Coalition Shakeups

This may be a hint that cap-n-trade is not going to be tabled this year. But there could be some organizational issues as well.

WSJ: Defections Shake Up Climate Coalition

Three big companies quit an influential lobbying group that had focused on shaping climate-change legislation, in the latest sign that support for an ambitious bill is melting away.

Oil giants BP PLC and ConocoPhillips and heavy-equipment maker Caterpillar Inc. said Tuesday they won't renew their membership in the three-year-old U.S. Climate Action Partnership, a broad business-environmental coalition that had been instrumental in building support in Washington for capping emissions of greenhouse gases.

The move comes as debate over climate change intensifies and concerns mount about the cost of capping greenhouse-gas emissions.
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ConocoPhillips's senior vice president for government affairs, Red Cavaney, said the USCAP was focused on getting a climate-change bill passed, whereas Conoco is increasingly concerned with what the details of such a bill would be.

"USCAP was starting to do more and more on trying to get a bill out without trying to work as much on the substance of it," Mr. Cavaney said.
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As long as climate legislation appeared imminent, companies were willing to paper over their differences and continue to work together. But by late last year, momentum had stalled in the Senate as Washington turned its attention to health care, the economy and the midterm elections. Few experts expect a bill to pass this year.

Investors Push for Rapid Action

This is from the Investor Summit on Low Carbon Economy .


Investors Representing $13 Trillion Call on U.S. and Other Countries to Move Quickly to Adopt Strong Climate Change Policies
“Cannot Wait for a Global Treaty,” Investors Tell Congress and other Government Policymakers at United Nations Investors Climate Summit

Saying “we cannot wait for a global treaty,” U.S., European and Australian investor groups representing $13 trillion in assets called on U.S. Congress and other global decision-makers “to take rapid action” on carbon emission limits, energy efficiency, renewable energy, financing mechanisms and other policies that will accelerate clean energy investment and job creation. Investors made clear today that there are competitive advantages for countries with comprehensive climate and energy policies.

I have written in the past about this coalition (INCR) which is pushing for systemic changes to get the low carbon economy. It represented 7T$ of assets when I last wrote. Now it looks like the coalition has expanded to represent about 13T$ of investment including CalPERS.


The investor statement suggests a great opportunity to make money.

While leading studies indicate that the costs of action to reduce GHG emissions are both affordable and significantly lower than the costs of inaction,2 developing a global low-carbon economy will nonetheless require substantially increased levels of investment from the private sector. For example, the UNFCCC Secretariat estimates that more than $200 billion in total additional investment capital for mitigation is required each year by 2030 just to return GHGs to their current levels by then,3 while the International Energy Agency estimates that additional investment of $10.5 trillion is needed globally in just the energy sector from 2010–2030 to stabilize GHG emissions at around 450ppm.4 This equates to roughly 0.1% of the total value of world financial assets and approximately 0.23% of the total value of debt and equity securities,5 so this is certainly an achievable level of investment – and one that would yield returns in terms of energy savings, energy security, reduced capital expenditures for pollution control, and avoided climate damages. But it is also well above current investment levels. Although public spending in this arena has increased recently to hasten recovery from the global recession, more than 85% of the total investments needed to meet the climate challenge will likely have to come from private capital.

Investors will seek every sound investment opportunity, but until governments establish policies and rules that make low-carbon strategies the clear strategic choice for all businesses, we will not be able to deploy capital into low-carbon investments at the scale required. Until then, our billions of dollars in investments will remain a ‘drop in the bucket’
compared to the trillions of dollars needed. To enable the necessary flows of private capital and allow us to fully assist in achieving a low-carbon and sustainable global economy, policymakers around the world must act swiftly. National policies are needed that provide greater certainty about the direction of climate and energy regulation, ensure transparent markets, facilitate wider and more open capital flows for carbon trading and investment, and benefit consumers and workers as they transition to a low-carbon economy. Accordingly, we see the following measures as being critical for unleashing the volumes of private capital urgently needed to meet the challenges of climate change:

Cap-n-trade battle heats up

New groups join climate lobby fray

An analysis of the latest federal records by the Center for Public Integrity shows that the overall number of businesses and groups lobbying on climate legislation has essentially held steady at about 1,160, thanks in part to a variety of interests that have left the fray. But a close look at the 140 or so interests that jumped into the debate for the first time in the third quarter shows a marked trend: Companies and organizations that feel they’ve been overlooked are fighting for a place at the table.
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At issue are the free “allowances,” or carbon dioxide pollution permits, that the House-passed climate bill would give to manufacturers that use a lot of energy to produce internationally traded products such as steel and aluminum. Those energy-intensive industries fighting international competitors successfully lobbied for protection from loss of jobs to China and other cheap-energy countries if the United States unilaterally enacted a carbon reduction program that would make coal burning more expensive here. But the House bill’s approach means manufacturers that don’t use as much energy — like Campbell — would have to bid at auction for carbon emission allowances from the federal government.

