Posts Tagged climate change

The International Climate REDI Project

Posted by on Tuesday, 4 January, 2011

The Climate Renewables and Efficiency Development Initiative is an international agreement, led by the Department of Energy, that helps residents of low income countries switch to more energy efficient appliances. According to the Department of Energy, the United States will be paying $85 billion of the project costs from 2011-2015, and other developed countries will cover the remaining $265 billion in costs.

This project includes several new programs. One program is the Solar and LED energy program. LED bulbs are much more energy efficient than traditional incandescent bulbs, and they are even more energy efficient than compact fluorescent bulbs. The purpose of this project is to provide the bulbs, along with solar generators, to rural residents and other people who don’t have access to the electric grid.

The Super Efficient Equipment and Appliance Deployment program is also a new program that Climate REDI establishes. The program focuses on market incentives. California and other states periodically offer tax credits for energy efficient appliances, immediate purchase rebates, and provide subsidies so that sources of clean energy can compete with other power sources such as coal and oil. According to Humboldt State University, California advisers are already familiar with establishing standards for these incentive programs because of the previous and current initiatives in the state.

The third new Climate REDI program is the Clean Energy Information Platform. This is a database that allows scientists in developing countries to easily exchange information with advisers in the developed countries that are funding the project. Each technologically advanced country picks different areas of expertise, so Australia and Britain consult on carbon capture and Germany and Spain give advice about solar power.

Another program is the Scaling Up Renewable Energy Program. $250 billion out of the total $350 billion of project funds will support this program, which is an existing program that the World Bank manages, according to America.gov. Although Climate REDI offers $250 million to finance this project, the World Bank also uses funds from other sources to support renewable energy projects in developing countries.

Climate Change Grants

Posted by on Friday, 20 August, 2010

Federal funding is available for climate change research and education projects. The American Recovery and Reinvestment Act provides monetary contribution to states as well as to cities, counties, and other local programs. The goal of ARRA is to support existing initiatives, so many of these projects form partnerships, with more funding provided by existing donor companies and local taxpayers.

The City of Minneapolis has an annual program which awards climate change grants, which was founded in 2007. The Minneapolis program is open to all types of applicants, from individuals to universities and corporations, and the 2010 program awards up to $10,000 per winner. One unique requirement for this grant is that the applicant should help people register for the Minnesota Energy Challenge.

The California Energy Commission awards climate change grants as part of its PIER program. PIER, or Public Interest Energy Research, supports both efficiency in energy use and projects which produce additional clean energy. PIER grants are large, as the California Energy Commission may provide up to $1 million in funding, and the project may also receive additional federal support.

The Department of Agriculture also awards climate change grants. These are some of the largest climate change grants available anywhere, as the USDA can award up to $25 million for a single project. This is even larger than the Department of Energy grants which average around $5 million. The Department of Agriculture is looking for methods which reduce the amounts of energy, water, and nitrogen based fertilizer that farmers require. These grants are also available to anyone, including individuals, and the Department of Agriculture will award smaller grants for projects with less requirements.

California also has a program available that supports small individual projects. The California Energy Commission created the Energy Innovations Small Grant Program, which provides as much as $95,000 for hardware demonstrations and up to $50,000 for projects which model climate change. This program allows small businesses to apply. These projects cover the same topics as the PIER request for proposals, just on a smaller scale.

Vermont also awards climate change grants. According to the Vermont Governor Jim Douglas, 17 projects throughout Vermont received $188,000 in total funding in 2009. Projects included replacing inefficient boilers at schoolhouses, adding efficient insulation to buildings, and replacing inefficient light bulbs such as incandescent bulbs. The Vermont Agency of Natural Resources lists the grant conditions, which focus on small scale efficiency and conservation improvements that can easily be implemented in several Vermont communities.

The Global Warming Debate

Posted by on Saturday, 12 June, 2010

This is necessary because of the scandal at Hadley CRU. We can’t fix this problem when much of the United States population believes that this is a made up issue. We are also taking a major chance here, since other countries will develop methods to deal with these problems. I’m not in favor of the United States having to purchase mitigation equipment from other countries, or having predictable disasters cause further damage to our economy. It’s especially a problem when younger Americans don’t seem to consider global warming a major concern, and this is happening, according to E360.

