Two sectors, energy and forestry, play crucial roles in our efforts to combat global climate change. In the energy sector it is specifically the burning of fossil fuels that leads to the emission of global warming causing carbon dioxide.

Forests meanwhile serve as sinks for the carbon dioxide we produce; the larger the forest, the more carbon emissions it can absorb.

As a member of the global community, what we do in our forestry sector plays a significant role in helping mitigate global climate change. Promoting the REDD (reducing emission from deforestation and degradation) scheme is one way Indonesia can help.

Indonesia's consumption of energy is not as large as that of China or India. Carbon dioxide emissions produced by Indonesia's energy sector are much smaller than those that result from the culling of our forests, especially during forest fire season. But this does not mean that the Indonesia energy sector need not participate in endeavours to combat climate change.

A reduction of carbon dioxide emissions from the energy sector could be implemented by adding clean energy sources to our current energy portfolio (supply side) or by making sure we consume the energy we do use more efficiently (demand side).

The first approach could include developing nuclear power plants or renewable energy sources (particularly geothermal) or by shifting our consumption of fossil fuels from the dirtier sources (coal) to the cleaner ones (natural gas).

The Blue Print for National Energy Management 2005-2025 targets a major shift in the country's energy portfolio, from a heavy reliance on oil to the use of more coal, natural gas and renewable energy. Minimizing the total cost of energy consumption seems to be the objective function of the plan.

However, the major constraint for the implementation of this supply side approach is that it requires a huge amount of capital investment, which Indonesia lacks. Construction of energy infrastructure requires thorough and consistent planning over a relatively long period. We do not currently have such a good long term plan for the development of large-scale, complex energy infrastructure.

We do have a "target" of developing nuclear power plants (stated in the 2005-2025 Long-Term Development Plan) but so far it is not clear how we may meet this target, given that project development for nuclear power plants is a complex endeavour in which we have no experience.

There is an ambitious plan to develop about 4,000 Megawatts of power from geothermal energy (as a part of the second 10,000 Megawatt project), but we have yet to successfully implement the first huge 10,000 Megawatt project. Other renewable projects that might produce lower carbon dioxide emissions await the stronger commitment from various parties, including the government, that are essential for the success of the project.

The conservation (demand side) approach, on the other hand, can be achieved faster and at a lower cost; it also has a larger potential for emission reduction. We might better going in this direction.

Studies across countries, including that by the International Energy Agency, show that energy efficiency and conservation promise much better results in terms of emissions than merely pursuing cleaner energy sources.

The governor of California Arnold Schwarzenegger is among the leaders strongly campaigning for energy conservation to mitigate climate change. He argued the government should force energy consumers (particularly in the transportation sector) to meet energy-emission targets.

In Indonesia we question who has the power to regulate energy consumption. Our energy institutions emphasise the supply side and largely neglect the demand side.

The use of motorbikes, cars, etc. is allowed to grow at an uncheck rate, without considering the amount of energy they are consuming nor the huge amount of pollution they create. Industries in Indonesia meanwhile rely on inefficient and high polluting machinery; concentrated in Java, these industries are far from where our energy sources are located meaning inefficient transportation is also required.

Coal fired plants dominate our electricity mix. The plants continuously release huge amounts of carbon dioxide and other green house gasses (into the western and eastern part of Java in particular).

In general, energy is consumed lavishly as its production, transportation and consumption pollutes our sky and land.

Even though there has been regulation on energy conservation published (Presidential Decree No 10 Year 2005 for example), the institution dealing with the policy is too small and lacks the capacity to effectively make people conserve energy.

There is the hope that the newly-created National Energy Council will have the power to balance our approach to energy management between supply and demand, but we may still have to wait for the Council led by the President to put their policies into effect.

It is not only to mitigate climate change but also to improve our energy intensity that we have to implement broad energy conservation programs. Establishing the old-planning Energy Conservation Center and preparing the Law on Rational Use of Energy are things we should wait longer to start work on. (By Hanan Nugroho)

The writer is an energy plan-ner-economist with the National Development Planning Agency (BAPPENAS).

Source: The Jakarta Post

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BONN, Germany—The latest talks on the road toward a new global deal on climate change made a “step in the right direction” toward a global climate pact, but many countries still aired criticism that little progress has been made.