Johnston argues that Campbell should either be exempt from that process or be provided some freebies, too. “I think it’s clear from our view that we're not being treated as fairly as carbon-intensive industries,” Johnston said. “There needs to be some recognition of the role the food industry plays in our economy.”

The report is based on an investigation by Center for Public Integrity.
They have a number of videos on youtube like this one on carbon markets lobby.

World's highest cabinet meeting

Drama has its place in politics. First we had the cabinet meeting under water, now we have one on a mountain.

Cabinet meeting at Mt. Everest

On Friday, to highlight the danger that global warming poses to glaciers, Nepal's government held a Cabinet meeting at Mt. Everest - a stunt the government billed as the world's highest Cabinet meeting. The ministers posed for pictures, signed a commitment to tighten environmental regulations and expand the nation's protected areas, and then quickly flew away.

"The Everest declaration was a message to the world to minimize the negative impact of climate change on Mount Everest and other Himalayan mountains," Prime Minister Madhav Kumar Nepal later said.

The Prime Minister, his two deputy prime ministers and the 20 Cabinet ministers were examined by doctors before boarding helicopters to Kalapathar, a flat area at an altitude of 17,192 feet (5,250 meters) next to Everest base camp, the jumping point for climbers seeking to scale the peak.

Aviation Industry at COP15

Posted on twitter by enviroaero

This is similar to the shipping industry's response. I think there is merit to the idea that industries that cross national boundaries should be managed by a neutral third party, possibly a new UN organization or subgroup that works with the Aviation industry.

The global aviation sector:
united behind common goals and a global solution
A global approach for a global industry tackling a global problem

Recommendations for including aviation in a global climate change framework
The global aviation sector believes:
1. Aircraft CO2 emissions should be addressed in any post-Kyoto global framework, through the International Civil
Aviation Organization (ICAO).
2. Emissions from aviation should be addressed through ICAO adopting a global sectoral approach that does not
distort competition amongst airlines, treats aviation as one indivisible sector rather than by country and takes a
global approach to emissions reduction.
3. Aviation emissions should only be accounted for (and paid for) once.
4. The aviation industry can achieve carbon-neutral growth from 2020 and work towards reducing aviation net
carbon emissions by 50% in 2050, compared to 2005 levels. These ambitious targets require assistance from
governments through:
• the necessary investments to modernise air traffic management
• investment in aerodynamic and operations technology research and development through academic and
industry partners
• investment in the development and commercialisation of sustainable, second-generation biofuels for use in
aviation

Munich Re: Ambitious climate targets needed

This is interesting coming from the insurance industry who will see payouts if bad things happen. The fact that payouts will increase does not necessarily mean that insurance industry cares. It could easily mean brisk business. We need to dig a little deeper to understand their economics and response. But at the surface, it makes the right noises.

Ambitious climate protection targets are needed –
or the cost of climate change will keep rising

Munich Re’s NatCatSERVICE database shows that, globally, the average number of major weather-related catastrophes such as windstorms, floods or droughts is now three times as high as at the beginning of the 1980s. Losses have risen even more, with average increases of 11% per year since 1980. To what extent the increased losses are due to climate change is not yet clear. Preliminary analyses suggest that it accounts for a low single-digit percentage of
annual overall losses.

Although this increase appears low, the amounts involved are enormous. This is illustrated by total natural catastrophes losses in the period 1980–2008. According to studies by Munich Re, overall losses due to weather-related events came to around US$ 1.6tn in original values, with insured losses amounting to approximately US$ 465bn. In the period from 2000–2008 alone, overall losses totalled over US$ 750bn, whilst insured losses came to around US$ 280bn.

“Even conservative estimates show that we are talking here about climate change costs already running into billions per year. The insurance industry is able to adapt but, in the end, each individual has to bear the cost”, said Peter Höppe, Head of Munich Re’s Geo Risks Research. “It is therefore very important and makes economic sense to lay cornerstones for a new agreement, with ambitious targets, in Copenhagen. After all, the climate reacts slowly. Even now, climate change can no longer be halted, it can only be attenuated. And it is time this was done.”

