3% reduction with respect to EU's  offer of 20% cuts and Japan's offer of 25% cuts.  Our offer is too small.
 
What we really need is a systematic and serious approach to reduce emissions in China and the US as part of an ongoing process. While the new developments from the US are important, we need more that gestures of good will that arise when a major international event exposes the problem to the global community and the television screens broadcast our actions to the world. 
 

A Proposal To Achieve Chinese Emissions Cuts
 
A modest extension of international law can achieve a systematic reduction of emissions in China, and has already been found acceptable in the United Nations context, by Chinese officials, by law makers within the US, and has been recently discussed at the White House. It is an update of the 1992 Climate Convention that the US has signed and ratified in 1992. 
 
How does my proposal work?  
 
The US can purchase a right, without the obligation, to buy emission cuts from China while China can simultaneously purchase a right, without the obligation, to sell these rights to the US at a minimum appropriate value. These two transactions can be structured so they require little or no exchange of money -- thus overcoming concerns from the Congressional Budgetary Committee. This financial mechanism gives us the right to force emissions reductions on China, while China can say truthfully that it will be appropriately compensated when this happens. This one - two punch can facilitate a Senate's vote in favor of the Markey - Waxman Energy Bill, since it overcomes the sound bite about China's emissions. This both China and the US will reduce their emissions, and the world's two largest emitters become part of a world community that needs their help to avert a potentially catastrophic risk of climate change. 
 
The proposal just described is a modest extension of the carbon market that I designed and drafted into the Kyoto Protocol in 1997 and is now trading US$125 bn per year at the European Union Trading System. The same carbon market approach has been adopted by the Waxman - Markey climate change bill, where it is called  "cap and trade". The proposal advanced here is therefore in tune with US legislation and with a market - based approach. 
 
The proposal described above can be extended to other developing nations as voluntary participants. At present China and the developing nations are not part of the carbon market, since Article 4 of the 1992 Climate Convention exempts China and the developing nations from mandatory emission limits without compensation. But the procedure I proposed overcomes this difficulty, as it does not require emissions limits for its implmentation: the limits arise as part of the financial mechanism itself. The Secretariat of the UNFCCC Convention views this proposal as an interpretation of existing law, a positive sign that can ease its adoption in Copenhagen. 
 
This proposal serves the interests of the global community and of the US citizen; it is a win - win solution for the world as a whole. I hope it will have the support of Representative Edward Markey, D-Mass, the co-sponsor of the excellent House climate change bill. We want the Markey-Waxman bill to become law, and the proposal presented here will definitely help in this direction.

Foot in Carbon Trading Door for Small Nations?

08.2011

By: GRACIELA CHICHILNISKY

In June 2009, a group of 43 small island nations helped to pass a U.N. General Assembly Resolution to place the issue of global warming for the first time under the aegis of the powerful U.N. Security Council.[1]

This landmark advisory resolution underscores the seriousness of the global warming crisis, and the increasing difficult problems that may result from it.

The Security Council is all about war. It is the part of the United Nations that has most power and resources.

This unexpected resolution was passed by the smallest nations on earth - nations who are most at risk from raising sea levels caused by global warming. They succeeded against the votes of the United States and Russia, in an example of global democracy at work.

Yet this impressive diplomatic success does not bring real and tangible solutions.  As global warming causes temperature increases and rising sea levels, hundreds of millions of people are at risk. The permafrost in Alaska and Greenland are already melting as the air and seas warm, and entire towns in Alaska may need to be relocated.[2] This has the potential to be the largest humanitarian emergency of our times.

The world's scientists increasingly believe that reducing carbon emissions will not work, and that there is little that adaptation to a warming climate or efforts to slow greenhouse gas emissions can do for the small island nations.  What is needed is a concerted effort to reduce immediately the carbon already in the atmosphere and arrest the worst catastrophic effects of global warming. At a September meeting in New York, President Mohamed Nasheed of the Maldives and his energy minister said they believe hundreds of millions of people in small island states risk perishing under the seas. He confirmed that his government is buying land in India as a possible long term solution in case his entire island nation disappears.

He also said he supports using negative carbon technology – machinery to capture and store carbon already in the atmosphere -- and believes in what it could do for regions that will be the hardest hit by climate change, including small island nations and poorer countries in Africa and Latin America. These regions could potentially host some of the technologies and earn money or carbon credit from the Kyoto Protocol carbon market and its Clean Development Mechanism. In this way, a strong Kyoto Carbon Market could help replace or supplement the faltering global war on emissions.

Following their diplomatic success in pushing climate change before the U.N. Security Council, the smallest and most vulnerable nations on earth should now go a step further and use their moral power at climate negotiations in Copenhagen in December 2009.   AOSIS, the Alliance of Small Island States, should push through a small extension of the carbon market to include negative carbon technology. That could lead to a win-win solution at Copenhagen.

