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  • Farmers sink carbon and improve soil

    Dr Jones told the inquiry agricultural soils have the capacity to sequester large volumes of atmospheric carbon by “rebuilding” robust agricultural soils, which would also “enhance the resilience of the Australian landscape to withstand changes to climate” she said.

    An added benefit would be that expenditure on fuel, fertiliser and chemical inputs would be significantly reduced, she said.

    “As a bonus, sequestering carbon in soils represents a practical, permanent and productive solution to removing excess CO2 from the atmosphere,” Dr Jones said.

    “It would require only a 0.5pc increase in soil carbon on 2pc of Australia’s agricultural land to sequester all greenhouse gas emissions.

    “That is, the annual emissions from all industrial, urban and transport sources could be sequestered in farmland soils if incentive was provided to landholders for this to happen.”

    While some farmers are fearful of having soil carbon included in an emissions trading scheme because there may be times when agriculture would have to pay for emissions in years when soil quality is poor, Dr Jones told the inquiry there was “no valid reason for the Australian agricultural sector to be a net emitter of CO2”.

    “By adopting regenerative soil-building practices, it is practical, possible and profitable for broadacre cropping and grazing enterprises to record net sequestration of carbon in the order of 25 tonnes of CO2 per tonne of product sold (after emissions accounted for),” she said.

    “Discussions on adapting to climate change are irrelevant unless they focus on rebuilding healthy topsoil.

    “There is an urgent need for a national strategy to assist Australian agricultural industries to adapt to climate change. To be effective, this strategy will require a radical departure from ‘business as usual’.”

    But Dr Jones said in the last decade the key people working to develop soil building strategies have been declined funding from research and development corporations due to ‘expert scientific advice’ that it is not possible to build stable soil carbon.

    She said while farmers have data of the effectiveness of the work they’re doing, it is not considered data by scientists because it does not fit into the scientific model.

    “The scientific establishment had been talking among themselves while farmers across Australia were doing amazing innovative stuff,” she said.

    “We need a large investment to get the soil carbon accounting models right.”

    She said improved resilience from building better soils would reduce the need for drought assistance.

    “Improved agricultural productivity and profitability would translate to reduced requirements for government assistance.

    “Furthermore, farming in a perennial base would enhance the resilience of the agricultural landscape to a wide range of climatic extremes, some of which may not even have been encountered to date.”

  • Brown coal companies attempt emissions blackmail

    It was a drastic statement. The Latrobe Valley provides more than 90% of Victoria’s power and if Mr McIndoe is right, the state would grind to a halt. Most observers believed the comments were just part of the industry’s frantic lobbying at this crucial time: the Federal Government, following Professor Ross Garnaut’s draft report on Friday, is finalising the details of its carbon scheme, while Climate Change Minister Penny Wong is set to release a green paper next week.

    But Mr McIndoe’s warning hints at how much pressure a carbon price will place on Victoria, the state most reliant on dirty brown coal. Although careful to respect the Federal Government’s process, Victorian Energy Minister Peter Batchelor appears increasingly nervous in his public comments. Asked if one of the state’s brown coal generators will be forced to close prematurely, he said: “It depends on the nature of the emissions trading scheme (introduced).”

    Under a trading scheme, large polluting companies such as power stations must buy from the Government an ever-decreasing amount of permits to emit carbon dioxide. This cost is passed on to the customer with the idea that carbon-heavy goods and services become more expensive and are used less. In the meantime, if companies find cleaner ways to produce energy and fuel, they benefit from not having to buy permits or from selling them to others.

    The scheme will push some of Victoria’s brown coal generators to the wall – even industry accepts that. The questions are when and which ones go first.

    Meanwhile, the spin on clean coal is wearing thin. Despite millions of dollars of taxpayer investment, the costs of retrofitting Victoria’s four brown coal power stations with technology to make them cleaner could be so high it might be cheaper to build new ones or convert them to natural gas.

