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Mother Pelican
A Journal of Solidarity and Sustainability
Vol. 8, No. 5, May 2012 Luis T. Gutiérrez, Editor
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Short-Term Strategies for Sustainable Energy
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SUMMARY & OUTLINE
This new page is work in progress. The plan is to build a "one page synthesis" on short-term tactics and strategies for the transition to clean energy.
1. Global Citizen Movements & The Occupy Movement
2. Education for Sustainable Development
3. Net Energy and Energy Return on Investment (EROI)
4. Financial Transaction/Speculation Taxes
5. Shift to Land/Resource Value Taxes
6. Guaranteed Basic Personal Income
7. ISO Standards, Guidelines, and Best Practices
8. Transferring Subsidies from Fossil Fuels to Clean Energy
9. Fostering and Deploying Clean Energy Technologies
STATEMENT BY THE U.N. SECRETARY GENERAL
"For most of the last century, economic growth was fuelled by what seemed to be a certain truth: the abundance of natural resources. We mined our way to growth. We burned our way to prosperity. We believed in consumption without consequences.
Those days are gone. In the twenty-first century, supplies are running short and the global thermostat is running high. Climate change is also showing us that the old model is more than obsolete. It has rendered it extremely dangerous. Over time, that model is a recipe for national disaster. It is a global suicide pact." UN Secretary-General Ban Ki-moon’s remarks to the World Economic Forum session on redefining sustainable development, Davos, Switzerland, 28 January 2011. For the complete text, click here.
ANALYSIS & SYNTHESIS OF SHORT-TERM STRATEGIES
Methods for analysis of short-term strategies include precedence diagrams, interdependency matrices, and optimization techniques such as linear programming. Software is readily available to do the number crunching.
The following are recent contributions to short-term improvement of energy systems:
Industrial Energy System Optimization, UNIDO web site as of 26 february 2012.
Energy Management Standards, UNIDO web site as of 26 february 2012.
Management System for Energy (ISO 50000), UNIDO web site as of 26 february 2012.
Stability criteria for complex ecosystems,
Stefano Allesina & Si Tang, Nature, 19 February 2012.
Considering the energy, water and food nexus: Towards an integrated modelling approach, Morgan Bazilian et al., Energy Policy, 21 October 2011.
Reinventing Fire: Blueprint to the new energy era, Rocky Mountain Institute, 15 October 2011.
Simulation of Energy Transitions, Emile Chappin, Delft University, 16 June 2011.
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1. Global Citizen Movements & The Occupy Movement
"The term Global Citizens Movement (GCM) refers to a profound shift in values among an aware and engaged citizenry. Transnational corporations, governments, and non-governmental organizations (NGOs) remain powerful actors, but all of these are deeply influenced by a coherent, worldwide association of millions of people who call for priority to be placed on new vales of quality of life, human solidarity, and environmental sustainability. It is important to note that the GCM is a socio-political process rather than a political organization or party structure." Global Citizens Movement (GCM), Encyclopedia of Earth, November 2007.
KEY LINKS:
- Non-Governmental Organizations (NGOs), Peter Willets, UNESCO Encyclopedia of Life Support Systems, 2006.
- Global Citizens Movement (GCM), Encyclopedia of Earth, November 2007.
- Earth Charter Initiative, ECI, 2009.
- The Widening Circle, TWC, 2011.
- The Access Initiative, TAI, 2011.
- Unelected Oligarchy: Corporate and Financial Dominance in Britain's Democracy, David Beetham, Democratic Audit UK, 2011.
- Advancing a Global Citizens Movement, Paul Raskin, Kosmos, Spring-Summer 2011.
- Moving Planet Worldwide Rally, 24 September 2011.
- The Occupy Movement: Links, Events & Resources
- CHARTS: Here's What The Wall Street Protesters Are So Angry About, Henry Blodget, Business Insider, 11 October 2011.
- VIDEO: Signs of the Times, Jessica Lehrman, Grist, 26 November 2011.
How to Turn the Power of the Wall Street Protests into Real Reforms
by Brent Blackwelder, Daly News, 24 October 2011
As the Wall Street protests have spread from New York City to the rest of the country, some media pundits have criticized the protesters for being unfocused — as if there were only one thing wrong with the financial sector of the U.S. economy. The protests have provided a welcome response to Wall Street’s massive takeover of governance, and continued opposition to the status quo could produce opportunities to enact real reforms.
Don’t expect Wall Street to undertake such reforms voluntarily — some of the shady practices are too profitable. It’s going to take new laws, and key legislation is pending in Congress that could provide important remedies. But new legislation won’t pass without the strongest pressure. That’s where the protesters could make a difference, especially with some forceful activity in the districts where the obstructionists, like House Majority Leader Eric Cantor from Virginia, reside. Cantor said to the conservative Values Voter conference: “I, for one, am increasingly concerned about the growing mobs occupying Wall Street” but he backtracked a week later when cautioned by his political finger-in-the-wind testers about the growing popularity of the protests.
Among all the morally bankrupt practices on Wall Street, there’s one in particular that would be easy to abolish. Easy, that is, if we can translate some the energy of the protests into pressure on lawmakers. Pending in Congress are powerful bills such as Senator Levin’s S. 1346 (Stop Tax Haven Abuse Act of 2011) that would strike hard at tax dodgers. But a bill like that has no prayer of passage unless representatives like Cantor feel the pressure.
Instead of reform, Congress is in fact poised to give another “one-time only” tax holiday to companies that stashed profits in tax havens. Huge and wealthy U.S. corporations are actively seeking what is known as a “repatriation holiday” because they say it would create jobs. Such a holiday would allow them to bring home offshore profits at a reduced rate — a nice holiday for the well-to-do CEOs and shareholders, while the rest of us taxpayers suffer the consequences of losing $80 billion of revenue.
The Tax Justice Network and a number of small business associations are trying to right this wrong. They have sent a letter to Congress to dispute this repatriation holiday, noting: “Too many corporations have turned their tax departments into profit centers, using aggressive accounting manipulation to disguise U.S. profits as foreign profits.”
Bloomberg Business Week has pointed out prime examples: Google reduced its income taxes by about $3.1 billion over three years — first by shifting income to Ireland, then to the Netherlands, and finally to Bermuda. Another example is Forest Laboratories, a company that sells over 99% of its drugs in the U.S. but attributes the bulk of its profits to a law office in Bermuda.
Corporate abuses are all the more frustrating in light of how the Congressional “Supercommittee” is discussing the deficit. The Supercommittee is poised to recommend draconian cuts in important programs, but its Republican members are unwilling to address tax havens and tax dodgers that cost the U.S. Treasury an estimated $100 billion per year. The two biggest banks benefiting from taxpayer bailouts are Citigroup with 427 subsidiaries in tax havens and Bank of America with 115.
A recent report by the Institute for Policy Studies (IPS) adds more grist to the protesters’ mill. The report notes that the salary of chief executives (CEOs) of the S&P 500 soared 27.8% in 2010 to $10.8 million, making the ratio between average CEO pay and average U.S. worker pay now 325 to 1. Back in the good old days of 2009, the ratio was much more equitable at “only” 263 to 1. The IPS study found that 25 of the top 100 CEOs received more pay than their companies paid in federal income tax. Furthermore, 20 of these 25 companies spent more on lobbying than they paid in federal income tax.
One more recent analysis, published in the journal of the Association for Psychological Science, provides new support for those advocating major reforms in the tax code. The analysis found that those countries with the most progressive tax codes (those that are the exact opposite of a flat tax where everyone regardless of income pays the same rate) had the highest happiness ratings.
Americans want a sustainable and fair economy. But we won’t get one without fundamental financial reforms and a clamp-down on tax dodgers. And we won’t get that without applying pressure to lawmakers and corporations. Now that’s a good focus for a protest.
CASSE Web Materials by CASSE are licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 Unported License
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A high priority of global citizenship is education, either informally through personal contacts and public means of communication such as the internet, or more formally via programs sponsored by educational institutions. At a time when both developed and developing nations seem to be engulfed in political and financial corruption, education in noviolence is especially important. If a global revolution is coming, let it be a nonviolent revolution!
If a global revolution is coming, let it be a nonviolent revolution!
