Economic recession has failed to curb rising emissions, undermining hope of keeping global warming to safe levels Photograph: Dave Reede/All Canada Photos/Corbis

Greenhouse gas emissions increased by a record amount last year, to the highest carbon output in history, putting hopes of holding global warming to safe levels all but out of reach, according to unpublished estimates from the International Energy Agency.

The shock rise means the goal of preventing a temperature rise of more than 2 degrees Celsius – which scientists say is the threshold for potentially “dangerous climate change” – is likely to be just “a nice Utopia”, according to Fatih Birol, chief economist of the IEA. It also shows the most serious global recession for 80 years has had only a minimal effect on emissions, contrary to some predictions.

Last year, a record 30.6 gigatonnes of carbon dioxide poured into the atmosphere, mainly from burning fossil fuel – a rise of 1.6Gt on 2009, according to estimates from the IEA regarded as the gold standard for emissions data.

“I am very worried. This is the worst news on emissions,” Birol told the Guardian. “It is becoming extremely challenging to remain below 2 degrees. The prospect is getting bleaker. That is what the numbers say.”

Professor Lord Stern of the London School of Economics, the author of the influential Stern Report into the economics of climate change for the Treasury in 2006, warned that if the pattern continued, the results would be dire. “These figures indicate that [emissions] are now close to being back on a ‘business as usual’ path. According to the [Intergovernmental Panel on Climate Change's] projections, such a path … would mean around a 50% chance of a rise in global average temperature of more than 4C by 2100,” he said.

“Such warming would disrupt the lives and livelihoods of hundreds of millions of people across the planet, leading to widespread mass migration and conflict. That is a risk any sane person would seek to drastically reduce.”

Birol said disaster could yet be averted, if governments heed the warning. “If we have bold, decisive and urgent action, very soon, we still have a chance of succeeding,” he said.

The IEA has calculated that if the world is to escape the most damaging effects of global warming, annual energy-related emissions should be no more than 32Gt by 2020. If this year’s emissions rise by as much as they did in 2010, that limit will be exceeded nine years ahead of schedule, making it all but impossible to hold warming to a manageable degree.

Emissions from energy fell slightly between 2008 and 2009, from 29.3Gt to 29Gt, due to the financial crisis. A small rise was predicted for 2010 as economies recovered, but the scale of the increase has shocked the IEA. “I was expecting a rebound, but not such a strong one,” said Birol, who is widely regarded as one of the world’s foremost experts on energy.

John Sauven, the executive director of Greenpeace UK, said time was running out. “This news should shock the world. Yet even now politicians in each of the great powers are eyeing up extraordinary and risky ways to extract the world’s last remaining reserves of fossil fuels – even from under the melting ice of the Arctic. You don’t put out a fire with gasoline. It will now be up to us to stop them.”

Most of the rise – about three-quarters – has come from developing countries, as rapidly emerging economies have weathered the financial crisis and the recession that has gripped most of the developed world.

But he added that, while the emissions data was bad enough news, there were other factors that made it even less likely that the world would meet its greenhouse gas targets.

• About 80% of the power stations likely to be in use in 2020 are either already built or under construction, the IEA found. Most of these are fossil fuel power stations unlikely to be taken out of service early, so they will continue to pour out carbon – possibly into the mid-century. The emissions from these stations amount to about 11.2Gt, out of a total of 13.7Gt from the electricity sector. These “locked-in” emissions mean savings must be found elsewhere.

“It means the room for manoeuvre is shrinking,” warned Birol.

• Another factor that suggests emissions will continue their climb is the crisis in the nuclear power industry. Following the tsunami damage at Fukushima, Japan and Germany have called a halt to their reactor programmes, and other countries are reconsidering nuclear power.

“People may not like nuclear, but it is one of the major technologies for generating electricity without carbon dioxide,” said Birol. The gap left by scaling back the world’s nuclear ambitions is unlikely to be filled entirely by renewable energy, meaning an increased reliance on fossil fuels.

• Added to that, the United Nations-led negotiations on a new global treaty on climate change have stalled. “The significance of climate change in international policy debates is much less pronounced than it was a few years ago,” said Birol.

He urged governments to take action urgently. “This should be a wake-up call. A chance [of staying below 2 degrees] would be if we had a legally binding international agreement or major moves on clean energy technologies, energy efficiency and other technologies.”