    Safely putting carbon back in the ground, a process known as geosequestration, has been widely seen as the biggest test for clean coal technology. But a bigger test for the power stations is actually how to capture the carbon from generators before it is buried.

    The size of the infrastructure to capture carbon is enormous and any full retrofit could see a generator out of service for years. While the scientists say it is technically possible, none of the three companies that own brown coal plants have declared it likely to be economically viable.

    “The companies would never do it, it would send them broke,” says John Boshier, the executive director of the National Generators Forum, which represents the Latrobe Valley brown coal power plants of Hazelwood, Yallourn, Loy Yang A and Loy Yang B. “I’m an engineer and I can’t see how it can be done, but someone might figure out how to do it.”

    Energy Minister Peter Batchelor acknowledges the difficulties, but stands by the $30 million investment in clean coal technology trials designed for retrofitting the 44-year-old Hazelwood plant, the state’s oldest. “There’s no doubt about it – retro-fitting existing power plants is both a difficult and expensive task. But we’ve got to try everything. There’s no silver bullet,” he said.

    Last week, the Brumby Government trumpeted a new brown coal plant for Victoria, just three days before the release of Professor Garnaut’s draft report. In his press release, Mr Batchelor said the $750 million Latrobe Valley development, to be built by HRL and Chinese power company Harbin, was a “clean coal” power station – it is 30% better than a normal brown coal plant, but just as polluting as NSW’s black coal plant.

    But based on figures provided by the State Government to The Sunday Age, a rough calculation shows that the plant will emit 72 million tonnes of carbon dioxide over its 30-year life. This would almost negate the expected annual pollution savings of the Victorian Energy Efficiency Scheme, designed to cut energy use in homes by 10% by 2010.

    The Victorian announcement caused grumblings of displeasure around the offices of the Garnaut Review, but the professor himself is not too concerned. The reason is that the new coal-fired power station will be able to substitute gas for coal, thereby reducing its emissions, and will be designed to take on capture and storage technology when it becomes economically feasible. “It is appropriate that coal-based power generation be prepared for capture of carbon dioxide as soon as possible,” he told The Sunday Age yesterday.

    If emissions trading comes in at 2010, as planned, and clean coal is not considered viable until 2020 or 2025, Victoria’s brown coal generators face an uncertain 10 years.

    Brown coal electricity produces more carbon than any other fossil fuel because it has a high water content and is inefficient to burn. Until now it has been one of the cheapest ways to make electricity and this bargain power has underpinned the state’s manufacturing sector. But because it produces more carbon, the companies that own the generators – TRUenergy, International Power and AGL – must, under the emissions trading scheme, buy more permits, which pushes up their costs. Most of this cost will be passed on to consumers on their electricity bills.

    Even if the Government initially sets a low price, between $20 to $30 a tonne of carbon is mooted, brown coal electricity starts to become uncompetitive with black coal, which can be imported on the national electricity market from NSW. Also, at low carbon prices, brown coal starts to become more expensive than gas. Natural gas, a much cleaner fossil fuel, has generally been used in Victoria to cover peak demand. But a carbon price would push these gas plants into full production.

    As the carbon price rises to between $30 and $40 generators may shut down some parts of their plant and cut back on maintenance, further stressing the bottom line. At this point one of Victoria’s two dirtiest power stations – Hazelwood and Yallourn – could be pushed to their economic limit. “There is no doubt the older plants are less able to be retrofitted and adjust to a world where they have to ramp up and down,” says Paul Johnston, CommSec senior utilities analyst.

    When the carbon price hits $50 to $60, renewable energy such as wind will start to become competitive and the clean coal technologies appear more attractive. It may also become economic at this point to start replacing coal with gas entirely.

    There is an upside for brown coal, however. As it is traded on the international market, gas prices are likely to rise sharply at some stage – meaning that, for a time, the remaining brown coal stations will be on an even keel price-wise with natural gas.

     

    Then, as the Federal Government further restricts pollution permits, the carbon price is expected to rise again, making expensive energy sources, such as big solar thermal plants, more economical. But it is difficult to estimate the timing of these carbon price levels without knowing how quickly the Government will want to cut greenhouse gases and how the carbon price and the energy market will react over decades.