According to Höppe, in Copenhagen a binding commitment will have to be defined that limits global warming to 2°C above pre-industrial levels. This can be done only if global carbon emissions are cut to 50% of 1990 levels by 2050. Höppe: “That means the industrial countries will have to achieve 80%, and that globally there will have to be a real fall in emissions within the next few years.” Furthermore, to rapidly find a successor to the Kyoto Protocol, all the principal carbon emitters would have to accept binding reduction targets.

Thoughts on climate activism

Solve Climate has a fascinating article detailing the growing activism across the world. This is similar and related to activism on fair trade, wildlife protection, iraq, water privatization etc. There are several important things to notice here about this kind of activism:

1. It is global. The level of coordination in terms of scale is high. Roughly 9M people signed up to tcktcktck campaign.
2. It is relentless. Everyday and hour there is something or other somewhere.
3. It is strategic in terms of methods and timing.
4. It is in visible. It is in your face and you cant miss it. Roughly 20K people are gathering in Copenhagen, and there are four parallel events happening.
5. It understands money. While they work the politics, they are working on altering the economics as well.
6. It understands communication. They are bringing the best of strategic communication to the table which make it hard to fight.

The challenge to global political and economic decision makers has never been higher, I think. People have talked about information and knowledge societies for a long time now. We are beginning to what it looks like and can see power structures being altered in real time.

I think at the core is a desire in people for change, and people are using their knowledge and skills to shared problems outside the government and business context. They see too much of wars, greed, destruction of life and property, concentration of power, rights violations etc. They are participating whenever there is an opportunity. I myself worked on a campaign to get Coke to control its water usage and education in India. I was surprised by my own 'reach' in the system.

Climate Activism Soars Planetwide

At Ambrose's office on Wednesday, another group of protesters was drawing attention to the tar sands industry's contribution to global climate change, Kinder said. A youth-produced video out of Canada this week, The Tar Sands Blow, also urges Harper to stop the expansion of the tar sands, or oil sands, which it calls "the greatest mistake we've made."

In Australia, 200 climate protesters blocked the entrance of parliament, calling for deep cuts from the Rudd government before 130 of them were arrested by police and taken away.

In Indonesia, protesters from Greenpeace chained themselves to four cranes at a paper mill on the island of Sumatra. Their goal was to highlight the role that deforestation plays in global warming.

The Washington, D.C.-based 1Sky campaign is organizing what its calling a "creative action" on Dec. 4 in front of the White House with images reflecting the urgency of the climate challenge.

How Climate Change is Changing Lobbying

This blog is fundamentally about tracking events in the journey to low carbon economy. This is, I think, a significant event.

This article from October but is talking about how this act of leaving a large and influential lobby group like US Chamber of Commerce is unprecedented. Companies are reading the future differently, and some like Apple are betting on a carbon-scarce future. This is indicative of two things: first, it has become unacceptable to be seen as global warming denier, and second, the business coalition for status quo is weakening every day. There will probably be a tipping point down the line - watch for it.

Exit Through Lobby by James Surowiecki, Newyorker Magazine

Last Monday, Apple announced that it would be quitting the U.S. Chamber of Commerce because of the Chamber’s opposition to global-warming legislation. And that was just the latest in a series of defections: in the past few weeks, the public-utility companies Pacific Gas & Electric, PNM Resources, and Exelon all announced that they’d be leaving the Chamber, while Nike quit the organization’s board of directors. Historically speaking, this is a positive exodus.

...

Why the difference? Partly, it may be a matter of self-interest; Exelon, for instance, has big investments in renewable energy. But it may reflect a calculation that global warming is simply too big an issue to get wrong, both economically—few companies are really going to benefit from the melting of the polar ice caps—and from a public-relations point of view.

It concludes with a strong statement

global warming isn’t just bad for the planet; it’s bad for business.

Mercury News, among others, has reported on this:

"Apple is committed to protecting the environment and the communities in which we operate around the world," Catherine Novelli, Apple's vice president of worldwide government affairs, said in a letter to Thomas Donahue, the U.S. Chamber of Commerce president and CEO. "We strongly object to the Chamber's recent comments opposing the EPA's effort to limit greenhouse gases."

The move comes amid efforts by Apple to burnish its green image. The Cupertino-based company revealed its carbon footprint — or total greenhouse-gas emissions — for the first time last month, announcing on its Web site that 53 percent of the 10.2 million tons of annual carbon emissions it takes responsibility for comes from consumer use of its products.

