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Archive for the ‘Carbon’ Category

Rainforest protection drives 34% growth in voluntary carbon market

June 6th, 2011 Posted by Admin in Carbon, Forestry

The world’s leading voluntary carbon market report, produced by Ecosystem Marketplace and Bloomberg Energy Finance, showed a 34% increase in the voluntary carbon market volume in 2010. Despite the closing of the Chicago Climate Exchange (CCX) in 2010, an increase in the voluntary market overall was driven by continued CSR and specifically by projects aimed at saving endangered rainforest and capturing carbon in trees; a mechanism known as “Reduced Emissions from Deforestation and Degradation” (REDD).

In 2010, REDD accounted for almost 30% of all emissions reductions documented, thanks in part to new REDD methodologies published by the “Verified Carbon Standard” (VCS) which provided guidance for almost a third of all credits. As a result there was a surge of activity with REDD projects especially in Brazil and Latin America where there was a doubling of credits from the previous year. Read more at Greenbiz.com here.

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EU ambitious 30% emission reduction

November 26th, 2010 Posted by Admin in Carbon

The European Parliament has approved its resolution recommending the EU increase their 2020 renewable energy goals from 20% to 30% emissions reduction in relation to 1990 levels.

It is now agreed that raising the reduction target will be economically beneficial to the EU economy, and so this is what the MEPs will recommend to other developed countries next week at the 16th Conference of Parties in Cancun gathers in Cancun, Mexico.

Currently the EU is falling short of the self-imposed 20% reduction goals, non-binding as per the Kyoto Protocol. Despite this they hope to persuade other global leaders of the economic advantages in increasing the reduction goals, and in doing so have all developed economies extend the Kyoto Protocol together.

With deforestation and change of land use causing around 20% of global emissions, the EU also intends on committing an additional €30bn per year to a global fund specifically to help smaller countries focus on reducing emissions from deforestation and degradation (REDD).

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Balancing expectation, one year on from Copenhagen

November 23rd, 2010 Posted by Admin in Carbon

In our lives there are historical occasions that we remember vividly. What happened that day, where we were and how we felt. One of the most famous was the day JF Kennedy was assassinated, whilst more recently the tragic 11^th September 2001 was a day none of us will ever forget. For me another one to add to that list was the 15^th Conference of Parties in Copenhagen, December 2009; the day we turned our back on Mother Nature.

Nearly one year ago today I stayed up, gripped with hope, watching with baited breath for the world leaders to come together in the name of mankind. As the last light of hope flickered, President Obama came out to announce the agreement that would guide us safely in to the future. Thousands of ideas, hopes and dreams of a new world rushed around in my head. How would it be, how would society work together and function financially, where would our food and water come from?

Millions of hopes were shattered when no more than a token peace-keeping gesture was offered. Something for the press to chew on. Despite decades of research from the world´s finest scientists (independently inside and outside the IPCC for any skeptics still left), nothing on the scale required would be done.

“Yes” we know CO2 ppm is rising hundreds of times faster than ever before. “Yes” we know that last time CO2 ppm was at current levels the world was inhabitable. “Yes” we understand that a rise of 2 °C will send our ecosystems over an irreversible tipping point which will devastate society and “Yes” we realize that we could reach this tipping point by 2040. “Yes” we understand what needs to be done and how much funding needs to be invested in order to prevent this occurring and “Yes” we understand that if these aren´t implemented by 2012 then it may be too late.

“No”, we won´t do anything about it.

Since then these past 12 months have seen the slow painful asphyxiation of markets that were essential to creating a sustainable future. Where $1 trn should have been carefully distributed to put the future infrastructure in place, instead renewable energy markets have diminished in volume, flagship ventures have essentially shut down, and governments continue with promises and rhetoric for electoral goals whilst delivering far short of the scale needed.

