Friday 30 January 2009

All star team talk Copenhagen

Great panel discussion on what steps are needed to reach a global agreement in Copenhagen, though a representative from India, China or Brazil was sorely needed. To me, we are about to witness the single biggest economic transformation in the history of the entire world, and this will be decided in Copenhagen. We have the right man in Obama, the Europeans are on board, Australia is now more or less committed, Japan is prepared to pay to be a responsible global citizen, and all that awaits is whether the carrots will be there for developing countries to join the club. That is a gross simplication to what is an extremely complicated problem that overlaps with international trade, population growth, poverty, and differing cultural attitudes.

However, the greater picture is what will determine Copenhagen's success. To that end, I agree with the panelists that Copenhagen must produce agreement on long term binding targets with a price on carbon for all countries, creating a level playing field for all. That sums up what is needed.

A binding target so it gives the private sector certainty in investment decisions, and a global CO2 price to prevent carbon leakage, which looms as the biggest potential threat to solving the climate crisis.

Kakarigeiko

Tonight's training Andrea senpai had us focus on how to practice kakarigeiko (かかり稽古), which translates into something like 'continous hitting'. This practice has many benefits as it quickens your reflexes and ultimately helps you strike a target immediately as it opens, automatically without thinking.

It's one of those exercises where you dread it the second before the first strike, but once you're in the action it's quite an exhilarating feeling of release and freedom. I've never been too good at it myself but today I think I've made a breakthrough.

I've always strived to be faster (with good form) but today I realised that a mindful kakarigeiko is superior to one that is fast but ignorant. Though the hits may be continuous and at a thousand miles an hour, there is always a 'split' second where you can anticipate, adjust distance and think about which strike to use. By mindfully applying that 'split' second, your strikes become more meaningful, and communication between the kendoka is created. This is where good players develop their timing.

But yah, I still want to be as fast as these guys here!

Thursday 29 January 2009

Windy day

Quite a packed day, but nothing overly exciting.

Probably the highlight was a visiting talk by the Vice President Jakob Larsen of Vestas, the world's leader and largest manufactuer of wind turbines for wind power electricity generation. It's interesting the way Scandanavians operate, compared to Brits. Serious, staid, zero humour, ruthless efficiency. I imagined myself making a big mistake to have Jakob bashing me over my head shouting "jaaaaaaaa". Maybe that's going too far.

But it's amazing the record so far for Vestas. There turning over some 4 billion EUROs a year, have installed 35000 wind turbines worldwide currently with sales of 4000 megawatts (4 gigawatts) in 2007. They've increased the efficiency of their wind turbines 100 times in 15 years and are aiming to install HALF of what they've installed in their entire history every year for the next 10 years. This amibitious target is being brought about by EU's target of 20% renewables by 2020, strong potential in China and the positive signals of the Obama regime.

He pitched it so well that I even thought of buying some Vestas shares. Indeed, if the politicans follow up with their rhetoric and a global deal at Copenhagen is agreed, Vestas will be one of the biggest winners.

There are some difficult challenges that remain though, with the intermittency of the wind the major drawback. Firstly technologies will need to be developed to store electricity that is generated for times when the wind is not blowing. Secondly, an integrated grid infrastructure is needed to support and complement wind with other electricity generators. The example Jakob gave was that in Denmark, approximately 23% of electricity generation is from wind. However when wind speeds pick up, other power plants are shut and Denmark can be 100% wind. Any surplus can also be sold to Norway or Sweden through integrated grids. When wind speeds are low, Denmark purchases surplus hydro generated electricity from Norway. Such an arrangement sounds so logical and more importantly works.

The positive outlook for Vestas may be the reason why they've sent a delagation to the sombre World Economic Forum, where Russia and China are blaming and bashing the US for global economic woes. It's pretty scary when the IMF projects that globally 55 million jobs will be lost....am I gonna be one of them? But maybe there will be light at the end of the tunnel for cleantech, it seems.

Well I certaintly hope so.