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2. Education for Sustainable Development
Education for Sustainable Development (ESD) worldwide - at all levels - is a high priority. UNESCO has a worldwide program, but universities and other educational institutions must contribute. The family is the best school of sustainable human development.
KEY LINKS:
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UNESCO Education for Sustainable Development. The program includes the following modules:
- The Global Development and Environment Institute at Tufts University is offering the following educational resource:
The Social Science Library (SSL), which is a contribution to the UN Decade for Education for Sustainable Development, contains over 3,400 full-text journal articles, book chapters, reports, and working papers in Anthropology, Economics, History, Philosophy, Social Psychology, Sociology and Political Science. To browse the SSL collection online, click here. Note: This resource is also available in UBS/CD format.
To inquire about getting/distributing this resource, visit the GDAE SSL website or write to them at gdae@tufts.edu
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- The EveryAware Project, European Union. "EveryAware is an EU project intending to integrate environmental monitoring, awareness enhancement and behavioral change by creating a new technological platform combining sensing technologies, networking applications and data-processing tools."
- Global Systems Science Education, University of California - Berkeley. "Global Systems Science, a science course for grades 9-12, focuses on science-related societal issues. 12 books, teacher guides, and software can support a 1-year integrated science course or supplement existing biology, physics, chemistry, Earth science, or environmental science."
- Climate Change Education. "Portal Web Site Dedicated to: Global Warming Education, Climate Change Science Education, Science, Solutions -- Directory of Vetted Resources & Programs. For Teachers, Students, Parents, Families, Education Programs, Everyone."
- Global Warming for Kids. "Great links for kids on global warming, climate change, etc."
- DegrowthPedia. "A new collaborative platform for information and education about degrowth."
RECENT:
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Contributions to the UN Decade of Education for Sustainable Development, Walter Leal Filho et al. (Editors), Peter Lang, January 2012.
- Teaching Aids on Controlling Climate Change, Bert Metz, European Climate Foundation, 16 January 2012.
- Education for sustainable development – preserving linguistic and cultural diversity, UNESCO Media Services, 20 February 2012.
- Themed Edition on
The Geography of Sustainabilty, Journal of Sustainability Education, March 2012.
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Education booklets on Sustainable Development, Green Changemakers, March 2012.
- The Earth Charter Center for Education for Sustainable Development, Earth Charter, Peace University, Costa Rica, 27 March 2012.
ESD best practices should include practical (and field tested) means to advance public policy for sustainable development. It is hoped that ESD will overcome the ambiguity of the term "sustainable development" to make it clear that infinite growth in a finite planet is a practical impossibility in the long-term. What really matters going forward is "sustainable human development."
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3. Net Energy and Energy Return on Investment (EROI)
DEFINITIONS
At each point in the energy supply chain:
NET ENERGY = ENERGY GAINED - ENERGY SPENT (in energy units, eg., MegaJoules)
ENERGY RETURN ON INVESTMENT = ENERGY GAINED / ENERGY SPENT (dimensionless ratio)
Thus, Net Energy and Energy Return on Investment (EROI) -- or Energy Return on Energy Invested (EROEI) -- are conceptually the same measure. Generally, EROI is closely correlated with "financial return on financial energy investment" -- a measure of financial return in dollars -- as long as "constant [year] dollars" are used.
ENERGY RETURN ON ENERGY INVESTED (EROEI, also abbreviated as EROI)
"Energy Return on Investment (EROI) refers to how much energy is returned from one unit of energy invested in an energy-producing activity. It is a critical parameter for understanding and ranking different fuels. There were a number of studies on EROI three decades ago but relatively little work since. Now there is a whole new interest in EROI as fuels get increasingly expensive and as we attempt to weigh alternative energies against traditional ones. This special volume brings together a whole series of high quality new studies on EROI, as well as many papers that struggle with the meaning of changing EROI and its impact on our economy. One overall conclusion is that the quality of fuels is at least as important in our assessment as is the quantity. I argue that many of the contemporary changes in our economy are related directly to changing EROI as our premium fuels are increasingly depleted." Charles Hall, Introduction to Special Issue on New Studies in EROI (Energy Return on Investment), Sustainability, Volume 3, Issue 10, 7 October 2011.
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COMPARATIVE ANALYSIS OF ENERGY RESOURCES
As the time window of opportunity may be shorter than expected, it is imperative to work out short-term energy strategies in conjunction with long-term strategies. A 2009 study by Richard Heinberg and the Post-Carbon Institute includes a comparative analysis of 18 energy sources according to 10 criteria, as follows:
Searching for a Miracle: ‘Net Energy’ Limits & the Fate of Industrial Society
Richard Heinberg, Post Carbon Institute, September 2011
Energy Sources
1) Oil
2) Coal
3) Natural gas
4) Hydropower
5) Nuclear
6) Biomass
7) Wind Power
8) Solar Photovoltaics
9) Active Solar Thermal
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10) Passive Solar
11) Geothermal Energy
12) Energy from Waste
13) Ethanol
14) Biodiesel
15) Tar Sands
16) Oil Shale
17) Tidal Power
18)Wave Energy
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Criteria for comparative analysis:
1) Direct Monetary Cost
2) Dependence on Additional Resources
3) Environmental Impacts
4) Renewability
5) Potential Size or Scale of Contribution
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6) Location of the Resource
7) Reliability
8) Energy Density
9) Transportability
10)"Net Energy" or "Energy Returned on Energy Invested" (EROEI)
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The tenth criterion, "Net Energy" or "Energy Returned on Energy Invested" (EROEI), is critical: "This
measure focuses on the key question: All things considered, how much more energy does a system
produce than is required to develop and operate that system? What is the ratio of energy in versus
energy out? Some energy “sources” can be shown to produce little or no net energy. Others are only
minimally positive."
A summary of the results is as follows:
Comparison of Fuel Sources, Post-Carbon Institute, 2009
Conclusions:
"The present analysis, which takes into account EROEI and other limits to available energy
sources, suggests first that the transition is inevitable and necessary (as fossil fuels are rapidly depleting
and are also characterized by rapidly declining EROEI), and that the transition will be neither easy
nor cheap. Further, it is reasonable to conclude from what we have seen that a full replacement of
energy currently derived from fossil fuels with energy from alternative sources is probably impossible
over the short term; it may be unrealistic to expect it even over longer time frames.
"The core problem, which is daunting, is this: How can we successfully replace a concentrated
store of solar energy (i.e., fossil fuels, which were formed from plants that long ago bio-chemically
captured and stored the energy of sunlight) with a flux of solar energy (in any of the various forms in
which it is available, including sunlight, wind, biomass, and flowing water)? ...
"Based on all that we have discussed, the clear conclusion is that the world will almost certainly
have considerably less energy available to use in the future, not more, though (regrettably) this strong
likelihood is not yet reflected in projections from the International Energy Agency or any other
notable official source. Fossil fuel supplies will almost surely decline faster than alternatives can be
developed to replace them. New sources of energy will in many cases have lower net energy profiles
than conventional fossil fuels have historically had, and they will require expensive new infrastructure
to overcome problems of intermittency...
"How far will supplies fall, and how fast? Taking into account depletion-led declines in oil and natural
gas production, a leveling off of energy from coal, and the recent shrinkage of investment in the
energy sector, it may be reasonable to expect a reduction in global energy availability of 20 percent
or more during the next quarter century. Factoring in expected population growth, this implies substantial
per-capita reductions in available energy. These declines are unlikely to be evenly distributed
among nations, with oil and gas importers being hardest hit, and with the poorest countries seeing
energy consumption returning to pre-industrial levels (with energy coming almost entirely from
food crops and forests and work being done almost entirely by muscle power).
"Thus, the question the world faces is no longer whether to reduce energy consumption, but how.
Policy makers could choose to manage energy unintelligently (maintaining fossil fuel dependency
as long as possible while making poor choices of alternatives, such as biofuels or tar sands, and
insufficient investments in the far more promising options such as wind and solar). In the latter case,
results will be catastrophic. Transport systems will wither (especially ones relying on the most energy intensive
vehicles—such as airplanes, automobiles, and trucks). Global trade will contract dramatically,
as shipping becomes more costly. And energy dependent food systems will falter, as chemical
input and transport costs soar. All of this could in turn lead to very high long-term unemployment
and perhaps even famine.
