Copy from my Column from Sustainable Industries July 2009

The American Clean Energy and Security Act, known as the Waxman-Markey bill, is “a rare opportunity to rise above parochial concerns to enact a bill with a profound national impact,”according to President Barack Obama. Republican critics are attacking Democrats as pro-business and anti-consumer and small business, which is ironic as the GOP is the “The Party of ExxonMobil (NYSE: XOM) and Peabody coal. “Using this tactic, the GOP wants to hold the line against the climate change bill, even though Duke Energy (NYSE: DUK), Johnson & Johnson (NYSE:NJN) and Shell Corp., along with other businesses and environmental organizations, are backing the bill. “I find it extremely amusing that suddenly the Democrats are being attacked for being too friendly to business creation,” Senator Barbara Boxer (D-Calif.), chairwoman of the Senate Environment and Public Works Committee, has said. The GOP argues that the Waxman-Markey bill would create higher energy costs for small business and consumers.

The real issue is the bill does not go far enough. It needs to create an “energy-efficiency and renewable energy set aside”-or green building carbon offset program-which rises above the regulatory approaches to energy efficiency. The Waxman-Markey bill provides for an economy-wide cap-and-trade program. The cap reduces greenhouse gas (GHG) emissions to 17% below 2005 levels by 2020, and 83% below by 2050. Offsets (project-based reductions) are limited to 2,000 million metric tons CO2 equivalent per year, or 30% of U.S. emission reductions, split evenly between domestic and international offsets. Domestic offsets do not include offsets from green buildings.

However, federal regulators are closely watching California, which is holding public hearings about AB32 implementation [see "California gives legs to AB32, Sustainable Industries, December 2007]. Members of the San Francisco Carbon Collaborative, including Carbonflow, have made significant progress with the regulators on getting an “energy efficiency set aside” into the discussion for possible inclusion in AB 32. This is an important first step, as California is known as a global leader in energy related legislation.

Simultaneously, at the recent CarbonExpo in Barcelona, many expressed interest in a Global International Protocol on Energy Efficiency and Renewable Energy set asides. Under the Waxman-Markey bill, energy efficiency would be achieved through a renewable electricity standard, a low-carbon fuel standard, and energy efficiency programs and standards for buildings, lighting, appliances, as well as vehicles and stationery sources and fuels.

These are all good initiatives. But according to Anne-Marie Warris, author of the Voluntary Carbon Standard, “the problem is that it relies on energy efficiency measures to be applied as the natural turnover of building stock takes place,which is estimated to take anything from 500 to a 1,000 years….which is time we simply do not have to prevent climate change,” Warris says.

Indirect sources of emissions

The Waxman-Markey bill relies on capping direct sources of emissions such as power plants and other smokestack industries. The bill’s definition of domestic offsets includes agriculture,landfill, waste-to-energy projects and biomass. But, it does not include green building offsets. The conventional wisdom is that cap-and trade should be restricted to direct industrial sources, because there are fewer of them and they are already heavily regulated. The bill follows the reliance on reductions from direct sources and forecloses on the possibility to achieve reductions from indirect sources, such as buildings that consume electricity despite their cost effectiveness.

“As a result, a valuable incentive for voluntary GHG reductions is lost, the low-hanging fruit of increasing energy efficiency in buildings goes unpicked, and industrial sources are required to shoulder a greater share of required GHG reductions, all of which increase the societal cost for addressing climate change and makes it less politically feasible to accomplish,” says Donald Simon, an attorney for Wendel, Rosen, Black and Dean.

Huge potential with existing buildings

Existing regulation leading to emissions reductions through “green” construction techniques usually comes in the form of building codes that reach only new construction and substantial renovations. Yet the majority of GHG in the built environment come from existing buildings. Current government incentives “are helpful but inadequate because they do not achieve sufficient market penetration and rely on limited government funding that can disappear in lean budget years,” Simon says. Domestic green building offsets would allow regulated industries to choose between reducing their own emissions or purchasing offsets from others who are able to reduce theirs at lower cost.

This would reduce the overall cost of climate change regulation for consumers because the market would exploit the lowest cost GHG reductions. Green building carbon credits would provide a large funding source that partially finances energy efficiency improvements. Poorer communities would benefit, as credits would fund energy efficient and renewable energy upgrades to existing building stock at a more accelerated rate than building codes currently create.