Wednesday 28 January 2009

The end of beef

Since I became passionate about climate change issues, which admittedly is still recent (from March, 2008), I've decreased my beef consumption to almost nothing. Ocassionally I have a hamburger at a pub or a steak but there's usually no meat in the house and when there is it's chicken. It helps when you live with 3 vegetarians.

I avoid beef because of the high global warming effect of producing beef (cows belch methane which is 25 times more lethal than CO2), the inhumane industrialisation and mechanization of cow slaughter through feedlots, and the chemical "enhancements" of beef into toy food with strange properties such as lasting forever and "nutritional" benefits.

However, after reading this article from Scientific America, I'm debating whether to quit beef. Forever. Turns out that the global warming effect of beef consumption is much scarier than I thought. For example, the carbon equivalent emissions of a beef hamburger patty is equivalent to driving a car for 10 miles. Also, in order to produce a kilo of beef, you basically need 10 kilos of crop which can be used to feed much more hungry people for longer time. Raising cows also require more land which contributes greatly to deforestation in developing countries, where meat demand is increasing the fastest. When forests are cut, the CO2 that trees lock up in the ground are released causing more global warming.

Why don't I just quit beef then? Well, as in everything in life there is always another side.

First of all there is locally produced and distributed, humanely treated, organic, grass fed beef at small quantities that are not mass produced, and sold at premium prices (well depicted in Omnivore's dilemma by Michael Pollan). At geogrpahic areas where forests can not be planted I can't see why it shouldn't exist. Secondly there are cultures where the preparation of a particular beef dish is a real art and part of their identity as people, and I respect that.

I guess my conclusion is that unless I face a situation with the above conditions, I quit beef. Forever.

McKinsey is back....version 2

No classes today, hence woke up at 9am and really lazing around...

It appears that due to the financial crisis, companies under the EU ETS will have surplus EUAs of up to EURO1 billion to sell in the market, due to decreased production and demand. Selling of these EUAs in the market is likely to lead to windfall profits as they were allocated EUA permits for free. The situation is shown in this Forbes report. The effect of this sell-off is that carbon prices have plummeted, most recently to EURO11 for an EUA.

There are some points worthy of note in this issue:

1) The surplus and sell-off does not hurt the cap and the environmental integrity of the scheme. The cap is still being met regardless because less fossil fuels are being burnt. In terms of the environment and the atmosphere, it doesn't care how it's done.

2) But windfall profits do bring into question the ambitiousness of the cap.

3) the windfall profits would not be there if the permits were auctioned instead of given away for free by government.

4) Even though there are suplus EUAs, they are being bought. Because EUAs can be banked into the third phased whether they are needed for compliance or not, the price will unlikely drop to zero like the first phase. Companies will likely buy "bargain" EUAs in anticipation that EUAs will be scarce in the third phase, thus pushing prices back up.

5) Some industrials whose existence may be threatened before compliance date 2012 may sell all the EUAs they have, even those they need to comply, especially if they will shutdown by 2012.

On another matter, McKinsey's long awaited and "infamous" cost abatement curve version 2 is here.

Personally I'm not a fan of this curve as it's overused by proponents of cleantech and dare I say academics without seriously thinking through all the intangibles such as incentives, inconvenience of installing new technology and equipment, political lobbying etc. It oversimplies the myriad of factors that need to be considered when talking about switching.

But I'll have a read of it and make some comments later ; p.

Chinese New Year Part III



Part III of Chinese New Year celebrations took place at Wien's uni lodging. Wow food wise it was by far the best potluck I've been to since coming to Edinburgh...Le's stir fry lettuce was unbelievable, I also liked the jellyfish and even just the plain rice! Been eating half a year of pan boiled or microwaved rice and today's steamed rice from a proper rice cooker was simply heaven.


Spoke to Wien's flatmate Rieko today in proper Japanese. Haven't practised for such a long time but came out better today...language is such a confidence thing. Today I felt more confident, and spoke and listened much much better!