"However, if policy makers manage the energy downturn intelligently, an acceptable quality of life
could be maintained in both industrialized and less-industrialized nations at a more equitable level
than today; at the same time, greenhouse gas emissions could be reduced dramatically. This would
require a significant public campaign toward the establishment of a new broadly accepted conservation
ethic to replace current emphases on neverending growth and over-consumption at both
personal and institutional-corporate levels."
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These conclusions are confirmed by many independent analyses done as far back as the 1970s and as recent as January 2012. The data is noisy, but the signal is always strong and always the same: barring a technological miracle (or an "act of God") it does not appear possible to replace fossil fuels with any or all of the renewable ("clean") sources and maintain the same rate of energy flow through an industrial economy. This brings to mind the applicability of the precautionary principle to the energy availability situation worldwide.
EROI TRADEOFF ANALYSIS FOR TRANSITION PLANNING
With proper funding, it might be possible to use biophysical input-output analysis to explore energy policy tradeoffs going forward. For a given year, let
X = n-dimensional total production vector ($)
U = n-dimensional final demand vector ($)
A = NxN matrix of direct inputs (i.e., aij = input from industry i to industry j)
Note that the n industries include the energy extraction, production, and delivery sectors, as well as the pollution abatement and environmental remediation sectors. The basic Leontief equation for total required production is
X = AX + U
X - AX = U
(I-A) X = U
X = (I-A)-1U
Let, for a given energy resource r,
Y = n-dimensional industry energy input vector (i.e., production energy intensity vector, y=1,...,n, in joules/dollar), and
Z = n-dimensional public consumption output vector (i.e., consumption energy intensity vector, z=1,...,n, in joules/dollar)
Then, for the total economy,
Ey = X . Y
is the total amount of energy resource r (in $ . joules/$ = joules) required by the economy during the year, taking into account both direct and indirect inter-industry energy flow requirements; and
Ez = U . Z
is the total amount of energy resource r (in $ . joules/$ = joules) used by consumers of all products during the year.
One problem with input-output analysis in economics is that the interindustry coefficients are in dollars of input from industry i to dollars of output by industry j. Given the volatility of monetary issues (inflation, deflation, politics, etc.), data in dollars are always problematic. From the perspective of biophysical economics, it would be preferable to use coefficients in physical units, i.e., the ratio of units of industry i input to units of industry j output. This would allow for analysis of technological tradeoffs with much of the "noise" filtered out. Dollar conversions can then be applied to translate EROI results (in biophysical units) to financial return on investment in dollars. While input-out models provide a static "snapshot" model of the economy at a given point in time, the biophysical coefficients could be formulated as functions of time in order to take into account the time required for technological changes to be implemented.
Given the technological complexities and social risks of a transition from a high-EROI to a low-EROI economy (as painfully experienced, for example, in Cuba during the early 1990s and North Korea during the early 2000s, both due to unanticipated oil shortages) it is arguably reasonable to spend significant effort (and dollars) in developing better analytical tools to ease the pain.
OTHER ANALYTICAL METHODS FOR ENERGY POLICY ASSESSMENT
The input-output method of analysis is static, i.e., it is based on a "snapshot" of the economy at a given point in time. It is most useful when detailed (and short-term) comparative evaluation of specific energy sources and technologies are required -- oil versus coal, oil versus wind, oil versus solar, etc. Even in such cases, the data refinement effort pursuant to make the interindustry coefficients time-dependent may or may not be possible.
A broader analysis may be required in order to include long-term dynamic interactions between social, economic, and environmental variables in conjunction with plausible energy transition scenarios. Then analysis at a higher level of aggregation might be indicated, and it may be more expedient to use simulation models such as Limits to Growth -- with "resources" more specifically reformulated as "energy resources" -- to examine the repercussions of the transition from high-EROI to low-EROI economies and lifestyles. There is a need for "Revisiting the Limits to Growth After Peak Oil." This is the kind of analysis that will be attempted with SDSIM 2.0.
The social-economic-ecological system is too complex for any single method of analysis, or any combination of existing methods. The best practice is to start with the policy questions or issues to be addressed and use the method(s) that would yield the best insights for consideration by citizens and policy makers. In this regard, the recently emerging method of behavioral economics is promising and may be useful to capture changing patterns of human decision-making during the transition from high-EROI to low-EROI societies.
Another good practice is to recognize that modelers are scientists, not policy makers or problem solvers. Modelers are scientists using models and simulation experiments to test a hypothesis under "controlled" conditiones that may or may not to amenable to replication in the real world. There must be constant dialogue between scientists and decision-makers. But conflating science and decision-making generally exacerbates confusion and seldom leads to practical solutions.
RECENT RESEARCH
- Economic Input-Output Life Cycle Assessment, Green Design Institute, Carnegie-Mellon University, 1997-present.
- IPAT Equation (Ehrlich's Equation),Marian Chertow, Encyclopedia of Earth, 18 November 2008.
- NAICS Industry Classification, BEA, US department of Commerce, 1997-present.
- Transition Scenarios, Global Transition Initiative (GTI), 1996-present.
- World Energy to 2050: A Half Century of Decline, Paul Chefurka, The Oil Drum, 10 November 2007.
- Powering Civilization to 2050, Stuart Staniford, The Oil Drum, 28 January 2008.
- Benchmark Assessment of Sustainable Engineering Education, Center for Sustainable Engineering and EPA, 2008.
- Energy Return on Investment (EROI), Nate Hagens, The Oil Drum, Part 1 of 6-1 April 2008, Part 2 of 6-8 April 2008, Part 3 of 6-15 April 2008, Part 4 of 6-22 April 2008, Part 5 of 6-29 April 2008, Part 6 of 6-14 May 2008.
- Continuously Less and Less—The New American Reality, Chris Clugston, Wake Up Amerika, 2009.
- Searching for a Miracle: ‘Net Energy’ Limits & the Fate of Industrial Society, Richard Heinberg, Post Carbon Institute, September 2009.
- Center for Sustainable Engineering, Partnership of Syracuse University (lead institution), Arizona State University, Carnegie-Mellon University, Georgia Institute of Technology, and the University of Texas at Austin, 2009-present.
- Revisiting the Limits to Growth After Peak Oil, Charles A. Hall and John W. Day, American Scientist, Vol. 97, May-June 2009.
- Prosperity without Growth: Economics for a Finite Planet, Tim Jackson, Earthscan, 2009.
- World Energy Consumption, EIA USDOE, 2010.
- The next generation of scenarios for climate change research and assessment, Richard H. Moss et al., Nature, Vol. 463, 11 February 2010.
- Earth System Science for Global Sustainability: Grand Challenges, W. V. Reid et al, Science, Vol. 330, 12 November 2010.
- Increasing Global Nonrenewable Natural Resource Scarcity—Prelude to Global Societal Collapse, Chris Clugston, Wake Up Amerika, 2010.
- The Second Law of Economics: Energy, Entropy, and the Origins of Wealth, Reiner Kümmel, Springer, 2011.
- Energy and The Wealth of Nations: Understanding the Biophysical Economy, Charles Hall & Kent Klitgaard, Springer, September 2011.
- Special Issue: New Studies in EROI (Energy Return on Investment), Doug Hansen and Charles Hall, Guest Editors, Sustainability, October 2011.
- Sustainability: A Comprehensive Foundation (Open Textbook), University of Illinois & CNX, November 2011.
- Working Paper: Ever-increasing Nonrenewable Natural Resource (NNR) Scarcity, Chris Clugston, Wake Up Amerika, December 2011. Available via email request.
- Forthcoming Book: Scarcity—Humanity’s Final Chapter?, Chris Clugston, Wake Up Amerika, January 2012. Available via email request.
- Sustainable Energy Without the Hot Air, David Mackay, Cambridge University, 8 January 2012.
- The Essentials for the Necessary Transition to a Renewable Energy Economy, Jon Ryan, AlterNet, 15 January 2012.
- What EROI tells us about ROI,
Chris Nelder, SmartPlanet, 15 February 2012.
- Net-energy (EROEI), Peak Oil denial & Oil Shale hype - Part 1, Peak Oil News, 24 February 2012.