In less than one week the 16^th Conference of Parties will commence. At this point there is still no defined successor to the Kyoto Protocol which expires in 2012 and there is no agreed proposal for a structure to secure actual commitment in enforcing emission reduction levels. The main polluters, historically the US with over 300bn tonnes CO2 since the industrial revolution, China with over 130bn tonnes CO2 and modern heavyweights such as Australia, India and Brazil, direct policy attention away from their own pollution to smaller less relevant economies. So, do we dare to hope for a defined, measured and proactive proposal to be implemented after COP16?

Well, according to executive secretary for the UNFCCC Christiana Figueres, these talks in Cancun Mexico are not intended to establish a final and ultimate framework for global action. Apparently the conference will be a success if all the parties gain something from it and “balance their expectations so that everyone leaves carrying a positive achievement from their own perspective”. I have balanced my expectation.

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Carbon capture & storage; the world’s most dangerous experiment?

April 26th, 2010 Posted by Admin in Carbon

Capturing CO2 and trapping it under ground in order to keep our own atmosphere habitable sounds like a concept out of an Isaac Asimov science fiction novel. However many groups of experts around the world have been working for years on developing carbon capture & storage (CCS) technology as a genuine real solution to save the planet. Certain areas in the US have large underground gaps in the rock where the depositing of CO2 at high pressure has been seriously under consideration from some time now, whilst the Scottish government has been planning to use the emptied north-sea oil fields for the very same activity. But how real is the science behind this, and how secure is it?

With global CO2 levels rising faster than ever, drastically affecting our ecosystems possibly beyond repair, global governments are dedicated to exploring every possible option for improving energy efficiency, developing sustainable renewable energy, reducing CO2 emissions in to the atmosphere and even removing CO2 from the atmosphere. Reducing energy consumption is a crucial exercise for the most immediate effect, whilst minimising CO2 production levels from ongoing energy production is the long-term goal, and CCS seems like the most adventurous concept. Nature itself has many natural devices it has developed to remove CO2 from the ecosystem, such as the world’s oceans and forests. We all know that planting trillions of trees would solve the problem, but implementing this globally is just proving completely impossible, and so now scientists have been working on other ways to remove or absorb the CO2 and keep our atmosphere liveable.

Concepts range from the wilder and wackier such as ”fake trees” to sequester much higher rates of CO2, through to simply trapping the CO2 generated (from standard coal-fired power plants) and rather than releasing in to the atmosphere, simply collecting, treating and hiding away. This has never seemed like a real solution, but more like a stop-gap, or a last-chance attempt by the fossil-fuel power plant owners to justify their continuing activity. Your domestic equivalent would be storing your household rubbish under the bed. The house will look tidy, but after a few days, weeks, months, years, at some point things will start to turn bad.

Storing harmful gases under high pressure under the ground on which we walk is not the most confidence-filling concept, however the scientists promoting the idea have always firmly stated that this was technologically feasible. However now some independent studies from un-biased scientists from Houston University have highlighted that there really are large flaws and look likely to blow a hole in the theory supporting the concept. Hopefully the world’s governments will not be so short-sighted as to continue with such a potentially dangerous activity without the highest level of independent scientific research for this particular experiment. For further details click here.

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EPA historic health warning to US citizens

December 16th, 2009 Posted by Admin in Carbon

Last week the US’ Environmental Protection Agency officially confirmed that global warming from manmade greenhouse gases does have a negative effect on the American citizen’s health and welfare, something that the previous Bush administration refused to accept. They also stated that the pollutants – mainly carbon dioxide from fossil fuels – should be reduced, if not by Congress then by the agency responsible for enforcing air pollution. Existing power plants could now be forced to clean their emissions and also a more fuel-efficient vehicle policy across the US could be enforced, via the EPA’s “US Clean Air Act”. Either way, whether the EPA or Congress control the emissions reduction programs, the American people will feel the economic squeeze but can look forward to a healthier future.

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Copenhagen; survival of the fattest?

December 14th, 2009 Posted by Admin in Carbon

A cruel twist of fate may have let the world’s major polluters off again. Unfortunately following the African nations’ walkout earlier in the 15^th Conference of Parties in Copenhagen, the US and developed nations have been able to divert attention away from the serious issue of their own pollution levels, to the less important issue of controlling growth over developing countries’ emissions. Courtesy of Recharge News a new sculpture in Copenhagen captures the reality of the situation, poor nations carrying the rich, in “The Survival of the Fattest”.

