Viewing posts tagged: "Policy"

The Inside View of Carbon and Energy Auctions

Michael Kanellos: April 1, 2009, 9:51 AM
They work. In the first carbon auctions conducted last September by RGGI Inc., the administrative body for the East Coast's Regional Greenhouse Gas Initiative, the auction yielded 12.6 million allowances for $3.07 per allowance, according to World Energy, which provides the underlying software and services for the auction. A second auction in December yielded 31.5 million allowances at $3.38 per allowance. At another auction on March 23, 31.5 million allowances were auctioned at $3.51 per allowance. The March auction also saw the sale of 2.2 million 2012 vintage allowances for $3.05 per allowance. In all, the the March auction raised $117 million for energy efficiency and other projects. (The money goes to the ten participating states.) These kind of results are helping bolster the argument for cap-and-trade programs over carbon taxes, said Phil Adams, World's president. RGGI is an example of cap and trade. Representatives from several governments have already contacted World about auctions. People who helped implement RGGI now work in the Obama administration. Cap and trade has an advantage over taxes in that the price is less arbitrary, he argued. (Canada, Al Gore and others, though, say a tax is the way to go.) World also conducts energy auctions. Manufacturers and other large organizations state what they want to buy and independent power producers bid on the deals. Buyers can see the identity of the sellers, but the sellers don't know who else is bidding. They just see the latest quotes. Despite the fact that the contracts can total well into the millions, you see a lot of the same psychology you do on eBay. The bidding will proceed on a moderate basis until the last minutes of the auction, which last an hour. Then it plummets as sellers try to undercut each other. Some sellers have multiple log-ins to better react to incoming bids from competitors. Buyers are not obligated to buy any of the offers "but we close almost every deal," said Adams.

Want to Know a Chemical’s Toxicity? Check Out the EPA’s New Online Database

Ucilia Wang: March 12, 2009, 9:21 AM

The U.S. Environmental Protection Agency has opened a new database that allows you to search for your favorite toxic chemicals.

The EPA said the Aggregated Computational Toxicology Resource database provides information on more than 500,000 man-made chemicals, including the physical makeup, toxicity and experimental and test results of each chemical. The EPA has culled the data from more than 200 public resources, such as the U.S. Food and Drug Administration, National Institute of Health, Centers for Disease Control and Prevention, Health and Environment Canada, the European Union and the World Health Organization.

The database will not only serve scientists and the public, it also will help the EPA better regulate chemicals. The EPA currently regulates nearly 10,000 chemicals. The database will enable staff at the EPA’s National Center for Computational Toxicology to analyze the chemicals’ potential toxicity by using computer modeling and other methods.

The center’s work, in turn, will help the EPA identify missing information and prompt more testing of the chemicals, the EPA said. What the EPA has found so far is that it has acute toxicity data for 59 percent of the chemicals it regulates, but it only has carcinogenicity testing data for 29 percent of them. For data on the chemicals’ effects on the reproductive health of humans or other animals, the EPA said it only has information on 11 percent of the chemicals.

California also is working on developing a more comprehensive chemical database. The state wants what will be a publicly accessible database to help consumers evaluate the products they buy and use (remember the poisonous toys from China?). About 100,000 chemicals are used to make consumer products today, said Maureen Gorsen, director of the California Department of Toxic Substance Control, at the Cleantech Forum in San Francisco last month.

The department, part of the Cal EPA, is developing the database. Another new law also is giving the department the power to identify and rank chemicals that pose health threats and to determine alternatives for manufacturers to use.

Cal Air Resources Board Proposes New Fuel Standard

Ucilia Wang: March 5, 2009, 12:56 PM

The California Air Resources Board released a draft regulation Thursday to require the use of alternative transportation fuels in order to cut greenhouse gas emissions.

CARB released the proposal for the Low Carbon Fuel Standard that would promote alternative fuel use and enable the state to meet its emissions reductions goals. Fuel producers, importers, refiners and blenders will have to start providing fuels to meet the standard starting in 2011. The standard is based on calculations carried out by CARB's staff on the greenhouse gas emissions that can be produced by the production, transportation and use of various types of fuels.

One of the goals for enacting a new fuel standard is to replace 20 percent of the conventional fuels used by cars in the state with cleaner alternatives such as electricity, biofuels, natural gas and hydrogen, the CARB said.

The public will have 45 days to review and comment on the proposed standard.

