Environment Forum

Chevron CEO sees smoke and mirrors in cap and trade

“If you liked credit derivatives swaps, you’re going to love cap-and-trade.”

One can presume that Chevron Chief Executive David O’Reilly is not a fan of the current deep worldwide recession — which was worsened by a credit-market lockup blamed in part on hard-to-value securities.

And, he made it very clear on Thursday that he is not enamored of the system the Obama administration hopes to use to reduce U.S. emissions of greenhouse gases including carbon dioxide, which are produced through the burning of fossil fuels sold by the No. 2 U.S. oil and gas company.

“It’s smoke and mirrors,” O’Reilly told a Boston business group. “Personally, I think it’s going to be a difficult system. I don’t think the American people trust it.”

A proposal working its way through the U.S. Congress would put in a place a cap-and-trade system that would give individual U.S. companies the right to emit certain quantities of greenhouse gases, which contribute to global climate change. Companies whose emissions are below their allotment could sell their extra rights to other companies.

The Obama administration in its budget proposal released on Thursday called for the initial emissions permits to be sold, rather than given away free. That would give businesses a financial incentive to reduce their emissions.

O’Reilly argued that an easier way to reduce emissions would be to raise taxes paid on gasoline for cars. He said Washington has embraced cap-and-trade to avoid the appearance of raising taxes.

A scheme by any other name…

It was a discussion that would have made George Bernard Shaw smile. The British Nobel Prize-winning writer said America and England were separated by their common language.

Such was evident recently during a panel discussion at the Milken Institute Global Conference in Beverly Hills. The panel focused on the effort to limit carbon dioxide emissions by trading carbon credits, commonly called a cap-and-trade scheme, and creating such a system in the United States.

That’s the rub, said Elizabeth Kanna, a marketing professional who said that “scheme” is an awful choice because, for most Americans, it means something sinister.

“Most Americans don’t understand carbon. It’s a confusing subject,” said Kanna. “You can’t convince Americans it’s a good idea by calling it a cap-and-trade ‘scheme’. I know ‘scheme’s’ a bad word. In other countries ‘scheme’ is not a bad word but you cannot create a global market using a word like ‘scheme’ that doesn’t work everywhere.”

To the British, scheme means a plan of action. Scheme is also used often for programs at the United Nations, where its meaning is neutral. But to Americans, it implies a plan of action in an underhanded way.

In fact, both definitions are correct. U.S. dictionary Merriam-Webster defines scheme as “a plan or program of action; especially: a crafty or secret one.” However, it also gives another definition: “a systematic or organized configuration.” The Oxford English Dictionary gives similar definitions, including “a secret or underhanded plan” and “a systematic plan”

“We have to come up with a better word,” said Kanna, who lives in Sacramento, California. “Here’s a story to illustrate my point. In January, I was in New York. In the cabs now, they have the news on flat screen.  On the bottom of the screen, it said, ‘Madoff Ponzi Scheme.’ It was a new assessment of the money lost. Scheme. At the same time, the cab driver has on the news and they said ‘The cap-and-trade scheme was going forward in Washington.’ ”

Antarctica warms; scientists say we’re to blame

New research shows that both Antarctica and the Arctic are getting less icy – and the best explanation is mankind’s emissions of greenhouse gases.

But will that convert anyone who doubts that global warming is caused by human activities, led by burning fossil fuels?

The scientists, writing in the journal Nature Geoscience, say that a study of temperature records from Antarctica (there aren’t many of them) shows a slight rising trend over recent decades that can be best explained by a build-up of greenhouse gases led by carbon dioxide.

Antarctica had until now been the only continent where a human fingerprint of warming had not been detected by scientists — that meant some sceptics said it might not be global at all.

Ice around the frozen continent has tended to expand in recent years — some climate experts have theories to explain that that could be a side-effect of warming linked to shifting ocean currents or changes in snow and rainfall.

But more ice obviously doesn’t sound a convincing argument for global warming when a runaway melt of the summer sea ice in the Arctic — to a record low in September 2007 – is often held up as Exhibit A in the evidence for climate change.

The U.N. Climate Panel said last year that it was at least 90 percent certain that most of the global warming in the past half century was caused by human activities. Ten percent is room for doubt, but it seems to be shrinking.