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Who is responsible for Global Warming?

December 10th, 2009 Posted by Admin in Carbon

Although China recently exceeded the US as the largest annual polluter, the US became the largest global polluter ever by overtaking the UK in 1910 with around 21bn tonnes cumulatively each at the time. US industrial growth has since given the US a cumulative carbon footprint of 334bn tonnes, as estimated in 2006 since 1751. When compared with China at 100bn tonnes, the UK at 72bn tonnes, Japan at 46bn tonnes and Germany at 41bn tonnes, it is easy to see who should take the most responsibility for global warming.

Take in to account that the US carbon footprint has tripled (from 110bn tonnes) in the past 50 years alone, during which time the exact same country has become by far the strongest economy in the World. It takes decades for carbon dioxide to have full effect on our eco-systems and these results of global warming (such as Hurricane Katrina which is recognised as a global warming influenced invent) are only now being noticed more and more in the last decade. Let’s hope that the US takes responsibility for their emissions at the Copenhagen Conference of Parties next week and make a financial commitment proportional to their impact on global warming.

Keep up to date with the COP15 progress as the US and other developed countries hopefully acknowledge their responsibilities to not only the developing World but our own children’s futures, here: http://en.cop15.dk/news/view+news?newsid=2942

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US & China’s Action Plan not enough

December 1st, 2009 Posted by Admin in Carbon

As the Conference of Parties in Copenhagen approaches next week, 192 nations of the World prepare to meet to solve the global pollution problem and find a workable replacement to the Kyoto Protocol. Being something that the US has still not signed up to, what was desperately needed to add weight to this gathering was an official emissions-reduction target from the United States. However the US and China, the 2largest polluters in the World responsible for 50% of global pollution, have given us little more than a publicity stunt.

Following an historic meeting in mid November 2009, both President Hu Jintao of the People’s Republic of China and President Obama of the United States of America, outlined their “Action Plan”. In this the US and Chinese administration agreed to invest US$150m (yes million, not billion) over 5 years in “research & development” toward mitigating climate change. Breaking it down, they will be investing $75m each over 5 years, so $15m each, each year. It doesn’t take much to see through these glossy magazine-selling statistics and realise that this is little more than a get-out-of-Copenhagen-free card.

obama-hu

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The Rainforest Rush is on!

November 16th, 2009 Posted by Admin in Carbon

Although you may not be aware, all the World’s largest corporations are rapidly purchasing as much-endangered rainforest as possible. Why would they do this you ask? To which the simple answer is that they are all highly undervalued and so a very good investment!

All multi-national corporations have enormous global carbon footprints, and only in the coming years will this officially become a financial burden to them as global governments slowly enforce various methods of what is effectively an emissions tax. As the underlying unit of CO2 emissions is the carbon credit, and rainforests are the largest organic owner of carbon credits, the investment decision is an easy one.

With deforestation the root cause of around 20% of global carbon dioxide pollution, “reduction of emissions from deforestation and degradation” (REDD) projects should be accepted by the UNFCCC this December in Copenhagen. Once this occurs, implemented REDD projects will have carbon credit values within the Kyoto Treaty’s “Clean Development Mechanism” giving them enormous inherent financial value. Rather than wait for this decision most MNC’s have made their minds up, taken the bull by the horns, and are buying their stock at “pre-launch prices”. The Rainforest Rush is on!

As scientists worldwide perfect their analysis techniques including using satellite technologies, the carbon stock already stored and the sequestration rates of forests are being calculated and rainforests evaluated. It isn’t every forest of course. Only those that are officially endangered by a high risk of deforestation, in countries such as Brazil, Indonesia and Papua New Guinea, will pass the rigorous REDD standards.

amazon rainforest

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UN and the WWF highlight accelerating climate change

October 23rd, 2009 Posted by Admin in Carbon

With the climate change conference in Copenhagen just 6 weeks away, these may unknowingly be the most important time of all our lives. Officials from over 190 countries are charged with the simple task of agreeing how to continue the global fight against climate change, and take over from the Kyoto Protocol. With many of the most fundamental issues still in dispute, we await with baited breath.