- Net-energy (EROEI), Peak Oil denial & Oil Shale hype - Part 2, Peak Oil News, 26 February 2012.
- Net Energy and Time: a critical review, Luis de Sousa, European Tribune, 25 March 2012.
- Net Energy Analysis in a Ramsey-Hotelling Growth Model, Arturo Macías & Mariano Matilla-García, Banco de España, March 2012.
Abstract: "This article presents a dynamic growth model with energy as an input in the production function. The available stock of energy resources is ordered by a quality parameter based on energy accounting: the “Energy Return on Energy Invested” (EROI). To our knowledge this is the first paper where EROI fits in a neoclassical growth model (with individual utility maximization and market equilibrium), setting the economic use of “net energy analysis” on firmer theoretical ground. All necessary concepts to link neoclassical economics and EROI are discussed before their use in the model, and a comparative static analysis of the steady states of a simplified version of the model is presented."
Editor's Question: Isn't this another mathematical rationalization of "infinite growth in a finite planet"?
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4. Financial Transaction/Speculation Taxes
Financial transaction/speculation taxes are a disincentive to excessive greed in pursuing financial transactions of dubious social value, such as the so-called "financial derivatives."
KEY LINKS:
- The Benefits of a Financial
Transactions Tax, Dean Baker, Center for Economic and Policy Research (CEPR), December 2008.
- Financial Speculation Tax, CEPR, 2009.
- Facts and Myths about a Financial Speculation Tax, CEPR, 2010.
- Time to Tax Financial Speculation, Sarah Anderson, Yes! Magazine, 9 February 2010.
- Taxing Global Public Bads, Stephany Griffith-Jones and Paul Bernd Spahn, The Broker Online, 6 October 2010.
- Financial Transaction Taxes - A Double Dividend, Paul Bernd Spahn, The Broker Online, 6 October 2010.
- Financial Transaction Tax (FTT) Factsheet, CIDSE, June 2011.
- Cut Wall Street Down to Size With a Financial Speculation Tax, Sarah Anderson, The Nation, 8 June 2011.
- Financial Transaction Tax Might Fix Host of Ills, Ralp Nader, Bloomberg Business Week, 15 July 2010.
- A General Financial Transaction Tax – Motives, Effects, Revenues and Feasibility, Stephan Schulmeister, European Trade Union Institute (ETUI), 13 January 2010.
- Frequently Asked Questions on the Financial Transaction Tax, Party of European Socialists, 24 April 2011.
- Liberals Continue to Push for Financial Transaction Tax, Ronald Orol, Common Dreams, 17 February 2010.
- Regulating Derivative Markets To Meet Real Needs, Angus Cunningham, Authentix Coaches, 2010.
- Here's Why The Financial Transaction Tax Won't Work, John Carney, Business Insider, 9 November 2009.
- Financial Transaction Taxes: Assessing their role in Financing for Development and the International Financial Architecture reform agenda, Aldo Caliari, UN-NGLS, 2010.
- Financial Speculation Tax: Serious Tool for Long-Term Deficit Reduction, CEPR, January 2011.
- Financial speculation tax could cut deficit, Ben Rooney, CNN, 24 January 2011.
- Financial Speculation Tax Introduced, FOE, February 2011.
- The Financial Transaction Tax for People and the Planet: Financing Climate Justice, CIDSE, June 2011.
- Financial Transaction Tax (FTT) Factsheet, CIDSE, June 2011.
- Financial Speculation Tax Could Help Heal America, James Parks, 22 July 2011.
- Financial Transaction Tax (FTT), Wikipedia as of 24 July 2011.
- Cut Wall Street Down to Size With a Financial Speculation Tax, Sarah Anderson, Common Dreams, 27 July 2011.
- Financial world dominated by a few deep pockets, Rachel Ehrenberg, ScienceNews, 15 August 2011.
- Financial Transaction Tax: A Human Rights Imperative, CIDSE, 20 April 2012.
The following section is about reforming tax codes so as to protect the integrity of the human habitat. The following is a excerpt from one many recent reports calling for taxing financial transactions to support the transition to clean energy:
Reclaiming Power: An energy model for people and the planet, Friends of the Earth, 2 December 2011.
"New research by Friends of the Earth presents an alternative energy model that would tackle climate change and enable everyone to gain access to energy.
"Our current energy model is not working:
- Our dependency on fossil fuels is driving dangerous climate change
- Our traditional energy model fails to serve 40 per cent of the world's population adequately
- 1 billion of those without electricity will never be reached by expanding national grids
"The alternative:
"Friends of the Earth proposes an energy model based on a system of global feed in tariffs whcih guarantee cash back for local renewable energy generation. This model would help to:
- Tackle climate change by shifting energy away from polluting fossil fuels
- Deliver low-carbon, decentralised energy
- Address poverty and development through universal access to clean, reliable, affordable energy
- Rapidly lower the cost of renewable energy technology, making a low-carbon transition easier and cheaper worldwide
"This mechanism should be publicly funded by rich countries who have committed to help developing countries adapt to climate change
"Sources of funding could include:
- A tax on financial transactions <-------------- FINANCIAL TRANSACTION TAX
- Government subsidies diverted from fossil fuels
- Special drawing rights from the IMF
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RECENT:
- UK to be left isolated, lose out on billions in public spending, as FTT goes ahead, Max Lawson, Ekklesia, 19 January 2012.
- Cardinal Turkson calls for a Financial Transaction Tax (FTT) for the common good on the eve of EU summit, CIDSE media statement, 26 January 2012.
- Remarkable Editorial Bias on Climate Science at the Wall Street Journal, Peter Gleick, Forbes, 27 January 2012.
- Financial transaction taxes as a human rights imperative, Center of Concern, Social Watch, 16 April 2012.
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5. Shift to Land/Resource Value Taxes
There are taxes that focus on depletion of natural resources ("depleter pays principle") and/or the deterioration of natural resources ("polluter pays principle"). One key tax reform proposal that deserves further consideration is the "Land Value Tax" (LVT), originally proposed by American economist Henry George in 1879. The underlying concept is to shift tax burdens from earned incomes to unearned incomes via taxes on the usage of land/natural resources.
An International Declaration on Individual and Common Rights to Earth
Originally composed and declared at a meeting of the International Union for Land Value Taxation held in 1949
REPRINTED WITH PERMISSION FROM EARTH RIGHTS
We hereby declare that the earth is the common heritage of all and that
all people have natural and equal righs to the land of the planet. By the term
"land" is meant all natural resources.
Subject always to these natural and equal rights in land and to this
common ownership, individuals can and should enjoy certain subsidiary rights
in land.
These rights properly enjoyed by individuals are:
- The right to secure exclusive occupation of land
- The right to exclusive use of land occupied.
- The right to the free transfer of land according to the laws of the
country.
- The right to transmit land by inheritance.
These individual rights do not include:
- The right to use land in a manner contrary to the common good of all,
e.g., in such a manner as to destroy or impair the common heritage.
- The right to appropriate what economists call the Economic Rent of
land.
The Economic Rent is the annual value attaching to the land alone apart
from any improvements thereon created by labor. This value is created by the
existence of and the functioning of the whole community wherein the
individual lives and is in justice the property of the community. To allow
this value to be appropriated by individuals enables land to be used not only
for the production of wealth but as an instrument of oppression of human by
human leading to severe social consequences which are everywhere evident.
All humans have natural and equal rights in land. Those rights may be
exercised in two ways:
- By holding land as individuals and/or
- Sharing in the common use of the Economic Rent of land.
The Economic Rent of land can be collected for the use of the community by
methods similar to those by which real estate taxes are now collected. That
is what is meant by the policy of Land Value Taxation. Were this community
created land value collected, the many taxes which impede the production of
wealth and limit purchasing power could be abolished.
The exercise of both common and individual rights in land is essential to
a society based on justice. But the rights of individuals in natural
resources are limited by the just rights of the community. Denying the
existence of common rights in land creates a condition of society wherein the
exercise of individual rights becomes impossible for the great mass of the
people.