I contributed by making Taiwanese fried chicken, which has become somewhat of a specialty now since I got those "secret" spices from cousin Josie. Unfortunately, I stuffed up again the first couple of pieces because the oil was too hot!! But later with Manish's help I could finally work out how to test for the right oil temperature. Simply sprinkle some batter or egg yoke into the oil and if it sizzles and doesn't fall to the bottom, it's hot enough. If it sizzles too quickly and get burnt it's obviously too hot. So logical isn't it!!!!!

Also, though putting in the oven takes away some of the oil, the crispiness of the fried chicken is lost so it's still better to serve straight after deep frying.

All that about fried chicken...

Tuesday 27 January 2009

Air Algae!

Was just chatting to Rahul today about algae as replacement for jet
fuel and after googling I found this:

Wow! Definitely something to be hopeful about. I also found this
nice audio report on the state of the algae market.

Obamanation!!

Wow, today has been a breakthrough, I actually woke up early for the first time this year!!! 7AM to get ready for th 9AM Energy policy class. Woohoo!

Hot off the press this morning is Obama's new CC envoy for negotiations:

http://www.boston.com/news/nation/washington/articles/2009/01/26/todd_stern_expected_as_us_climate_change_envoy/?rss_id=Boston.com+--+Latest+news

A helpful statement by Clinton: "With the appointment today of a special envoy we are sending an unequivocal message that the United States will be energetic, focused, strategic and serious about addressing global climate change and the corollary issue of clean energy,".

This next one may not be so helpful: "No solution is feasible without all major emitting nations joining together and playing an important part."

This sounds awfully similar to the US' stance at Kyoto, and we know what happened there. To compound things further, the head of the envoy is Todd Stern, a senior White House official under former President Bill Clinton, who was part of the negotiation team at Kyoto!! Let's hope that he is brave enough to make the calls this time, 10 years on.

"The time for denial, delay and dispute is over. The time for the United States to take up its rightful place at the negotiating table is here" Stern said.

"We can only meet the climate challenge with a response that is genuinely global," he said. "We will need to engage in vigorous, dramatic diplomacy."

This is a classic politician's line with a get out clause....we will just have to wait and see.

Van Ness Feldman law firm's weekly CC policy is out today:

http://www.vnf.com/news-policyupdates-235.html

Looks like we can be expecting climate change legislation including cap and trade early 2009. This is after Obama's call last week for a $825 billion economic stimulus package which included a total of $77 billion for clean energy. $37.8 billion for energy efficiency, $27.8 billion for renewable energy and $11.6 billion for transportation programmes.


The MF Global weekly CDM and VER report is also out . The situation with CERs is so depressing these days, and it's sad that clean tech projects are being postponed and canceled due to the low CER price and uncertainty facing the CDM post 2012. The VER market however remains "buoyant with consistent trading activity", with vintage VCUs trading at around $6 a tonne. That is surprising.


Also coming from that report was this: "China will receive $2.8 million in financial support from the Asian Development Bank to design and implement a national emissions trading scheme". Wow I never thought China would progress this fast on CC but it shows they are serious. And when China is serious, it gets is done faster and at bigger than anyone else. Plenty to be hopeful from this.

To finish off, more hopeful signs coming from Obama in the Australian today. And even GM and Ford are on board too??

"General Motors said it was “working aggressively on the products and the advance technologies that match the nation's and consumers' priorities to save energy and reduce emissions,” and was ready to work with Mr Obama and Congress."

"The 11 member Alliance of Automobile Manufacturers, which includes Ford and Chrysler, said it was also ready to work with the administration."

Is this still earth I'm living in???





Monday 26 January 2009

Climate Change Policy in Europe

Today's climate change lecture will be in CC policy in Europe, which we've already done with the EU ETS last semester. Hopefully this time around emphasis will be put on the 202020 deal agreed last December and powers of the European Commission to ensure that Europe meets in 2020 targets.

A nice review of the current EU climate change deal can be found at the following link:

http://www.caissedesdepots.fr/?article656

In short summary, the EU has committed to a 20% reduction of GHG from 1990 levels by 2020, and 37% in an international agreement can be reached. All of the permits for electricity utility companies will be auctioned, except for special cases such as Poland who are emerging economies dependent on coal. Heavy industries will see gradual rises in % of permits auctioned (20%-70%), depending on their exposure to foreign competition. There will be caps on CERs allowed into the trading system to prevent the carbon price from falling excessively and to prevent EU companies from "buying" their way out of their obligations.

