The comments on Marguerite’s blog echo my thoughts.

What is the plan for weaning us off our dependence on oil and will car manufacturers start making vehicles that use alternative fuels? How does that dove-tail in with his plans for the middle-east? The world community needs to know what is Barack Obama’s plan.

Then on Bloomberg, Andy Grove has another take on the debate over Barack Obama’s energy strategy.

Andy Grove of Harvard Business School and former head of Intel Corp is unimpressed with the energy policies of the leading presidential candidates, Republican Senator John McCain and Barack Obama. Grove maintains the most important issue is getting away from the dependence on oil, not moving to renewable energy by 2018, as recommended by Al Gore which `is addressing the second most important problem,” Grove said.  (more…)

Cleantech Blog and other sites interested in technology often focus on green consumers purchasing anything from new energy-efficient or alternative fuel cars to bidets. The option to retrofit is also emerging with consumers as noted by Grove in earlier posts opting to undertake ‘do it yourself retrofits of cars’ to become electric cars. In the case of toilets, a very simple alternative to toilet paper common in most asian countries is “the bucket and soap” by the loo or a hand held hose connected to a bath tap as the alternative solution to toilet paper. It saves a lot of paper and is a lot cheaper than a bidet. I like bidets but many bathrooms don’t have the room in their original design.

By the way women use more toilet paper than men. I was involved in a survey for the Sydney Olympic stadium on toilet paper use by men and women and women were shown to use more toilet paper even for micturation (peeing) than men. Not surprising really!

CarbonFlow has completed its first round of venture capital funding for $2.9million through investment from Clean Pacific Ventures www.cleanpacific.com, OVP Venture Partners www.ovp.com and Meridian Energy. www.meridianenergy.co.nz

CarbonFlow has developed a software package that helps manage carbon markets. It handles record keeping, as well as automatic validation and verification, and promotes credibility through transparency. The suite includes an eRecord, which handles all details of a carbon credit project, reducing costs and risks. An eRecord essentially provides an independent audit trail, which can protect all parties involved in carbon markets. The company also offers Carbon Step, an application which automatically handles verification, delivery and distribution of offset credits. www.carbonflow.com

The UN has set up a document rich process for the creation of carbon credits in each market, which follows a similar path. CDM has become the de-facto standard for all other carbon markets. There are a range of multi-party players in the project creation, approval, certification and trading process for a CDM/ JI project. Throughout the process there are inherent delays, which raise the cost of the process, which in itself acts as a disincentive to more rapid project creation. The project cycle can take up to 12 to 18 months from project origination to issued CER.

Baker and McKenzie, in their July 2008 Client alert have highlighted common problems in the Voluntary market concerning claims and terms such as carbon neutral, green or environmentally friendly are not well understood by consumers. The need for standards is common across all markets. www.bakernet.com

CarbonFlow’s software product offerings are focused on solving two problems. First, the inefficiency of carbon markets; participants tend to have difficulties collaborating on projects as well as managing long-term work. Second, the software is meant to bring more transparency to carbon markets through improved records, validation and verification. CarbonFlow’s software is designed to meet Kyoto standards for registration, verification, certification and monitoring.

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Australia is embarking on a new Emission Trading Scheme (ETS) and the US will no doubt follow next year after the US election in November. Australia and the USA have both been non-Kyoto Protocol countries for some years. Australia ratified the Kyoto Protocol after Kevin Rudd was elected Prime Minister in 2007. Six months later a Green Paper on the proposed Australian ETS system was released on the 16^th July 2008, which will be followed by a White Paper later in the year with more specific targets, sectors and timetables for action on Climate Change. A consultation process has begun with stakeholders. Australian Prime Minister, Kevin Rudd released the paper, which he said, “will ease Australia into a relatively gentle scheme on July 1, 2010”.        www.smh.com.au

GHG Science is confirming global warming is responsible for the Australian drought in the Murray Darling basin. Reporter Tim Jeanes of the World Today team 14th July 2008, interviewed Associate Professor Mathew England form the University of New south Wales: “there’s more and more evidence that greenhouse build-up has caused a decline in rainfall in Australia, and they’re warning that the situation is likely to get much worse, with southern Australia particularly vulnerable” he said. www.abc.net.au

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I first came across David Mills from the University of Sydney, during the Sydney Olympics. I was looking for world class solar  technologies for the greening of the Sydney Olympics. David was working on solar-thermal at that time. From the early 1990 till very recently funding in Australia was not forthcoming on the scale required.