The proposal is one of a series of regulations that CARB is drafting to meet the mandate of the state’s Global Warming Solutions Act of 2006, a sweeping legislation designed to cut California’s greenhouse gas emissions to the 1990 levels by 2020. The transportation sector, from fuel production to tailpipe emissions, is responsible for generating 40 percent of the state’s greenhouse gas emissions, the CARB said.

CARB issued a master plan last December for carrying out the climate change law. The plan included a program to cap and trade carbon emissions.

The proposed fuel standard will sure elicit strong opposition from some fuel makers. In fact, an ethanol advocacy group last October objected to the metrics used by CARB staff to determine what types of alternative fuels would pose more environmental harm than others.

The sticking point was the inclusion of the impact of indirect land use, such as emissions that resulted from clearing forestland for farming energy crops. Measuring direct land use impact would look only at the emissions that come from growing and turning crops into fuels.

Another ethanol group called Growth Energy reiterated the same objection Thursday. Measuring indirect land-use impact would unfairly punish ethanol makers, the group said

CARB recently passed other regulations aimed at reducing emissions, including one that requires big rigs truckers to add filters to their existing fleets between 2011 and 2014. A new law that took effect in January limits the amount of time long-haul truckers can idle the engines in order to cut emissions.

How Will the Fed Stimulus Package Help Me?

Ucilia Wang: March 4, 2009, 12:10 PM

Our government passed the $787 billion federal stimulus package to give a boost to a variety of clean energy sectors. But as many of you might have noticed, it can be darn confusing to figure out how and when the money will be distributed.

The California Energy Commission has created a Webpage that it hopes will make it easier for businesses and consumers to learn how they can benefit from the new spending plan. From the Webpage you can sign up for email alerts about programs and their funding. The commission also plans to hold a Webinar about economic recovery soon (date not set yet).

The commission said it expects to get about $295 million for energy efficient and renewable energy programs, including a block grant program to help cities and counties deploy projects to help reduce their residents’ energy use.

The stimulus package includes money for programs that are not under the commission’s jurisdiction, by the way. So check with other relevant state agencies or your own Congressional representatives to get more information.

Some provisions of the stimulus package require the U.S. Department of Energy and Treasury to figure out the rules for doling out the funding for various programs. That will take time. So you are not the only one who is wondering, at this point, how the government can help you out during this recession.

Know Your Chemicals, Make Healthier Buying Decisions

Ucilia Wang: February 25, 2009, 9:23 AM
Do you know what chemicals are used to make the toys and furniture in your home, or the plastic lunch box and bottles that hold your food and drinks?

In California, work is underway to create a database of chemicals and their toxicity levels for public access, thanks to a law that took effect in January this year. State officials hope to use the online database to nudge manufacturers into ditching more harmful ingredients and designing better products.

The state Department of Toxic Substances Control (DTSC), part of Cal EPA, is developing the database, which will enable consumers to evaluate and decide whether they want to buy certain products. The state also enacted another law last month that empowers the department to identify and rank chemicals that pose health threats and figure out alternative that manufacturers could use.

“There is a lack of information to choose non-toxic products,??? said Maureen Gorsen, director of the DTSC, at the Cleantech Forum in San Francisco Wednesday. “What are alternatives to plastics? That’s where the opportunities are for green materials.???

In the past, the state’s efforts to regulate chemicals mainly focused on cleaning up chemical spills and limiting toxic exposures in the workplace. News about high lead content in toys highlighted the public's ignorance on what they touch and use daily.  Autism, cancers and other health problems also have been linked to excessive exposures to toxic chemicals.

The DTSC has created a wiki to allow consumers to pitch in to help to create the rules for collecting the chemical data and assessing the toxicity levels of the consumer products. The two laws came out of the Green Chemistry Initiative launched by the Cal EPA in 2007.

Here are some interesting numbers from Gorsen and the DTSC website:

  • The U.S. chemistry market is worth $635 billion. California accounts for $7.2 billion of that pie.
  • The worldwide chemical market grows 3 percent each year, doubling every 25 years.
  • About 100,000 different chemicals are used to make consumer products today.
  • Two million plastic beverage bottles are tossed away every five seconds in the United States.
  • 426,000 cell phones are discarded each day in the country.

Gov’t Aid and Its Unintended Consequences

Ucilia Wang: February 24, 2009, 9:39 AM

The federal stimulus package will help greentech companies weather the economic downturn, but it also could lead to some undesirable effects.

“It’s critical for the industry to view the stimulus package and all the helping hands as incredibly temporary,??? said Michael L. Goguen, a general partner of Sequoia Capital. “We don’t want a company to depend on the government. It’s easy to be deluded into thinking that you are in a sustainable business because you’ve got all those money [from the stimulus package].???