As a recent report from the WWF outlined that we have less than 5 years to stop uncontrollable climate change, hopefully by now the climate change scheptics would have been educated long ago. It seems however they remain steadfast in their own self-denial, be it adamant, ignorant or just stupid. With Nasa, UN and independent scientists and scholars all around the World pointing out that drastic and immediate measures need to be taken to prevent a 2˚C temperature rise, hopefully there will be no doubters in Copenhagen! And why the concern over a 2 degree increase? Only that a catastrophic breakdown of ecosystems, leading to mass migration, poverty, hunger and drought, with half of all animals and plants going extinct and a large sea level rise, and massive change in weather patterns. This has been forecast to occur at current rates WITHIN THE NEXT 35 YEARS.

Droughts, acidic oceans and melting glaciers are the most simple signs of accelerated global warming, a United Nations report said recently. Mountain glaciers in Asia are melting at such advanced rates that they could threaten water supplies far sooner than expected, including irrigation and hydropower, affecting up to 25% of the World’s population.

Copenhagen

So with regards to Copenhagen, what is really making this all so difficult? Our complete dependence on fossil fuels and an inability to realise an affordable and scaleable replacement is the main problem. Of course this is not helped by the fact that developed nations like China and the US have such high levels of pollution, and yet dont seem willing to even announce let alone stick to emission reduction targets. A fundamental change in developed society, how we live, how we travel, how we eat, will all need to occur if society is to have any chance of preventing climate change. Our lives will change drastically in the coming years, of that there is no doubt. Are we ready and willing for this? Perhaps also the largest single issue with the Kyoto Protocol was that the developed nations need the less-developed nations to help them reach their emission reduction targets, but dont seem willing to pay for it! With just over 6 weeks to go, these are nervous times indeed.

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Indonesia giant steps to Rainforest protection

August 29th, 2009 Posted by Admin in Carbon

Indonesia is recognised as the World’s largest greenhouse gas polluter through deforestation. With the release of CO2 in to the atmosphere through deforestation responsible for 20% of global greenhouse pollution, practically the largest single reason for global warming, Indonesia is in the limelight. Unfortunately with high levels of press exposure concerning illegal deforestation in Indonesia for the purpose of Palm Oil plantations, competing with potential food crops, the situation needs quickly addressing.

Reducing emissions from deforestation and degradation, or “REDD” as it is known, is one of the most crucial topics to be addressed by the UN in Copenhagen this December. It is widely accepted by experts that limiting the rise in global temperature to 2˚C above pre-industrial levels (the level at which widespread ecosystem breakdown is forecast) will be almost impossible without REDD.

Once the International Panel on Climate Change present their findings in Copenhagen to the World governments it is hoped that necessary financial mechanisms will be implemented that correctly incentivize 3^rd World governments such as Indonesia to not only protect existing rainforest but replant new forests. Only then will the Kyoto Protocol’s effective successor have taken the crucial action in attempting to mitigate climate change.

Mean while, with over a billion tons of CO2 emissions from its forests and peatlands, Indonesia has pre-empted the UNFCC’s decision and officially issued national regulations on REDD. Now all forest stakeholders, be they private organisations, local authorities or indigenous people, can all acquire REDD permits for projects that prove they prevent CO2 otherwise entering the atmosphere.

Should a large %age of Indonesia’s current deforestation be prevented, and if REDD is accepted in to Kyoto’s existing CDM system, then the potential carbon credit trading value for Indonesia will run in to US$ bns. We can only hope that in Copenhagen this winter the World’s governments can reach an agreement for this vital solution to global climate change, and financially motivate everyone to protect their forests.