Making energy upgrades affordable

Moderate House Democrats and Republicans say that under a cap-and-trade program, ordinary people would incur higher energy costs over time because most have not upgraded their homes and small  businesses with energy-efficient technologies.

However, by allowing green building offsets into the federal cap-and-trade system, subsidies to poorer communities for increased energy costs would not be necessary. Their buildings would be retrofitted by the private sector using the dollars from green building offsets. Ultimately, these people would consume up to 50 percent less energy, with no net energy cost increase. Green building offsets would allow construction companies, project developers, engineers and architects to initiate energy efficiency and renewable energy building projects. And, revenue from the sale of the credits would fund projects and create new “green” jobs. Without this small inclusion to the Waxman-Markey bill, the Democrats may miss a chance to pass sweeping climate change legislation in 2009.

Over the past 10 years, US political leaders have played only a minor role in the global carbon offset market, changing their views about climate change and global warming with each new administration. Once a forerunner of the Climate Change Conference held in Kyoto, Japan in 1997, the United States failed to stay on the track, allowing the European countries to drive the development of a carbon offset market.

In the 1990s, the Clinton administration was involved in the crafting of the Kyoto Protocol, proposing the Joint Implementation Scheme to encourage international partnerships to enable low-cost reduction in greenhouse gas (GHG) emissions. Though the Clinton administration supported the Kyoto Protocol, it was not submitted for ratification after the Republican-led Senate made a statement that it would not ratify any treaty which did not include binding targets for developing nations expecting to be responsible for the majority of emissions in the future.

During the U.S. presidential campaign in 2000, George W. Bush promised to set mandatory targets for the reduction of CO2 emissions but expressed his reservation about participation in the Kyoto Protocol.(Dietrich, 2005) Later as president, he did not introduce domestic CO2 reduction targets. The U.S. also pulled out of the Kyoto Protocol discussions, with the Bush administration stating that the Protocol did not impose compliance on the countries responsible for the majority of CO2 emissions globally, and therefore, participation in such treaty could only cause serious harm to the US economy. The Bush administration also emphasized the importance of further scientific research about global warming, and proposed the use of alternative energy sources and “market-based incentives” such as a voluntary approach and energy-efficiency programs to reduce GHG emissions.(Dietrich, 2005)

The Kyoto Protocol required ratification by 50 nations in order for it to be recognized as a major international agreement according to United Nations. After Russia ratified the agreement in 2004, the Kyoto Protocol entered into force in 2005 without any reliance on US support. The Bush administration stayed isolated from the global debate on climate change throughout its eight-year term, continuing to favor an “aspirational” approach instead of mandatory CO2 caps to combat climate change. (Bohan, 2007).

President Barack Obama has been very outspoken about the importance of US involvement in climate change issues and the development of national regulations to reduce GHG emissions, lower energy consumption and accelerate the adoption of alternative energy technologies. However, Obama was not always supportive of the Kyoto Protocol. In 1998, as an Illinois senator, he voted for the bill condemning the Kyoto treaty and disapproving GHG emissions regulations in the state of Illinois to protect the coal industry, as Dilanian (2008) conveys in his article “Obama shifts stance on environmental issues”. The article states that Obama continued expressing his favoritism towards the coal industry during his election to the U.S. Senate in 2004 proclaiming that “there’s always going to be a role for coal” in Illinois. Dilanian (2008) points out that during Obama’s campaign for president, he addressed his opposition towards the bill by saying that the Kyoto treaty did not have “meaningful and achievable emissions targets,” and that he “did not believe that state agencies in Illinois should unilaterally take steps to implement a global policy on their own …”

However, in the U.S. Senate Barack Obama showed his favor towards environmental friendly policies by opposing then-President Bush’s air-pollution proposal for relaxing federal air pollution control restrictions. Although Obama continued sponsoring bills that provided coal subsidies, he shifted towards broader public interest the closer he moved towards the presidential elections.

In October 2007, Senator Barack Obama presented a plan to decrease the US dependence on foreign oil and fight global warming with a national “cap and trade” system across the economy to reduce greenhouse gas emissions including an auction system requiring power companies and other energy-intensive industries to pay for their pollution. He continued to encourage mandatory policies throughout his presidential campaign.

