I have been away and attended a conference Carbon Expo, the Global Carbon Market, Fair and Conference, May 27th-29th 2009 in Barcelona, the most important conference in the Carbon Calendar and under new market initiatives in the Voluntary and Regulatory market there is now a “Cities & Carbon Finance Stream Workshop”. This shows the force of Cities gearing up to participate in the Post 2012 Climate Change Agreement.  This is unusual as Nation States participate in International Treaties not city states. Climate Change is impacting on global governance issues as all levels of government are involved in Climate Change emissions, reductions, impacts and mitigation. Even a few years ago the role of Cities and local government at international meetings was questioned. Mayor’s of the world are responding spontaneously such that City states are now involved with the lead up meetings like Carbon Expo to Copenhagen for the Post 2012 Agreement. For example in the U.S, I have recently heard that Governor Schwarzenegger of California state may well be present along with Global Presidents and Prime Ministers in Copenhagen.    Eventually organizations on behalf of cities will have to be represented at these Global meetings, as the numbers and levels of government simply become unwieldy.

According to the Carbon Expo program, there is “increased awareness and growing commitment of city decision makers to city climate strategies and implementation of GHG mitigation in policies and measures in both developed and developing country cities. However, currently there is limited access to information, knowledge on technologies and innovative financial solutions are some of the barriers preventing local leaders, entrepreneurs and business groups from seizing an overabundance of low carbon win-win options in urban centers. Hence the Cities stream aimed to facilitate and promote dialogue, knowledge sharing, networking and business communication within relevant stakeholder groups to be a part of an essential measure to foster a transition to low-carbon city development. The streams covered:
- Beyond Carbon Trading - Policies & Measures at the local level for financing low carbon development in cities
- Carbon finance in cities post-2012- Scaling up GHG reductions and enhance urban development co-benefits
- CDM/JI in Cities - What has worked and what has not
- Creating Urban Carbon Assets: From Concepts to action
- Leveraging Greater Energy Efficiency in Buildings with Carbon Finance - How can we make it happen?
- The Role of Carbon Finance in the transport sector in urban areas

U.S Cities are moving fast to catch up with European initiatives and are closer to taking over - they are well  organized and spear-heading major initiatives around GHG reduction at the city level. The San Francisco Carbon Collaborative is part of a broader groundswell of spontaneous activity by the World’s Mayors.The City of San Francisco Urban EcoMap, an Internet-based tool that enables cities around the world to provide smarter climate change information for their citizens. Urban EcoMap provides information on carbon emissions from transportation, energy and waste among neighborhoods, organized by ZIP/ Post codes.

On PBS March 23rd 2009, it was announced that the U.S Conference of Mayor’s established 4 years ago by Seattle Mayor Greg Nickels reached the 900-mayor milestone. The 900 mayors represent 80 million Americans, and they illustrate the increasingly prominent role that cities and towns are playing in combating climate change.

According to Seattle Mayor, Greg Nickels, “cities cover less than one percent of the earth’s surface, but hold half its population and produce about 80 percent of greenhouse gasses. And cities will have to deal with the effects of climate change, from sea level rise in coastal cities to heat waves, strong storms and other extreme weather”.

Seattle has  aims to reduce its carbon emissions by 30 percent below 1990 levels by 2024 and 80 percent below 1990 levels by 2050. The plan includes transportation goals — such as building a light rail system, improving bicycling infrastructure and using more “clean vehicles” in the city’s fleet — and improvements in building energy efficiency.

Mayor Michael R. Bloomberg and Council Speaker Christine C. Quinn on April 26th 2009 announced the world’s most comprehensive package of legislation to reduce greenhouse gas emissions from existing government, commercial, and residential buildings. According to the PlaNYC inventory of greenhouse gas emissions, almost 80 percent of New York City’s carbon footprint comes from buildings’ energy use.

A six-point plan, when enacted as part of PlanNYC, will dramatically reduce the City’s energy usage and save consumers money, while simultaneously creating thousands of well-paying jobs and significantly reducing New York City’s carbon footprint. The six-point plan consists of four pieces of new legislation and two PlaNYC programs that will achieve carbon reductions, train workers for the estimated 19,000 construction jobs that will be created, and help finance energy-saving improvements using $16 million available from the American Recovery and Reinvestment Act. The plan will also result in cleaner air, since emissions from boilers, furnaces, and local power plants will also be reduced.

“Today we’re introducing the greener, greater buildings plan, a far-reaching package of new local laws that will dramatically improve New York’s energy efficiency and reduce energy costs by some three-quarters of a billion dollars a year,” said Mayor Bloomberg. “This will significantly improve our economic competitiveness, put thousands of New Yorkers to work in green jobs, and do more to shrink our own direct impact on global warming than any other actions imaginable.”

According to the PlaNYC inventory of greenhouse gas emissions, almost 80 percent of New York City’s carbon footprint comes from buildings’ energy use. Once implemented, the legislation announced today will reduce citywide emissions by 5 percent….

The reductions will be achieved through the six point green buildings plan unveiled today:
* Legislation that creates a New York City Energy Code that existing buildings will have to meet whenever they make renovations;
* Legislation that requires buildings of 50,000 square feet or more to conduct an energy audit once every ten years and make any improvements that pay for themselves within five years;
* Legislation that requires commercial buildings of 50,000 square feet or more to upgrade their lighting to more energy-efficient systems that pay for themselves through energy savings;
* Legislation that requires buildings of 50,000 square feet or more to make an annual benchmark analysis of energy consumption so building owners can better understand what steps they can take to increase efficiency;
* A jobs program that will work with the real estate and construction industries to train the workforce that will fill the estimated 19,000 construction jobs the legislation will create; and
* An innovative financing program that uses Federal stimulus money to provide loans for property owners to pay the upfront costs for the efficiency upgrades that eventually pay for themselves.

