Category Archives: Energy
Climate Friendly is a reputable, “profit for purpose” business that sells “Carbon Management Solutions” to businesses and households.
Basically, they offer people an easy way to make voluntary payments towards schemes that reduce global greenhouse gas emissions. If you buy a credit for A$22, they promise to prevent 1 tonne of carbon dioxide being released into the atmosphere.
To celebrate the launch of their new website, Carbon Friendly is offering a 10% discount on carbon offsets…
Does anybody else think this is odd way to market carbon credits? What next? Free steak knives?
I mean, householders buy carbon credits out of the goodness of their heart because they want their money spent reducing carbon emissions. Householders know that…
…if you give 10% less cash to Oxfam, they have 10% less to spend on projects that reduce poverty and injustice.
…if you give 10% less cash to Greenpeace, they have 10 % less to spend on activism and conservation projects.
…if you give 10% less blood to the Red Cross, they have 10% less life-saving blood in the blood bank.
The fact that you can get a 10% discount on a tonne of carbon emissions is a stark reminder that someone is making a handsome profit from your offset purchase.
Charities are often quizzed on how much of their donation income ends up being ‘lost’ in administration and marketing costs. That kind of question is at least as pertinent in a profit for purpose business. Given that 5% of the value of all household sales of carbon credits is donated to WWF Australia and an undisclosed portion (presumably more than 10%) is retained by Climate Friendly as operating expenses and profit, what proportion of your payment actually ends up being spent building wind farms and whatnot?
What is a $22 credit really worth in terms of on-ground investment? What is the wholesale price of the carbon offsets you are buying? How much is creamed from the top?
The voluntary carbon offset industry would be much more credible if it was much more transparent.
photo credit: ChicagoGeek
Many businesses claim that their operations are ‘carbon neutral’. That is, they claim that on balance they have no impact on the amount of carbon in the atmosphere because they pay for projects that ‘offset’ or ‘neutralise’ their emissions. Some companies go even further, claiming that they are ‘carbon negative’ – and that their operations actually lower the amount of carbon dioxide in the atmosphere.
This is usually misleading.
Although they are better for the environment than conventional fuels, 22-wheeler biodiesel trucks are not carbon neutral.
Whenever fossil fuels are burned, carbon is taken from the ‘lithosphere’ (rocks and underground reservoirs, like oil and gas fields in the Earth’s crust) and transferred into the ‘biosphere’ (the atmosphere, oceans and living things).
As we add more carbon to the biosphere, it becomes harder for us to minimise the impact of global warming.
It takes only a few decades or centuries for industry to put a lot of carbon into the biosphere, but it takes hundreds of thousands of years for nature to lock it away again in the lithosphere.
You can’t put a genie back in the bottle and you can’t neutralise fossil fuel emissions.
Biodiesel is often promoted as a clean, green, renewable substitute for regular diesel or petrol. Unfortunately, the green credentials of biodiesel aren’t much better than for ethanol.
|The difference between biodiesel and ethanol
Biodiesel and ethanol are both ‘biofuels‘. However, biodiesel and ethanol are not the same thing. Ethanol is an alcohol made by fermenting sugars. Biodiesel is made from plant oils and animal fats that have been chemically treated with a small amount of methanol.
The problem with biodiesel (and ethanol) is that it is impossible to produce very large amounts of biodiesel without clearing very large amounts of land or converting land used for food production into land used for fuel production. When biodiesel is made from plants grown specifically to produce fuel (and most is), biodiesel is likely to drive up food prices and incur all the attendant problems that go along with land clearing for agriculture – habitat destruction, soil erosion, water quality decline, carbon emissions, etc. Bummer.
On the plus side, biodiesel generates lower emissions of some air pollutants, including hydrocarbons, carbon monoxide and possibly nitrous oxides and particulate matter. Also, we can produce small quantities of biodiesel using waste cooking oil and waste fat from meat production (tallow). And one day soon it may also be possible to produce large quantities of biodiesel on small amounts of land using algae fed from sewage, but as with cellulosic ethanol, the technology for mass production of algae oil is still being developed.
When biodiesel is made from used cooking oil or tallow, overall greenhouse gas emissions are greatly reduced compared to diesel or petrol. However, less than 1% of biodiesel is made this way. Most biodiesel is produced from soybean, sunflower and rapeseed (canola) oil. Other food plant sources include castor beans, coconuts and oil palm – the same plant often blamed for the destruction of orang-utan habitat. When biodiesel is made from crops the overall reduction in greenhouse gas emissions is relatively low and may actually be higher than regular diesel.
So, whether or not you should switch to biodiesel depends on the source of the oil. If the oil comes from old cooking oil or tallow you’ll be reducing your greenhouse gas emissions by up to ninety percent. Fantastic!