I’ve heard people say that greenhouse gases are not a problem, or that Carbon Dioxide should not be considered a greenhouse gas. Are you familiar with reports on the atmosphere of Venus? Enough carbon dioxide in the atmosphere and large amounts of heat will be trapped, and the temperature will skyrocket. It is possible that the warming will open up new farmland near the poles, such as in the Canadian tundra, but it will destroy farmland around the equator, producing many more refugees. Carbon particles that land on ice in the Arctic absorb heat just as the black asphalt in cities absorbs heat, as the ice changes from clear to black.

Global warming causes a lot of natural disasters, especially in California, according to the University of California.
Some of these problems are things I have written about in the past. An increase in the temperature melts ice and makes the sea levels rise. For a state like California, with large populations on the coast, this can cause disasters. In addition, higher average temperatures increase the damage that wildfires cause in California. The Securities and Exchange Commission now requires corporations to take these effects into account when estimating future profitability on their financial statements. Generally Accepted Accounting Practices require a company to list expected losses on its books when there is a high likelihood that the losses will happen.

Sometimes, the best way to argue in favor of a position is to study the opponents’ arguments, in my opinion. Here is an anti global warming argument. The paper claims that dealing with global warming is expensive. It is expensive, and the damage from not dealing with these problems is even more expensive. The author suggests conspiracy theory, which can signal a weak argument. Finally the author does suggest methods of mitigation such as cleaning carbon out of the air, which is definitely possible. Preventing a problem is often cheaper than dealing with a problem which has already happened, just look at the Gulf of Mexico as an example.

Climate Change in the Alps

Posted by on Tuesday, 1 June, 2010

The Alps are a world famous destination for vacations, and many travelers visit these mountains each year to ski and snowboard during the winter months. The Swiss government is concerned about climate change because it is having significant effects on the snow in the Alps.

The European Environment Agency is researching the effects of climate change in the Alps. Specifically, the Alps are heating up as more carbon is added to the atmosphere. According to the European Environment Agency, the temperature in the Alps is increasing twice as fast as the overall temperature average for the entire planet. This is a major problem, as a smaller temperature increase here will cause the snow to melt without other locations seeing a temperature increase that impresses the urgency of the issue on them.

The major concern with climate change in the Alps is water supply. The tourist resorts use a lot of water, and Switzerland also supplies water to other parts of Europe. A temperature increase will cause a drought, and instigate conflicts between the separate cantons. Switzerland might be forced to shut down some of its resorts because its citizens need the water, and a snowfall reduction might also limit the season for some outdoor activities.

The Swiss government is also studying the effects of climate change in the Alps. Melting snow on mountains changes a solid ice pack into water and mud. This creates hazards as the mountains themselves are no longer stable, and there will be avalanches, mudslides, falling rocks, and other disasters as the snow melts further. According to Swisster, melting permafrost is already increasing the levels of bacteria in Swiss drinking water and the runoff from the mountains is contaminating well water supplies.

Even the small expected change is expected to have a drastic effect on resorts, according to Swiss Info. The global temperature increased about two degrees Celsius in the last 250 years, according to Swiss Administration News. Of course, global temperature is increasing faster now as more companies become industrialized and build factories and cars. An increase of two degrees Celsius globally will raise the average temperature in the Alps about four degrees, and according to Swiss Info this would make snow cover unreliable for half of the resorts in Switzerland. The effect of climate change is much greater in German areas of the Alps, where only a one degree Celsius increase makes sixty percent of their resorts unreliable for snow coverage.

The Canadian Climate Change Accountability Act

Posted by on Sunday, 9 May, 2010

Climate change accountability has come to Canada. The act establishes strong goals, including a very sharp decrease in carbon emissions. The New Democrat Party states that this plan sets a reduction of twenty five percent emissions by 2020, and eighty percent emissions by 2050, below the 1990 levels of carbon emission. This is a very significant move, since those are some aggressive targets.