The deal has been criticised for being too lenient to countries like Poland, and also the inclusion of eastern european states Estonia, Lativia and Czech Republic etc. who are still below their 1990 emission levels (because of the collapse of communism post 1990) makes the actual ambition of the emission cuts questionable...the amount of power that an uncooperative Italy waved around was also farcical.

However, it does look to be a HUGE improvement on Phase I and II with 100% auctions from the utility sector. It probably does need a price floor to ensure a stable price for carbon. This is totally reasonable since the permits will be auctioned anyway, meaning they must have some value. Another breakthrough was the EC taking control of NAP (National Allocation Plan) from the individual member states. This should lesson the perverse incentives of giving one's own country more permits than they need.

On another note, check the following:

http://www.alertnet.org/thenews/newsdesk/LM448772.htm


So a levy of around 2-3 Euros per tonne of CO2 in the EU ETS could raise up to EURO200 billion for a climate change fund, such is the size of the market. It could then be used for mitigation and adaptation for developing countries. How to allocate that 200 billion will be a logistical and political nightmare but let's not go there yet. The crucial question is will this carrot (fund) bring China on board to actually place caps on its GHG emissions as an "emerging developing country", as the EU hopes. My guess is probably not. China is open to being more energy efficient and for the west to help fund its ambitious renewable energy targets. But they are not going to place a cap, especially in current economic tough times where growth has "slowed" from 9% to 7%.

I do generally agree with such a fund as it could be used to provide the funding that the CDM needs to handle thousands of applications per year. Also it should help the least developing countries already suffering the effects of climate change, such as Bangladesh. Further there are some crucial technologies that need special help such as CCS, CSP and cellulosic biofuels (and biofuels from algae) to help it get running at commercial scale all over the world. These initiatives need not only funding but palpable targets and goals.

But equally important is the investment environment that individual EU govts have to make in order to incentivise clean tech. This requires brave policies so that entrepreneurs will take the risk to implement clean tech projects not only in the EU, but all over the world.

Finally, hurray for Obama!!

http://www.theaustralian.news.com.au/story/0,25197,24965380-601,00.html

Sunday 25 January 2009

Kendo and TW Chinese New Year Party!

Trained kendo 4 times this week, and today's one was an intensive sessions with senior and "dedicated" people only. I've been sleepwalking through trainings this year....unmotivated even though there is a competition next month. I myself can't work out why. Sometimes the passion is there, sometimes it's not. A training partner would definitely help.

I've been thinking about certain aspects of my kendo lately. Simple things:

1) cut men and kote-men going forward, not up
2) Chin down in every cut
3) back straight and nice posture all times. No leaning back
4) vary my cutting distance
5) seme straight in not at an angle
6) no blocking
7) oji waza men suriage men, nuki doh, kote suriage men

I realise that by focusing on these things I'm limiting myself and not trying other things. That's the problem with kendo, there's a million things to work on! During training I felt that my kote was getting stronger. However, my doh is still not nidan level, neither is my tsuki. I also need to improve stamina and kiai.

After training, rushed back home and got myself ready for CNY dinner. It was held at a Chinese buffet restaurant and over 100 people turned up! Was very international with people from India, China, Japan, Korea, American and Europe. The food was ok but really not used to outside Chinese food so could only eat one plate. Ice cream was really good, though!

Really enjoyed the Taiwanese "feel"- the chaotic, fragmented atmosphere, the mahjong, the KTV, and the humour of the conversations. In fact, I felt that everyone was so similar, their thinking, the humour, the conversations. Guess that why they can form such close knit "families" away from home. Was especially great to catch up with Fang and his lovely wife, they are like my Taiwanese family here : ).

So, Happy Chinese New Year to all!

Lazy Sunday carbon updates!