However, if your oil comes from sunflower or canola the greenhouse gas reductions are much less. What is worse, you might also be contributing to pushing up food prices and encouraging conversion of land from forest to cropping. That’s bad news for people, forests, orang-utans and carbon emissions. For example, CSIRO in Australia found that biodiesel produced using palm oil grown on cleared forest will produce emissions that are between 8 and 21 times greater than for regular diesel. Ouch!
In Australia, mining companies have profited handsomely from an ongoing commodities boom driven by very high demand for Australian minerals in China. Australia is currently the world’s largest exporter of iron, coal and some other minerals.
Against this backdrop, the Australian government plans to do two things that have prompted an aggressive backlash mining companies. Firstly, the government wants to introduce a new mining tax, to ensure that the Australian public secures a fair share of the very high profits that the mining companies are reaping at the moment. After all, we own the minerals and once they are dug up and shipped out they are gone forever. Secondly, the government wants to introduce a price on carbon – an idea that may gradually reduce demand for coal in Australia.
A vocal critic of the government’s plans to increase taxes on mining companies and put a price on carbon pollution is Gina Rinehart. Rinehart is the only child of mining magnate Lang Hancock. She took over her father’s company, Hancock Prospecting, following his death in 1992. On the back of the commodities boom, she has become the richest woman in Australian history.
ABC’s Hungry Beast profiled Gina Rinehart in this video:
Despite her usual reclusiveness, Rinehart has been in the news a lot lately. This month she bought a 15% stake in Fairfax Media, adding to a 10% stake in Channel Ten that she bought a little over a year ago. A total investment of about $400 million.
Amidst these developments, journalist Graham Readfearn discovered a YouTube video where Christopher Monckton is seen in a meeting pushing for an Australian Fox News. The video, which I first learned about via GetUp, is extraordinary. It reveals how wealthy mining interests seek to manipulate the public and influence government policy.
At the centre of these developments are three lead characters: Gina Rinehart, Christopher Monckton and Australian journalist Andrew Bolt. I’ve tracked back events involving Rinehart, Monckton and Bolt through the media over the last two years.
Over this time we see Rinehart developing an interest in manipulating public opinion and successfully destroying the proposed Resource Super Profits Tax and contributing to the downfall of the Prime Ministership of Kevin Rudd. Over the years, Rinehart, Monckton and Bolt seem to have joined forces and begun to formulate plans to expand their influence on public opinion through mass media.
This is how events unfolded:
27 January 2010
Monckton visits Australia, backed at least in part by Rinehart.
2 May 2010
Federal government announces proposal for a Resource Super Profits Tax (RSPT).
An ad war begins between government and mining interests over the RSPT. Mining interests spend $22 million dollars in their campaign in 6 weeks. Fierce lobbying against the tax leads to its abandonment and will eventually contribute to the downfall of Prime Minister Kevin Rudd.
9 June 2010
Rinehart, who normally avoids the media, makes headlines when she addresses a rally urging the Australian government to dump plans for the RSPT – using the slogan “axe the tax”.
24 June 2010
Prime Minister Rudd is dumped by his party and replaced by Julia Gillard. The RSPT is also dumped.
2 July 2010
Prime Minister Gillard announces a proposed Minerals Resources Rent Tax (MRRT). The MRRT makes significant concessions to mining companies compared to the RSPT. Some mining companies welcome the new tax, but it is opposed by others, including Rinehart’s Hancock Prospecting.
21 August 2010
A federal election is held. Gillard’s Labor party wins narrow victory thanks to support from independents.
22 November 2010
Rinehart buys a 10% ($166 million) stake in Channel 10 and joins the Board.
24 November 2010
The MRRT passes lower house of Australian parliament. The legislation is due to be debated in the Senate in 2012 and introduced from 1 July 2012.
Andrew Bolt, a right-wing climate change sceptic and opponent of the federal governments mining taxes writes in his blog – “I have no idea what Rinehart hopes now to do to Ten, if anything. Nor could I guess what chances she’d have of turning it into, say, an Australian Fox News, even if she wanted to”. The comments appear to suggest knowledge of Monckton’s plans that would be revealed when he visits Australia in July 2011.
4 July 2011
Christopher Monckton visits Australia again. At some time during his visit, Monckton attends a meeting in Perth hosted by the Mannkal Economic Education Foundation, a group chaired by Rod Nanners, a member of Gina Rinehart’s lobby group ANDEV.
This is where everything comes full circle:
At the meeting, Monckton frequently mentions Fox News and Andrew Bolt, who Monckton says was “rocketed to fame” and that “devoting some time and effort to encouraging those that we know are super rich to invest in perhaps even establishing a new satellite TV channel is not an expensive thing. “ Monckton goes on to state that he would like to work with people like Andrew Bolt ”to put together a plan for such a thing” and then seek an “angel funder”. Those in the room unanimously agree to take the idea away and work on the proposal.