The New Democratic Party gets to claim responsibility for this act, since others in the Canadian government were trying to reduce the climate change targets. The Green Party of Canada notes that Prime Minister Stephen Harper’s conservative legislators are attempting to weaken previous legislation. Negotiators at the climate change conference in Copenhagen noticed these attempts, adding blame to Canada during the international talks. According to the Green Party, the United States planned to invest more money in green energy funding than Canada’s government, although this accountability act will definitely change the likelihood of getting green energy subsidies for renewable energy plant construction in Canada.

The act itself is available at the Parliament of Canada site. The summary explains additional features of the act, such as how it will be enforced including subsidies and penalties. The act is broken up into five year plans that set targets for periods between 2015 and 2045. The gas regulates several greenhouse gases other than carbon dioxide, including methane, sulfur and nitrogen dioxides, and chlorofluorocarbons and related chemicals. It does specify that the regulation applies to the shorter chain CFCs, since larger chains do not rise into the atmosphere. Shorter carbon compounds such as propane are gas at room temperature, longer chains such as waxes are solid at room temperature.

This bill includes room for flexibility. There is a lot of room for the Canadian government to set up monitoring methods later, although the legislation does include a mandate to create these monitoring methods. This includes possible permits and inspection for any machine that releases any of these greenhouse gases as well as a possible carbon credit trading exchange. In addition, these regulations are intended to set specific targets for each province of Canada, which brings up the possibility that provinces may trade carbon credits among each other as well. United States manufacturers and resource extractors should pay attention to this legislation, since they are likely purchasing supplies from Canada and this act will add compliance and inspection costs as a component of sales. Truckers should also be concerned, since this act could include additional inspection and installment of devices on trucks allowed into Canadian provinces.

Non Farm Payrolls and the Blizzard

Posted by on Friday, 5 March, 2010

It’s the first Friday of the month and we all know what that means. At 8:30 AM on the East Coast, or 5:30 AM here, the payroll numbers for the United States are released. Traders always watch this news as it can set the tone for the next few months, and the markets tend to be quiet and then break out with panicked buying or selling once everyone gets ahold of the number. Of course, political wonks and partisans also love to watch this news release, as it makes good material to argue the virtues of one candidate or another.

This Friday is a special situation. After many months of job losses, the pace of dismissals has been tapering off, although we have still not returned to job creation. If the current trend holds we are probably looking at around -100,000 for this month’s jobs number. Rumors going around suggest that a will have a major effect on the number of people reported as showing up for work. The link here mentions that in January 1996, there was another blizzard that caused a dip in the numbers. Since this was a temporary effect, the next month saw a significant jump in the payrolls, with 140,000 jobs added. That’s a difference of more than 350,000 jobs, although a large job loss number in January isn’t unusual as seasonal temporary workers are let go. Watch for a similar reversal this April, combined with the trend it might even push the numbers into positive territory and create a welcome psychological effect.

Once again we see that climate change has a clearly foreseeable effect on the markets. Strong weather conditions such as blizzards can increase in frequency because of warmer air over the Arctic. For example, the icebergs in the Arctic which are covered with carbon particles will melt, and seawater is much darker than ice. This will change the temperature of wind currents and the atmospheric pressure in the area, as well as allowing the heated air to absorb more water vapor, potentially creating strong storms. Since the ice concentration continues to shrink in recent years, future blizzards are not unexpected. We already know that a blizzard can affect the reported unemployment rate, and this rate in turn affects prices in many other actively traded markets. Companies should prepare a strategy to deal with this risk in the future, and they are now required to report future economic consequences due to this foreseeable event because of the recent SEC press release previously mentioned here.

Hadley Cru changes nothing

Posted by on Tuesday, 2 March, 2010

Or why a business would still have to keep these records even if there was no climate change. We still would not be able to rely on carbon based fuels to their current extent, and it would still be necessary to account for potential risks based on their use.