WE THEREFORE DECLARE THAT THE EARTH IS THE BIRTHRIGHT OF ALL PEOPLE
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The following is a policy proposal (recently submitted that the United Nations Economic and Social Council - ECOSOC) for land value capture/taxation of surface land sites:
LAND VALUE CAPTURE Alanna Hartzok, Earth Rights Institute
Submitted to UN ECOSOC, 5 April 2012
Land Value Capture is a creative public finance policy that utilizes incentive taxation mechanisms that promote productive capacity, employment and decent work while enabling inclusive, sustainable and equitable economic growth.
UN Habitat Action Agenda Section B. 56(h) states: "Consider the adoption of innovative instruments that capture gains in land value and recover public investments." The UN Habitat Global Land Tool Network advocates public recovery of land values as a fair and effective way to meet the Millennium Development Goal of significantly improving living conditions for at least 100 million slum dwellers by 2020.
The Vancouver Action Plan – founding document for UN Habitat – states:
Social justice, urban renewal and development, the provision of decent dwellings and healthy conditions for the people can only be achieved if land is used in the interests of society as a whole…. Taxation should not be seen only as a source of revenue for the community but also a powerful tool to encourage development of desirable locations, to exercise a controlling effect on the land market and to redistribute to the public at large the benefits of the unearned increase in land values… The unearned increment resulting from the rise in land values resulting from change in use of land, from public investment or decision or due to the general growth of the community must be subject to appropriate recapture by public bodies.
Land value capture—aka land value taxation—is an equitable, efficient way to obtain public revenue. The more governments rely on land value capture for revenue, the lighter need be the tax burden on labor and production.
Land rent (surplus value attaching to land) is a significant amount. Detailed studies by Land Values Research Group indicate that surface land rent is at least one third of GDP in many countries.
When robustly implemented, land value capture eliminates incentives for land speculation; stabilizes land prices; and maintains land affordability. Recovered land rent can 1) operate, maintain and extend services and infrastructure; 2) fund revolving loans for housing and micro enterprises; and 3) repay bonds issued to build public facilities.
Programs to house poor people often flounder because unaffordable housing prices are primarily the result of rising land values compared to purchasing capacity. Land value capture reduces and stabilizes the costs of land. Low-income families can thus more easily secure shelter at prices they can afford.
Land value capture promotes rational and balanced development. Growth radiates smoothly from more intensive use in the urban centers to rural areas without pockets of vacant or poorly utilized land in between. Urban sprawl is curtailed and rural land is more readily retained in its natural state, available for parks and nature preserves. Rational and balanced development decreases costs for transportation, utilities, fire and police protection. Land value capture is therefore an essential component of good urban planning.
This creative approach to financing public goods and sustainable development is a holistic and practical policy directive that can be implemented on local, regional and/or national levels.
For more information, see BEarthright: the Economics of Freedom, and for additional supporting articles click here. You can also register for a Land Rights and Land Value Capture Online Course.
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KEY LINKS:
- Hartzok, Alanna. The Earth Belongs to Everyone, Earth Rights Institute - Institute for Economic Democracy Press, 2008. See pp. 190-192 for data on global maldistribution of wealth.
- Gaffney, Mason. George's Economics of Abundance, GroundSwell, March-April 2009.
- Resource tax? Green new deal? Or new social contract?, Ariel Salleh, Online Opinion, 1 June 2010.
- Gaffney, Mason. Sleeping With the Enemy: Economists Who Side With Polluters, GroundSwell, January/February 2011.
- Land Value Tax (LVT), Wikipedia as of 25 June 2011.
- Modernizing Henry George, Herman Daly, CASSE, 19 July 2010.
- Resource Value Tax (RVT), Herman Daly, CASSE, 6 June 2011.
- Course on Land Rights and Land Value Capture, Earth Rights, 2011.
- Classical LVT in the works of Henry George:
- George, Henry. Progress and Poverty, 1879 (available online at the Library of Economics and Liberty).
- George, Henry. Protection or Free trade, 1886 (available online at the Library of Economics and Liberty).
- Council of Georgist Organizations. An Introduction to Georgist Philosophy & Activity, November 2010. Web Site as of 29 May 2011.
- The Henry George School of Social Science (HGSSS). The Henry George School of Social Science, Note: Founded 1932. Web site as of 30 May 2011.
- The Henry George Institute. Understanding Economics, 1995-2011. Web Site as of 29 May 2011.
- Agrarian Justice beyond Henry George's Single Tax, Keith Gardner, Liberty Revival, 24 September 2011.
- Are We Headed For a Land Value Bubble?,
Kent Thiesse, CSD Blogs and Opinions, 26 July 2011.
- Storing Water for a Dry Day Leads to Suits, Felicity Barringer, 26 July 2011.
U.S. Study Suggests Pricing Carbon from Ground to Consumer
By Deborah Zabarenko, Reuters, 18 October 2011
"To measure a country's greenhouse emissions from fossil fuels, it makes sense to consider the whole carbon supply chain, from oil well or coal mine to a consumer's shelf, researchers wrote in the journal "Proceedings of the National Academy of Sciences." Currently, putting a price on climate-warming carbon dioxide generated by oil, coal, natural gas and other fossil fuels typically takes place where the fuel is burned. However, the scientists suggest that as a practical matter, it could be most efficient to administer any so-called "carbon tax" at the point of extraction. The scientists analyzed fossil fuel extraction, combustion and consumption in 112 countries and 58 industry sectors. They learned that 51 percent of all carbon dioxide emissions from human activities stemmed from fossil fuels or goods that were sent across borders to get to consumers. They found that 67 percent of global carbon dioxide emissions would be covered if regulation of fossil fuels was done at the point of extraction in China, the United States, the Middle East, Russia, Canada, Australia and India." Source: Sustainable Energy Network, 21 October 2011
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Environmental tax reform: increasing individual incomes and boosting innovation
European Environment Agency (EEA), 9 January 2012
European governments could simultaneously reduce income tax, increase innovation and cut pollution by introducing well-targeted environmental taxes and recycling the revenues back into the economy. This was one of the findings from a pair of reports on environmental tax reform (ETR) published today by the European Environment Agency (EEA).
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Assuming that land/resource value taxes are set high enough that they yield a surplus of public revenue, how is this surplus to be distributed back to all citizens?
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6. Guaranteed Basic Personal Income
BASIC CONCEPT
Source: Basic Income Earth Network (BIEN)
KEY REFERENCE
SOCIOECONOMIC DEMOCRACY: An Advanced Socioeconomic System
Robley E. George, Center for the Study of Democratic Societies (CSDS), 2002
SUMMARY (Reprinted with Permission from CSDS)
Socioeconomic Democracy is a model economic system, or more precisely, socioeconomic
subsystem, in which there is some form of Universal Guaranteed Personal
Income as well as some form of Maximum Allowable Personal Wealth,
with both the lower bound on personal material poverty and the upper
bound on personal material wealth set and adjusted democratically by all society.
The book then individually examines in some detail
each of these two bounds, i.e., UGI and MAW. Next is democracy. Here
we first consider a few preliminaries, including a discussion of the
inevitability of democracy, a prehistory of majority rule and
a brief discussion of contemporary qualitative democracy. We
then consider the simple, mathematically correct procedure by which
society, exercising quantitative democracy (employing the most
elemental of public choice theory results), can democratically decide
the amount or magnitude of these two bounds -- and
other amounts in question.
The book illustrates and looks at the many possible
theoretical variations of Socioeconomic Democracy. Anthropological,
philosophical, psychological, religious and human rights justifications
for some form of Socioeconomic Democracy are next provided. The similarities,
differences and relationships between Socioeconomic Democracy and Islami
economics -- in particular, Zakat, one of the five pillars
of Islam -- are examined. The book then considers economic incentive
and self-interest in general and as associated with Socioeconomic Democracy.
Next, the book examines a number of practical political approximations
to, and some of the many financial benefits and reduced costs of, such
a system. It then establishes the feasibility of and discusses the necessary
implementation procedure to realize Socioeconomic Democracy. Finally,
the book describes a number of the simultaneously realized
ramifications of this fundamentally just and democratic socioeconomic
system. The book concludes with an appendix containing exercises for
the interested reader.
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KEY LINKS
- Common Ground-USA. Common Ground USA, Since 1997. Web site as of 30 May 2011.