However, success has come and I am very please for David. US investors have raised $40 million for the first factory for the “mass production of “solar parks”, which will open in Las Vegas later this month”. (Ben Cubby, Environment Reporter, June 16, 2008).

Solar-thermal reflects sunlight with mirrors to boil water and use the steam to spin turbines, generating electricity for a price not much higher than that of a coal-burning power station. But, unlike some solar power systems, they can function when the sun isn’t shining by storing heat in insulated chambers for a rainy day, and continue steadily feeding power into the grid.

Dr David Mills moved the headquarters of Ausra, www.ausra.com the solar company he founded, to the US last year and he “believes his technology will be competitive with coal-fired electricity, especially when it has the extra cost of having carbon capture and storage fitted,” and “Added to that, we obviously we have no fuel costs.”

This is a technology to watch!

The Australian Worker’s Union, AWU National Secretary Bill Shorten - 22 December 2006, The Age, supported the development of an Australian owned and built hybrid car, because we don’t make any version of the hybrid in Australia. Now with the price of fuel rising everyday and likely to reach $8.00 a litre by 2018, it would seem like a good time to take up Bill Shorten’s suggestion to support the Australian manufacturing industry. He estimated the based on “Toyota’s plant in Georgetown, US, it woudl cost $20 million and take less than a year to reconfigure a production line in Australia that could produce 48,000 hybrids annually.” Seems to me like the time for that idea to gain support has arrived.

The emerging economies have said ‘No’ to the G8 call for a 50% cut in GHG. So far the stand off continues.

The Chinese, Indians and other emerging economies are not going to accept GHG reductions. “On the final day of the G8 summit in Japan, a declaration by the world’s major emitting economies refused to endorse the rich world’s goal of halving emissions by 2050″ (SMH-10th July 08-Mark Davis Political Correspondent in Rusutsu, Japan)

“Mr Rudd, pushed for countries such as China, India, Indonesia and Brazil to join the developed world in urgent action to tackle climate change”.

Kevin Rudd has taken on a stateman like role in the region to garner support from India and China to agree in principle to reducing GHG emissions. Australian exports of coal, NG, minerals are key to our economy.

The threat of Climate Change will have to be seen to be greater than narrower competitive advantage.

Australia, like the U.S. needs everyone to be in the global consenses, so we are not penalised for adopting targets, whilst others don’t. Australia’s domestic Emissions Trading scheme is planned to be up and running by 2010. There is a lot of discussion about what sectors will be in the Australian ETS. Will it include transport and the utilities, which have been excluded from other schemes like the UK in the intial phase. Will petrol be in the Aus ETS.

The World Business Council on Sustainable Development stated that global carbon markets will explode over the next few years. http://www.wbcsd.org/plugins/workspace/message.asp?WspaceId=NTA&msgId=OTA4Mg

It highlights the negotiations that will go on between the developed and developing world read India and China over who benefits from the carbon markets. It will be a very interesting period. Although the Lieberman Bill in June 08 did not pass through this time, it is just the beginning of the process in the US to introduce a cap and trade system domestically and to participate eventually in the global consensus on reducing GHG emissions and to participate formally in the global carbon markets. Both candidates in the U.S. Presidential race have made solid commitments to reducing climate change.

“Global carbon market set to explode in next decade

EurActiv.com, 19 February 2008 - Analysts foresee a boom in carbon emissions trading by 2020 as the EU prepares to include new sectors in its Emissions Trading Scheme (EU-ETS) and the United States’ accession to a similar system appears increasingly inevitable. (more…)

by Richard T. Stuebi

In early June, the U.S. Senate considered the Lieberman-Warner Climate Security Act (S. 2191), which proposed the establishment of a cap-and-trade system for CO2 emissions, analogous to the cap-and-trade program in place in the U.S. for acid rain pollutants since the mid-1990’s.

Predictably, the bill was defeated, before even going to a formal vote. In a press release, Senator Lieberman bravely painted the defeat with a positive spin: “We have convinced a majority of the Senate to support mandatory, comprehensive, market-based legislation to curb global warming and enhance U.S. energy security.” No-one expected the bill to make it out alive from the Senate, and even if it somehow had, the House would never have passed a similar bill, and surely President Bush would never have signed any such bill into law.

As might be expected, the Senate debate on the Lieberman-Warner bill largely came down to economic considerations. Those who favored the bill foretold of the massive “green economy” that would be spurred by its passage: the creation of wealth and jobs that would occur by pursuing technology innovations and growing businesses in renewable energy and energy efficiency necessary to combat climate change. On the flip side, those who voted against the bill saw the threat – increases in energy prices, loss of industrial competitiveness, declining economic activity – much more acutely than the opportunity.

