COP15: Gassing 15 years on Carbon and Climate Change


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You cannot control emissions by merely penalising.
CAP & TRADE will only benefit the Wall Street.It will also hurt the energy industry and raise your energy bills phenomenally . STOP chasing GASSES . Build technologies that DO NOT GAS. GLOBALIZE Mass produce CHEAPclean energy Support Direct Funding of SOLAR ENERGY, WIND POWER and RAINFOREST PLANATION.

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COP15: Gassing 15 years on Carbon and Climate Change

  1. 1. COP 15: Gassing 15 years on Carbon Economy... Climate Change : Positive Solutions Series CE81 : The Perils of Carbon Trade
  2. 2. It is futile to chase gasses !! Both Carbon Cap & Carbon Tax are damaging. They are negative solutions and do little to stop climate change
  3. 3. Negative solutions can never deliver . Cap & trade or Cap & tax are penal economic solutions that only tells you What not to do ?
  4. 4. We need Positive solutions today!! <ul><li>Needed positive technology solutions to the worlds energy crisis, that tells you </li></ul><ul><li>What to do ? </li></ul>
  5. 5. Carbon Cap or Carbon Tax <ul><li>It does not address three Key concerns : </li></ul><ul><li>Feasibility </li></ul><ul><li>Scalability </li></ul><ul><li>Efficiency </li></ul>
  6. 6. Feasibility <ul><li>The feasibility of running fossil fuel units with high carbon price or carbon tax has not been correctly investigated. </li></ul>
  7. 7. Scalability <ul><li>The overhead costs of running and monitoring a global carbon economy with continuity and scalability has not been properly examined. </li></ul>
  8. 8. Efficiency <ul><li>The fact that direct funding of renewable energy will be always cheaper , quicker and more efficient than indirect methods of disputable cap and trade solutions have been clearly ignored. </li></ul>
  9. 9. Feasibility & Scalability Questions : What is the prevailing Carbon Price ? What must it be to reduce emissions ? Is such pricing feasible & sustainable? Is the Carbon economy scalable ?
  10. 10. Carbon Price Reality !!! <ul><li>Carbon Prices in </li></ul><ul><li>U.S. during 2008-2009 </li></ul><ul><li>auctions average only </li></ul><ul><li>$ 3.3 / Metric Ton </li></ul><ul><li>Ref: COP15: Bullshitting 15 yrs on </li></ul><ul><li>climate change http:// </li></ul>
  11. 11. Low Carbon prices in U.S. RGGI auctions 110 million Carbon Credits in US over one year at a total price of USD 366 million in 4 carbon auctions held for 10 states. Ref: COP15: Bullshitting 15 yrs on climate change http://
  12. 12. Low volumes in European auctions <ul><li>Under the EU – ETS Scheme the first Carbon auction in Europe held in November 2008 yielded only GBP 54 million with a mere 4 million allowances sold at a unit price of 13.6 GBP per unit. </li></ul><ul><li>Ref: Telegraph report </li></ul>
  13. 13. Few carbon buyers in British auctions, only 7 % of allowances auctioned 93% of the allowances were given away free by the British Government , simply because there were no takers for Carbon and critically important units that could not be shut refused to buy Carbon As a result of this only 4 million credits went under the hammer. Ref: Telegraph report
  14. 14. Besides Carbon trading is open to frauds <ul><li>Since a credit purchased in any country can be sold anywhere, it leaves room for frauds. </li></ul><ul><li>First arrests in Britain of 6 persons in carbon fraud of 38 million British Pounds for evading VAT reported on the 20 th August 2008 </li></ul>Ref: Telegraph
  15. 15. Carbon trading is also susceptible to speculation that may hurt utilities . <ul><li>Carbon trading will hurt the liquidity starved energy industry who don’t have deep pockets. </li></ul><ul><li>Most Utilities will not lock funds in auction but will buy small quantities from spot markets, even if it is at higher rates. These market prices will be eventually passed on to consumers as per the agreements of scheduled distribution of Utility companies. </li></ul>
  16. 16. Wall Street will run the Carbon world <ul><li>Carbon speculation will only fatten the Wall street big investor who will buy low due to deep pockets at the Carbon auctions and then hoard and sell high to needy utilities . </li></ul><ul><li>The utilities will ultimately have to depend on expensive spot market purchases leaving them with lesser resources to modernize and adopt green practices. </li></ul>
  17. 17. Wall Street will ruin the Carbon world <ul><li>It will also enable setting up of the Carbon Casino, like the CDS in housing mortgage derivatives thus bringing huge speculative profits for the Wall Street during boom time but disastrous losses for the Global community at crashes. </li></ul>Carbon & Energy Derivatives ?