    For his part, Professor Garnaut believes the generators’ modelling that predicts early shut-downs is flawed. He told The Sunday Age yesterday that the companies, at least in the early stages of carbon trading, were in a reasonable position because of the rising costs of their gas and black coal competitors. The costs of building new power stations were rising so quickly that retrofitting would become more commercially viable, he said.

    In his report, Professor Garnaut said $1 billion to $2 billion of the emissions trading scheme proceeds should be invested in clean coal technologies, matched dollar for dollar by the companies. If clean coal worked, he said, the Latrobe Valley would heave a “prosperous and expansive future”. If it didn’t, money from the scheme should be used to help retrain workers and to help the valley community survive the brave new world of zero emissions.

     

  • World Bank blames biofuels for food prices

    “It would put the World Bank in a political hot-spot with the White House,” said one yesterday.

    The news comes at a critical point in the world’s negotiations on biofuels policy. Leaders of the G8 industrialised countries meet next week in Hokkaido, Japan, where they will discuss the food crisis and come under intense lobbying from campaigners calling for a moratorium on the use of plant-derived fuels.

    It will also put pressure on the British government, which is due to release its own report on the impact of biofuels, the Gallagher Report. The Guardian has previously reported that the British study will state that plant fuels have played a “significant” part in pushing up food prices to record levels. Although it was expected last week, the report has still not been released.

    “Political leaders seem intent on suppressing and ignoring the strong evidence that biofuels are a major factor in recent food price rises,” said Robert Bailey, policy adviser at Oxfam. “It is imperative that we have the full picture. While politicians concentrate on keeping industry lobbies happy, people in poor countries cannot afford enough to eat.”

    Rising food prices have pushed 100m people worldwide below the poverty line, estimates the World Bank, and have sparked riots from Bangladesh to Egypt. Government ministers here have described higher food and fuel prices as “the first real economic crisis of globalisation”.

    President Bush has linked higher food prices to higher demand from India and China, but the leaked World Bank study disputes that: “Rapid income growth in developing countries has not led to large increases in global grain consumption and was not a major factor responsible for the large price increases.”

    Even successive droughts in Australia, calculates the report, have had a marginal impact. Instead, it argues that the EU and US drive for biofuels has had by far the biggest impact on food supply and prices.

    Since April, all petrol and diesel in Britain has had to include 2.5% from biofuels. The EU has been considering raising that target to 10% by 2020, but is faced with mounting evidence that that will only push food prices higher.

    “Without the increase in biofuels, global wheat and maize stocks would not have declined appreciably and price increases due to other factors would have been moderate,” says the report. The basket of food prices examined in the study rose by 140% between 2002 and this February. The report estimates that higher energy and fertiliser prices accounted for an increase of only 15%, while biofuels have been responsible for a 75% jump over that period.

    It argues that production of biofuels has distorted food markets in three main ways. First, it has diverted grain away from food for fuel, with over a third of US corn now used to produce ethanol and about half of vegetable oils in the EU going towards the production of biodiesel. Second, farmers have been encouraged to set land aside for biofuel production. Third, it has sparked financial speculation in grains, driving prices up higher.

    Other reviews of the food crisis looked at it over a much longer period, or have not linked these three factors, and so arrived at smaller estimates of the impact from biofuels. But the report author, Don Mitchell, is a senior economist at the Bank and has done a detailed, month-by-month analysis of the surge in food prices, which allows much closer examination of the link between biofuels and food supply.

    The report points out biofuels derived from sugarcane, which Brazil specializes in, have not had such a dramatic impact.

    Supporters of biofuels argue that they are a greener alternative to relying on oil and other fossil fuels, but even that claim has been disputed by some experts, who argue that it does not apply to US production of ethanol from plants.