Governments are to meet next week in Bonn for the next round of the UN talks, but little progress is expected.

Sir David King, former chief scientific adviser to the UK government, said the global emissions figures showed that the link between rising GDP and rising emissions had not been broken. “The only people who will be surprised by this are people who have not been reading the situation properly,” he said.

Forthcoming research led by Sir David will show the west has only managed to reduce emissions by relying on imports from countries such as China.

Another telling message from the IEA’s estimates is the relatively small effect that the recession – the worst since the 1930s – had on emissions. Initially, the agency had hoped the resulting reduction in emissions could be maintained, helping to give the world a “breathing space” and set countries on a low-carbon path. The new estimates suggest that opportunity may have been missed.

Source Guardian

We are entering a new era, one of rapid and often unpredictable climate change. In fact, the new climate norm is change. The 25 warmest years on record have come since 1980. And the 10 warmest years since global recordkeeping began in 1880 have come since 1998.

The effects of rising temperature are pervasive. Higher temperatures diminish crop yields, melt the mountain glaciers that feed rivers, generate more-destructive storms, increase the severity of flooding, intensify drought, cause more-frequent and destructive wildfires, and alter ecosystems everywhere. We are altering the earth’s climate, setting in motion trends we do not always understand with consequences we cannot anticipate.

Crop-withering heat waves have lowered grain harvests in key food-producing regions in recent years. One with a profoundly direct human impact was the searing heat wave that broke temperature records across Europe in 2003. The intense heat, which contributed to the world grain harvest falling short of consumption by 90 million tons, also claimed more than 52,000 lives.

There has also been a dramatic increase in the land area affected by drought in recent decades. A team of scientists at the National Center for Atmospheric Research reports that the area of the globe experiencing very dry conditions expanded from less than 15 percent in the 1970s to roughly 30 percent by 2002. The scientists attribute part of the change to a rise in temperature and part to reduced precipitation, with high temperatures becoming progressively more important during the latter part of the period. A 2009 report published by the U.S. National Academy of Sciences reinforces these findings. It concludes that if atmospheric CO2 climbs to 450–600 ppm, the world will face irreversible dry-season rainfall reductions in several regions of the world. The study likened the conditions to those of the U.S. Dust Bowl era of the 1930s.

The warming is caused by the accumulation of heat-trapping “greenhouse” gases and other pollutants in the atmosphere. Of the greenhouse gases, CO2 accounts for 63 percent of the recent warming trend, methane 18 percent, and nitrous oxide 6 percent, with several lesser gases accounting for the remaining 13 percent. Carbon dioxide comes mostly from electricity generation, heating, transportation, and industry. In contrast, human-caused methane and nitrous oxide emissions come largely from agriculture—methane from rice paddies and cattle and nitrous oxide from the use of nitrogenous fertilizer.

Atmospheric concentrations of CO2, the principal driver of climate change, have climbed from nearly 280 parts per million (ppm) when the Industrial Revolution began around 1760 to 387 ppm in 2009. The annual rise in atmospheric CO2 level, now one of the world’s most predictable environmental trends, results from emissions on a scale that is overwhelming nature’s capacity to absorb carbon. In 2008, some 7.9 billion tons of carbon were emitted from the burning of fossil fuels and 1.5 billion tons were emitted from deforestation, for a total of 9.4 billion tons. But since nature has been absorbing only about 5 billion tons per year in oceans, soils, and vegetation, nearly half of those emissions stay in the atmosphere, pushing up CO2 levels.

Methane, a potent greenhouse gas, is produced when organic matter is broken down under anaerobic conditions, including the decomposition of plant material in bogs, organic materials in landfills, or forage in a cow’s stomach. Methane can also be released with the thawing of permafrost, the frozen ground underlying the tundra that covers nearly 9 million square miles in the northern latitudes. All together, Arctic soils contain more carbon than currently resides in the atmosphere, which is a worry considering that permafrost is now melting in Alaska, northern Canada, and Siberia, creating lakes and releasing methane. Once they get under way, permafrost melting, the release of methane and CO2, and rising temperature create a self-reinforcing trend, what scientists call a “ positive feedback loop.” The risk is that the release of a massive amount of methane into the atmosphere from melting permafrost could simply overwhelm efforts to stabilize climate.