  18. 18. Efficiency & cost control Capping carbon has its costs. Trading Carbon has its costs. Channeling Carbon funds to clean energy has costs.
  19. 19. But users don’t want carbon They want low cost clean energy For only low cost clean energy development is user friendly and can stop climate change. So why not cut the carbon talk & fund clean energy directly, efficiently, at a lower cost.
  20. 20. Carbon trading Governance is expensive and inefficient <ul><li>Since it is multi-lateral trading, the U.N. machinery will handle several aspects of the cap and trade regulatory mechanism. </li></ul><ul><li>This will cause operational delays and a high cost governance with U.N.’s legendary overhead costs. </li></ul>
  21. 21. Users want to know…. <ul><li>Will the carbon </li></ul><ul><li>economy ever </li></ul><ul><li>break even ? </li></ul>
  22. 22. Carbon trading solutions are both formative and expensive Being a grassroots concept it will also have huge infrastructure cost with the NYMEX, Chicago Exchange or London Climate Exchange plc and the software vendors building the carbon trading solutions from zero. The formative years will need multiple solutions for testing the workability as its scope is very wide ranging from industrial to forest Carbon valuations
  23. 23. Carbon economy is still in experimental stage and may undergo costly changes. Besides the effect of carbon cap on emissions is still hypothetical and the trading mechanism is still based on elementary understanding of the subject . Forest carbon cap is still disputable and under scrutiny.
  24. 24. Each nation must have compatible infrastructure which is expensive <ul><li>Each of the nations in the cap & trade ambit will also have to invest millions of dollars for system & infrastructure integration without commensurate returns. </li></ul><ul><li>To integrate with the carbon economy your investment will be high regardless of volumes, to ensure compatibility with global system. </li></ul>
  25. 25. So why is Carbon Cap the talk of town? <ul><li>But if capping or taxing carbon is so very problematic, why is everybody trying it </li></ul><ul><li>How did the Carbon Cap theory come about and how did it become everybody’s darling. </li></ul>
  26. 26. A novice economist proposed cap & trade <ul><li>The Cap & Trade theory was first proposed by a student of economics Mr. Thomas Crocker in1966 who had no industrial experience & had not even finished his thesis at Wisconsin. </li></ul><ul><li>Proposed at a Washington Conference in absence of pollution data of Fertiliser plants of Florida that was to be produced by him, Crocker suggested this unique theory of penalising polluters that heralded an unprecedented controversy amongst nations over the next 40 years. </li></ul>
  27. 27. Protectionist groups made it “The Green Bible.” <ul><li>Protectionist groups used it and quickly leveraged it reduce imminent penalties to violators, and also to stall direct U.S budgetary investment in clean energy, proposing a dicey Cap & Trade funding. These theories were pumped up during the early Bush era of 60s </li></ul><ul><li>The lobbies were now killing </li></ul><ul><li>2 birds with 1 stone </li></ul>
  28. 28. Cap & Trade Creators now debunk own theory <ul><li>40 years after they proposed the Cap & Trade Theory the creators admitted their mistakes </li></ul><ul><li>In 2001 Mr. Dales the author of ‘pollution property and prices’ admitted flaws in Cap & trade theory . </li></ul><ul><li>Last month Mr. Crocker the creator of cap & trade admitted to WSJ that it was a mistake </li></ul>Ref: WSJ:
  29. 29. Why Asia is hesitant… <ul><li>Chasing gas will be always expensive </li></ul><ul><li>Western nations have surplus to experiment </li></ul><ul><li>They do not have billions to feed & clothe </li></ul><ul><li>They have already built their infrastructure and enjoy funding experimentation, research& development that increases profitability & value addition and not efficiency </li></ul><ul><li>or low cost development. </li></ul>
  30. 30. What Asia doesn’t trust Politics in Western nations are influenced by their lobbies be it the oil or the investment community & devise expensive solutions to protect those interests. They have adequate energy availability and have little stake in developing clean energy cheaply,& will keep trying indirect solutions that bring profits for its lobbies