Last night's Chinese New Year party at Stanley's apartment was great. Tried out my Taiwanese fried chicken....first couple were not entirely convincing but the rest was good enough for most
; p. Thanx to everyone for being my guinea pigs! Also met some nice ppl including a HK girl who seemed really interested in climate change issues, which resulted in me blabbering on quite a bit. Occupational hazard...oops. The Frenchies were lovely as usual, and really enjoyed the card game "heart attack". Host of regulars were there Torsten, Kathy, Xi Lian, Chet, Sze Chern. I also met Stanley's friend Cynthia and Ray from MSc economics who I hadn't seen since orientation last year!



Woke up today, checked the news and a couple of intersting articles to share:

http://www.miamiherald.com/news/americas/AP/story/869100.html

I knew deforestation was a problem, but the stats are truly mind boggling. At BAU, we're talking about one and a half American football field being cut down per minute???!!! How do you even cut that fast...at 400 million tonnes of CO2 per year released it is the biggest carbon issue for Brazil to tackle. Appears that economic activity, more than law enforcement, is the main factor influencing deforestation rates and it's understandable. No matter how much law enforcement is put into place, where there is demand and money to be made officials will be corrupt and forests cut down. The real challenge is to create new profitable activities that do not require land-use. And that is a seriously hard question to answer.

http://www.smh.com.au/news/environment/its-big-expanding-and-has-a-carbon-footprint-to-match/2009/01/23/1232471590774.html

OK so it's no longer a secret. The IT and computing industry is a huge emitter of CO2, on par with aviation in fact (2-3% of world emissions). Recently there were also reports that a google search emits as much CO2 as boiling a cup of tea. Electricity use will also rise with the switch to the digital age, with TVs nowadays consuming at least 3 times the energy of its predecessor analogs.

In saying though Internet does save us time and also from travel. Instead of driving to my local shop to buy goods I can simply order online over the Internet. Studies need to be down on the CO2 savings from Internet use, and how significant that is in the overall picture. My guess is that the CO2 savings are not significant.

The only way out of this problem is....again to consume electricity from renewable sources to run the huge servers at Google, Yahoo! and Microsoft's data centres.

http://www.ajc.com/biz/content/shared-gen/nyt/business/c9b24aaf-8ae8-445c-8c96-8bef358d43d7.html

The Europeans want the US to join in carbon trading, presumably under a compliance system where credits are "fungible" between the different markets. And hopefully this would incorporate the Australian, NZ and Canadian cap and trade regimes when they come into force as well.

2 things. Caps have to be stringent enough across the different regimes to ensure a high enough carbon price over the long term to incentivise switching to cleaner energy. Secondly permits have to be auctioned, or a reasonable price floor across the board be implemented, for this to work.

However the scheme does look awfully complicated and it's safe to say no one knows how it could possibly turn out, and whether the US will accept credits from the third world since they've been so critical of the CDM.

http://www.climatechangecorp.com/content.asp?contentid=5911

Finally this nice article outlines what we should realistically expect from Obama in terms of CC policy over the next 12 months. I guess the mood can be summarised as cautiously optimistic.

Saturday 24 January 2009

IEA Energy Outlook 2008

Thought I'd share this nice presentation from Fatih Birol, Chief
Economist of the IEA. Provides a great update on the energy situation
and the impacts of financial crisis on clean tech.

Food for thought: Birol says that in order to stabilise at 450ppm,
half of the current global wind capacity needs to be additionally
built EVERY year, and 20 new nuclear power stations (or presumably
replacing coal fire stations with CCS) needs to be built EVERY year,
until 2030 I think. That is some pretty scary stat.

http://uk.youtube.com/watch?v=m377Is4tGF0&feature=channel_page

Friday 23 January 2009

Obama's energy team

Just wanted to respond to a classmate's assertion that Obama's climate change team is simply a recycling of former Clinton staff and will make no difference. This is simply false.

Stephen Chu, the new Secretary of Energy is a Nobel physics laureate at the University of California Berkley and has not been involved in any previous adminstrations. For White House science adviser, Obama chose John Holdren, a Harvard University expert on climate change.