Another unsettling development is the effect of atmospheric brown clouds (ABCs) consisting of soot particles from burning coal, diesel fuel, or wood. These particles affect climate in three ways. First, by intercepting sunlight, they heat the upper atmosphere. Second, because they also reflect sunlight, they have a dimming effect, lowering the earth’s surface temperature. And third, if particles from these brown clouds are deposited on snow and ice, they darken the surface and accelerate melting. These effects are of particular concern in India and China, where a large ABC over the Tibetan Plateau is contributing to the melting of glaciers that supply the major rivers of Asia. Soot deposition causes earlier seasonal melting of mountain snow in ranges as different as the Himalayas of Asia and the Sierra Nevada of California, and it is also believed to be accelerating the melting of Arctic sea ice.

In contrast to CO2, which may remain in the atmosphere for a century or more, soot particles in ABCs are typically airborne for only a matter of weeks. Thus, once coal-fired power plants are closed or wood cooking stoves are replaced with solar cookers, atmospheric soot disappears rapidly.

If we continue with business as usual, the Intergovernmental Panel on Climate Change’s (IPCC’s) projected rise in the earth’s average temperature of 1.1–6.4 degrees Celsius (2–11 degrees Fahrenheit) during this century seems all too possible. Unfortunately, during the several years since the IPCC study was released, both global CO2 emissions and atmospheric CO2 concentrations have exceeded those in its worst-case scenario. With each passing year the chorus of urgency from the scientific community intensifies. Each new report indicates that we are running out of time. For instance, a landmark 2009 study by a team of scientists from the Massachusetts Institute of Technology concluded that the effects of climate change will be twice as severe as those they projected as recently as six years prior. Instead of a likely global temperature rise of 2.4 degrees Celsius, they now see a rise exceeding 5 degrees.

Another report, this one prepared independently as a background document for the December 2009 international climate negotiations in Copenhagen, indicated that every effort should be made to hold the temperature rise to 2 degrees Celsius above pre-industrial levels. Beyond this, dangerous climate change is considered inevitable. To hold the temperature rise to 2 degrees, the scientists note that CO2 emissions should be reduced by 60–80 percent immediately, but since this is not possible, they note that, “To limit the extent of the overshoot, emissions should peak in the near future.”

The Pew Center on Global Climate Change sponsored an analysis of some 40 scientific studies that link rising temperature with changes in ecosystems. Among the many changes reported are spring arriving nearly two weeks earlier in the United States, tree swallows nesting nine days earlier than they did 40 years ago, and a northward shift of red fox habitat that has it encroaching on the Arctic fox’s range. Inuits have been surprised by the appearance of robins, a bird they have never seen before. Indeed, there is no word in Inuit for “robin.”

Douglas Inkley, National Wildlife Federation senior science advisor, notes, “We face the prospect that the world of wildlife that we now know—and many of the places we have invested decades of work in conserving as refuges and habitats for wildlife—will cease to exist as we know them, unless we change this forecast.” Unfortunately, this observation holds true for humans as well. If we cannot quickly reduce carbon emissions, it is civilization itself that is at risk.

Adapted from Chapter 3, “Climate Change and the Energy Transition,” in Lester R. Brown, Plan B 4.0: Mobilizing to Save Civilization (New York: W.W. Norton & Company, 2009), available online at www.earth-policy.org/books/pb4.

Additional data and information sources at http://www.earth-policy.org/.

Sometimes the most important news is what is not happening.

This summer has given us one such example: the climate change bill, for which the US President Barack Obama had pushed so hard, will not even be presented to the US Senate because it stands no chance of passage.

This means the US is about to repeat its “Kyoto experience”. Twenty years ago, the US participated (at least initially) in the first talks aimed at achieving a global accord to reduce carbon dioxide emissions.

At the time, the EU and the US were by far the greatest emitters so it seemed appropriate to exempt the world’s emerging economies from any commitment.

Over time, it became apparent that the US would not live up to its commitment owing, as now, to opposition in the Senate. The EU then went ahead on its own, introducing its path-breaking EU Emission Trading System in the hope that Europe could lead by example.

