News February 2007

The following are summaries of news stories from the February 2007 print edition of Environmental Finance magazine

Commission throws down emissions, energy gauntlet

The European Commission has called for the EU to commit to a unilateral target to cut greenhouse gas emissions to 20% below 1990 levels by 2020, rising to 30% if a post-2012 international agreement can be reached.

The call came as part of a package of proposals aimed at establishing an integrated energy and climate change policy for the EU, which included targets for renewable energy and biofuels, as well as calls for energy market liberalisation.

Launching the package, Commission President José Manuel Barroso said: “The challenges of climate change, increasing import dependence and higher energy prices are faced by all EU members. A common European response is necessary to deliver sustainable, secure and competitive energy.”

Climate changes in Congress, despite Bush

President George Bush made a brief mention of global warming in his State of the Union address, but legislators are not awaiting his cue as they introduce a flurry of bills on greenhouse gases and biofuels.

No fewer than four bills are before Congress, including ones sponsored by Republican presidential hopeful Senator John McCain, and Democrat Barbara Boxer, who chairs the Senate Environment & Public Works Committee.

Furthermore, House Speaker Nancy Pelosi said she will establish a “select committee” to address global warming.

Corporate climate action accelerates

A slew of corporate initiatives to tackle climate change have been announced in recent weeks – with environmentalists even claiming a shift in position by climate change bête noire ExxonMobil – in response to growing public concern around the issue.

The most recent announcement was the formation of the US Climate Action Partnership, which brings together 10 blue-chip firms, including GE, oil major BP, aluminium producer Alcoa and investment bank Lehman Brothers, with environmental organisations including Natural Resources Defense Council, the Pew Center on Global Climate Change and the World Resources Institute.

Also in the US, environmentalists seized on news that ExxonMobil is a member of the US Climate Policy Forum, a group of 25 companies convened by think-tank Resources for the Future.

Across the Atlantic, Swedish energy firm Vattenfall is co-ordinating the Combat Climate Climate (3C) initiative, which is calling for the “integration of climate issues into the world of markets and trade facilitated by means of a global framework coming into force in 2013”.

UK stirs up carbon offset market

Leading carbon offset providers have blasted UK government proposals for a voluntary carbon offset standard that would exclude verified emission reductions generated by non-Kyoto projects and have criticised the inclusion of allowances from the EU Emissions Trading Scheme (ETS) in the plans.

Providers were also surprised that EU allowances were included in the government plans as a possible source of carbon offsets. The vast majority of allowances are given away free to companies in the EU ETS and are essentially a permission to pollute, not an emission reduction.

2006: breakthrough year for environmental sector?

Investment in clean technology companies soared in 2006, along with the stock market valuation of the environmental sector, in a stellar year for the environmental industry worldwide.

The value of companies in the Impax ET50 index, which tracks the largest 50 environmental businesses by market capitalisation, rose to $120.1 billion in 2006, up from $47.5 billion in 2005.

M&S, Tesco go green

Marks & Spencer plans to spend £200 million ($390 million) over the next five years on a wide-ranging environmental plan, as British retailers race to prove which high street giant is greener.

Meanwhile, Tesco has promised to invest £100 million in “sustainable environmental technology”, halving its energy use per square foot by 2010, and to reduce the amount of carbon dioxide produced per case of product delivered by 30% by 2009. The supermarket will also develop a carbon labelling system, and – as an interim measure – will identify products that have been airfreighted.

China struggles to boost energy efficiency

China is losing the battle to improve the poor energy efficiency of its factories and power stations – despite increasing official recognition that the country has paid an appalling environmental price for its dramatic economic growth.

The government’s 2006–10 five-year plan set a target of a 20% reduction in unit GDP energy consumption, but this is not expected to be met.

Calvert ramps up activism

Real estate developers are among the companies to be targeted by US asset manager Calvert, as it steps up its shareholder activism in 2007.

Stu Dalheim, manager of advocacy and policy at Calvert, said:“We see the residential real estate market and home builders in the US as at the nexus of several important issues to us: energy efficiency, climate change, labour relations, affordable homes.”

Website offers weather risk for the masses

A new online weather risk management service has been launched in the US, aiming to offer small and medium-sized enterprises access to weather hedges.

WeatherBill, launched by a San Francisco-based start-up, offers tools to help companies estimate their weather sensitivity, and customisable contracts based on any combination of minimum, maximum or average daily temperatures, and daily precipitation levels, at 200 US weather stations.

EBRD bows out of Sakhalin

The European Bank for Reconstruction and Development (EBRD) has ended its five-year investigation into whether to fund the controversial Sakhalin II oil and gas project, because Gazprom’s deal to secure a stake in it invalidates the proposal.

In December, Gazprom signed a $7.45 billion deal with the consortium which is constructing the project on the island of Sakhalin, off Russia’s Pacific coast, to acquire a 50% stake. Shell, previously the majority shareholder in Sakhalin Energy, will reduce its share to 27.5%.

An EBRD spokesman told Environmental Finance that the door is still open for the new consortium to reapply for funding, but “there hasn’t been a request from Gazprom or Sakhalin Energy”.

Canada promises renewable cash

Canadian Prime Minister Stephen Harper and three of his cabinet colleagues announced three major climate change initiatives in January, committing some C$2 billion (US$1.7 billion) for rebates for home energy efficiency measures, renewables and clean energy research.

Opposition MPs and environmental groups have complained that the new campaign simply repackages programmes that were either cancelled or stalled in early 2006, shortly after the Conservatives took office. “The Conservative plan isn’t ‘made in Canada,’ it’s delayed in Canada,” said Liberal MP Mark Holland.

go to Features February 2007