Thanks to growing global awareness of climate change issues and Obama’s emphasis on low carbon economy, the United States now is actively pursuing implementation of enforced reductions for GHG emissions and stronger energy efficiency legislation. As a result, the U.S. House of Representatives recently passed the Waxman-Markey bill (also known as American Clean Energy and Security Act - ACES) as a first step towards a regulated carbon market. The new legislation proposes national energy efficiency targets for residential and commercial buildings as well as a cap-and-trade mechanism mandating a reduction of 2005 emissions levels by 20% by 2020. The cap-and-trade system is set up to regulate carbon allowances and offsets for electric utilities and other energy-intensive industries. The Obama administration has repeatedly promised to pass federal legislation that would limit CO2 emissions in the United States, and continues to pressure the Senate to follow the House’s lead - emphasizing that the Waxman-Markey bill would create jobs, lower the cost of renewable energy and reduce oil dependency. In his speech at the first meeting of the Strategic Economic Dialogue between the United States and China on July 27, President Obama stressed the importance of the cooperation of world’s two largest emitters of greenhouse gases on climate issues.

The Kyoto Protocol expires in 2012. This December 2009, the UN and international government officials will meet in Copenhagen (UNFCCC COP15) to discuss the final details of a new climate agreement. The Obama administration plans to be actively involved in the negotiations of a new treaty trying to regain leadership in the international climate debate.  It remains to be seen whether Obama will act upon his words to become national and international leader in the fight against climate change.

The past resistance of the US government to establish national carbon reduction targets and to participate in the Kyoto Protocol has significantly slowed down the development of a carbon market in the United States. The next posting will describe how the carbon market has developed in the US in light of the resistance of the US government.

This announcement by Steven. T.Dennis, seems to indicate that, “Waxman has agreed to give utilities free initial allocations on nearly all of their greenhouse gas emissions. Boucher had sought to give utilities the credits to avoid rate hikes for consumers”. They have still not addressed the issue in the long-term of how to not incur rate-hikes for consumers, see my previous blog. The other change from the Draft bill seems to be a reduced interim target to 17% down from 20% reduction in greenhouse gas emissions out to 2020. It is a good start though and hopefully the Bill will be passed today.

Democrats on the House Energy and Commerce Committee have reached a deal on the most contentious aspects of cap-and-trade legislation for carbon emissions and plan to unveil the bill on Thursday, Chairman Henry Waxman (D-Calif.) said Tuesday night.

“We have resolved a good number of the issues,” Waxman said after a meeting with committee Democrats, adding that the bill remains on track to clear his panel next week. Opening statements are planned for Thursday with a marathon markup beginning on Monday.

“I am optimistic. I believe we will have the votes to pass the bill [next week],” Waxman said.

Waxman had to compromise with Rep. Rick Boucher (D-Va.) on one of his key goals -the overall level of carbon reductions by 2020. Waxman had wanted a 20 percent cut; Boucher has worried such a steep cut would outpace the development of new technologies like carbon capture from coal-fired power plants. They settled on a 17 percent cut instead.

Waxman also agreed to give utilities free initial allocations on nearly all of their emissions. Boucher had sought to give utilities the credits to avoid rate hikes for consumers.

The Energy Committee chairman added that details have not yet been worked out on all of the allocations, including those for refineries, but said he expected that they would be reached quickly.

A smiling Boucher also acknowledged that some details still need to be completed. “It’s still a work in progress,” he said.

Members also reached a deal on renewable electricity requirements. Energy and Environment Subcommittee Chairman Ed Markey (D-Mass.) said the legislation would require that 15 percent of electricity be renewable by 2020, although up to 8 percent could come from efficiency measures.

The agreement also includes additional help for automakers on top of the “cash for clunkers” provision announced last week at the request of Rep. John Dingell (D-Mich.).

The Waxman and Markey Climate Change bill has to be finalized by 25^th of May on Memorial day 2009. The House is considering climate change legislation authored by a key subcommittee chairman, Rep. Ed Markey (D-MA). President Obama has said this is, “a rare opportunity to rise above parochial concerns to enact a bill with a profound national impact”.

The Waxman-Markey Discussion Draft provides for an economy wide cap & trade program: The cap reduces greenhouse gas emissions to 20 percent below 2005 levels by 2020, and 83 percent below 2005 levels by 2050. Offsets, (project based reductions) are limited to 2,000 million metric tons CO2 equivalent (MtCO2e) per year or 30% per cent of U.S emission reduction, split evenly between domestic and international offsets. Domestic offsets does not include Green Buildings offsets. There are provision for emissions reductions from reduced deforestation through allowance set-asides.