Without the American climate change package, the promises made by the US administration only seven months ago at the Copenhagen summit have become worthless. The European strategy is in tatters – and not only on the transatlantic front.

China’s commitment to increase the carbon dioxide efficiency of its economy by about 3 per cent a year is of no help because annual GDP growth rates of close to 10 per cent mean the country’s emissions will soar this decade.

By 2020, Chinese emissions could be more than triple those of Europe and even surpass those of the US and Europe combined. Exempting emerging markets from any commitments, as the Kyoto Protocol sought to do, no longer makes sense.

Why has every attempt to set prices for global carbon emissions failed? The answer is cheap and abundant coal.

Burning hydrocarbons (natural gas and petrol) yields water and carbon dioxide. By contrast, burning coal yields only carbon dioxide. Moreover, compared with natural gas and crude oil, coal is much cheaper for each tonne of carbon dioxide released.

This implies that any tax on carbon has a much higher impact on coal than on crude oil (or gas). Owners of coal mines and their clients are thus strongly opposed to any tax on carbon.

They constitute a small but well organised group that wields immense lobbying power to block efforts to limit carbon dioxide emissions by putting a price on them, as the planned US cap-and-trade system would have done.

In Europe, indigenous coal production no longer plays an important economic role. Therefore, it is not surprising that Europe could enact a cap-and-trade system that imposes a carbon price on a large part of its industry.

The tax seems to fall mostly on foreign suppliers of coal and to a lesser extend on foreign suppliers of hydrocarbons in the Middle East and Russia.

By contrast, opposition by US states with economies that rely significantly on coal production proved decisive for the fate of Mr Obama’s climate change bill.

The US experience has wider implications. If it proved impossible to introduce a moderate carbon tax in a rich economy, it is certain no commitment will be coming for the next generation from China, which remains much poorer and depends even more on indigenous coal than the US. And, after China, India looms as the next emerging coal-based industrial superpower.

Without any significant commitment from the US, the Copenhagen Accord, so laboriously achieved last year, has become meaningless.

Business will now continue as usual in terms of climate change diplomacy, with its wandering circus of big international meetings, and of rapidly increasing emissions.

The meetings are aimed at creating the impression that the world’s leaders are still working on a solution to the problem. But rising carbon dioxide emissions constitute what is really happening on the ground: a rapidly growing industrial base in emerging markets is being hard-wired to intensive use of coal. This will make it exceedingly difficult to reverse the trend in the future.

A planet composed of nation-states that in turn are dominated by special interest groups does not seem capable of solving this problem.

Unfortunately, there is enough cheap coal around to power ever-higher emissions for at least another century. So the world will become warmer. The only uncertainty is how much warmer.

Determined action at the global level will become possible only when climate change is no longer some scientific prediction but a reality that people feel.

But at that point, it will be too late to reverse the impact of decades of excessive emissions. A world incapable of preventing climate change will have to live with it.

* Project Syndicate

Daniel Gros is the director of the Centre for European Policy Studies.

China’s leaders are so concerned about rising energy use and declining energy efficiency that the cabinet held a special meeting this week to discuss the problem, according to a statement Thursday from the ministry of industry and information technology. Coal-fired electricity and oil sales each climbed 24 percent in the first quarter from a year earlier, on the heels of similar increases in the fourth quarter

Premier Wen Jiabao promised tougher policies to enforce energy conservation, including a ban on government approval of any new projects by companies that failed to eliminate inefficient capacity, the ministry said. Mr. Wen also said that China had to find a way to meet the target in its current five-year plan of a 20 percent improvement in energy efficiency.

“We can never break our pledge, stagger our resolution or weaken our efforts, no matter how difficult it is,” Mr. Wen said. Western experts say it will be hard to meet the target, but that China’s leaders seem determined.

“No country of this size has seen energy demand grow this fast before in absolute terms, and those who are most concerned about this are the Chinese themselves,” said Jonathan Sinton, the China program manager at the International Energy Agency in Paris.

China has been the world’s largest emitter of greenhouse gases each year since 2006, leading the United States by an ever-widening margin. A failure by China to meet its own energy efficiency targets would be a big setback for international efforts to limit such emissions.

Such a failure would also be a potential diplomatic embarrassment for the Chinese government, which promised the world just before the Copenhagen climate summit meeting in December that it would improve energy efficiency.