    “It is clear that some biofuels have huge impacts on food prices,” said Dr David King, the government’s former chief scientific adviser, last night. “All we are doing by supporting these is subsidising higher food prices, while doing nothing to tackle climate change.”

  • Poor farmland offers biofuel solution

    Elliot Campbell, Robert Genova and Christopher Field of the Carnegie Institution’s Department of Global Ecology, with David Lobell of Stanford University, estimated the global extent of abandoned crop and pastureland and calculated their potential for sustainable bioenergy production from historical land-use data, satellite imaging and ecosystem models. Agricultural areas that have been converted to urban areas or have reverted to forests were not included in the assessment. 

    The researchers estimate that globally up to 4.7 million square kilometers (approximately 1.8 million square miles) of abandoned lands could be available for growing energy crops. The potential yield of this land area, equivalent to nearly half the land area of the United States (including Alaska), depends on local soils and climate, as well as on the specific energy crops and cultivation methods in each region. But the researchers estimate that the worldwide harvestable dry biomass could amount to as much as 2.1 billion tons, with a total energy content of about 41 exajoules. While this is a significant amount of energy (one exajoule is a billion billion joules, equivalent to about 170 million barrels of oil), at best it would satisfy only about 8% of worldwide energy demand.

    “At the national scale, the bioenergy potential is largest in the United States, Brazil and Australia,” says lead author Campbell. “These countries have the most extensive areas of abandoned crop and pasture lands. Eastern North America has the largest area of abandoned croplands, and the Midwest has the biggest expanse of abandoned pastureland. Even so, if 100% of these lands were used for bioenergy, they would still only yield enough for about 6% of our national energy needs.”

    The study revealed larger opportunities in other parts of the world. In some African countries, where grassland ecosystems are very productive and current fossil fuel demand is low, biomass could provide up to 37 times the energy currently used.

    “Our study shows that there is clearly a potential for developing sustainable bioenergy, and we’ve been able to identify areas where biomass can be grown for energy, without endangering food security or making climate change worse,” says Field, director of the Department of Global Ecology. “But we can’t count on bioenergy to be a dominant contributor to the global energy system over the next few decades. Expanding beyond its sustainable limits would threaten food security and have serious environmental impacts.”

    This research was funded by the Carnegie Institution and by the Global Climate and Energy Project at Stanford University.

  • Finding a new form for the corporation

    Many believe that the prevailing corporate form focuses on maximizing profit for stockholders at the expense of other stakeholders – specifically employees, the community in which it operates, and the natural environment. Even corporations that strive to integrate corporate social responsibility (CSR) into their operations face constraints on their ability to pursue deep social responsibility, primarily as a result of the fiduciary obligations of their boards of directors.

    The inadequacy of the rigid line between for-profit corporations and tax-exempt organizations has been highlighted by two different movements which have gained momentum in the last decade. For-profits are beginning to pursue social missions like nonprofits, and nonprofits are taking on profitable subsidiaries much like for-profits.

    The emergence of these two movements raises questions about the adequacy of existing corporate forms. Are there significant limitations to for-profit and nonprofit models that prevent organizations from successfully blending profit making with social mission?

    There are many proposals being floated and experiments underway today. As yet, it is unclear whether any of the proposals can create large-scale change quickly.

    On the nonprofit side, the various types of hybrids do work. However, social enterprises are hobbled by many legal constraints, including a seemingly arbitrary designation of what is considered tax-exempt revenue, and the labyrinth of legal rules that regulate their activities. In addition, nonprofits are required to articulate a fairly narrow public purpose in their articles. They also lack access to financial markets, relying instead on philanthropy.

    Incorporating more for-profit business principles into certain types of revenue-generating nonprofit models will serve the nonprofit community well. Yet nonprofits on the whole remain a very small percentage of the overall economy and will never have the power to effect widespread change.

    On the for-profit side, the problems inherent in new voluntary or mandatory charters could frustrate their effectiveness. Proposed new forms – incorporating profit-making with social mission – may work for small-scale for-profits. Yet the ‘legacy problem’ represents one of the great challenges of retaining that social mission over time. Many socially oriented for-profits find that their social mission is dependent on founders’ fervor, and when founders retire or sell, their social legacy is often lost as more traditional owners and managers take over.