Waxman does not yet have support from House Republicans or moderate Democrats like Rep. John Dingell (D-MI) who are opposing the bill. Opposition concerns whether to give away or auction the permits to manufacturers, utilities, and other industrial sectors in a U.S Cap and Trade Emissions Trading scheme. The U.S is coming up against the same opposition from industry and parochial interests that the Europeans came up against, when they decided to give away the majority of permits in the early years of the European Emissions Trading scheme (EU-ETS). The U.S was originally highly critical of the Europeans for going down this path.   Al Gore has gone on the front foot calling for unity from the democrats on Climate Change against the resistance of some democrats wanting to protect local industry. Similar to the results of the EU-ETS, we found with the Carbonflow carbon game emission reductions were achieved even with giving away the permits in the first period. So, whatever the House decides on auctioning versus giving away permits that should not block the Draft bill’s passage through the house.

Some believe that Speaker Pelosi will make the House vote on a version of the Markey bill with 254 House Democrats, but important House Democrats like Mr. Dingell may make a similar case as House Republicans, that the bill should be opposed because of the higher energy costs for consumers.

The approach taken by the Waxman-Markey bill does not alleviate the problem whereby household consumers will pay higher energy costs because the regulatory approach to energy efficiency and renewable energy is insufficient. Under the bill energy efficiency and renewable energy is proposed to be achieved through regulation by establishing a renewable electricity standard, a low carbon fuel standard, and energy efficiency programs and standards for buildings, lighting, appliances and additionally further standards for vehicles, stationery sources and fuels.

According to  Donald Simon, an attorney for Wendel, Rosen, Black and Dean, BOMA International, The Real Estate Roundtable, U.S. Green Building Council and the California Business Properties Association, regulation does not achieve the result intended as, “Building codes typically affect only new construction, because existing buildings are “grandfathered” and new code requirements apply only to substantial renovations, which is  hugely problematic. Existing buildings account for the vast majority of real estate sector GHG emissions. Government incentives are helpful but inadequate and unreliable because they do not achieve sufficient market penetration and rely on limited government funding that can disappear in lean budget years”.

Simon goes on to say that, “in the world of Climate Change regulation, there are two major classifications of GHG emission sources - direct and indirect. Direct sources release GHGs directly into the air, like power plants and other smoke stack industries. Indirect sources are activities that consume what the direct sources produce, like buildings that consume electricity produced by power plants. The conventional wisdom among regulators globally is that market-based programs, like cap and trade, should be restricted to direct industrial sources, because there are fewer of them and they are already heavily regulated. This generally forecloses the possibility for green building projects to generate carbon credits, despite their cost-effectiveness. As a result, a valuable incentive for voluntary GHG reductions is lost, the low-hanging fruit of increasing energy efficiency in buildings goes unpicked, and industrial (direct) sources are required to shoulder a greater share of required GHG reductions, all of which increase the societal cost for addressing Climate Change and make it less politically feasible to accomplish”.

Not only do, Cap and Trade Green Building carbon credits provide a much larger funding source that could partially finance energy efficiency improvements if buildings are allowed to participate, they also actually benefit poorer communities by upgrading the existing building stock with energy efficient and renewable energy technologies at a much more accelerated rate as the private sector is incentivised from the price of carbon to go out and do projects on a large scale, providing whole districts and building owners with clean technologies funded by the credits. Regulatory approaches just take too long to retrofit the existing building stock and leave people stranded with high energy bills.

House moderate Democrats and Republicans correctly say ordinary people will incur higher costs of energy over-time because most people will not have had their homes and small businesses upgraded with clean technologies and they know the subsidies to poorer communities for energy costs will be short-lived and once removed all Americans will be left with higher energy costs. A householder or small business faced with a doubling of energy costs from USD 100 - USD 200 a quarter would probably just pay as there is not enough incentive to go out and retrofit the house nor do they have the trades expertise to do it.

The better outcome is that Green Building Carbon Credits are allowed and business, construction companies, project developers, engineers, architects do energy efficiency and renewable energy building projects using the funds from the credits and create the Green jobs President Obama is talking about.

In short proposed subsidies to less well off Americans waste money that should be going into making all American homes energy efficient and creating green jobs.