The issue has major economic implications for China and for global energy markets. The nation’s ravenous appetite for fossil fuels is driven by China’s shifting economic base — away from light export industries like garment and shoe production and toward energy-intensive heavy industries like steel and cement manufacturing for cars and construction for the domestic market.

Almost all urban households in China now have a washing machine, a refrigerator and an air-conditioner, according to government statistics. Rural ownership of appliances is now soaring as well because of new government subsidies for their purchase since late 2008.

Car ownership is rising rapidly in the cities, while bicycle ownership is actually falling in rural areas as more families buy motorcycles and light trucks.

General Motors announced on Thursday that its sales in China rose 41 percent in April from a year earlier, virtually all of the vehicles made in China because of high import taxes.

Zhou Xi’an, a National Energy Administration official, said in a statement last month that fossil fuel consumption was likely to increase further in the second quarter of this year because of rising car ownership, diesel use in the increasingly mechanized agricultural sector and extra jet fuel consumption for travelers to the Shanghai Expo.

The shift in the composition of China’s economic output is overwhelming the effects of China’s rapid expansion of renewable energy and its existing energy conservation program, energy experts said.

The increase in oil and coal-fired electricity consumption in the first quarter was twice as fast as economic growth of about 12 percent for that period, a sign that rising energy consumption is not just the result of a rebounding economy but also of changes in the mix of industrial activity. The shift in activity is partly because of China’s economic stimulus program, which has resulted in a surge in public works construction that requires a lot of steel and cement.

Burning fossil fuels releases carbon dioxide, which many scientists describe as the biggest man-made contributor to global warming.

President Hu Jintao pledged in November that by 2020 the Chinese government would slow its growth in greenhouse gases by sharply improving energy efficiency. Mr. Wen went to the Copenhagen climate meeting three weeks later and opposed any international monitoring of China’s energy efficiency effort or binding limits on China’s overall energy consumption.

China’s current five-year plan, from 2006 to 2010, already sets an efficiency target that the country may now be less likely to meet.

The plan calls for the energy needed for each unit of economic output to decline by 20 percent in 2010 compared to 2005.

For a while, China seemed to be on track toward that goal. According to the ministry of industry and information technology, energy efficiency actually improved by more than 14 percent from 2005 to 2009.

But it deteriorated by 3.2 percent in the first quarter, the ministry said on Thursday.

Mr. Wen said that this deterioration would make it “particularly difficult” for China to meet the 20 percent target.

Without big policy changes, like raising fuel taxes, “they can’t possibly make it,” said Julie Beatty, principal energy economist at Wood Mackenzie, a big energy consulting firm based in Edinburgh, Scotland.

Mr. Hu promised last November that China would improve the energy efficiency of its economy by 40 to 45 percent by 2020. The ministry statement on Thursday did not mention whether Mr. Hu’s promise might still be achievable.

Complicating energy efficiency calculations is the fact that China’s National Bureau of Statistics has begun a comprehensive revision of all of the country’s energy statistics for the last 10 years, restating them with more of the details commonly available in other countries’ data. Western experts also expect the revision to show that China has been using even more energy and releasing even more greenhouse gases than previously thought.

Revising the data now runs the risk that other countries will distrust the results and demand greater international monitoring of any future pledges by China. If the National Bureau of Statistics revises up the 2005 data more than recent data, for example, then China might appear to have met its target at the end of this year for a 20 percent improvement in energy efficiency.

China’s recent embrace of renewable energy has done little so far to slow the rise in emissions from the burning of fossil fuels.

Wind energy effectively doubled in this year’s first quarter compared with a year earlier, as China has emerged as the world’s largest manufacturer and installer of wind turbines. But wind still accounts for just 2 percent of China’s electricity capacity — and only 1 percent of actual output, because the wind does not blow all the time.

Meanwhile, fuel-intensive heavy industry output rose 22 percent in the first quarter in China from a year earlier, while light industry increased 14 percent.

Rajendra K. Pachauri, the chairman of the Intergovernmental Panel on Climate Change, a United Nations research unit, said in an e-mail message that he believed China was serious about addressing its emissions.