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Timber investments stand strong through economic gale

July 5th, 2009 Posted by Admin in Carbon

In April 2009 timber prices had fallen 28% year-on-year, the biggest price decline in the last decade. Many investors baulked, however forestry investment still outperformed both real estate and equities over a three-year annualised basis, according to the Investment Property Databank. However experienced timber investors will ignore this knee-jerk reaction and remain confident with their knowledge and understanding of the fundamentals that separate the timber market from other investment classes that have suffered so much recently. With biological growth rates, relatively accurate forecasts can be made from historical data to predict a tree’s wood volume delivery rate. Considering the long slow and stable growth period between planting a seed to harvesting the asset, the timber market supply is therefore a relatively stable one. Only in the past decade as a result of the construction industry boom has some instability crept in to the demand-side of the market, rallying the market and driving prices faster than previously expected. Some believe that due to the halt in construction a knock-on effect will make timber market values plummet, however a few crucial factors need considering that will prevent this occurring;

Timber growth is a long slow process and a housing construction crash now will not affect today’s timber production cycle in any way. Wood will either be harvested and sold at current slightly lower market prices, giving investors a slightly lower IRR when considering the number of years the investment is made, otherwise it will be stored rather than sold. Neither of these actions will directly drive prices down.

Timber plantations and investments also have a much lower gearing level than that of all other financial instruments during recent years, such as COO for equities and mortgages for real estate. Lower gearing within both the supply and demand-side of any market directly results in a much less volatile price market. With very little credit entering the marketing, rallying and driving prices and attracting price speculation, and subsequently deserting and in turn deflating the market, timber prices are so much more stable.

One more crucial difference between the timber markets and other investment assets is the ability to create complex financial instruments. In the equity markets all number of derivative and option markets, hedge funds and funds of funds, have skewed the perceived true value of the underlying assets and enabled the derivative market to become more “valuable” than the asset itself. In the real estate world, the off-plan investment model was devised that was dangerously exacerbated by off plan financing, further enabling re-writing of short-term contracts and falsely inflating market prices.

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PAPUA NEW GUINEA CARBON CREDITS SUSPENDED

June 12th, 2009 Posted by Admin in Carbon

Its not all good news in the evolution of the voluntary carbon markets. Papua New Guinea has the highest deforestation rates in the World, significantly affecting PNG’s and global carbon sequestration levels.

With illegal and legal logging rife in PNG and Indonesia, financial incentives are crucial to prevent further deforestation and motivate reforestation. Forests carbon credit value are already calculated and traded on the Voluntary Carbon Markets, however the Reducing Emissions through Deforestation and Degradation (REDD) initiative must be ratified at the United Nations Climate Change Conference in Copenhagen this December 2009 to make these valuations official and regulated.

In the mean time, considering the potential financial / carbon-offset value these forests may have in the future, developed countries are jostling for control over developing countries forests and reforestation opportunities. Should the carbon credits be accredited or not, distribution and sales of these credits is also a highly pursued market. In PNG suspicious government activity has cast a shadow over the future forest carbon credit market and even attracted the attention of Interpol. Peter Younger from Interpol told Reuters that he expected to see fraudulent trading of carbon credits, as organised crime infiltrates the systems of companies and countries in the developed world’s buying rights to the stored carbon.

The PNG government “Office of Climate Change and Environmental Sustainability” OCCES recently awarded two brokers the opportunity to sell $500m of carbon credits allocated to one rainforest “April Salome” in return for a payment of US$8m to assist the agency set-up. In the memo seen by Reuters, the officer requesting sign-off from the PNG Prime Minister also highlighted that the OCCES would receive 20% share of the brokers ongoing profit.

April Salome is expected to generate up to 1m tonnes of avoided carbon dioxide emissions, and with the voluntary market valuing these credits around $8/tonne, the annual revenue to be generated from the credit sales is significant. Whilst the PNG government have now stated that an “open tendering” system will be in place for brokers to win the business, one broker firm “South Pole Carbon Asset Management” claims to have all the legal documents giving it rights to sell April Salome. They are already selling the carbon rights despite the project not yet approved or validated by any third party according to Reuters.