Policy-makers can encourage voluntary reductions by structuring carbon markets in a way that allows parties to convert their GHG reductions into carbon credits that they can sell to regulated sources to offset their emissions. Under the current plan the U.S would be in the anomolous situation of accepting international carbon offsets from energy efficiency and renewable energy but not accepting it domestically. This makes no sense. Domestio Green building offsets would allow regulated industries an alternative way to comply with regulatory obligations by letting them choose between reducing their own emissions or purchasing Green Building offsets from others who were able to reduce theirs at lower cost. This reduces the overall cost of Climate Change regulation by letting the free market exploit lowest cost GHG reductions.

Green Building carbon credits would be more transparent as they would have to be independently validated and verified, and open to public scrutiny, whereas money going to government agencies for programs may well end up being used on things other than greenhouse gas reductions projects. Even the double-counting issue can be managed as companies like Carbonflow, multi-party software designers for the carbon industry can easily retire end use building credits back to the Cap.

I believe however, if the house was not to get too hung up over auctioning or giving away permits in the first phases and secondly, to introduce Green Building Carbon Credits, it could solve all the problems that beset the Draft Waxman-Markey bill before the House on Memorial Day.

DNV has had its accreditation reinstated with the CDM Executive board, which was temporarily suspended at the end of December 2008.

DNV was one of the first organizations to be accredited according to the CDM, and has so far validated close to 50% of the registered projects worldwide. Following the findings of the spot check in early November, the CDM Executive Board decided to temporarily suspend DNV’s accreditation for the validation and verification of CDM projects.

“We took the spot check findings very seriously, and we have allocated our best resources to correct them. Through these actions we have now further formalised and thus improved the documentation of our processes for validation and verification of CDM projects. Today we are better able than ever to carry out this work,” says DNV’s CEO Henrik O. Madsen.

During the suspension period, validation and verification work relating to ongoing projects continued as usual. No projects could, however, be submitted to UNFCCC for registration or requested for issuance of certified emissions reductions. Due to the fact that the on-going projects were progressing normally during the suspension period, only a limited number of projects experienced a delay in their validation and verification processes.

“We have been in close contact with our customers all the way and are grateful that our customers have shown patience with us during this time,” says Mr Madsen.

The reinstatement also means that DNV again is allowed to do Joint Implementation (JI) and Voluntary Carbon Standard (VCS) work as well.

The Australian ETS and U.S. Cap and Trade should include soil carbon and energy efficiency offsets

In Australia, Malcolm Turnbull announced the Opposition Government’s Green Carbon Initiative on Saturday 24^th of January at the young Liberals Convention in Canberra.The Turnbull plan for combating climate change is basically a two pronged approach to reducing greenhouse gas emissions (GHG). Firstly it involves “a comprehensive bio-carbon strategy investing in the health of our landscape, restoring soil carbon by reversing over-grazing and excessive tillage, embedding CO2 in bio-char (charcoal fertilizer), tree planting, and re-vegetation” and the second prong is to “dramatically increase energy efficiency, especially in buildings”. This plan has the support of globally renowned Scientist Tim Flannery on the use of soil carbon as a major way to draw down existing carbon from the atmosphere.

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One key difference according to Point Carbon in the “Progress So Far”, article is that the U.S proposed Cap and Trade compared to the EU-ETS (European Union Emissions Trading Scheme), will include, “more aggressive auction schedules than in the 1^st phase of the EU-ETS”.  ”The EU-ETS allowed an over-allocation of free allowances that took place in phase one giving ‘windfall profits’ to companies. The U.S. will advocate aggressive auctioning at the beginning of a US program in order to avoid what occurred in Europe”. Social justice advocates and environmental groups have complained about this aspect of the EU-ETS in California.

The other approach that may be different is the clean development mechanism (CDM) one of the Kyoto protocol’s project-based flexible mechanisms that allows carbon credits to be generated from emissions reductions projects in developing countries. The U.S. has indicated that it will pursue transparency and rigor around criteria for “additionality” for CDM offset projects.

Neal Dikeman, CEO of Carbonflow based in San Francisco supports this view of greater industry transparency in the carbon offset market. Our objective is “to provide validation, verification and on-going monitoring automation software for project developers, validators, verifiers throughout the entire chain of the multi-party process for the creation of carbon credits in CDM and any market that uses carbon offsets” and, “this also applies to domestic national Emissions Trading Schemes that use offsets, such as energy efficiency and agricultural offsets”. he concluded.