  31. 31. Why Asia is scared <ul><li>China , India and other Asian nations are savings based economies, while the American economy is today debt oriented & based on financial trading & speculative investment. </li></ul><ul><li>Why should Asia pump carbon savings into Wall Street, NYMEX or Carbon Exchange plc where poor regulatory mechanism is a order of the day and there is no respect for a transparent world economic order. </li></ul>
  32. 32. Macro level Objectives <ul><li>No provision in Carbon auctions or Kyoto pact stipulates that Carbon funds shall be essentially used for funding clean energy. </li></ul><ul><li>Clean development is not mandatory. </li></ul><ul><li>Kyoto’s main international offsets scheme, the Clean Development Mechanism </li></ul>
  33. 33. Objectives & Reality <ul><li>UNFCC Claims that 2.9 billions of tones of Co2 could be reduced from 2006 -2012 by implementing Kyoto accord & Carbon economy could yield trillions of Dollars. </li></ul><ul><li>CAN IT REALLY DELIVER ? </li></ul><ul><li>Total global carbon revenue since the year 2006 is </li></ul><ul><li>less than $ 1 billion </li></ul><ul><li>GHG & Emissions show marginal increase since start of the Kyoto implementation period 2006 </li></ul>
  34. 34. Wishful thinking <ul><li>The average price of Carbon auctioned last year in Europe & U.S. was less than $5/Mt </li></ul><ul><li>As per CERA Estimates if Carbon prices increase to $ 60/Mt emissions will drop 22% by 2030 </li></ul><ul><li>As per CERA Estimates if Carbon prices increase to $ 100/Mt emissions will drop by 60 % by 2030 </li></ul>
  35. 35. Carbon Prices to Emission ( objective & reality graph)
  36. 36. Can energy producers bear high Carbon cost Let us say the Kyoto & CERA’s pipe dream comes true !! Carbon prices rise to $60/MT or $ 100/MT What then will be the cost of energy ?
  37. 37. Can consumers pay the cost Can you pay for it ? Will you ever allow it to happen? Is wishful thinking enough to stop climate change?
  38. 38. See what You will pay To understand how it will pinch your pocket see this Case Study of Allegheny Energy of Pittsburg, Pennsylvania, U.S. a 10,000 MW a large Coal fired utility, that is Involved in emission cases in 3 states.
  39. 39. Allegheny Energy of Pennsylvania <ul><li>Producing 9730 MW , </li></ul><ul><li>Coal consumed 19 million tonnes per annum </li></ul><ul><li>4000 employees, major job provider in 3 states </li></ul><ul><li>Lowest generation cost. Sells both regulated & unregulated power. </li></ul><ul><li>Co2 emissions 44,000,000 tonnes per annum </li></ul>
  40. 40. Allegheny Energy of Pennsylvania <ul><li>Total Revenues $ 3Bn /year </li></ul><ul><li>Co2 emissions 44,000,000 tons per annum </li></ul><ul><li>So Allegheny will pay and pass you the Bill for </li></ul><ul><li>Carbon Price @5/Mt = $ 220 million/p.a </li></ul><ul><li>Carbon Price @60/Mt = $ 2.64 Billion/p.a </li></ul><ul><li>Carbon Price @100/Mt = 4.40 Billion/p.a. </li></ul><ul><li>Will you pay billions for cap ? </li></ul>
  41. 41. Even if you pay for it !! <ul><li>People have paid happily for TARP & Bailouts </li></ul><ul><li>Let us assume they also pay for Carbon Cap. </li></ul><ul><li>Does it solve the climate change problem ? </li></ul><ul><li>No ! </li></ul>
  42. 42. The emission story is never ending Because after Carbon there is GHG. After GHG there is mercury After mercury there are toxic releases And the emission list goes on happily ever after!!!
  43. 43. Let us see the Allegheny figures to find some more gasses to chase ? <ul><li>Nitrogen Di-oxide & Sulphur Di-oxide produced at Allegheny Energy increased by 8% during 2005-2007 </li></ul><ul><li>Co2 generation rose by 3 % from 2005 to 2007 </li></ul><ul><li>Mercury produced went up by 15% in 2005-07 </li></ul><ul><li>Toxic release inventory went down by 10% </li></ul>
  44. 44. But are these the only gasses that affect climate change ? Well not really if you understand the core basics of industrial development worldwide. There are over 600,000 pollutants that cause widespread damage with a few million also ran’s. We look next at CFC the refrigerant, that was the popular gas chase of the seventies, as it harmed the ozone layers. See list of the alternatives to CFC (not all ratified) by a single Chinese producer. Needless to say that COP 15 or the IPCC or any cap & trade scheme cannot chase all.