- George, Robley E. Socioeconomic Democracy, Center for the Study of Democratic Societies (CSDS), 2002.
- de Wispelaere, Jurgen and Lindsay Stirton. The Many Faces of Universal Basic Income, The Political Quarterly, 2004.
- George, Robley E. Different Possibilities for the Magnitudes of the Two Democratically Set Bounds of Universally Guaranteed Personal Income (UGI) and Maximum Allowable Personal Wealth (MAW) in the practice of Socioeconomic Democracy, Center for the Study of Democratic Societies (CSDS), 2008.
- George, Robley E. Introduction to a Democratic Socioeconomic Platform, Center for the Study of Democratic Societies (CSDS), 2009.
- George, Robley E. Ramifications of Socioeconomic Democracy, Center for the Study of Democratic Societies (CSDS), 2009.
- Basic Income Earth Network (BIEN). Basic Income Earth Network (BIEN), Note: The Basic Income Earth Network was founded in 1986 as the Basic Income European Network. It expanded its scope from Europe to the Earth in 2004. Web site as of 30 May 2011.
- Basic Income Guarantee (BIG) Network - USA. The U.S. Basic Income Guarantee (BIG) Network, Note: Started 1999. Web Site as of 30 May 2011.
- World Bank forum on Gender-equality produces more votes for Basic Income than anything else, USBIG, 6 October 2011.
- Basic Income - Summary, IEET, 28 January 2012.
- The Unconditional Basic Income Economy - Part 1, IEET, 29 January 2012.
- The Unconditional Basic Income Economy - Part 2, IEET, 29 January 2012.
- Towards a Guaranteed Basic Income?, Peter Wicks, Future of Humanity, 10 March 2012.
- Basic Income Around the World: Horizons of Reform, Edited by Matthew C. Murray and Carole Pateman, International Political Economy Series, Palgrave Macmillan, forthcoming 10 August 2012.
Work dignifies the working person, and quality work even more so. This applies to all kinds of work, from the most humble to the most exalted. The objective of guaranteed basic income is not to induce laziness but to liberate people from a salary system that incentivizes conformance rather than creativity. To ensure that this is the case, quality standards are needed.
SWITZERLAND: Petition Drive For A Referendum On A Basic Income
Felix Coeln, Basic Income News, Switzerland, 22 March 2012
On April 21st, 2012 Switzerland is starting a petition for a referendum on a basic income with a big party in Zurich. The referendum would establish the following principles in the constitution:
- the confederation installs a basic income
- the basic income allows the whole population a dignified life and full participation
- the law lays down funding and amount of the basic income
The petition needs 100,000 signatures to bring the referendum to a vote. The initiative follows the national motto: Unus pro omnibus – omnes pro uno (all for one and one for all).
For further information to go: http://bedingungslos.ch/ (only German) (translations in French and Italian are going to be added). The folowing article is highly recommended:
Unconditional Basic Income as a Postpatriarchal Project
Ina Praetorius, Switzerland, March 2012
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INDIA: Basic Income Pilot Project in India makes progress Wofgang Muller, Basic Income News, 8 April 2012
The Basic Income pilot project in India, conducted by the Self Employed Women’s Association and the India Development Foundation, has been making progress and may provide interesting statistical data in the future, according to information by Guy Standing, professor of economic security at the University of Bath and co-president of the Basic Income Earth Network (BIEN), who has also operated as advisor for the project. For more information click here.
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GERMANY: New Interactive Webpage about Basic Income
Wolfgang Muller, Basic Income News, Germany, 11 April 2012
A small group of individuals active in art, design, film and politics has launched a new webpage with the idea of introducing the idea of an unconditional basic income to its visitors interactively. More than 40 clips cover various aspects and answer questions about the unconditional basic income. The webpage is only available in German so far, but any clip can be watched with English subtitles.
Click “CC” (Subtitles) in the video menu-bar of the clip to watch them with English subtitles:
Link to the German website with English subtitles
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7. ISO Standards, Guidelines, and Best Practices
All humans have a propensity to cut corners. Regardless of how income is taxed (Section 5) and returned (Section 6) to tax payers, there is a continuing need for quality standards in all kinds of human work.
KEY LINKS:
- International Standards Organization (ISO)
- List of ISO Standards, Wikipedia as of 26 July 2011.
- ISO 9001 - Quality Management System, ISO, 2005.
- ISO 14001 - Environmental Management System, ISO, 2004.
- ISO 26000 - Social Responsibility Guidelines, ISO, 2010.
- ISO 50001 - Energy Management System, ISO, 2011.
- ISO International Classification for Standards (ICS), ISO, 2011.
- Baldrige Performance Excellence Program, NIST, 2011.
- Baldrige Criteria for Performance Excellence, NIST, 2011-2012.
- Baldrige Health Care Criteria for Performance Excellence, NIST, 2011-2012.
- Baldrige Education Criteria for Performance Excellence, NIST, 2011.
- Case Studies on Good Practices in Nature-based Climate Change Adaptation, Ecosystems and Livelihoods Adaptation Network (ELAN), 2011.
- Land rehabilitation on the central plateau of Burkina
Faso and building resilience to climate change through farmer-managed natural regeneration in Niger, ELAN, 2011.
- Payments for ecosystem services as a mean to adapt
to climate change in Madagascar, ELAN, 2011.
- Using the Maya nut tree to increase tropical
agroecosystem resilience to climate change in Central America and Mexico, ELAN, 2011.
- Community-based restoration of mangroves in the
Philippines, ELAN, 2011.
- Community-based mangrove reforestation and management in Da Loc, Vietnam, ELAN, 2011.
- Community-based rangeland rehabilitation for adaptation to climate change and carbon sequestration in Sudan, ELAN, 2011.
- Promoting ecosystem-based adaptation practices and
iterative learning in Bangladesh's drought-prone areas, ELAN, 2011.
- Clean Energy Standards: State and Federal Policy Options and Implications, Center for Climate and Energy Solutions (C2ES), 17 November 2011. The following is from the press release:
A well-designed clean energy standard (CES) can create new industries, diversify U.S. electricity supplies, and reduce air pollution, according to a new paper "Clean Energy Standards: State and Federal Policy Options and Implications." Among the key issues for policymakers is defining “clean energy.” Options include renewables; highly efficient natural gas combined cycle generation; fossil fuel generation with carbon capture and storage; nuclear power; and electricity savings from efficiency and conservation. By allowing utilities flexibility to choose among energy sources, the paper notes, a CES can minimize cost impacts on electricity consumers. A CES can also limit utilities’ and consumers’ exposure to fuel-price volatility by diversifying electricity supplies, and spur growth and jobs in clean energy industries. Thirty-one states now have some form of renewable or alternative energy portfolio standard. Yet in the absence of significant new policies, according to the paper, the share of U.S. electricity coming from clean energy sources is unlikely to increase more than a few percentage points in the next 25 years.
For the full press release, click here.
For the executive summary, click here.
To download the full report, click
here.
For more information about the C2ES climate and energy research, click here.
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RECENT:
What about quality standards for financial institutions? ISO 9000 could be used, but it would seem that the financial services industry should have a dedicated five digit standard. ISO-26000 on social responsibility is a guideline, not an auditable standard. Both stricter regulation and auditable standards are urgently needed for the global financial system.
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8. Transferring Subsidies from Fossil Fuels to Clean Energy
The transferring of subsidies from the fossil fuels industry to the clean energy industry is understandably a sensitive political issue. The fossil fuel industry is enormously powerful. The age of fossil fuels has practically run its course. However, the temptation to keep producing and using "cheap energy" is very strong regardless of environmental consequences. The United States of America has yet to ratify the Kyoto Protocol because "it is bad for business." The "easy profits" derived from the exploding manipulation of worthless financial assets is also bad for business, but not yet recognized as such by the general public. Subsidies are tricky business, and there seems to be a paucity of expertise about the societal cost of subsidizing pollution-intensive industries.
KEY LINKS:
- Federal Energy Subsidies: Energy, Environmental and Fiscal Impacts, Doug Koplow, Alliance to Save Energy, 1993.
- Federal Fossil Fuel Subsidies and Greenhouse Gas Emissions: A Case Study of Increasing Transparency for Fiscal Policy, Doug Koplow and John Dernbach, Annual Review of Energy and the Environment, 26:361-389, 2001.