By "sucking carbon" from the atmosphere, air capture technology could begin shifting funds available through Kyoto's Clean Development. Mechanism from bigger economies to some of the smallest nations. Africa, as a continent, produces 3 percent of global carbon emissions so has gained little from the mechanism, which channels funding to developing countries trying to cut their carbon emissions. But if Africa and Latin American began using negative carbon technology to pull carbon dioxide directly from the atmosphere, they could potentially attract substantial funding through the mechanism. Because negative carbon technology now being developed runs on waste heat from power plants, energy-poor countries would also gain by building new zero-emission power plants. This solution could benefit the United States and the European Union as well. Negative carbon is a U.S. technology that the U.K. Royal Academy has recently sanctioned, and is becoming a real possibility for overcoming global warming. It requires about $3 trillion in resources deployed over 15 years - or about $200 billion per year. This is a large sum but is the right size to stimulate the global economy. More importantly, the funding could come from the Kyoto Protocol's carbon market and its Clean Development Mechanism. All that is needed is a rather small modification to existing law in Copenhagen.

This solution can create energy sources in poor nations, technology jobs in industrial nations, and can increase U.S. and European exports - at the same time that it sucks carbon from the atmosphere and decreases the risk of catastrophic climate change.


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The Unseen Benefits And Profits

08.2011

Original source: NationalJournal.com - The Unseen Benefits And Profits

Many in the US believe that the Markey - Waxman climate change bill is just about increasing the cost of energy. Most fail to see the benefits and profits that it brings to industry, how it can help expand our exports and, most importantly, the many jobs it can create.  This has to change. It is critical that the US public realizes how the climate change bill can benefit our economy. Its 'cap and trade' legislation is a version of the carbon market of the Kyoto Protocol that became international law in 2005. Each of the US$125 billion traded in the carbon market per year represents a payment made by someone who overemits and is received by someone who underemits. For each dollar paid, a dollar is received leading to commercial gains and profits. The overemitters pay and the underemitters benefit, exactly as one would like things to be to provide incentives towards a safer atmosphere. But the carbon market's net cost to the economy is zero. And in addition it creates positive incentives for averting climate change, for clean technology jobs, clean goods and services, and clean exports. 
 
The energy industry and large segments of the business community understand that there are significant gains to be made from the carbon markets. They want clear guidelines, they need such guidelines to succeed. A recent discussion in London with senior executives of EON, the EU's largest carbon emitter, confirms that the carbon market's guidelines are important for them and viewed as helping their business strategies into the future. EON supports the Kyoto Protocol's carbon market for this reason - it is an integral part of a successful business strategy. The same is true for our US automobile industry who sells globally - all major industries sell globally today -- and it is handicapped today without the guidelines created by the carbon market, since US has not ratified the Kyoto Protocol. The Markey Waxman bill will correct this.
 
The carbon market changes the prices of all goods and services in the world economy because it helps make clean energy cheaper and fossil energy more costly and undesirable - for the first time. Everything we produce -- cars and trucks, homes, electricity, food, machinery, heating services -- everything uses energy. A change in the price for clean energy is a major signal that US industry needs and does not yet have. Since US car makers do not have an equivalent legislation at present, and will not have one until the Markey - Waxman Bill becomes law, they lack the guidelines they need for the cars they sell globally. US cars are less desirable overseas as they burn more gas than the global consumer wants. This created a major disruption in the US automobile industry - which is the heart of America - and led to painfully high levels of unemployment that could have been avoided.
 
With the right market price signals, we can turn the energy industry and business as a whole into friends of the environment.
 
Clean technology is where the US excels. We can be world leaders in  innovation and commercialization, because we have the risk capital and the intellectual property rights needed for innovation like nobody else in the world. China cannot compete with us here. But we are handicapping our economy and our own innovation capability by failing to provide appropriate carbon market guidelines to our economy. The Markey - Waxman climate change bill and its 'cap and trade' system can help achieve the incentives and guideliness needed for clean innovation and commercialization, to compete globally and lead a clean tech industry that is a major source of US exports and new jobs at home.

By Graciela Chichilnisky - Director, Columbia Consortium for Risk Management, and Professor of Economics and Statistics, Columbia University

Sucking Carbon from Air: Carbon Negative Power Plants

07.2011

A heartfelt comment came from a reader of my recent blog Innovation and Abuse: “How does the Global Thermostat technology work? Notice that they don’t explain how they do it -- it seems too good to be true!”

I sympathize with the comment, which is fitting for my blog on Innovation and Abuse.  Global Thermostat is very innovative – and it’s ‘out of the box’ approach prompts comments like the one just quoted. 

It also gives me an opportunity to explain who we are and how we do it.

Global Thermostat LLC (GT) (globalthermostat.com) was formed in 2006. It was co founded by Professor Peter Eisenberger of Columbia University and myself to develop and commercialize a unique technology for the direct capture of carbon dioxide from the atmosphere and other sources. Our technology is so efficient that it can turn a fossil power plant into a carbon sink – reversing the usual equation: Now the more power you build, the more you clean the atmosphere.

How does this work?The GT process “co-generates” carbon capture with other industrial processes—such as power production—by using the ‘process heat’, the residual heat from those processes, to drive its carbon capture technology. By combining CO2 capture from air along with capture from the flue gas of an electrical power plant, and using the power plant’s low cost process heat to provide the energy needed for the air capture process, GT technology has the capability of transforming power plants into net carbon sinks.