Planet sick; do the doctors care?

    The UN’s climate surgery opening hours this week in Bonn, Germany, are 10am-1pm and 3pm-6pm.

    Several times they’ve finished early — lack of demand?

    “That’s good. Often they just go on and on. Next week it may be a bit later,” a UN spokesperson told me.

    Welcome to a new round of talks to find a successor to the UN-administered Kyoto Protocol on global warming. Bonn is the second of eight meetings of 190 countries and 2,000 people or so to agree a new climate pact by December 2009.

    All right, on the two-week agenda there’s also a lot of side events, lobby group huddles and so on, while delegates wake up very early to attend busy, ad hoc sessions, one told me.

    But from the outside at least there’s no sense of rush – the plenary sessions are often dry presentations from government bureaucrats, re-hashing well known positions with erudite allusions to climate convention text written 16 years ago.

    UN chairmen tried on Friday to steer talks towards “concrete proposals” for a new pact, to discuss in more meetings.

Way better than the subway

There are plenty of ways to get around New York City, not all of them savory — subway, bus, car, taxi, bike, shoe-leather — but few offer the environmental cachet of the plug-in electric motorbike. Sleek, slim and silent, the Vectrix two-seater owned by filmmaker Michael Bergmann is definitely preferable to rocketing around town under almost any other kind of power. The ride from the East Side to the West Side one recent evening was an absolute pleasure, with less ambient noise than a golf cart as we zoomed across Central Park.

“I’ve always felt that enjoying life in New York to the fullest requires a way to get around New York,” Bergmann said later in an e-mail. “A way that’s quiet and up on the surface so you can enjoy the varied life and changing neighborhoods as you travel. That requires a vehicle that’s street legal (so I don’t worry about being stopped or having it confiscated), always available, that isn’t hard to park, that doesn’t contribute to congestion or pollution (air or noise), that can carry the amount of stuff one ordinarily carries, and carry a passenger as well. So as soon as I found out about the Vectrix I wanted one.”

Vectrix, headquartered in Rhode Island, first started selling its electric plug-in motorbikes in Europe and is now expanding in the U.S. market. The company bills its plug-in model as “an advanced zero-emission, battery-powered motorcycle,” with comparable performance to a 400cc gas-powered motorcycle.

Bergmann and his wife Meredith, a sculptor, use the bike as their principal mode of transport around Manhattan. The Vectrix gets parked and plugged in in the underground garage at their apartment house, where they pay for half a parking space, with electricity included. It gets about 40 miles (65 km) to a charge, which is enough to get around New York’s five boroughs, and Michael figures the company’s claim that it can get up to 62 miles (100 km) per hour is accurate, since he’s been able to accelerate uphill on the FDR Drive, no mean feat.

Bergmann has always been an early adopter of new technology, and he’s no exception here. You can see what he’s done in the film world.

He admits there’s one drawback: the price. His model cost $11,000. But he reckons that, because of where and how he and his wife live, “it will pay for itself in taxis not taken in two years.”

Substance trumps style at climate talks

   It was like a scene from the future. A carpark brimming with fuel-cell and hydrogen-powered cars, while fuel-cell buses ferried delegates to lunch near the modern conference centre outside Tokyo.

   Japan was determined to display its green credentials at weekend G20 talks, one of the biggest meetings of the world’s top greenhouse gas emitters since last December’s Bali gathering. Even conference staff were given chopsticks and traditional “bento” boxes that could be reused instead of the usual throw-away items.

    Inside the conference hall, though, delegates were more interested in substance than style as they discussed ways to agree on a global pact by the end of 2009 to curb growing emissions of carbon dioxide and other greenhouse gases.

    And for most delegates, Japan came up very short indeed.

   Japanese ministers told the gathering, ranging from G8 nations to big developing countries China, India, Brazil and Mexico, that combining individual emissions reductions targets for industries is one way to come up with national goals to fight climate change.

   But the plan met resistance from developing nations and a number of rich nations in the group that said the idea lacked clarity and didn’t fully cater to poorer states’ individual circumstances for their industries.  It was also unclear if the targets were voluntary or mandatory.

   Developing nations say they need more money and clean energy technology from rich nations to clean up their steelmills and power stations and that developed nations should do more to curb their emissions, too. That means clear and binding emissions targets.