    Federal or state governments could offer a possible solution by passing a law to create a new corporate form which would embed social purpose into the DNA of future corporations. This new form could be structured as either a for-profit charity, a socially conscious corporation, or some combination of both. Such hybrid models have both strengths and weaknesses.

    One example of of this approach is the model proposed by the Minnesota State Legislature in 2006 through the Minnesota Responsible Business Corporation Act. Under the act, a corporation would have the ability to designate itself as a Socially Responsible Corporation, using the letters ‘SRC’ after its corporate name rather than the standard letters ‘Inc.’ The aim of the legislation is to create a design that integrates a dual focus on both financial success and social responsibility.

    The legislation includes the following features:

    (a) In determining the best interests of the corporation, directors and officers must consider (in no particular order of importance), the interests of the corporation’s stockholders, employees, customers and creditors; the ‘public interest’; and the long-term as well as short-term interests of the corporation and its stakeholders.
    (b) Employees will elect 20 percent of the board of directors, and an additional 20 percent of seats will be reserved for public interest directors (who are also required to balance the interests of all stakeholders).
    (c) If publicly traded, corporations will be required to issue an annual ‘Public Interest Report’ along with their annual report.
    (d) The board is required to provide opportunities for stakeholders to provide advisory input at regular stakeholder meetings and through a web site or email listserve.
    (e) The corporation is required to train its officers, directors, and employees regarding the special duties to stakeholders.
    (f) To prevent courts from overriding the legislation, the law explicitly carves out the application of the common law of agency, under which the officers and directors are required to act almost solely in the interests of the stockholders by maximizing the corporation’s profits.

    Despite its benefits, companies that chose the new form may face a lack of flexibility, possible conflicts with future business plans, and more limited access to capital markets. Also, an external regulation (even one that is voluntary) may require greater ongoing enforcement costs.

    None of the various forms or legislation proposed so far will serve as a viable option for the multinational corporations that are the most powerful forces in the world today. New hybrids and social enterprises are likely to be used primarily to expand the nonprofit community.

    Where the business case for CSR is compelling, the operations of larger, for-profit corporations can be transformed significantly by the adoption of CSR principles. In addition, we must be optimistic that boards and management (with court approval and guidance) will exercise their business judgment in expansive ways that embrace the concerns of stakeholders, broadening company mission beyond a sole focus on return on investment for stockholders.

    However, there are two fundamental issues with sole reliance on the existing corporate tools. First, Corporate Social Responsibility initiatives are not likely to stimulate change fast enough to address the major issues facing us today. The current fiduciary duties have evolved though legislation and judicial activism over the past 100 years. Second, given that CSR has only recently been embraced fully by certain large multinational corporations, it is too early to tell if an increased emphasis on employees, community, and the environment can serve to change the fundamental way a corporation operates – primarily because the stockholder remains the sole legally recognized stakeholder.

    What changes may serve to effect the greatest transformation of the corporation most quickly?

    First, instead of relying on modifications of charters or the creation of hybrids, legislation should create new fiduciary duties – covering both public and private corporations – that favor employees, the community, and the natural environment. The legislation must be federal or adopted nationwide, although one or two states could serve as pilots for the new regime.

    The largest obstacle will be creating a means for the board and management to weigh the different and often diverging interests of stakeholders effectively when making decisions.

    To ensure accountability, the legislation must include clear metrics to measure the impact of the corporate actions on various stakeholders. One proposal is the analytic hierarchy process developed by Thomas Saaty, which would create a matrix decision-making tool to help in balancing financial and non-financial stakeholder interests.