The Point Carbon article further recommends that “industry will need to aggressively communicate the benefits of markets in achieving climate policy objectives in order to ensure that legislation authorizes the use of offsets to the greatest extent practicable”.

The EU-ETS, Phase 1 did not include domestic offsets such as energy efficiency and transport. U.S. Green groups and social justice campaigners criticized the EU-ETS on the basis that big companies only benefited from Emissions Trading and not the community, local and regional city governments, missing out on opportunities to do renewable energy projects, green building projects, public transport, alternative fuels and other small-scale projects to reduce GHG emissions, which ironically could be done in developing countries under CDM.

Due to the criticism of the EU-ETS, which did not allow offsets, resulting in a lack of participation by the general community, the earlier proposed U.S. bills did offer detailed offset provisions and will act as the starting point for the final U.S. Cap and Trade scheme. The Lieberman-Warner and Bingaman­Specter bills included detailed offset provisions.

For example The Bingaman-Specter includes domestic offsets including 5% of offsets from agricultural sequestration. The limit for total domestic offsets was nominated at 15% with a further 15% of offsets coming internationally, a campaign commitment that still seems to be holding. (GHGBlog)

The argument for domestic offsets is that it reduces the cost of abatement of compliance with Climate Change legislation. Recent economic modelling cited in the “Progress so Far” by the EPA of the Lieberman-Warner bill concluded that access to offsets can result in significant economic savings. If limits on the use of domestic and international offsets in the Lieberman-Warner proposal were removed, allowance prices would fall by 71 per cent, from $51/t to $15/t in 2020, compared to the bill as written*. This translates into GDP savings of $333 billion in 2020.

The types of offset projects that could be included are:

Landfill methane use;

animal waste & wastewater methane use;

coal-mine methane use;

agricultural and rangeland sequestration and management projects;

land-use and forestry projects;

reduction of sulphur hexafloride from electric transmissions and distribution transformers; and

other activities, approved by either the President or the US Environmental Protection Agency (EPA) administrator, respectively.

The other activities should include energy efficiency if we are to achieve these ambitious targets. Energy efficiency has to be in the mix as 40% of global emissions come from electricity generation. It is well known that renewable energy can’t be deployed faster enough to the existing grid.

Mr Dikeman, has indicated that any U.S. scheme that includes domestic offsets such as energy efficiency can be included provided the transparency and the auditability is there, which he believes the software can provide. (Declaring my interest, I am a co-founder with Neal of Carbonflow). Carbonflow has solved the double-counting issue, which to date has precluded energy efficiency from being included.

In terms of domestic harmonization to my mind there are already many initiatives in the U.S which will have to be either seriously streamlined in line with the federal policy or dropped altogether.

The two programs of significance include the Regional Greenhouse Gas Initiative in the North East comprised of 11 U.S. states and the Western Climate initiative. These initiatives basically follow the electricity grid on the east and west coast and reach across border into Canada and South to Mexico. There are other many other state programs, city ordinances, building codes on energy efficiency, renewable energy and so forth, too many to be documented in detail. Suffice to say the U.S. has been doing many things whilst not officially part of the global consensus on Climate Change.  These regional programs have much lower caps than the national proposal and the sectors are narrow in the case of RGGI, much broader in the case of the WCI.

To add to this the Voluntary carbon markets have been very active in the U.S. more than any other developed nation. Prior to the U.S. election as late as October 20^th 2008, California was leading the way using voluntary programs as the mainstay of U.S participation in global carbon trading.  “The Voluntary Carbon Standard Association (VCSA) approved the California Climate Action Registry as the first independent greenhouse gas (GHG) offset program.

Linda Adams, Secretary, California Environmental Protection Agency and Chair of the California Climate Action Registry said that, “Recognition by VCS provides the foundation for the establishment of common global standards for voluntary GHG emission reduction projects and their offsets. This is significant in unifying international carbon markets and providing a platform that global investors can participate in with confidence, un-precedent-opening a new gateway for trading between the U.S. and international voluntary offset markets.

Not with-standing the U.S Cap and Trade legislation, which is now advocating targets greater than any country in the world, the question is will the U.S. lead the international negotiations in Copenhagen. I certainly hope so and maybe they will be able to advocate stronger targets and changes, which based on the review of the success of the EU to date could come along with U.S. ratification of Kyoto Mark 11.