With the UN Conference in Copenhagen still a long way off, this will be a very interesting summer and will hopefully show all the weaknesses the existing market has. Fingers crossed this will enable policy makers to make the critical decisions in implementing the right system to motivate a fully global movement toward forest protection and sustainable reforestation.

Papua New Guinea deforestation

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WORLD LEADING SCIENTISTS WARN OF HIGHER TEMPERATURE INCREASES

June 11th, 2009 Posted by Admin in Carbon

Alarming news was released recently following an imperative study by some of the World’s leading scientists. A collective from the Massachusetts Institute of Technology (MIT), some of whom have been studying climate change for decades, produced startling results from their “Integrated Global Systems Model”.

This model is the most detailed computer simulation ever designed and studies the interaction between the most important aspects of global economic activity and the resulting climate change occurrences. In this recent test the model was programmed to run over 400 computational iterations, each one input with different variables and simulating the resulting climate change over the coming century.

Results were extremely alarming. From the iterations ran, the “best case scenario” for global surface temperature by the year 2100 was an increase of 3.4 degrees Celsius. This is less than a century away, in our grandchildren’s lifetimes. It is widely accepted that a temperature increase of this proportion will drastically change the face of global weather patterns, in a negative manner. Should this occur, and the Worlds leading scientists predict it will, then we can expect far more floods, monsoons, hurricanes, droughts and wild-fires.

From the 400 iterations, the “worst case scenario” calculated that if we do nothing to prevent our current CO2 emissions growth rates that the potential surface temperature could increase by as much as 7 degrees Celsius.

If anyone is equipped enough and wishes to challenge the MIT teams‘ results and theories, then they should step forward urgently. However in the mean time I think we should all be investing everything we have in to saving our environment.

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Electric Sports Car maker valued at half of General Motors!

May 25th, 2009 Posted by Admin in Carbon, Electric Vehicles, Renewable Energy

Popularity for, and the future of, the high-spec electric car industry is now further confirmed as Daimler invest US$50m for just 9% of Tesla Motors Inc. Daimler follow behind several other wise investors such as Musk, founder of PayPal Inc, who invested US$70m in Tesla last year along with the owners of Google Inc.

This latest investment now gives Tesla Motors a market value of around US$550m – nearly half the value of automobile giant General Motors. Considering Tesla have sold less than 500 cars in total, whilst GM sold over 8m vehicles in 2008, this valuation seems unusual. However with GM supposedly facing bankruptcy later this year, these latest valuations show the reality of the changing market sentiment. Supported by Obama’s latest bill, larget monster gas-guzzling trucks are now “out” and super-healthy super-slick environmentally conscious electric cars are most definitely “in”.

Stuttgart-based Daimler are owners of the european popular Smart Car and as such are increasingly interested in the most advanced electric car battery-technology. This investment displays their intent on pursuing this industry and Daimler’s realisation that the high-end electric car market will also be one for capture.

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China wants 40% emission cuts by 2020

May 22nd, 2009 Posted by Admin in Carbon

China issued a surprisingly pleasant statement last week outlining that developed nations should aim to cut their GHG emissions by 40% by 2020 from 1990 levels.

China is believed to be one of the largest GHG emitters with a thriving industrialised economy powered by coal-fired power stations. China’s coal-fired energy is predicted to continue growing for the next few decades however China is also leading the way in carbon sequestration technology development.

The statement, issued by the National Development and Reform Comission, was intended to lay out China’s opinion prior to the Copenhagen summit this December, which will attempt to take over from the previou Kyoto protocols. They also clearly stated that the new policies resulting from Copenhagen must ensure to include all countries which did not previously ratify the Kyoto Agreement – a direct jibe at the US.

Hopefully the next 6 months will see the power players jostling for position and control, each country hoping to enter the Copenhagen conference seen as the leader in order to direct policies to their benefit. Either way, as long as aggressive targets are agreed upon such as this recent one from China, the results will be positive!

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Australia goes Green

May 18th, 2009 Posted by Admin in Carbon, Renewable Energy

Only a week after causing uproar amongst environmentalists by delaying their emissions trading scheme (despite Kevin Rudd’s election campaign focussing on immediate implementation of carbon-reduction schemes) Australia has doubled-back and now committed to fast-track to cut coal emissions.