“There is a growing realization within Chinese society that major reductions in greenhouse gas emissions would be of overall benefit to China,” he wrote after learning of the latest Chinese energy statistics. “This is important not only for global reasons, because China is now responsible for the highest emissions of greenhouse gases, but also because its per capita emissions are increasing at a rapid rate.”

To some extent, China’s energy consumption now might actually help limit its global warming emissions in the future.

China, for example, used 200 million tons of cement in building rail lines last year, while the entire American economy only used 93 million tons, said David Fridley, a China energy specialist at the Lawrence Berkeley National Laboratory. Although production of that cement raised energy use and emissions of global warming gases, it also expanded a rail system that is among the most energy-efficient in the world.

China currently moves only 55 percent of its coal by rail, for example, which is down from 80 percent a decade ago, as many coal users have been forced by inadequate rail capacity to haul coal in trucks instead. The trucks burn 10 or more times as much fuel per mile to haul a ton of coal, Mr. Fridley said.

But now, with new high-speed passenger lines leaving more room on older lines to haul coal and other freight, the percentages could begin shifting away from energy-inefficient trucking, he said.

Source New York Times

Total World Coal Consumption in 2008: 7,238,207,000 Short Tons!
When it comes to global warming and air pollution, coal is the number one enemy. We were curious to know which countries burned the most, so we compiled a list of the top 10 coal-burning countries in the world based on the latest statistics from the U.S. Energy Information Administration (EIA). We chose not to use per capita numbers because the atmosphere doesn’t care about that; in the end, all that matters is absolute numbers. Do you know which country’s number one? Could you guess most of the list?

#10 South-Korea 112,843 thousand short tons

#9 Poland 149,333 thousand short tons

#8 Australia 160,515 thousand short tons

#7 South Africa: 193,654 thousand short tons

#6 Japan: 203,979 thousand short tons

#5 Russia: 269,684 thousand short tons

#4 Germany: 269,892 thousand short tons

#3 India: 637,522 thousand short tons

#2 USA: 1,121,714 thousand short tons

#1 China: 2,829,515 thousand short tons

Danger! World Coal Consumption is Going Up Rapidly
According to the EIA numbers, between 2004 and 2008, total world consumption of coal went from 6,259,645,000 to 7,238,208,000 short tons. That’s a 15.6 percent increase of the most carbon-intensive kind of fuel in just four years. Ouch.

According to the U.S. Department of Energy:

Carbon dioxide (CO2) forms during coal combustion when one atom of carbon (C) unites with two atoms of oxygen (O) from the air. Because the atomic weight of carbon is 12 and that of oxygen is 16, the atomic weight of carbon dioxide is 44. Based on that ratio, and assuming complete combustion, 1 pound of carbon combines with 2.667 pounds of oxygen to produce 3.667 pounds of carbon dioxide. For example, coal with a carbon content of 78 percent and a heating value of 14,000 Btu per pound emits about 204.3 pounds of carbon dioxide per million Btu when completely burned. Complete combustion of 1 short ton (2,000 pounds) of this coal will generate about 5,720 pounds (2.86 short tons) of carbon dioxide.

Via: EIA

Speaking in an unusually candid manner during a European Parliament hearing on Wednesday (14 April), De Boer said the UN climate negotiations in Copenhagen last year had been dominated by a sense of “suspicion”.

The December UN conference ended with a loose agreement, the Copenhagen Accord, which left Europeans “disappointed” because it contained no firm commitment from world nations to reduce greenhouse gas emissions.

“A lot of the reason why this process has been moving so slowly is because of suspicion, especially on the part of developing counties,” said De Boer, who will step down from the UNFCCC in July to take an advising role at consulting firm KPMG.

“Trust just isn’t there.”

European leaders routinely refer to the EU’s 2020 target to reduce emissions by 20% on 1990 levels as the most ambitious in the world.

But the UN climate chief suggested that the target will in fact be easy to achieve, raising suspicion from developing countries that it is only a smokescreen.

“Many of the discussions that you have in Europe are not terribly private,” he said. “And the rest of the world knows that the European Commission said to EU countries that achieving the minus 20% was a piece of cake and that achieving minus 30% isn’t going to ruin the European economy.”

“So countries in the rest of the world are asking themselves: ‘If that’s true, then why is this minus 30 now being taken off the table?’”