Though some candidates have been around, it shows their experience. It's the position and area of responsibility that is important here. For example, former New Jersey environment chief Lisa Jackson now heads the U.S. Environmental Protection Agency and Nancy Sutley, deputy mayor of Los Angeles, will run the White House Council on Environmental Quality. These are people with proven track records of speaking out on climate issues being put in positions of power.

Same goes for Carol Browner, who headed the Clinton administration's EPA, who will now take a new White House position coordinating policy on energy, environment and climate change.

More importantly, Obama now steers the ship and he chose his first speech as President elect to be on climate change, committing in front of the world to a return to 1990 emission levels by 2020. That is a huge commitment considering the growth of emissions between 1990-2009. If Obama brings that to the table at Copenhagen, the Europeans would grab it and run. Done. US on board.

For me, there is no doubt that a seachange has ocurred in US Climate Change policy compared to Bush's deliberate ignorance over the last 8 years. To state that Obama "brings nothing new" is cynical in the extreme and unhelpful in my view.

Technology Transfer

So we had our lecture today on technology transfer under the UNFCCC. A very basic overview of what technology transfer means, the instruments created under the Global Environment Facility. An almost heated exchange between an Indian Chevening fellow and the lecture over the corruption and undemocratic nature of the World Bank and the GEF. He made some valid points but went over the top since we all know that the World Bank and GEF have vested interests and the lecturer wasn't trying to defend them anyway. Then he went on to attack the entire Obama energy team saying they are all recycled people, which is not true because Steven Chu has never been involved in politics before.

One point that the lecture didn't cover in good detail was the complexity of the "environment" for promoting technology transfer. Western governments can't just turn on the technology transfer tap and, before you know it, developing countries have all the know-how they need for low carbon economies.

This is made clear in this report on tech transfer by a French think tank called CERNA. You can download it at

http://www.cerna.ensmp.fr/index.php?option=com_content&task=view&id=192&Itemid=288

Basically they've tried to analyse the extent of tech transfer from clean tech related patent filings all over the world. The gist is that clean tech patent filings have increased significantly since Kyoto, but technology has not necessarily been exported to developing countries. 75% of clean tech patents filed in 2 countries or more are still between developed countries only. Only 18% of patents exported have been north-south.

My understanding is that even if governments of developed countries want to transfer technology to developing countries, their hands are tied because the IP rights of technologies are mostly held by private actors who will only file patents, invest and commercialise technologies in another country if it's commercially feasible and profitable. So it's not a matter of western governments turning the "technology tap" on, so to speak.

Either governments have to offer carrots (low interest rates, funds) to clean tech companies to invest in developing countries, or create an attractive and profitable investment environment, something in the lines of the CDM (but much larger scale and more efficient) where proceeds from CERs can compensate for the initial capital outlay.

A possible solution was proposed by James Cameron in his talk on post-Kyoto, where he said clean tech investment would be much more efficiently implemented at the large scale we need, if the developed world embraced truly ambitious cuts e.g. 50% of 1990 levels by 2020, and scrap the additionality requirement in the CDM and scale up its administration to handle more applications. The huge cuts that are required means that there will be enormous demand for CERs, which will stimulate more and more large scale investments in the developing world at a scale we need to stabilise at 450ppm. Though environmental integrity will not be examined on a case by case scenario, the theory is that the attractive investment environment will create a scale so large that the carbon reductions more than compensates for the lack of the additionality requirement. This argument is very persuasive to me at the moment.

Carbon vantage - first post!

So, I've finally decided to use my free-time more efficiently by blogging about carbon management! And also sharing experiences of my student life in Edinburgh.

A quick background intro to myself. My name is 許銘均 (Ming-Chun Hsu, John), 26, Taiwanese born Australian currently studying a Masters of Carbon Management at the University of Edinburgh. I will be posting some nice links and articles relating to climate change and carbon trading, whilst also giving some of my insights and commentary, if your lucky! Originally I had done this on Facebook, which turned out to be more like spamming other people's accounts.

I'll also put up things relating to my life as a student, and my other interests such as kendo, football, basketball and books.

So...here we go!!!