Despite “clean coal” being a less popular environmental response, due to additional costs and energy-consumption involved with capturing and transporting CO2, with over 80% of Australia’s electricty delivered by coal-fired power stations this investment is vital.

With the World energy demand predicted to increase by 45% by 2030 according to the International Energy Agency, renewable energy source development will simply not proliferate fast enough to provide the full solution. For this reason the Australian Government are also joining with GE Energy in sponsoring carbon capturing projects worldwide by founding the Global Carbon Capture and Storage Insitute.

More positively, in affirmative attempts to develop renewable energy sources, a $1bn+ investment in clean and renewable energies will focus mainly on solar energy development programs and smart-grid technology, where residential electricity is delivered monitored and controlled digitally. Hundreds of millions of dollars will go in to solar technology projects as Australia obviously has the land space and hopes to become a global leader in these technologies. Prime Minister Rudd announced that 4 solar-power energy stations would be built to replace the alternative coal-fired power station. He also announced that Australia had joined the IREA International Renewable Energy Agency.

At the same time the Australian office announced the largest debt in its history with a deficit now stretching near to $60bn.

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Avoiding the Carbon Crunch

May 16th, 2009 Posted by Admin in Carbon

Our planet has entered a new era, an era where the actions of the dominant species now directly control the wellbeing of the planet itself. Luckily, as inherent with any species, we will do whatever possible to protect our own future.

We now know that the burning of fossil fuels produces Carbon Dioxide that directly effects the stability of the planet’s ecosystem. We also now know that deforestation has a double conseqence, burning of trees not only releasing Carbon Dioxide in to the atmosphere but also cutting down trees removes the essential function of sucking Carbon Dioxide out of the atmosphere. We also know that as a species we continue to grow, not only through reproduction but also due to improving healthcare and medical advances we are all living longer, with predictions suggesting we will reach 9bn in 50 years time. We know that the survival of 9bn will depend on certain fundamental needs being fulfilled; clean air, clean water, housing, food and energy, and we know that succeeding in this for 9bn people will be impossible unless we change our habits.

So as the responsible species we seek solutions, and we have the tools to be capable of doing so. Technology is advancing. We are developing better educational systems to outline the problems we all face. We are developing better methods of purifying and recycling water. We are developing more environmentally-friendly ways of constructing homes, communities, offices, factories, and implementing infrastructure to maintain our lives. We are working on global political movements to ensure that all humans live and work towards our common survival. We are developing new environmentally-friendly technologies to deliver the energy we need, harnessing solar, wind and bio-fuel energy, and methods of reducing our power consumption. We are implementing regulations to protect the existing forests of the World, and incentives to plant new forests for the World.

We now face the greatest challenge, not just fast and smooth system implementation but most importantly how to integrate this in to our financially-driven societies. The rapid creation of the Carbon Markets is crucial and necessary, giving Carbon emissions (or the lack thereof ) a financial value across as many industries as possible. This illustrates our survival instinct not only as a species but at an individual level - the age-old desire to gain via trade. As Carbon Markets develop the greatest concern is how to develop them to perform their fundamental task, ensuring the health & safety of our grandchildren, whilst still giving us the platform to compete amongst one another.

The Carbon Markets are essentially derivates markets, buying and selling “futures” or ‘forwards”, aka the promise to deliver a Carbon Allowance or Credit at a set price at a set date in the future. The danger arises with the necessary inclusion of Carbon Offset Credits, in that these are “earned” for NOT emitting Green House Gases (GHGs). So they are not a genuine product. Issues have already arisen with dangerous GHG chemicals being produced and then destroyed purely to gain the Carbon Credits. Verification and assessment methods for quantifying volumes of GHGs emitted are still not perfected, and many industrial projects going ahead anyway will claim Carbon Credits despite not being intentional for that purpose. Welcome to Subprime Carbon. Alarm bells ringing yet?