The company has taken a broad view of greenhouse gas emissions, using a "life-cycle analysis" to calculate greenhouse gas emissions for each product, from production to transportation, consumer use and recycling.

"We believe it has resulted in the broadest possible measure of the carbon footprint for each of our new products," Apple said in response to a lengthy questionnaire by the Carbon Disclosure Project, which publishes emissions data for the world's largest corporations. "No other electronics company reports this information at the product level, but we think they should."

Business coalition calls for firm CO2 treaty

Continuing the momentum thread, this is from yet another business coalition. There is a consistency in what multiple of the business coalitions are asking for - clarity, commitment, and low uncertainty. They have accepted that carbon price and legislation is coming. They are trying to influence the course now.
Business coalition calls for firm CO2 treaty

The private sector investment needed to tackle climate change will not be made without a binding international deal on carbon emissions, according to the head of a big business coalition.

Lars Josefsson, chairman of Combat Climate Change, a group including BP, General Electric, Unilever and more than 60 other large companies, said business was ready to act but would not do so without a clear regulatory framework.

“The necessary investments will only be made when you have a binding treaty and legislation,” he said in an interview.

“Of the money required to implement a deal, the vast majority – about 80 per cent – will come from the private sector. That can only come when there is a stable legal framework.”

This coalition calls itself the 3C Initiative

Combat Climate Change (3C) is business leaders’ initiative endorsed and actively promoted by the top executives of 66 of the world’s largest corporations.

The main objective of 3C is to support the UNFCCC-led negotiation process to establish a new global agreement on climate change, and to mobilize companies and business leaders across the world to contribute knowledge, resources and leadership to this common goal.
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At present 66 global companies including General Electric, Unilever, Citigroup, BP, Siemens, DTEK, Rusal, Reuters, Duke Energy, Gazprom, China Oil & Offshore Company, Volvo, Tata Power, HP and Vattenfall have joined our initiative!

Electrification Coalition: Adding momentum to EV deployment

A new lobby group has formed with some heavyweights to push for the EV deployment.

The Electrification Coalition

The Electrification Coalition is a nonpartisan, not-for-profit group of business leaders committed to promoting policies and actions that facilitate the deployment of electric vehicles on a mass scale in order to combat the economic, environmental, and national security dangers caused by our nation’s dependence on petroleum.

The Coalition seeks to achieve its goals through a combination of public policy research and the education of policymakers, opinion leaders, and the public. Equipped with exceptional research and analysis, these prominent business executives bring credibility, insight, and objectivity to the debate over electrification.

Look at members of this group:

Timothy E. Conver,AeroVironment, Inc. - Manufacturer (EV/UAVs)
Peter L. Corsell, GridPoint, Inc. - Smartgrid software vendor
David W. Crane, NRG Energy, Inc. - Enginnering/operations
Kevin Czinger, Coda Automotive - EV manufacturer
Peter A. Darbee, PG&E Corporation - Utility
Seifi Ghasemi, Rockwood Holdings, Inc. - Manufacturing, materials
Carlos Ghosn, Nissan Motor Company, Ltd. - EV manufacturer
Ray Lane, Kleiner Perkins Caufield & Byers - VC
Richard Lowenthal, Coulomb Technologies, Inc. - EV charging
Alex A. Molinaroli, Johnson Controls- Equipment manufacturer
Reuben Munger, Bright Automotive, Inc. - Vehicle design
Frederick W. Smith, FedEx Corporation - Logistics
David Vieau, A123 Systems, Inc. - Battery manufacturer


They have an electrification roadmap, if you wish to look at.

The Electrification Roadmap is a comprehensive report that outlines a vision for a fully integrated electric drive network in the united states. The report examines the challenges facing electrification, including battery technology and cost, infrastructure financing, regulatory requirements, electric power sector interface, and consumer acceptance issues. The Roadmap provides policymakers and business leaders with a framework for overcoming these challenges in order to drive meaningful reductions in u.s. oil dependence.

A few observations . First, people are taking the fight to the political level/public discourse now. The potential winners (GE/transportation/software etc.) are bracing for a show of force with potential losers (coal, oil etc.). Second, the coalition is still small. Only some are heavyweights - FedEx, PG&E, Nissan, and Johnson controls. Third, they are playing up, possibly for strategic reasons, the national security angle. They are likely being advised by the best of the messaging talent that exists out there. This strikes me a way to split the subset of lawmakers who are both market and security hawks.

The march to low carbon economy continues....