  45. 45. Few Refrigerant substitutes ( some untested) to CFC once considered harmful to Ozone layer in the 70s 0.06 42030b50b Refrigeration at hi-temp 3.15 -9.2 CH 3 CClF 2 R142b 0 30b50b R12 5.99 -24.7 CH 3 CHF 2 R152a 0 30b50b R22 17.02 -53.15 CH 2 F 2 R32 0.02 30b50b R11/R113 0.96 27.85 CHCl 2 CF 3 R123 0.02 30b50b R22/502 3.86 -10.95 CHClFCF 3 R124 0 30b50b R22/502 13.71 -48.45 CHF 2 CF 3 R125 0.05 42080024b R12 6.8 -32.4 R22/600a/142b R406A 0 42080024b R22 12.6 -46.1 R125/143a/134a R404A 0 42080025b R22 16.64 -52.7 R32/125 R410A 0 42080025b R22 11.74 -43.9 R32/125/134a R407C 0 42030b50b R12 6.65 -26.1 CF 3 CH 2 F HFC-134a ODP Packing(kg) Substituted Products vapor pressure (25°C)bar B.P(°C) Formula Name
  46. 46. What to monitor, whom to catch? The biggest problem with emissions is that it has hundreds of forms, changing by the day, with new technological advances and adaptations One of the largest sources of emission is from the unregulated rural Areas of Asia and Africa that is till date considered uncap able and un-taxable and even difficult to classify or quantify..
  47. 47. Moral of the story <ul><li>Don’t chase clouds </li></ul><ul><li>Don’t chase gasses </li></ul><ul><li>Don’t chase carbon </li></ul><ul><li>You can never cap carbon by penalizing </li></ul><ul><li>You can never tax carbon and reduce emission </li></ul><ul><li>And if you want to do it, prepare for candlelight dinners…….. </li></ul>
  48. 48. <ul><li>What then do we do ? </li></ul>
  49. 49. Stop talking Carbon Rubbish ! <ul><li>Fund </li></ul><ul><li>Clean Energy </li></ul><ul><li>Direct </li></ul>
  50. 50. Find a positive solution ! . Will emissions ever drop if clean energy investments are not made today? No ! You have to first invest in clean energy and then expect emissions to fall.
  51. 51. Let’s see what the experts say <ul><li>Global consultant Accenture in its climate change report 2009 says the onus is on U.S. and other developed nations to cut emissions by 90% plus to reach per capita stabilization levels. </li></ul><ul><li>Norwegian Institute Of Science & Technology research indicates that there is a strong dependence of CO2 emissions on wealth. With a doubling of per-capita expenditure, the CO2 emissions from fossil fuel burning and industrial processes increase by 81% . Biggest offenders are </li></ul><ul><li>Individuals who are big spenders. </li></ul>
  52. 52. Excerpts of data & analysis as in Accenture Report “ The stabilisation challenge is massive and is not well articulated by policy makers, nor well understood by business” The USA would have to reduce current emissions by 95% and the UK by 90% to reach per capita stabilisation volumes What can you currently get for your 1 tonne of CO 2 per year? <ul><li>Source: Accenture analysis </li></ul><ul><li>Data Sources and assumptions </li></ul><ul><li>Compact car emissions of 0.2 kg CO 2 per km </li></ul><ul><li>Coal station emissions of 900kg CO 2 per MWh </li></ul><ul><li>40 inch plasma television power rating of 400watts, not left on standby </li></ul><ul><li>Typical time to boil 3kw kettle = 3 minutes </li></ul><ul><li>CO 2 output from fruit inter-continental importation – UK Dept for Transport </li></ul><ul><li>Return flight based on 11,000km per tonne CO 2 </li></ul>Per capita energy related CO 2 emissions for selected countries and regions - 2004 0 5 10 15 20 25 USA North America Germany UK Eurasia Europe Global average China Central & South America Brazil Stabilisation level Africa India Tonnes CO 2 per capita per annum Return flight from New York to London (5560 km/3455 miles apart) or Drink two cups of tea a day and eat 0.5kg of fruit imported by plane a week or Sit in the dark and watch your digital television for eight hours a day or Stay at home and run four 100 watt light bulbs for 8 hours a day for a year or Drive a compact car for 5,000km (2700 miles)
  53. 53. You can’t expect miracles to happen. <ul><li>Is it possible for U.S. and U.K. to reduce emissions by over 90 % as Accenture suggests </li></ul><ul><li>Improbable </li></ul><ul><li>Is it fair to ask them to do so? </li></ul><ul><li>No….Not unless they are shown how to do it through a positive profit plan </li></ul><ul><li>That is cost effective, global & has mass appeal. </li></ul><ul><li>That is feasible, scalable and efficient . </li></ul>
  54. 54. NTNU says big spenders have largest footprint
  55. 55. Wealth and Responsibility <ul><li>“ The emissions of other greenhouse gases, primarily methane and nitrous oxides, increases less strongly with wealth, because they are mostly associated with food production. We see that for poor countries, food is the most important consumption category, while for rich countries, mobility, shelter, and the consumption of manufactured goods become more important “ says the Norwegian research. </li></ul><ul><li>The NTNU graph shows exponential rise in carbon footprint as personal expenses rise from $10,000 p.a to $ 100,000 p.a plus </li></ul>So can we tax the Rich ? … Improbable.