Recall that all petroleum based resources are being depleted. The famous engineer M. King Hubbert predicted that the United States would eventually drain its oil reserves and turn to imported petroleum. Eventually the other countries would start running low as well, as Britain depleted the fields in the North Sea and Mexico and Saudi Arabia are exhausting their reserves. Eventually the oil companies will be forced to turn to more difficult to reach oil sources, such as the bottom of the ocean, shale rocks, and reservoirs of impure, high sulfur oil.

This will definitely raise petroleum prices, so any company that currently uses just in time inventory and has long supply chains is extremely vulnerable to a sudden price spike like the one that occurred in the summer of 2008. Since petroleum prices affect all inputs, this will add a significant amount to cost of goods manufactured and cost of goods sold in the future. It is possible to estimate the increase in oil prices, although this is complicated by the rumors that many companies and nations are overstating their reserves. Natural gas is also a limited resource, so similar characteristics apply.

Petroleum sources will still create external pollution. Especially with lower quality sources which are more likely to be present in the future, sulfur and nitrogen released in the burning fuel will still create harmful compounds in the atmosphere, such as smog and acid rain. Note that these types of pollutants can travel large distances, including over the ocean. Factories in China are capable of releasing particles that can cross the Pacific Ocean and cause harmful effects in the United States. Since these types of effects can create a negative externality that places a cost on another nation, it is also likely that new international treaties and laws will be passed which restrict a company’s actions. Coal usage creates the same issues when it is used as a fuel source.

Al Gore makes some of the same arguments, emphasizing that not only are oil resources dwindling, but that their concentration in unstable regions of the world is a cause of resource wars. He also mentions that cap and trade legislation has many flaws, although the alternative of doing nothing would risk much greater negative consequences. Cap and trade can also have positive effects on a company’s balance sheet, depending on the situation it is in. Gore ends the article with a Churchill quote, “Sometimes doing your best is not good enough. Sometimes, you must do what is required.” Inspiring and brings to mind another Churchill quote, “One ought never to turn one’s back on a threatened danger and try to run away from it. If you do that, you will double the danger. But if you meet it promptly and without flinching, you will reduce the danger by half.”

Welcome to Costing a Green Future!

Posted by on Tuesday, 2 March, 2010

Welcome, everyone. I am writing this article to continue some of the topics which I learned about in accounting coursework at Humboldt. We focused on several main topics, including how to explain why it can be much cheaper to deal with environmental issues when designing operations, what kinds of tools exist to keep track of possible environmental costs, and how to deal with keeping track of natural resources.

I am writing here today because I think there has not been enough focus yet on sustainability when keeping track of natural resources. The traditional accounting and costing systems do not always record the true costs of operations, especially when they include extraction and cleanup costs. Lately, some additional factors have entered the picture. The new SEC Press Release on climate change disclosure mentions a few major elements that are now necessary for a publically traded company to report.

For example, if the ocean rises and the coast is flooded, it can put a company’s offices underwater. Since this is a predictable risk and is likely to happen if people continue to use nonrenewable sources of energy, it should be recorded as a possible liability under generally accepted accounting practices. Similarly, if a company owns farmland in an area that is heating up and drying out, then it will soon find its farm has become a desert, which will drastically reduce its land value. Again, this is predictable, so it must be reported.

Four areas are specifically mentioned in this press release. Deloitte has offered some additional explanations for what this press release means. The effects of existing and pending legislation should be mentioned. This includes fines and penalties, and compliance costs, for not only the company but also its competitors. In addition, the effects of international accords should be disclosed. Many climate change treaties will have international effects and regulations in another country could materially affect profits in the USA. Indirect effects could also occur. The example that the SEC gives is that consumers who are following the climate change news might decide that they are more interested in buying products which produce less waste carbon during their lifecycle. This could definitely affect profits, in a good way or a bad way depending on how the company has designed its operations. Finally, a company must also report on the physical effects of climate change on its business. The examples of coastal flooding and desertification of farmland are two possible consequences of climate change which are predictable enough that a company should account for them.