Yvo de Boer, the top UN climate- change official, said he was confident of reaching an ambitious agreement in Copenhagen in December, though it will lack details and thus require further work.

The latest round showed that governments “are committed to reaching an agreement, and this is a big achievement,” de Boer said. “I look back on this as a significant session that has advanced our work in important ways.”

However, he said some industrialized countries have failed to offer commitments of deep cuts in greenhouse-gas emissions. He said the pledges made in Bonn are too far from the target for emissions reduction stated by the Intergovernmental Panel on Climate Change (IPCC).

‘Not enough’

The IPCC proposals, made in a 2007 report, call for a 25-percent to 40- percent reduction in order to reduce the risk of climate change caused by human activity.

Most of the world’s industrialized and rich nations offered a reduction in the range of 17 percent to 26 percent of 1990 levels by 2020.

“This is not enough to address climate change,” de Boer told journalists here. “Science is clear that we need to commit much more than what is offered on the table to avert the catastrophic impact of climate change to humanity. However, I am confident that a new climate deal will be in placed in Copenhagen. There must be a deal.”

Delegates from 180 countries met this week in Bonn, Germany, for the latest round of talks on a new pact to replace the Kyoto Protocol on greenhouse-gas emissions, which expires in 2012.

The negotiating process continues throughout the year with sessions in Bonn, Bangkok and Barcelona before concluding in Copenhagen, Denmark, this December.

The pace of progress in climate-change negotiations is far too slow and the strength of commitments is far too weak, according to Saleemul Huq, senior fellow in the International Institute for Environment and Development’s climate-change group.

“Heads of state need to get involved now and make some serious commitments that reflect the global challenge of climate change. This is simply a question of leadership. The money is there but the political will is not. We need our leaders to understand the scale of the threat climate change poses and to take the ambitious steps needed to face it,” Huq said.

And, with the slow pace of the negotiations in crafting a unified agreement to curb climate change, it’s the poor nations and the poor in all nations who will suffer most because they lack adequate coping capacity, said Presidential Adviser on Climate Change Heherson Alvarez, head of the Philippine delegation.

“Countries should not step back or hold back in this negotiations. If the governments delay taking action [they] would pay a high price in food shortages, drought and public-health dangers in poor countries like the Philippines,” Alvarez said.

Earlier, Japan announced it would cut its emissions by only 15 percent. The European Union offered a cut of 20 percent by 2020 compared to its emissions in 1990. The United States proposed a cut of 17 percent compared to its emissions in 2005, which translates to about 4 percent in comparison with 1990.

While scientists agree that the pace of devastating climate change is accelerating and bring new evidence showing that natural disasters caused by rising temperatures will hit the poorest and most vulnerable, rich nations fail to make any sacrifices and concessions.

“We see no political breakthrough. Instead, delegates are just preparing themselves for battles to be fought at later meetings. They set out their positions more clearly, which is helpful, but they don’t resolve any of the difficult issues. We’re losing time,” Kim Carstensen, leader of WWF’s Global Climate Initiative said.

According to WWF estimates, “adding up the commitments from developed countries so far takes us to reductions at around 10 percent by 2020, possibly a bit more. It is far less than we need to solve the climate crisis.”

Carstensen said, “There is no money on the table from the polluting nations to cover the costs of climate change. Without that finance, it’s unreasonable and unlikely that developing countries will agree to deliver their part of a deal. (Written by Imelda V. Abaño)

Source: Business Mirror

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Tags: climate change

The FINANCIAL -- Government leaders, policymakers, and climate change experts from around the world will gather in the Philippines this week for a high-level dialogue and a series of technical meetings aimed at helping Asia-Pacific countries move toward low-carbon and climate-resilient development paths.

"Hosted by ADB, the Climate and Clean Energy Week will consist of two events. The High-Level Dialogue on Climate Change in Asia and the Pacific, to be held 16-17 June, will bring together policy makers to discuss the path forward for the Asia-Pacific region in the face of climate change. The dialogue will be followed by the 4th Asia Clean Energy Forum 2009, from 17-19 June, which will serve as a platform for exchanging experiences and forging new partnerships to advance clean energy solutions in the region," ADB says.

"Asia's share of greenhouse gas emissions has been growing rapidly over the past two decades and infrastructure investments in the next two decades will have profound impacts on the region’s economy and the global climate,” said ADB President Haruhiko Kuroda. "The Climate and Clean Energy Week is an opportunity to establish the basis for regional economic growth that is more environmentally sustainable, and to discuss priorities for Asia and the Pacific in the lead up to the United Nations Climate Change Conference in Copenhagen in December."