The potential for consensus building around this Bill is historic with a coalition of agricultural / industrial states, green groups, energy efficiency advocates and social justice groups supporting a passage of the U.S cap-and-trade scheme.

Carbonflow eRecord software to improve productivity of Kyoto Markets

Neal Dikeman, CEO of Carbonflow, a U.S company, which I am a co-founder of based in San Francisco is launching  version 1 of the eRecord software at the United Nations Climate Change Conference of the Parties (COP) 14 in Poznań, Poland held from the 1^st to the 12^th of December.

“The patent pending eRecord software will reduce costs, increase speed and transparency of the Kyoto Market mechanisms, particularly the Clean Development Mechanism (CDM) under the Kyoto Protocol”, said Mr. Dikeman, whose resume includes start up experience as cofounder of superconductor device manufacturer Zenergy Power plc (ZEN.L) and as Director of Business Development for the parent company of Yellowpages.com.

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A Cleantech.org and GHGblog.com Briefing Paper by Caroline Hoisington, Resource Economist

Introduction: the Green Paper

A number of commentators on the Green Paper for the proposed Australian Carbon Pollution Reduction Scheme that will enable Australia to meet its international obligations under the Kyoto Agreement have said that it is lacking in specifics. Actually, the Green Paper contains a great deal of information on the Government’s proposals for how the cap and trade emissions trading scheme (ETS) will work at various levels. However, it does not contain many numbers but focuses on the mechanisms. More detailed numbers - estimates of economic and financial impacts of introducing the cap and trade scheme - are to be included in the White Paper, to be released in October.

The framers of this proposed ETS have taken on a complex challenge, in an area where experience around the world is still developing. By signing the Kyoto agreement, Australia is joining the leading group of countries in this regard, and if the Australian plan is not weakened with measures that will undermine the incentives it creates, it may help Australia to earn new revenues and create new employment opportunities by becoming an innovation leader.

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Congratulations to President Elect Barack Obama and his campaign team, excellent job! Now, we need to look at the team going forward. Who will be in his line-up is of great interest.

Jim Wolfensohn, ex-director of the World Bank, made a comment yesterday that the most important thing, President Elect, Barack Obama needed to do was to appoint a b-partisan and seriously competent team to deal with energy security, climate change and the economy. The cabinet position of Secretary of Energy is to my mind the most important responsibility in the cabinet as it impacts on policy in all three areas.

Barack Obama as he said he would do is reaching across the aisle to the Republicans on Energy, a wise move and two possible names are of interest for Secretary of Energy, Governor Arnold Schwarzenegger and adviser James Woolsey to the McCain Campaign.

Governor Schwarzenegger passed the Western Climate Initiative (WCI) and his comments a month ago, “We’re sending a strong message to our federal governments that states and provinces are moving forward in the absence of federal action, and we’re setting the stage for national programs that are just as aggressive”, signals perhaps the extent of this bi-partisan approach that was being hatched behind the scenes.(www.ghgblog.com)

If Arnold Schwarzenegger was appointed, the WCI would most likely influence the blueprint for Federal action on a Cap and Trade Emissions Trading Scheme. However, during the campaign a bidding war emerged on US Climate Change legislation such that the Democrats and Republican positions were far stronger than any legislation in the world including California and Europe. If either campaign position was adopted the US would truly be leading the world in the post 2012 Kyoto world.

If James Woolsey, was appointed the Republican position on the proposed US Cap and Trade legislation could become the new democratic position, which is a very acceptable position with a Cap of 60% on greenhouse gases. The Woolsey plan anticipated getting legislation through the Senate, taking account of influential Republican coal states like Virginia and includes initiatives to appease coal -fired power generation by way of allowing more carbon capture, nuclear energy and 15% domestic offsets, which would mean energy efficiency was included and an allowance for agricultural offsets to create jobs in rural farming.

The Woolsey position was very practical as it allowed for gradual staging of the auctioning of permits.Either way both Republicans, Arnold Schwarzenegger or James Woolsey would be very interesting candidates to the position of Secretary of Energy.

Other names for Secretary of Energy include lobbyist Philip Sharp, a former Democratic congressman from Indiana and Senator Jeff Bingaman, the current chairman of the Senate Energy and Natural Resources Committee.

Further names include: Jason Grumet, Elgie Holstein, Robert, Sussman, Todd Atkinson and Heather Zichai.

See the Hill at www.thehill.com