    Second, governments should take action to increase corporate disclosure and accountability on environmental issues. Universal disclosure requirements should be adopted by the world stock exchanges, with NASDAQ, NYSE, AIM and the Tokyo Stock Exchange taking the lead. The effect of a corporation’s actions on all stakeholders – including the local and world community, employees, and the natural environment – clearly should be included in the definition of ‘materiality’. Stockholders would then be able to evaluate such factors, the expanded impact would be understood more widely, and connections between social impact and long term profitability would become clearer. Enforcement would be critical. Corporations would need to face real and substantial penalties for failure to disclose according to the new guidelines. Fortunately, such a disclosure framework already is being developed through the Global Reporting Initiative sustainability reporting guidelines.

    Third, it is vital to recognize that redesigned corporate forms are not the only route to creating corporate responsibility, particularly when quick change is needed. Also needed are new government regulations, particularly to address environmental degradation and climate change. Governments should regulate the environmental impact of all economic actors (including government and quasi-governmental entities), not just private corporations. And they should impose a uniform burden on all companies operating in the U.S., to minimize the likelihood that firms will re-incorporate off-shore to avoid compliance (recognizing that the extra-territorial extension of U.S. laws will not be well received on the international stage and will face enforcement complexities.)

    The challenges presented by the inadequacies of current corporate legal forms can and must be solved, for the 21st century will require corporate forms that incorporate a responsibility to a wide range of stakeholders, not just to stockholders alone. There is a clear case to be made for the creation of new corporate forms, yet the complete answer to the puzzle is not yet fully in hand. Many promising alternatives are already in play, but the ferment of existing experimentation needs to continue, as new ways of thinking about innovative corporate designs continue to evolve.

  • How Do You Like the Collapse So Far?

    Richard Heinberg on Global Public Media 

    Take relentless population growth. Add decades of expanding per-capita resource consumption. Simmer slowly over rising global temperatures.

    rh_120.jpg

     

    What do you get?

     

    Traumatic information: that is, information that wounds us through the very act of obtaining it.

    Everyone knows things are going wrong. But if you understand ecology, you know this in a way that others don’t. It’s not just that the current crop of world leaders is idiotic. It’s not just a matter of a few policies having gone awry. We’ve been on a perilous track since the dawn of agriculture, capturin

    g more and more biosphere services for the benefit of just one species. Fossil fuels recently gave our kind an enormous economic and technological boost—but at the same time enabled us to go much further out on an ecological limb. No one knows the long-term carrying capacity of planet Earth for humans, absent cheap fossil fuels, but it’s likely a lot fewer than seven billion. The implication is not just sobering; it’s paralyzing.

    So what to do with such traumatic knowledge? An argument can be made for denial. Why ruin people’s day if there’s nothing they can do, if it’s too late to unseal our fate?

    But we don’t know that it’s too late.

    As hard as it is to get up every day and remember, “Oh yes, that’s right, we’re headed toward systemic collapse,” in fact we can’t afford to forget it, if there are in fact measures to be taken to save a species, an ecosystem, or a human community.

    To be sure, some of us are better able to handle the information than others. Many fragile psyches come unhinged without constant doses of hope and assurance. And so for their sake we need continuing positive messages—about a project to make a village sustainable, or about a new coal power plant halted by protest. Some will cling to these encouraging news bits, believing that the tide has turned and we’ll be fine after all. But as time goes on, collapse becomes undeniable. Limits to growth cease to be forecasts; instead, we see daily proof that we’re hitting the wall. As this happens, those who can handle the information spend more of their time managing the fraying emotions of those around them who can’t.

    Strategy shifts. We move from rehearsing “Fifty simple things you can do to save the Earth” to discussing global triage.

    As the Great Unraveling proceeds, there may in fact be only one occupation worthy of our attention: that of identifying the qualities that make our species worth saving, and then celebrating and exemplifying those qualities. If we concentrate on doing that, perhaps we win no matter what. Outwardly, it will probably look a lot like what many of us are already doing: working to save a species, an ecosystem, a human community; to make a village sustainable, or to halt a new coal power plant.

    Taking in traumatic information and transmuting it into life-affirming action may turn out to be the most advanced and meaningful spiritual practice of our time.