- Analysis of the scope of energy subsidies and suggestions for the G-20 initiative, IEA, OPEC, OECD, and WB, 16 June 2010.
- Increasing the Momentum of Fossil-Fuel Subsidy Reform: A roadmap for international cooperation, Global Subsidies Initiative, 21 July 2010.
- Measuring Energy Subsidies Using the Price-Gap Approach, Doug Koplow, Earth Track, August 2010.
- Phase-out Fossil Fuel Subsidies,
Mark Halle, The Broker Online, 6 October 2010
- Fossil Fuel Subsidies, Bali to Copenhagen Project, IISD, 2011.
- EIA Energy Subsidy Estimates: A Review of Assumptions and Omissions, Doug Koplow, Earth Track, March 2010.
- Scoping Suggestions for NAS Review of Effects of the Tax Code on Greenhouse Gas Emissions, Doug Koplow, Earth Track, April 2011.
- Fossil Fuel Subsidies: A Closer Look at Tax Breaks, Special Accounting, and Societal Costs, David Sher, Environmental and Energy Study Institute, 23 June 2011.
- The Market Is Lying: Why We Must Tax Carbon, Not Subsidize It, Rinaldo Brutoco and Madeleine Austin, Truthout, 8 July 2011.
- International Energy Agency Warns Of Ballooning World Fossil Fuel Subsidies,
Muriel Boselli, Reuters, 5 October 2011.
"Global subsidies for fossil fuel consumption are set to reach $660 billion in 2020, or 0.7 percent of global gross domestic product, unless reforms are passed to effectively eliminate this form of state aid, according to the International Energy Agency. The IEA estimated such subsidies at $409 billion in 2010, compared to $312 billion in 2009. Oil products had the largest subsidies at $193 billion in 2010 while $91 billion went to natural gas. Iran and Saudi Arabia had the biggest subsidies. Leaders of the Group of 20 major economies committed in Pittsburgh in 2009 to phase out, over the medium-term, inefficient fossil fuel subsidies that encourage wasteful consumption. Eliminating fossil fuel consumption subsidies by 2020 would cut global energy demand by 4 percent and considerably reduce carbon emissions growth, the IEA said."
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- Banks That Broke the Economy Also Lead on Financing Coal Plants, SustainableBusiness.com, 1 December 2011.
"A new report, "Bankrolling Climate Change," examines the portfolios of 93 of the world's leading banks and analyzes their support of 31 major coal-mining companies (representing 44% of global coal production) and 40 coal-fired electricity producers (which together own over 50%of global capacity). Since 2005, the 93 banks analyzed in a study have financed coal to the tune of $309 billion. The top three banks that finance coal plants and thus are major contributors to climate change are JP Morgan Chase ($22 billion), Citi ($18.27 billion), and Bank of America ($16.79 billion). They are followed by Morgan Stanley, Barclays, Deutsche Bank, and Royal Bank of Scotland. The study was produced by several NGOs - urgewald (Germany), groundwork and Earthlife Africa Johannesburg (South Africa) and international network, BankTrack."
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9. Fostering and Deploying Clean Energy Technologies
Beyond taxes and subsidies, what are other ways to incentivize the development and commercialization of clean energy? There are many ways to foster clean energy technologies:
KEY LINKS:
- Financing Clean Energy
- Preparing to manage climate change financing, Simon D. Donner, Milind Kandlikar, Hisham Zerriffi, Science, 18 November 2011.
Excerpt: "At the 2010 Cancun Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC), the international community agreed in principle to one of the largest development programs in history. The developed nations pledged to mobilize U.S.$100 billion per year by the year 2020 to “address the needs of developing countries” in responding to climate change. The funds, which may apply to adaptation and mitigation, are proposed to flow through multiple channels, including existing development banks, official development assistance, bilateral programs, international private investment flows (e.g., carbon markets), and other public and private mechanisms. Recommendations provided by a transitional committee for the management and operation of the proposed climate change financing will be considered by the parties to the UNFCCC at the upcoming conference in Durban, South Africa."
- Global Green-Energy Investment Drops, Ben Geman, The Hill, 12 April 2012.
Excerpt: "Global investment in green energy fell sharply in the first three months of 2012 as European financial woes, upcoming U.S. elections and fears of declining federal support fed a “destabilizing uncertainty,” according to a new report from Bloomberg New Energy Finance. The study called the first quarter 2012 tally “the weakest since the depths of the financial crisis” in early 2009 as new financial investment fell 28 percent from the prior quarter to $27 billion. The $27 billion total is also 22 percent below the first quarter of 2011. The tally includes venture capital, private equity, public markets and asset finance, but not small-scale projects and corporate and federal research and development. The findings are part of a series of recent mixed signals for green electricity, which faces competition from cheap natural gas in the United States."
- Global Smart Grid IT Market Will Reach $8.6 Billion by 2017, Pike Research, April 12, 2012.
Excerpt:
"Billions of dollars are being invested in smart grid infrastructure, including smart meters and distribution automation systems. Recognition is growing, however, that the true value of this investment can only be realized by a parallel investment in a new generation of utility information technology (IT) systems that can help collect, manage, and analyze the vast amounts of data generated by smart grid technologies. According to a new report, “Smart Grid IT Systems,” the global smart grid software market will be worth $1.3 billion by the end of 2012 and will reach $2.9 billion by 2017, growing at a compound annual growth rate (CAGR) of 15.2%. The total software and related IT services market is forecast to reach $4.3 billion by the end of 2012 and grow to over $8.6 billion by 2017, with a CAGR of 15.5%."
Report Says Policies, Fuel Demand Are Driving Global Biofuel Growth, DomesticFuel.com, April 17, 2012.
Excerpt:
Government incentives, environmental policies and rising fuel demand are key to the growth of the global biofuels market, according to a new report “Biofuels (Biodiesel and Bioethanol) Market – Global Production, Regulations, Export-Import Analysis and Key Country Analysis to 2020,” from GlobalData. Biofuel production worldwide grew from 8.853 billion gallons in 2003 to 27.899 billion gallons in 2011, the report showed. The Compound Annual Growth Rate (CAGR) was 15.4 percent during this time period and the report expects production to grow another 4.4 percent between 2011-2020. In 2005, global production of biodiesel was 4,854 million liters, and grew to 23,579 million liters by 2011. Biodiesel boasted a CAGR rate of 30.1 percent and is expected to grow an additional 3.5 percent between 2011-2020 for an annual production level of 4,205 million liters.
New Report Highlights Importance of Clean Energy Policy, as Well As Need For Reform, World Resources Institute, April 18, 2012.
Excerpt:
A new report, “Beyond Boom and Bust: Putting Clean Tech on a Path to Subsidy Independence,” finds that U.S. federal spending on clean tech will drop 50 percent between 2011 and 2012, and a whopping 75 percent between 2009 and 2014. Deployment support, in particular, will fall by nearly 80 percent, nearly wiping out U.S. support for clean tech. In the United States, multiple subsidies have been wiped out and the Production Tax Credit for wind is likely to expire at the end of 2012, unless Congress acts. The cuts to U.S. subsidies extend far beyond the maturing renewables technologies, also hitting next-generation biofuels, electric vehicles, and advanced batteries—sectors with important futures, but some distance to go in reaching cost competitiveness. This trend is being repeated in the clean tech sector from Germany to India. Allowing current tax credits, like the PTC, to simply expire risks the U.S. leadership position in a tough international market that is still up for grabs. It would also put American clean energy jobs at risk today.
U.S. Can Do Good and Do Well by Supporting Sustainable Energy for All, Center for Global Development, April 20, 2012.
Excerpt:
The United States could boost U.S. exports, create good jobs, improve livelihoods globally, enhance energy security and reduce the risk of catastrophic climate change by helping to ensure poor people in developing nations have access to clean energy, according to a new report, "Energizing Rio+20: How the United State Can Promote Sustainable Energy for All at the 2012 Earth Summit." The report suggests a “suite” of actions to further increase the impact of the Overseas Private Investment Corporation and the Export-Import Bank, including new financial products focused on sustainable energy and greater willingness to co-finance projects with counterparts in Germany, Japan and other high-income countries.