EU divided over move to 30%

The WWF’s Stefan Singer says the EU will easily reach its 20% objective for 2020, thanks mainly to the de-industrialisation that has taken place in ex-Soviet states since the fall of communism and offset projects in developing countries (EurActiv 14/04/09).

Moreover, emissions dropped steeply last year – by 11% – due to the economic recession, making the 2020 objective that much easier to attain (EurActiv 2/04/10).

But the EU’s possible move to a 30% reduction target for 2020 is causing internal divisions among the 27 member states, with Eastern European countries saying the EU must first analyse how other countries’ pledges compare before making a decision.

By contrast, the European Commission and most Western EU member states including the UK, Denmark, the Netherlands and Sweden, argue that the move to 30% will stimulate green economic growth and innovation, creating new jobs along the way.

“If Europe is a strong believer in the green economic growth story, then those targets are imperative to achieve that sense of change of direction,” De Boer stressed.

‘Climate-wash’

De Boer said another major point of contention relates to the 100 billion dollars in annual climate aid that industrialised countries pledged for poor nations in Copenhagen.

“Is that going to be climate-wash or real and additional finance?” he asked. “Quite frankly, the track record is not quite there [to prove it],” he said.

Under existing arrangements, developing countries were asked to produce technology need assessments in their effort to fight climate change, De Boer explained. But these were rarely followed up and the promised funding was kept under wraps for the most part.

“Many among developing nations feel, with some justification, that these financial resources are not being provided. And that if financial resources are provided, they are often ‘climate-wash’,” he said, meaning development assistance re-labelled as climate aid. “So the money that was originally intended for poverty eradication now magically becomes climate change money.”

To break the deadlock, De Boer suggests giving developing countries responsibility for managing the aid. “What they would really like to see is that these huge sums of money are going to be distributed according to the priorities of the countries rather than according to the priorities of the donators.”

His proposal is to create a financial governance mechanism at the next UN summit in Cancún “that will really give developing countries the feeling that they are in control or in co-control of the money that is intended to help them green their economic growth”.

According to the Dutchman, developing countries are ready to accept that the money will be channelled through existing institutions like the World Bank, regional development banks or cooperation agencies.

Kyoto pledges not met

Speaking in the European Parliament, De Boer said the sense of suspicion had been heightened by the fact that industrialised nations had shown little willingness to meet their emission reduction pledges under the Kyoto Protocol, which expires in 2012.

“The first suspicion relates to the fact that, yes, although Europe as a whole is on track to meet its commitments under the Kyoto Protocol, there are individual countries within the European Union which are having a little more difficulty – at least for the time being – achieving their targets under Kyoto.”

Although the EU as a whole is set to overshoot its collective emission reduction target under the Kyoto Protocol, a recent report by the European Environment Agency (EEA) showed the ‘older’ EU-15 member states will fall short of their targets without new policies or offset credits (EurActiv 13/11/09).

Moreover, under the UNFCCC, rich countries were supposed to return their emissions to 1990 levels by the year 2000, De Boer said. “But in fact, only four individual countries met that goal,” he pointed out.

De Boer singled out Canada, which announced it will not meet its Kyoto target but nevertheless refuses to withdraw from the treaty. Developing countries have not heard any reaction to that statement, De Boer said, adding to their suspicion. 

“So there is not that much confidence that industrialised countries will meet their targets under the Kyoto Protocol,” he explained.

Source Euractiv

Sooner or later, mounting losses on commercial real estate could crash through the market’s 2009 optimism and send the economy and stocks into a double-dip downturn.

The major problem is that lawmakers and regulators are setting up investors into believing that commercial real estate (CRE) losses are being effectively addressed.

The truth is that escalating losses are being hidden as part of a campaign of optimism in a desperate gamble that a robustly reviving economy will save the day.

To protect yourself from another investment beating, here’s what you need to know.

WATCH THIS SPACE

The Essential Eight: The Only Economic Indicators Investors Need to Know

Housing starts. PPI. Same-store sales. Weekly jobless claims. Philly Fed. Lagging indicators. Core CPI. Industrial production.

When it comes to economic indicators, the list is almost endless. One economic indicator follows another, filling an entire calendar – weekly, monthly, quarterly, annually.