Goguen’s comment, made at the Cleantech Forum in San Francisco, is a reminder that government aid comes with potential side effects. The federal and state government had played key roles in promoting the growth of solar and other greentech sectors even before the financial market crumbled. Now that they are making even more money available, will the tech industry become co-dependent?

For H. Jeffrey Leonard, CEO and co-founder of the Global Environment Fund, the need for government dollars also reflects the importance of financing, which dwarfs the importance of technology development during this tough economic climate.

“The structure of the cleantech market is changing dramatically. What really matters is project financing,??? Leonard said at the forum.

Investors also can’t expect high return any time soon. Leonard said back in the mid 1990s, limited partners were making a 30 percent return in the stock market, so investing in startups wasn’t so lucrative. Now that the stock market is tanking, the LPs are looking for other opportunities and adjusting their expectations.

“It’s hard to make consistent double-digit returns in a subsidized industry,??? Leonard said.

Global Cleantech Race Quickens: SEZ to LCZ

William Brent: February 20, 2009, 9:47 AM
China’s amazing surge as an economic power started with the creation of special economic zones (SEZs) nearly 30 years ago, as did my “it’s complicated??? love affair with the country. The zones provided a blueprint for the rest of the country toward accelerated wealth creation. They also marked the beginning of a catastrophic decline in environmental capital. Now the country may be dusting off the SEZ concept and considering the creation of Low Carbon Zones (LCZs). My involvement in the U.S.-China Clean Energy Forum and JUCCCE has put China front of mind, as has my front-row seat in the international race to see who becomes the superpower of cleantech. In the resource-constrained world of the future, the economies that are most efficient (i.e., best at innovating and adopting clean technologies) will win. First proposed in 2007, the idea of Low Carbon Zones was an outcome of interaction between E.U. and Chinese think tanks, with the support of the U.K. Foreign Ministry and China’s National Development and Reform Commission (NDRC). The concept, thumbnailed here and here with even greater detail here, states:
LCZs would aim to stimulate transformational regional political leadership, endorsed at the national level, to create an enabling environment for large-scale innovative low carbon private and public investment. Just as SEZs provided China with a laboratory to shape its participation in the global market economy, the LCZs could pioneer approaches to decarbonisation compatible with Chinese institutions and development approaches.
It appears an initial pilot of the LCZ concept is planned for China’s heavy industrial province of Jilin. I hope the idea flies, as it’s clearly in the global long-term interest. But no doubt questions of IP, tech transfer and ultimately money could create concerns within the industrialized democracies that the West is once again funding China’s development, only to be left holding the bag. Another seemingly similar initiative in China has recently emerged from the Climate Group, outlined in a new report, which also focuses on developing low carbon cities. According to the Climate Group, the program aims to recruit, motivate, and engage 20 Chinese cities in a five-year campaign to transform and accelerate the local market for energy efficiency and renewable energy technologies. MOUs have already been signed with the cities of Guiyang and Dezhou. It’s unclear from the materials I’ve read what the specific funding mechanism for either of these concepts will be, although with the backing of groups like the NDRC at the central government level, it’s certainly within the realm of the possible. As I’ve written about before, China’s scale offers the greatest potential for any country (except for maybe India) to drive down costs of cleantech and make clean solutions truly commercially viable. But that doesn’t mean other countries aren’t trying to compete. Less developed ideas seem to be emerging in the U.S. and Europe. Cities like Seattle and Boston have been floating the idea of cleantech innovation hubs. Various states are also vying to attract cleantech investment and economic stimulus money, including Colorado, Pennsylvania, New Mexico and Michigan. In Europe, efforts are also under way to create the region’s first cleantech incubator, which if successful, might be followed by others. And of course, there is the Oz-like effort in Masdar in Abu Dhabi (“pay no attention to that man behind the curtain???), where the Wizard is oil money. It’s great to see a growing understanding that low carbon leadership will mean future political and economic leadership in the world. I just hope that those in the emerging Cleantech Great Game keep in mind the lessons of the original Great Game – that the fight for supremacy over a largely unmapped, strategic territory often leads to unnecessary pain and suffering at the expense of the common good. Let’s hope that the newly announced International Renewable Energy Agency (IRENA) can play a role in fostering the needed collaboration and help us put aside the myopia often caused by financial gain. A former foreign correspondent, William Brent is a public relations exec at Weber Shandwick. He started the firm’s cleantech practice. More can be found at