Today over a third of Carbon trading is suspected to be Carbon Offset Credits, leaving the door wide open for Subprime Carbon. Traders and speculators make up the majority of the market place, with independent carbon indexes and carbon funds already structured not to help companies achieve their Carbon Caps, but purely for capital gain. Should this really be an open market-place, where speculators can roam free and where hedge-fund tactics will surely selfishly allow the bubble to form with no care for the serious need for a stable market? Securitization of various classes of carbon offset credit projects can easily be done, and is no different from the very same securitization of various mortgage products which led to the eventual downfall of the credit market. These two models will be the same, and it could easily be far more difficult to analyse the variation in carbon-backed securities, which would eventually lead to a collapse of similar magnitude.

Can we afford for this, probably the World’s largest but definitely most important, market to disappear down the same black hole into which our financial markets fell? Serious regulation is needed, united and inter-communicating, not self-regulating such as the debacle of Wall Street over the past decade. Conflicts of interest must be keenly investigated and whilst the development of sophisticated products will be unavoidable in the future, they must also be scrutinised and independently regulated. How corruption, political influence and Wall Street will be kept separate from destroying the environmental integrity of the market is yet to be seen. Emission-reduction target setting must be based on unbiased scientific opinions and emission tracking must also be analysed by effective and independent monitoring systems. Price and market transparency is also essential.

Where we will end up in the future we can not tell, what we do know is that the road to get there is a treacherous one, which we have no choice but to take.

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Montana; the World’s CO2 sink

May 14th, 2009 Posted by Admin in Carbon

In 2005, the entire global output of CO2 from human activities totalled 28bn tonnes. Recent studies by the “Big Sky Carbon Sequestration Partnership”, a US government-funded program in liaison with Montana State University, show that Montana - along with five neighbouring US States - could potentially store more than 200bn metric tonnes of CO2. Simple maths suggest that there is the potential to store up to 9 years worth of 2005’s global output some 2 kms under the ground in north west America.

Deep underground geological formations such as the Bowdoin Down in Montana are primary targets for carbon sequestration. It is considered that as they have held hydrocarbons such as oil or gas for eons, they are the perfect candidate to do the same again. The inherent dangers of such projects has yet to be fully ratified from a physical practicality, safety and environmental aspect, however this is why the Big Sky Carbon Sequestration Partnership has been developed. Over $12m has been received from the Federal Government to assist the research and development of the technologies crucial to making CO2 sequestration a reality.

The projects next major test will be an eight-year test to see if there is potential in the region to store up to 100 years worth of Carbon emissions. One million metric tons of CO2 will be captured and stored underground in Wyoming to test porosity of rocks to see how the future potential of this amazing development may pan out.

Despite these perceived positive movements, being a major coal-source and with a forecasted 1 billion tons of coal underground Montana still condones coal-fired power stations. Currently half of the US electricity is produced from coal-fired power stations, which in turn generates over 2bn metric tons of CO2 in to the atmosphere. So the financial gain for the coal-fired power stations is obvious, whereas the potential financial gains from underground storage is considered to be only hundreds of millions through the sale of “storage permits” to CO2 emitters.

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Soros invests in carbon capture technologies

May 12th, 2009 Posted by Admin in Carbon

George Soros has a reputation for spotting a good trend. One of the wisest investors in the World is now putting his cash down in to what could become an enormous industry, carbon capture and sequestration (CCS). With over 50% of US energy delivered from coal-fired power plants, and with the new Obama regime doing all they can to implement strict new GHG emission reduction programs, Carbon Dioxide capture technology will become very big business.

With many complaining that the energy used in capturing, re-distributing and storing the CO2 could increase power stations energy demands by up to 30%, development of efficient CCS technology is crucial in making it cost-effective. Certain to be enforced by the US administration to some degree, these advancements are essential to all energy companies, and when successfully designed it is hoped that CCS technology will be able to retain up to 90% of CO2 emissions from coal plants. This captured CO2 will also then be able to be sold to other firms needing to reduce their Carbon deficit.

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Soros invests in carbon capture technologies

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