December 2009 Archives

A low-carbon future can be possible if policy makers and industry leaders shift their focus from green energy to clean energy, according a new whitepaper from Dr. Joseph A. Stanislaw, a senior advisor to Deloitte and founder of the advisory firm The JAStanislaw Group, LLC. Stanislaw is also co-founder and former president and CEO of Cambridge Energy Research Associates.

In his whitepaper, "Clean Over Green: Striking a New Energy Balance as We Build a Bridge to a Low-Carbon Future," Stanislaw explains that the "all-consuming global obsession with anything green has subsided" and stresses that energy decision makers should "move from breathless anticipation of a green dawn, to the more sober work of systematically and thoughtfully building toward a low-carbon future."

According to Stanislaw, this means pursuing energy options that are clean, not simply renewable and green. Implicit in this is the idea that oil, natural gas and coal have the potential to be clean. "The principle goal of policymakers should be to establish a level playing field that makes it easier to identify the cleanest fuels producible at the lowest cost, while also reducing energy use through efficiency and other technologies," said Stanislaw.

In the paper, Stanislaw stresses that now is a good time to shift from green to clean because we are "in the midst of creating a new development model that allows for industry leaders and policymakers to simultaneously promote economic growth and fight climate change."

Stanislaw further recommends a series of potential changes in how we think about energy, including the following:

• Policymakers could establish a predictable price for carbon emissions to unleash greater efforts at conservation, efficiency and demand reduction -- leading to a cleaner future. Stanislaw feels that an enlightened and fair policy framework is intrinsic to this effort.

• The current schism between the old and new energy industries -- wherein the green evangelists mock the traditional fuels and the oil and gas crowd reciprocate -- should end. This transformation also could be led by policymakers who admit there is no silver bullet in our common effort to build a low-carbon future. All energy forms, provided they can meet standards for being clean and cost-effective, should be able to compete for market share and funding.

• The marginalization of natural gas, which the United States has in increasing abundance, should be an area of focused attention. This relatively clean fuel is desperately sought after by nearly every country, yet somehow the U.S. considers it a lesser fuel. Natural gas could be treated equally with other fuels in the climate change bills currently being debated in Congress.

• The oil and gas industries could do their part by committing to developing carbon-neutral technology. The top goal could be to produce ever-cleaner oil, natural gas and coal. Within a generation, we could well be talking about clean oil, clean natural gas and clean coal.

Stanislaw concludes his whitepaper by explaining that "there will probably be more money spent in the energy sector in a broad sense in the next 50 years than has been invested in the past 100 years, if not in the history of mankind. Channeling these investments well, into an era of clean energy, is the challenge that policymakers, the private sector and the public all face together. The bridge to tomorrow's energy future depends on a sensible transition plan -- one that takes advantage of all of the clean fuel sources available to us."

To download the whitepaper, visit www.deloitte.com/us/newenergybalance.

About the Deloitte Center for Energy Solutions:

The Deloitte Center for Energy Solutions (Center) provides a forum for innovation, thought leadership, groundbreaking research and industry collaboration to solve the most complex energy challenges. Through the Center, Deloitte's Energy & Resources group leads the debate on critical topics on the minds of executives -- from legislative and regulatory policy to operational efficiency to sustainable and profitable growth. The Center provides complete solutions to Deloitte's clients through a global network of specialists and thought leaders. With locations in Houston and Washington, D.C., the Center offers interaction through seminars, roundtables and other forms of engagement, where established and growing companies can come together to learn, discuss and debate. For more information, see www.deloitte.com/energysolutions.

SOURCE Deloitte

Results released today from a detailed economic study show that China may cut carbon emissions deeply and minimise the adverse effects on its economy over the next 40 years. The report, Going Clean: the economics of China's low-carbon development, by the Chinese Economists 50 Forum and Stockholm Environment Institute, says that emission reductions up to 2050 can be made for example through:

    - Energy efficiency gains through improved building design, standards for
      electrical appliances and the use of less energy-intensive materials

    - A massive shift towards the use of renewable energy such as wind and
      solar energy, municipal solid waste and biomass, and small hydropower

    - Electric vehicles for road transport

    - Using Carbon Capture and Storage technology in new coal-fired power
      plants

    - A better international cooperation mechanism that can channel more
      finance and technologies from developed countries

The report by Chinese, Swedish, German, British and American experts says that these changes would also present opportunities for China to improve its energy security and move its economy higher up the international value chain.

"A low-carbon China is a country with a larger service sector, more advanced labour skills and less environmental degradation," said Dr FAN Gang, Director of the National Economic Research Institute in China, who led the research in China. "Such a transition would also be an essential part of China's development."

China is currently one of the 10 most carbon-intensive economies in the world, meaning that it has a high carbon footprint in relation to the level of economic activity. "Avoiding dangerous climate change requires the world to act together to cut global emissions. Developed countries are largely responsible for the past build up in global green house gas emissions but future responsibility is shared by developed and developing countries alike," said Lord Nicholas Stern, report author and Professor at the London School of Economics. "This important report demonstrates that China can take strong and decisive action to reduce its carbon emissions, whilst continuing its economic growth and delivering a prosperous and a harmonious society for its people."

"China will be one of the countries most adversely affected by dangerous climate change. Avoiding dangerous climate change is in the best interest of China," said Professor Ottmar Edenhofer, report author, deputy director and chief economist of the Potsdam Institute of Climate Impact Research. "The study demonstrates that China can combine a high economic growth path with ambitious emission reductions. This is the reason why China has the potential to become a role model for other economies in transition."

Going Clean recommends a phase-out of fossil fuel subsidies and for carbon to be priced more highly, either through a carbon tax or a global cap-and-trade system. "With today's low prices, the incentives for a low-carbon transition are not strong enough. But this can change," said Dr Fan Gang. The report shows that it is technologically feasible for China to reach a 2 degrees pathway and estimates that the savings from lower energy use and other efficiencies will partly offset the costs of transformation. "High-income countries account for a vast majority of global emissions to date and need to shoulder this responsibility through financial support to developing countries," said Professor Johan Rockstrom, Executive Director of the Stockholm Environment Institute. "To make this a reality, Going Clean proposes a new international finance mechanism - the Inter-country Joint Mitigation Plan - as a broader and more efficient way of financing technology transfers."

"Consumption and production patterns also need to be steered in a more resource- sustainable direction," said Klas Eklund, report author and Senior Economist at the Nordic bank SEB. "As the world's most populous country and the largest emitter of greenhouse gases, China's role is critical in combating global climate change. Thus, effective economic tools to curb emissions are necessary."

The shift to a low-carbon economy will hit coal-fired power and some heavy industries, but will also create new 'green jobs'. In the first half of 2009, China built more wind turbines than the US. Low-carbon transport is growing - there are currently over 50 million electric bikes and motorcycles in the country, and China is now leading the mass production of electric hybrid cars.

"Even in these difficult economic times, climate change action may present more opportunities than costs," said Professor Johan Rockstrom. "Such a transformation, for China and the rest of the world, will not be easy. But it is possible, necessary and worthwhile to pursue."

The Chinese 50 Economists Forum is a Beijing-based grouping of Chinese economists for collaborative research and public discussion of China's economy. The Stockholm Environment Institute is an independent, non-profit research organization bridging science and policy for sustainable development.

    - Going Clean - The Economics of China's Low-Carbon Development will be
      launched in Beijing on 8 December 2009, 12:00 at the Raffles Beijing
      Hotel.

    - The report can be downloaded from http://www.sei-international.org

SOURCE Stockholm Environment Institute and the Chinese Economists 50 Forum