  56. 56. Emissions from Coal accounts for half of C02 but provides critical sustenance
  57. 57. Micro level happenings for coal <ul><li>No significant reductions observed in major coal fired power, steel and cement plants. </li></ul><ul><li>Increase of GHG observed at plant levels </li></ul><ul><li>Increase of land and water based toxicity like effluents containing mercury, arsenic and other toxic chemical substances. </li></ul>
  58. 58. The dilemma !!! Coal Power muzzles its way through in absence clean energy of alternatives !!! Emissions peak. You can’t stop coal…you can’t cap carbon… You can’t pay a kings ransom for energy You must not touch clean coal CCS as it is rubbish. Can you simply switch off.? Improbable.
  59. 59. Top 10 Total Emission & Energy Consumption Total Emission Data has been adopted from Norwegian Institute of Science & Technology Carbon Footprint Data released in 2009 while total population and energy consumption figures are from World Bank data which is updated by them up to year 2005
  60. 60. The haves & the have not syndrome Three of the 10 nations India, China, Brazil have very moderate per capita emission as well as low per capita energy consumption U.S. on the other hand is the biggest consumer in both areas with 25 times the energy and the per capita emission levels as India and even twice the levels of U.K. or France.
  61. 61. Developing nations need energy: You can’t stop that happening. <ul><li>U.S. wants India, China, Brazil to accept the same standards as its own self, for emissions and carbon cap though it has taken no significant steps in the last 15 years for emission reduction and capping solves no problem. </li></ul><ul><li>Is it possible for developing nations to really implement reduction even if politicians accept the clauses on paper. </li></ul><ul><li>Improbable </li></ul>
  62. 62. So what then is Probable ? Stop chasing carbon ! Develop low cost clean energy by direct financing How ?
  64. 64. Only globalization can mass produce clean energy & stop climate change <ul><li>Apply the 4 forces of globalization </li></ul><ul><li>Enterprise </li></ul><ul><li>Technology </li></ul><ul><li>Capital </li></ul><ul><li>Markets </li></ul>
  65. 65. The 4 forces of Globalization <ul><li>Combine the 4 forces, the competitive entrepreneurship skills and markets of Asia with the technology and capital of the West to create mass produced </li></ul><ul><li>low cost clean energy solutions. </li></ul>
  66. 66. How ? <ul><li>Watch for its release in October 2009 </li></ul><ul><li>“ Cost reductions and positive solutions” for clean energy using t he 4 forces of Globalization CE -91….onwards </li></ul>
  67. 67. Others to follow in the climate change positive plan “clean energy” series CE 21…… onwards “Solutions in solar energy” CE 41……. onwards “Solutions in rainforest plantation” CE 61…….onwards “Solutions in wind energy” CE 81…….onwards “The perils of carbon trade” CE91……. onwards “ Cost reductions and positive solutions for clean energy and climate change initiatives to make it a profit plan.”
  68. 68. Our references & acknowledgements Economy to Ecology Our goal is to help promote clean, safe and better practices in economy and ecology worldwide. Balanced, efficient and a little more sustainable. Read more in : Amazon Kindle Blog : Ecothrust Accenture Report on Climate Change Allegheny Energy Data from Allegheny website CERA Reports on Carbon Economy Kyoto agreement & Data / UNFCCC & COP Data Norwegian Institute Of Science Report Our Previous presentation on CE-01 Telegraph U.K. and Wall Street Journal
  69. 69. Other Presentations by User Business Risk Case Study – Ba 33 Climate Change Positive Solutions Series CE-01
  70. 70. Other presentations by user Business Risk management Series Business Risk Case Studies Ba31 Business Risk Case Studies Ba32
  71. 71. Authors Note <ul><li>The Clean energy positive plan series is an elaborate in depth study in the feasibility, scalability and efficiency of major solutions </li></ul><ul><li>and its user friendly low cost implementation with a total of approx. 30 presentations . </li></ul><ul><li>For any queries please e mail to </li></ul><ul><li>[email_address] </li></ul>