Triple Bottom Line (TBL)
- Towards the Sustainable Corporation: Win-Win-Win Business Strategies for Sustainable Development, John Elkington, California Management Review 36, no. 2 (1994): 90–100.
- Cannibals with Forks: The Triple Bottom Line of 21st Century Business, John Elkington, New Society Publishers, 1998.
- Triple Bottom Line (TBL), The Economist, 17 November 2009.
- The Paradox of Power in CSR – Organizational Conflict, Krista Bondy, TBL Magazine, 29 November 2010.
- Triple Bottom Line, Wikipedia as of 27 July 2011.
- The Triple Bottom Line: What Is It and How Does It Work?, Timothy F. Slaper and Tanya J. Hall, Indiana Business Review, Spring 2011.
Energy System Optimization
- Energy Systems Optimization, Slide presentation by Aristotelis Giannopoulos, 2009.
- Optimization in the Energy Industry, Josef Kallrath et. al., Springer, 2009.
- On-Line Economic Optimization of Energy Systems Using Weather Forecast Information, Victor M. Zavala et. al., ANL (USA), 2009.
- Industrial Energy System Optimization, UNIDO (UN) web site as of 28 July 2011.
- Industrial Energy Analysis & System Optimization, LBL (USA) web site as of 28 July 2011.
- Industrial energy efficiency and systems optimization, REEEP-UNIDO, Module 17 as of 28 July 2011. For links to all the modules, click here.
- Energy Optimization in Process Systems, Stanislaw Sieniutycz and Jacek Jezowski, Elsevier, 2011.
Energy Efficiency Policy and Carbon Pricing, IEA, 2011.
Combining Policy Instruments for Least Cost Climate Mitigation Strategies, IEA, 2011.
- Largest Zero Energy Community Opens in US,
Sustainable Business, 18 October 2011.
Excerpt: "University of California - Davis West Village is the largest planned zero net energy community in the US. Located on the University of California/ Davis campus, the community is designed to generate as much energy each year as it consumes, and to demonstrate that this can be done on a large scale. The first $280 million phase is complete - it has 315 apartments, 42,500 square feet of commercial space, a recreation center and village square. Final build-out is expected in fall 2013. When completed, the 130-acre development will be home to about 3,000 people in 662 apartments and 343 single-family homes." Source: Sustainable Energy Network, 23 October 2011.
Energy Business Council (EBC)
From the International Energy Agency's EBC web site:
"Regular consultations with industry make a vital contribution to the IEA's work on market and policy analysis and development.
As the private sector is responsible for the vast bulk of energy investment, it is therefore necessary for governments and industry to work hand-in-hand to create the right framework conditions that will create clear, predictable, long-term economic incentives that empower business to undertake the huge investment programmes required for a cleaner and more efficient energy future. Given the key role industry has to play, the IEA believes there is a clear need to enhance cooperation between the energy sector and energy policy makers. The establishment of the IEA Energy Business Council (EBC) addresses this need as it seeks to act as a facilitator to ensure the voice of the energy sector is heard in the energy policy debate. The EBC is an executive-level group that represents a wide variety of companies involved in different aspects of energy exploration, production, transformation and consumption. They range from commodities companies to automobile manufacturers to wind and solar energy producers, as well as industry associations. EBC companies’ operations are international and membership of the group evolves over time according to priority issues and within the IEA."
Publications:
World Energy Outlook (WEO) 2011, IEA 2011
WEO Fact Sheets, IEA 2011
WEO Key Graphs, IEA 2011
Key World Energy Statistics
CO2 Emissions from Fuel Combustion 2011, IEA 2011
Developments in Energy Subsidies, IEA 2011
Energy for All: Financing access for the poor, IEA 2011
Deploying Renewables 2011: Best and Future Policy Practice, IEA, December 2011
The global energy system faces urgent challenges. Concerns about energy security are growing, as highlighted by the recent political turmoil in Northern Africa and the nuclear incident in Fukushima. At the same time, the need to respond to climate change is more critical than ever. Against this background, many governments have increased efforts to promote deployment of renewable energy – low-carbon sources that can strengthen energy security. This has stimulated unprecedented rise in deployment, and renewables are now the fastest growing sector of the energy mix.
This “coming of age” of renewable energy also brings challenges. Growth is focused on a few of the available technologies, and rapid deployment is confined to a relatively small number of countries. In more advanced markets, managing support costs and system integration of large shares of renewable energy in a time of economic weakness and budget austerity has sparked vigorous political debate. The IEA’s new report, Deploying Renewables 2011: Best and Future Policy Practice:
- Provides a comprehensive review and analysis of renewable energy policy and market trends;
- Analyses in detail the dynamics of deployment and provides best-practice policy principles for different stages of market maturity;
- Assesses the impact and cost-effectiveness of support policies using new methodological tools and indicators;
- Investigates the strategic reasons underpinning the pursuit of RE deployment by different countries and the prospects for globalisation of RE.
This new book builds on and extends a 2008 IEA publication, drawing on recent policy and deployment experience world-wide. It provides guidance for policy makers and other stakeholders to avoid past mistakes, overcome new challenges and reap the benefits of deploying renewables – today and tomorrow.
Top 10 Clean Tech Stories of 2011, Zachary Shahan, CleanTechnica, 30 December 2011
CLICK TO ENLARGE
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1. 40% drop in cost of solar
2. Wind energy driving down the price of electricity
3. The Solyndra non-scandal
4. Solar energy industries employ a ton of people
5. Google & Facebook going clean
6. Electric vehicles (EVs) and EV charging stations roll out
7. Lack of strong federal clean energy policy
8. Wind penetration hitting record levels in U.S. and abroad
9. The public backlash against nuclear after Fukushima
10. Better Buildings Initiative
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Leveraging State Clean Energy Funds for Economic Development, Brookings Institution, January 11, 2012
[USA] "State clean energy funds have emerged as effective tools that states can use to accelerate the development of energy efficiency and renewable energy projects. These clean energy funds, which exist in over 20 states, generate about $500 million per year in dedicated support from utility surcharges and other sources, making them significant public investors in thousands of clean energy projects. However, state clean energy funds need to pay attention to critical aspects of building a robust clean energy industry, including cleantech innovation support through research and development funding, financial support for early-stage cleantech companies and emerging technologies, and various other industry development efforts. As more and more states reorient their clean energy funds from a project finance-only model in order to encompass broader economic development activities, clean energy funds can collectively become an important national driver for economic growth."
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A Jump Start for the Clean Economy: Good news—and ongoing opportunities—for green jobs, Maria Gallucci, Yes! Magazine, 24 January 2012
"A little-known source of clean energy funding could prove a crucial job-creation engine in the states, as federal support diminishes and they seek fresh growth drivers.
"Every [USA] state can create clean energy funds, or CEFs, which are typically supported by a small surcharge on monthly electricity bills. So far 22 states have done so, generating $2.7 billion overall for the clean technology sector during the past decade. Most have used the money to install tens of thousands of solar panel arrays, wind turbines and biomass facilities.
"But a few states have gone further by broadening investments to include technology research hubs, fledgling cleantech startups and green job training programs. The idea is to use the money, which today totals some $500 million a year, to help develop all the components of the clean economy and stimulate the creation of thousands of permanent local jobs."
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Proposals submitted for the UNFCCC Climate Technology Center and Network:
UNFCCC Climate Technology Center, Summary of Proposal by UNEP, Nairobi, Kenya
UNFCCC Climate Technology Center, Summary of Proposal by Research Institute of Petroleum Industry, Iran
UNFCCC Climate Technology Center, Summary of Proposal by Det Norske Veritas AS, Norway
UNFCCC Climate Technology Center, Summary of Proposal by Global Environment Facility, Washington DC, USA
UNFCCC Climate Technology Center, Summary of Proposal by Technology Information Forecasting and Assessment Council, India
UNFCCC Climate Technology Center, Summary of Proposal by South-South Global Assets and Technology Exchange, China
UNFCCC Climate Technology Center, Summary of Proposal by Instituto Tecnologico de Costa Rica, San Jose, Costa Rica
UNFCCC Climate Technology Center, Summary of Proposal by Agency for the Assessment and Application of Technology, Indonesia
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