PICS CLIMATE NEWS SCAN – 27 SEPTEMBER 2011
- Keystone XL pipeline safety standards not as rigorous as they seem
- The old model isn’t working: Creating the energy utility for the 21st century
- Deep oceans can mask global warming for decade-long periods
The PICS News Scan is produced by ISIS at the Sauder School of Business in partnership with the Pacific Institute for Climate Solutions (PICS). To be added to the News Scan distribution list or to provide content feedback and/or suggestions about interesting news items, please email: email@example.com.
RESEARCH THEME I: THE LOW CARBON EMISSIONS ECONOMY
Commercial interests driving GHG emissions reduction at world’s largest companies
14 September 2011. The global companies with the sharpest focus on climate change have rewarded their investors with double the average return of their peers. This is the key message from the Carbon Disclosure Project (CDP), a UK-based organization, which released its annual Global 500 report on September 14. The CDP challenged the 500 biggest companies in the world by market capitalization to reveal detailed information about their carbon footprints and the actions they are taking to confront and adapt to global warming – 404 companies (81%) responded. The CDP then compared the total financial returns between January 2005 and May 2011 of the companies identified as “carbon performance leaders” against the average of all 500 in the sample. The leaders generated a return of 86% compared to the average of 43%. This year’s report also found that, for the first time in the ten year history of the survey, the majority of companies surveyed have climate change actions embedded within their business strategy: 68% compared to 48% in 2010.
There is increasing pressure for companies to create policies on disclosure about climate change liabilities. Under the Western Climate Initiative (WCI) cap and trade scheme, facilities that emit more than 10,000 tonnes of greenhouse gases annually will have to report on their emissions. However, a case can be made for the disclosure of emissions in BC extending to companies that are responsible for emissions, but do not necessarily produce them directly (i.e. their indirect emissions, supply chains, product use etc.). In addition to providing information on their emissions profiles, such disclosures will help BC companies understand the risks and opportunities they face in relation to climate change. Existing documents and guidelines are available that provide corporate emissions accounting, including up- and downstream emissions protocols (see the Greenhouse Gas Protocol).
Keystone XL pipeline safety standards not as rigorous as they seem
September 19, 2011. According to the National Resources Defense Council, only 12 of the 57 regulations set by the Department of Transportation to ensure the safety of the Keystone XL pipeline go above and beyond current safety standards. Opponents of the pipeline are concerned that regulators have not gone far enough in mandating safety standards and regulations to protect waterways and natural heritage areas vulnerable to spills, and that the vast scale of oil sands development resulting from the pipeline will spell an end to any hope of keeping global warming to less than two degrees centigrade. The proposed pipeline would ship diluted bitumen from Canada’s oil sands a distance of over 1,700 miles to the southern US for refining. US President Barack Obama is under considerable pressure to block the project.
If the pipeline is built it will have a direct impact on Canada’s economy, national GHG emissions inventory, and other proposed pipelines meant to transport bitumen from Alberta’s oil sands. BC is currently facing similar questions in its evaluation of the proposal by Enbridge to connect the oil sands with oil tankers on the west coast of BC, shipping their cargo to markets in Asia. Like the Keystone XL pipeline, the Northern Gateway project will cross over 1,200 km of mostly BC wilderness, transporting bitumen to the coast and bringing natural gas to the tar sands. According to a Greenpeace campaign, the oil sands and pipelines are the world’s largest ticking carbon bomb and, according to Greenpeace, the creation of these pipelines will release enormous amounts of carbon into the atmosphere, prompting irreversible climate change. What is certain is that both the oil sands and pipelines are going to attract increasing opposition from environmental groups across North America over the coming months and years.
RESEARCH THEME II: SUSTAINABLE COMMUNITIES
The old model isn’t working: Creating the energy utility for the 21st century
September 14, 2011. A recent report by the American Council for an Energy-Efficient Economy (ACEEE) identifies an important conflict of interest when an energy utility’s financial objectives are at odds with customer energy efficiency programs. Traditional utility rate programs dictate that utilities generate profits by selling more energy, while conservation programs are aimed at just that, conservation. The ACEEE argues that utilities will avoid ‘funding and the implementation of energy-efficient programs’ unless regulatory changes are put in place to create new business models and eliminate the conflict between ‘saving energy and earning profits’. One of the key regulatory changes is the decoupling of energy sales from profits, in addition to sharing the benefits of energy savings with utilities and putting financial incentives in place for performance targets.