2 Feb 2012
Gina Rinehart increases her stake in Fairfax Media to 15% ($192 million dollars) – making her the biggest shareholder and potentially gaining her a board position.
The mainstream media continues to debate Rinehart’s motives for investing in the media – but could the reason be any clearer? Rinehart is Monckton’s super rich angel investor. Bolt is Rinehart’s media voice. And Monckton is the gun for hire of anyone with a vested interest in climate change denial.
‘Sustainability’ is a fairly simple concept. It’s just a word that describes our ability to carry on. People have worried about sustainability for a long time. Back in the 1860s, William Stanley Jevons and others alerted Britain to the inevitable exhaustion of British coal reserves – and the disastrous effect he believed this would have on the economy and the supremacy of Great Britain.
An intuitive response to over-exploitation of natural resources like coal, oil and natural gas is to use these resources more efficiently. Around the world there are regulations and standards that enforce or encourage energy efficiency of aircraft, homes and commercial buildings, automobiles, lighting, water heaters, air conditioners and home appliances.
In his 1865 book ‘The Coal Question’, Jevons argued that as technology improved or fuel efficiency increased, the work carried out using the fuel became cheaper – and total demand for that work increased. To put it his way:
Whatever…conduces to increase the efficiency of coal, and to diminish the cost of its use, directly tends to augment the value of the steam-engine, and to enlarge the field of its operations.
If this is true, and if this applies to other technologies that use different energy sources, then improving energy efficiency may be making it even harder to wean ourselves off of fossil fuels.
There seem to be several examples of Jevons Paradox at work in the modern world:
- Aircraft are becoming larger and more fuel efficient allowing airlines to lower the price of air tickets. Now more of us fly more often than ever before.
- The cost of owning and running a motor scooter has fallen dramatically. In cities all over Asia, motor scooters are replacing bicycles, increasing the overall consumption of oil.
- Cheap and very fuel efficient cars like the Tata Nano have been introduced to third world countries, opening up new markets for automobiles.
- Improving the energy efficiency of lighting has, throughout history, tended to increase the amount of lighting we use. LED lighting may make the future brighter – but not greener.
A part of the problem is that although energy efficiency has the potential to reduce energy consumption in mature markets – mostly in the developed world – it tends to help open up new markets for cheaper and more efficient products in the developing world.
In the first world, energy efficiency reduces the hip pocket pain we feel when we buy new appliances, take a vacation by air, install indoor and outdoor lighting we don’t need, plug in a beer fridge, buy a larger vehicle than we need or make decisions about how far is a reasonable trip for a daily commute.
Jevons Paradox explains why improving energy efficiency is not enough to drive step-wise improvements in sustainability. We need to do more.
However, unlike Jevons, we are less concerned about depletion of resources than we are about the pollution – especially CO2 – that fossil fuels generate. Although the coal in Britain did eventually run out, the economic collapse that he predicted didn’t happen. Jevons did not foresee the future importance of the internal combustion engine, petroleum or natural gas or the efficiency of shipping and world trade. But his ‘Paradox’ is as relevant as ever.
To ensure that our energy efficiency gains actually reduce carbon emissions, we need to simultaneously discourage expansion of non-renewable, emissions intensive energy production – and we need to do this world-wide.
Probably the best way to do this is to make carbon polluters pay. A number of options are available, but most are unpopular with businesses and voters. Pollution limits and pollution licenses have been effective in the past and have helped clean up our waterways and coasts. Modern-day economists tend to favour market-based instruments including so-called Cap and Trade schemes.
Cap and Trade schemes put a hard limit on total emissions using pollution permits. These permits can be traded so that business or industries that find effective ways to reduce pollution can make money by selling permits to others that cannot. Polluters can also ‘offset’ their emissions buy buying ‘credits’ from businesses that find ways to sequester carbon or avoid emissions in other ways (for example by planting trees, funding renewable energy projects or by avoiding deforestation). The ‘Cap’ is gradually lowered, giving all businesses a chance to find new and better ways to do business.
The main drawback of these schemes is that they only work in open, global markets if all countries participate. If some countries don’t participate, those that don’t cap emissions or force their industries to buy permits have an unfair advantage, and industries, jobs and emissions are simply exported to other countries.
I’ll talk more about Cap and Trade and ‘offsets’ in future posts.
You can download The Coal Question for free at Google Books. It’s worth a read and contains some interesting quotes – like this statement dismissing air travel:
…even if the aerial machine could be propelled by some internal power from fifty to a hundred miles an hour, it could not make head against a gale.