But on the specific day an indicator is announced, it seems to be the biggest deal going: Commentators comment, pundits pontificate, analysts and economics analyze, predict and forecast, and financial markets around the world react – often violently.
The next day brings a new batch of indicator reports. Yesterday is forgotten as the frenetic cycle plays itself out all over again.

Given this pattern, it’s not surprising that the economic-indicator game seems confusing – and perhaps even pointless. In the eyes of many investors, the only thing these indicators seem to “indicate” about the economy is that it can be highly confusing and extremely difficult to predict.

Saudi Arabia Shifts its Focus to China as the United States Falls Out of Favour

Saudi Arabia, the world’s largest oil producer, last year shipped more oil to China than it did the United States for the first time ever – a shift that highlights China’s ascension to the ranks of the world’s economic elite, as well as its position as the new focal point for the world’s energy producers.

The flow of oil from Saudi Arabia to China rose to more than 1 million barrels per day (bpd) last year, just as demand in the United States fell below that level for the first time in more than two decades.

China in December alone imported a record-high 1.2 million bpd of Saudi oil, as its economy rode the momentum of Beijing’s $585 billion (2 trillion yuan) stimulus package. U.S. imports of Saudi oil, on the other hand, fell to a 22-year low of 998,000 bpd in the first 11 months of 2009, as the world’s largest oil consumer clawed its way back from its worst recession in 70 years.

“This is a reflection of the global economy,” Jim Burkhard, managing director of global oil at IHS Cambridge Energy Research Associates, told The Financial Times. “China has been growing. The U.S. hasn’t. We’ve seen that reflected in oil demand figures.”

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China dumped $US34.2 billion of Treasuries Dec 2009, its fastest rate of selling in a decade. At the end of 2009, China’s holdings of US government debt stood at $US755.4 billion. This represents a drop of 6 per cent from the peak of $US801.5 billion last May.

This is a big shift for China, which has been the biggest lender to the US government since September 2008. The big question is, how worried should the US be? There’s almost certainly a political element in China’s selling.

Hostility between Washington and Beijing escalated after the US government approved a $6.4 billion arms deal to Taiwan. And China strenuously opposed Obama’s meeting with the Tibetan spiritual leader, threatening to “take corresponding action to make relevant countries see their mistakes.”

More worrying, however, is that the selling also reflects fundamental Chinese worries about US government finances.

For more than a year, Chinese officials have been expressing concerns over the burgeoning US budget deficit, which is expected to hit $1.6 trillion, or 10.6 per cent of GDP.

Earlier this month, Chinese publication The People’s Daily ran a story quoting Chinese economists who warned the US government would have to print more money to finance its large deficit, which would push the US dollar down and erode the value of China’s dollar-denominated assets.

The story quoted Cao Honghui, from the Chinese Academy of Social Sciences (which is a government think-tank), warning that the US should not transfer the problems of its enormous debt to creditor countries such as China.

The report also noted that China’s State Administration of Foreign Exchange had issued a statement in December saying China would diversify its foreign currency holdings – both currencies and securities – to reduce risk.

Signs of increasing Chinese impatience with the US budget deficits come as US Federal Reserve board members have issued public warnings about the need for Washington to rein in its spiralling deficit.

Thomas Hoenig warned earlier this week that if a government turned to its central bank to print money to help it bridge its budget shortfalls, the result would be overly rapid money creation that would eventually lead to high inflation.

Some days earlier, fellow board member, Richard Fisher, said that the US “cannot count forever on the largesse or the misfortune of others to mask our own imbalances here at home.”

But while China is certainly showing impatience at extending largesse to the US government, there are limits on China’s ability to express its frustration by dumping US government debt.

China has foreign exchange reserves of $2.4 trillion dollars, and it is estimated that more than 60 per cent of its reserves are invested in US dollar denominated assets.

If China starts aggressively selling off US government debts, it risks slashing the value of its existing US investments.

What’s more, US government debt is looking more attractive after ructions over Greece’s ballooning deficits curbed investors’ appetite for investing sovereign debt of weaker members of the European Union.

Meanwhile, there are signs that Washington is responding to this growing pressure to curb its deficit. President Obama is expected to sign an executive order to set up a bipartisan commission to look at spending cuts and tax initiatives to curb the country’s debt.

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Source New York Times

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