At BC Hydro, energy rates and conservation are partially decoupled, in that each year they are set based on a breakeven or revenue neutral model. Rates are set to allow BC Hydro to recoup costs for capital and operating expenses, while the Power Smart campaign aggressively promotes energy efficiency. An interesting consideration for energy utilities in BC and elsewhere in Canada is that energy conserved domestically can be sold in the US, often at higher prices if it is hydro. When viewed through a continental lens, BC’s clean electricity exported to the US often displaces higher carbon generation, so the net impact on GHG emissions may be positive.
RESEARCH THEME III: RESILIENT ECOSYSTEMS
Deep oceans can mask global warming for decade-long periods
September 19, 2011. A new study published in Nature Climate Change shows oceans absorb heat in ways that can reduce the rate of global warming and mask some temperature impacts for as long as a decade. These findings are significant because deep ocean heat storage could help explain periods when global warming has slowed, even though satellite data show no change in the amount of energy trapped in the Earth’s atmosphere. According to the study, that “missing heat” is hiding out in ocean waters at depths of 1,000 feet or more. The study also predicts that the continued warming of the climate will be punctuated by brief periods when the rate of warming slows, stops or even reverses, slightly.
This study is important because it shows the complexity of the Earth’s linked atmospheric, terrestrial and marine systems. It also demonstrates the problems of using short-term snapshots of temperature data to guide climate policy. Studies like this show that policy is best formulated based on long-term evidence, which should lead to long-term planning and action.
Minimizing extinctions in a changing climate
September 18, 2011. A new study published in Nature Climate Change presents new funding models to help reduce rates of extinction resulting from climate change. The study is the first to develop a decision-support model that incorporates both ecological and economic information to guide conservation investment in the face of a changing climate. Although extinction rates are predicted to increase under climate change, there is little advice on how money could be best spent to minimize these impacts. The authors combined ecological predictions with an economic decision framework to prioritize conservation activities, and tested the model on one of the world’s most biodiverse and highly threatened ecosystems; the South African fynbos that occupies part of the Western Cape region.
This is a very complex study, but it contains some findings extremely relevant to the province. There are more than 1,300 endangered and threatened species in BC, some of which are directly threatened by climate change. The study demonstrates that optimal investment is nonlinearly dependent on available resources, making the choice of how much to invest as important as determining where to invest and what actions to take. The study emphasizes the importance of a sound analytical framework for prioritizing adaptation investments. Integrating ecological predictions in an economic decision framework will help support complex choices between adaptation options under severe uncertainty.
RESEARCH THEME IV: SOCIAL MOBILIZATION
Community buy-in strengthens support for waste facilities
September 17, 2011. The public can be willing to support local energy-from-waste facilities, when presented with information on risks and with cash benefits. A recent survey in the UK found that, when informed about restricted landfill availability and when given transparent information around impacts such as pollution and fumes, the majority of participants supported the creation of a local energy-from-waste facility. In terms of financial compensation, personal incentives – such as utility bill or municipal tax discounts – carried more support than contributions to a community amenity fund managed by local leaders.
No neighborhood-scale energy-from-waste facilities are planned in BC, but two larger facilities are under development. One facility for Metro Vancouver was blocked last summer, but was recently approved underMinister Terry Lake. A facility at Gold River on Vancouver Island is also planned. As grid electricity in BC is essentially free from greenhouse gas emissions, any such facility would be used to produce heat (displacing natural gas) and would sequester carbon dioxide from plastics burned on site. While the actual results of this survey will be very locally specific, the report usefully outlines the methodology and questions used in some detail, as well as direct quotations from respondents. This should help policymakers and advisors in BC prepare similar surveys to assess public awareness of other issues and technologies.
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