In my view, both sides of this debate are guilty of hyberbole and exaggeration. Let’s take each in turn.

Regarding the green economy, perhaps no phrase is more in vogue these days than “green-collar jobs” — a concept most compellingly articulated by Van Jones, the Founder and President of Green For All. A dynamic speaker, Mr. Jones was among the first to recognize that the adoption of green energy (renewables and energy efficiency) leads to local economic activity consisting of jobs that look very much like what used to be called “blue-collar” jobs – which offers the opportunity to rescue a segment of the U.S. population that has been increasingly disenfranchised in the past few decades.

I think this line of argument is conceptually solid. Certainly, energy efficiency retrofits and solar panel installations cannot be sent offshore: they must be done locally. And, in many instances, the best opportunities are available in downtrodden urban areas that badly need building rehabilitation, economic revitalization and new job possibilities.

My primary beef with the green economy crowd is not with Van Jones, but to his often overly-ardent disciples that assign way too much credibility to estimates – in my view, guesses – of how many green jobs exist or will be created. Every politician and reporter wants to know the number of new jobs that will result from a move to an advanced energy economy. My pat answer to that question is “It’s likely to be a very big number, but no-one can possibly quantify it with any degree of rigor.” Yet, these “job studies” invariably produce numbers that are told and retold until they become accepted as fact — when actually, they are pretty darn dubious.

This is most pointedly illustrated by the 2007 study commissioned by the American Solar Energy Society, developed by Roger Bezdek of Management Information Services, which claims a current “direct” green energy job count in the U.S. of 3.7 million. The incredulity of the study’s results becomes clear when reviewing a case study for the state of Ohio, in which about 500,000 jobs are credited to 2006 energy efficiency activities in Ohio. Note that Ohio’s current employment level is about 5.3-5.4 million. Does anyone who knows anything about Ohio really think that nearly 10% of today’s Ohio workforce is employed in energy efficiency products and services? I sure don’t.

The other side of the climate change policy debates, those clinging to the status quo and skeptical of the advanced energy economy, is also guilty of overstatement to defend their position.

Earlier this year, the American Council on Capital Formation (ACCF) and the National Association of Manufacturers (NAM) commissioned a study by Science Applications International Corporation (SAIC) of the economic implications of Lieberman-Warner. The ACCF/NAM/SAIC study projected strong adverse impacts on manufacturing and industry, especially for many key states.

However, as well summarized in reports by both the Electric Power Research Institute (EPRI) and the Congressional Research Service (CRS), the ACCF/NAM/SAIC study is just one of several studies on this issue, with results that are far more economically scary than others performed by unbiased organizations such as U.S. EPA, U.S. DOE’s Energy Information Agency, and MIT. The ACCF/NAM/SAIC results are outliers – yet, they are used again and again by those interests who wanted to see Lieberman-Warner killed.

In short, both sides of the carbon debate – green jobs vs. economic destruction – use economic models inappropriately to justify their stances. This tendency reflects badly on both sides. But, of course, it is the side with the deeper pockets – the established industrial sector – that wins. And, good policy loses.

As an economist, I wish that people would use economic models for insights, not numbers – a point very well summarized in an excellent white paper by Janet Peace and John Weyant issued by the Pew Center. If political leaders were to strip away the overly bold rhetoric and review the facts and analyses with the proper context and perspective, I think we would make a necessary first large stride towards forging an agreement on good carbon policy. In the meantime, the world is hostage to dueling models wielded by careless advocates making overly bold statements.

Because insight is desperately needed to cut through the fog of biased chatter, to provide some closing perspective on the tradeoffs between the costs and benefits of climate change policy, I’ll leave the last word to remarks made last year by an eminent economist, the former Chairman of the U.S. Federal Reserve, Paul Volcker, who gives a succinct personal view on the thorny economic questions associated with climate change:

“First of all, I don’t think [taking action on climate change] is going to have that much of an impact on the economy overall. Second of all, if you don’t do it, you can be sure that the economy will go down the drain in the next 30 years. What may happen to the dollar, and what may happen to growth in China or whatever, pale into insignificance compared with the question of what happens to this planet over the next 30 or 40 years if no action is taken.”

What more need be said?

Richard T. Stuebi is the BP Fellow for Energy and Environmental Advancement at The Cleveland Foundation, and is also Founder and President of NextWave Energy, Inc.