Mr. Kuroda will co-host the high-level dialogue with Dr. Rajendra K. Pachauri, Director General of The Energy and Resources Institute and Chair of the Intergovernmental Panel on Climate Change, which received the Nobel Peace Prize in 2007. Philippines' President Gloria Macapagal-Arroyo and Goh Kun, former Prime Minister of the Republic of Korea, will also speak at the dialogue. UN Secretary-General Ban Ki-Moon will address the participants via video, and Mr. Yvo de Boer, Executive Secretary of the UN Framework Convention on Climate Change, will update participants on progress toward a new global agreement in Copenhagen.

"Open dialogue is critical to achieving the policy, finance and technology solutions needed to address climate change in Asia and the Pacific," said Dr. Pachauri. "Decoupling economic growth from future greenhouse gas emissions is key to the region's future development, and only collective action will help us achieve this."

ADB will use the 4th Asia Clean Energy Forum 2009 to launch its Energy for All Partnership, which aims to provide clean, reliable energy to 100 million people in the Asia and Pacific region by 2015. ADB will also unveil a plan which outlines ongoing and planned responses to climate change in each of its five regions.

Source: finchannel.com

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Tags: ADB , climate change

THE WINDS OF CHANGE -- AND OPPORTUNITY -- are blowing briskly in the developing U.S. carbon market.

The carbon sector has many tiers, but the strongest gusts are swirling around what's called "cap and trade." Under such a regime, the government sets a goal or "cap" for emissions of greenhouse gases, which are widely blamed for global warming. The "trade" aspect kicks in when a company that exceeds its cap buys an allowance from another company that was below its own cap. Companies can also get credit via "offsets," such as planting trees.

In the U.S., cap-and-trade programs exist or are developing on the regional level, but President Barack Obama is pushing a national system, touting climate-change legislation as a vehicle for job creation and revenue generation.

The global carbon trade totaled $118 billion last year, led mostly by Europe, which already has an established cap-and-trade program. If the U.S. joins the party, the global carbon market could swell to $2.1 trillion by 2020, says London-based research firm New Carbon Finance. "Cap and trade in the U.S. is going to be huge," says Michael Meehan of Carbonetworks, which provides technology solutions for emissions management and has offices in the U.S., Canada and the U.K.

This spring, the House of Representatives began debating a bill that would cut U.S. greenhouse-gas emissions by more than 80% by 2050. The bill would cap emissions from manufacturing, transportation and power generation, but lawmakers have agreed to distribute 85% of the allowances for free, leaving the rest for auction. Free allowances would help cut emission-reduction costs for companies, and help protect trade-sensitive industries like steel from a whirlwind of business moving to countries without climate-change laws, analysts say.

Yet due to the smaller number of credits, cap and trade would generate far less than the $624 billion over 10 years that Obama initially predicted, analysts warn.

While lawmakers debate a national program, the Regional Greenhouse Gas Initiative, or RGGI (called "Reggie"), is gearing up for its fourth auction of allowances on June 17. RGGI, which represents 10 Northeast and Mid-Atlantic states, says the most recent quarterly auction, in March, totaled $117 million. Some analysts expect another robust auction this month.

Experts in the carbon sector say investors have plenty of ways to capitalize on the current favorable winds, as more companies become involved in the process of reducing emissions or trading credits. One such firm is World Energy Solutions (ticker: XWES), which helps with the administration of the RGGI auctions. Company executives say the prospect of a national cap-and-trade program could be an enormous opportunity for their business or a similar firm. Other options include emissions-related contracts currently offered by Chicago Climate Exchange, owned by Climate Exchange (CLE.U.K.); the Green Exchange, owned by CME Group (CME); and Europe's BlueNext, to name a few.

The forecast for the months ahead include U.S. Senate consideration of a climate bill, and an international gathering on climate change in December. So the trade winds carrying the U.S. carbon market won't die down anytime soon.

JULY-CONTRACT COPPER FUTURES ROSE 4.1% on the week, to $2.3735 a pound, on Nymex's Comex -- lifted by Chinese import demand. However, a dollar rebound curbed gains on Friday. (By ANGIE POINTER)

Source: Barron's

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