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.

Renewable Energy seems to be one of the big winners in the U.S. Stimulus package. The American Recovery & Reinvestment Act of 2009, an economic stimulus package with tax and spending provisions totaling nearly $800 billion, was signed into law on February 17. The act contains a number of tax provisions that provide significant value to companies and individuals that are focused on producing renewable energy or reducing energy use through efficiency. By extending, modifying and enhancing several renewable energy and energy efficiency incentives, the stimulus package creates many opportunities for taxpayers to get paid for going green according to an article in Greener Buildings.

In Washington, The U.S. Interior Department said it has created a special task force to speed the development of renewable energy projects on federal lands. “More so than ever, with job losses continuing to mount, we need to steer the country onto a new energy path,” said Interior Secretary Ken Salazar.

The government is on the right path from the point of view of creating employment. According to a study, Defining, Estimating and Forecasting the Renewable and Energy Efficiency Industries in the U.S and Colorado by The American Solar Energy Society, Boulder, Colorado, and published on Climatebiz it found that,

“U.S. RE and EE in 2007, generated $1,045 billion in sales and created over 9 million jobs – including $10.3 billion in sales and over 91,000 jobs in Colorado. The U.S. RE and EE revenues represent substantially more than the combined 2007 sales of the three largest U.S. corporations - WalMart, ExxonMobil, and GM ($905 billion) before the melt-down. RE and EE are growing faster than the U.S. average and contain some of the most rapidly growing industries in the world, such as wind, photo-voltaics, fuel cells, recycling/re-manufacturing, and bio-fuels. The study further noted the importance of policy settings to the industry and said that, with appropriate federal and state government policies, RE and EE could by 2030 generate over 37 million jobs per year in the U.S. – including over 600,000 jobs in Colorado. The study goes onto report that the stronger the policy settings the stronger the job creation potential from RE and EE”.

Mr Salazar has said that, “We will assign a high priority to identifying renewable energy zones and completing the permitting and appropriate environmental review of transmission rights-of-way applications that are necessary to deliver renewable energy generation to consumers. We have to connect the sun of the deserts and the wind of the plains with the places where people live.” Furthermore, “the task force will identify specific zones on public lands where the department can act rapidly to create large-scale production of solar, wind, geothermal and biomass energy”.

I have a concern about this approach, which is that although creating large-scale renewable energy projects on government land, maybe more administratively easier, it may lead to local opposition to fields of solar collectors and wind farms. I think the application of this policy should be integrated into communities in a more subtle way.

I have suggested that rather than create renewable energy parks, the better concept is take an integrated approach and create entirely sustainable communities, which I described on this blog - “Convert the suburbs to Sustainable Communities and Bank the Credits”  - In this post I was also suggesting that energy efficiency, sustainable water and waste management be included in the mix of energy solutions such that whole communities could become entirely sustainable. Put another way it involves a move away from the monoculture approach to development and requires the adoption of strategies that mimic nature, based on bio-diversity.

On another blog on Multiple Crises, which concerns sustainable agriculture, I have drawn on the work of Dr Lietaer who takes up the notion of bio-diversity for the banking system. I am applying it to renewable energy systems and I believe that that the more diverse the renewable energy systems are the more resilient the community will be.

The conceptual breakthrough, which applies to all systems whether they be energy, financial or agricultural systems identified by Bernard Lietaer and his colleagues, “takes its evidence from balanced, structurally sound, and highly functioning eco-systems is that that all complex systems, including our energy, monetary and financial ones, become structurally unstable whenever efficiency is overemphasized at the expense of diversity, inter-connectivity and the crucial resilience they provide. The surprising systemic ‘a-ha’ insight is that sustainable vitality involves diversifying systems”.

The interior department is in a good position to do this as it manages one-fifth of the U.S. landmass and over 1.7 billion offshore acres. It needs to create diversity at the core of the sustainable communities it wishes to create and not make the same mistakes with the new renewable energy solutions that we made with the old ones.

At a press conference Friday January 16th, President-elect Barack Obama, said he was pleased, “that Congress “has moved quickly to consider his plan”, which “stresses the urgency of a renewable-energy economy”, a key measure that he believes will drive the stimulus package.

The Senate handed Obama a big political victory on Thursday 15th of January by voting to release the second half of the $700 billion bailout package. The Senate voted 52-42 against a resolution that would have barred Obama from using the roughly $350 billion remaining in the program. Obama has called on Congress to take “dramatic action” on his economic aid package as soon as possible, warning that a failure to do so would have devastating long-term consequences for the nation”.

His plan involves creating jobs in the green energy sector as a key part of his platform to jump-start the economy. He talked of companies hiring staff during the melt-down in the wind and solar industry. This was not picked up in the transcripts but I heard him stress, the importance of the private sector creating jobs in green businesses and noted that this sector is growing, whilst jobs are declining in just about all other sectors. He also indicated that government can only do so much and the private sector, the clean tech sector needed to move into the vacuum created by the melt-down.

Obama said, “we’re looking to create good jobs that pay well and can’t be shipped overseas. Jobs that don’t just put people to work in the short term, but position our economy to be on the cutting edge in the long term”.  Obama plans to “double the production of alternative energy within three years improve the efficiency of federal buildings and homes”.

It was mentioned only briefly but the green jobs agenda serves many political objectives from reducing dependence on foreign oil, to bailing out the economy and simultaneously reducing greenhouse gases that contribute to global warming. We will see what how congress reacts to the plan.