Global Thermostat technology also can work with renewable power plants, because it captures carbon directly from air using the plant’s process heat. For example, heat from a Concentrated Solar Plant (CSP) can be used by Global Thermostat to drive its capture process. CO2 capture from air is different from other forms of carbon capture in that it extracts CO2 directly from the atmosphere at low temperatures and at a concentration of about 400 parts per million (ppm) or somewhat more. Other carbon capture technologies typically extract CO2 only from flue gases at higher temperatures and about 10% concentration of CO2. Actually, Global Thermostat technology works very economically in conjunction with standard capture technology (CCS) by combining air and the flue as its sources of carbon – a process that we call the “carburetor” for obvious reasons.  This is the most economical way to capture carbon using our technology – and as far as we know it is also the most economic way to produce carbon anywhere in the world. Why? The input is free (air) and the energy driving the process is often free as well (process heat) thus explaining why our cost of capturing CO2 is so low.

Carbon capture is an increasingly important activity in the US, which consumes almost 100,000 tons per day of CO2 for industrial gases and Enhanced oil Recovery. The US Department of Energy recently announced $2.3 billion in funding in carbon capture technologies. Additionally, China has built into its Twelfth Five Year Plan a 17 percent reduction of CO2 per unit of GDP output and is funding a number of its own initiatives to accomplish this goal.

GT’s technology has multiple advantages. The most important are: (i) GT’s plant location flexibility allows CO2 capture where CO2 can be used as a product, thereby reducing transportation and distribution costs, (ii) GT technology has the ability to make a power plant carbon negative, and (iii) GT technology uses low cost process heat to provide the energy needed for the air capture process.

CO2 air capture has gained momentum on the policy front and in the business community as a viable and economic solution for reducing carbon emissions and is now being introduced commercially with pilot demonstration plants.

The first GT pilot plant erected at SRI International in Menlo Park, CA, captures 1,000 tpy (tons per year) of CO2 and was co-developed with Corning and BASF. A commercial demonstration plant at SRI will start operating this summer. The CO2 captured at plants like this is available for use in applications such as enhanced oil recovery, greenhouses, production of industrial grade formic acid, producing bio-fuels from algae, and, when combined with hydrogen, for producing hydrocarbons such as high octane gasoline. According to the International Energy Agency, over 41 percent of all human based emissions of CO2 are generated by power plants and 89 percent of electricity production around the world is powered by fossil fuels. This represents an energy infrastructure valued in excess of $55 trillion dollars. As this cannot easily be replaced, CO2 emissions will be around for some time to come. However, with CO2 air capture, much of this emitted CO2 can be recovered and molecularly tied up, thereby lowering the CO2 loading in the atmosphere. With GT’s technology, the more electricity one produces, the more CO2 one can reduce from the atmosphere. This reverses the paradigm that links fossil fuel-based power production with carbon emissions. A GT plant utilizing process heat in its process can capture up to twice the CO2 that a coal power plant emits, leading to carbon negative electrical power production. Here is a snapshot of how GT’s technology works. Air and/or the flue gas mixture are moved by fans over a wall of Corning’s honeycomb monoliths, which are coated with a proprietary “sorbent” (amine based chemical) produced by BASF. The coated monoliths adsorb the CO2. Process steam is then used to desorb the CO2 from the wall. High purity CO2 is recovered and the process heat that the plant does not use drives the GT process, making it more cost effective. A CSP plant can be used to drive the process as well. The purity level of the CO2 gas recovered by GT’s process can be as high as 98–99 percent, and the stream can be further purified and/or liquefied using standard “compression” techniques.

Transportation costs for large volume gaseous CO2 are significant and can run as high as $1.5 million per mile for a pipeline, plus compression. With the GT process, these costs are drastically reduced or eliminated; a CO2 air capture plant can be located anywhere, needing only air and heat to operate. A GT plant can be built next to an oil field or a food processor, eliminating the need to pipe the CO2 over a long distance. Global Thermostat technology can reduce emitted CO2 by 200 percent (it is carbon negative) and also can operate alongside other conventional methods of CO2 capture. GT’s technology enhances the efficiency, capture rates, and CO2 purity levels generated by conventional processes, which typically only reduce 90 percent of the emitted CO2. Global Thermostat is negotiating commercial plants with the largest users of CO2 for industrial gases and Enhanced oil Recovery in the world, and is planning to introduce its own brand of Renewable Gasoline in the US Canada, Hawaii and China and believes that its process holds significant value in reducing environmentally damaging CO2 emitted by these nations while creating economic value for its CO2 consuming industries. We offer a solution that is profitable and can help national security and avert climate change. It cleans after today’s emissions and it accelerates the introduction of renewable power sources.  It can also favor developing nations who can use the funds offered by the Kyoto Protocol’s Clean Development  Mechanism to build carbon negative power plants that clean the atmosphere while the provide new sources of power.

Graciela Chichilnisky is the co-founder and Managing Director of Global Thermostat LLC.
She can be reached at [email protected] and 212-678-1148.