Thursday, October 25, 2007

Biodiesel Potential in the world

The ease of manufacturing biodiesel from vegetable oils and animal fats has made it one of the most promising, near-term alternatives to fossil fuels.

Seeking to understand which nations are best positioned today to enter the burgeoning biodiesel market, researchers Matt Johnston and Tracey Holloway of the Nelson Institute's Center for Sustainability and the Global Environment (SAGE) ranked 226 countries according to their potential to make large volumes of biodiesel at low cost.

Scheduled for inclusion in the Oct. 24 journal Environmental Science and Technology, the analysis uncovered many of the usual suspects, including the United States, a top soybean grower; and Brazil, already a major biodiesel producer. The Netherlands, Germany, Belgium and Spain also cracked the top ten in overall volume potential.

But the researchers say the study's true motivation was to identify developing countries that already export significant amounts of vegetable oil for profit, but may not have considered refining it into biodiesel. By exporting biodiesel—a higher value commodity—these countries could improve their trade balances, says Johnston, or use the fuel to offset their own energy needs.

"A lot of these countries don't have any petroleum resources and so they're having to import petroleum," he says. "At the same time, they're exporting vegetable oil that they could be turning into biodiesel and using domestically."

Overall, the study ranked Malaysia, Thailand, Colombia, Uruguay and Ghana as the developing nations most likely to attract biodiesel investment, not only because of their strong agricultural industries, but also due to their relative safety and stability, lack of debt, among other economic factors.

Johnston emphasizes, however, that the set of criteria he and Holloway used is just one among many.

"As long as they're profitable and have large volumes of vegetable oils, all the countries on our list—even if they aren't on our top ten list—they could do this," he says.

The idea for the analysis first struck Johnston on a visit to a remote island of Fiji, where people rely primarily on petroleum diesel to run generators for electricity. Transported in by boat, the fuel cost the equivalent of $20 per gallon. Meanwhile, the islanders were growing coconuts and processing them into oil that sold for 50 cents a liter.

"The price disparity was just incredible," says Johnston, "and it prompted me to think about where else in the world countries might have this biofuels potential, but not necessarily realize it."

At the same time, many agencies—chief among them the United Nations - have raised concerns about the biofuel industry's possible impact on the world's poor, as vegetable oils, now used for food, are increasingly diverted to fuel production. Rampant growth of biofuels could also negatively affect the environment; a soaring demand for palm oil, for example, has already led to deforestation in Southeast Asia.

By highlighting the places in the world where biodiesel development will likely happen, Johnston and Holloway hope their analysis will help people foresee these problems and make plans to mitigate them.

"We're not saying, 'There's all this potential out there, go get it,'" says Johnston. "Instead, we're looking at which vegetable oil feed stocks are most likely to be affected and which countries will most likely be doing this at a large-scale. That way, we can anticipate some of the impacts, as opposed to having to react after the fact."

Of all the vegetable oils and animal fats examined in the study, soybean and palm oil were by far the most common. In fact, the world's top five soybean and palm oil producers—Malaysia, Indonesia, Argentina, the United States and Brazil—accounted for 80 percent of the potential global biodiesel production, the researchers found.

Based on current export volumes of vegetable oil from 119 countries, Johnston also estimated that a grand total of 51 billion liters of biodiesel could be produced annually—enough to meet roughly 4-5 percent of the world's existing demand for petroleum diesel. Yet, although interesting, these numbers aren't the main point.

"We're not suggesting that all exported vegetable oil should be converted into biodiesel, because that would fundamentally upset the food supply," says Holloway. "We're looking at this more from each individual country's perspective: They're already exporting one thing, could they be exporting something else?"

Because the study employed data from online, public sources—primarily the Food and Agriculture Organization of the United Nations Statistics Division—Holloway points out that any country could repeat the calculations or do its own analysis of the biodiesel opportunity.

Thursday, October 18, 2007

Why Global Action is urgent to combat Climate Change

Why is global action urgent and necessary to meet the challenge of climate change? The Intergovernmental Panel on Climate Change has determined that warming of the climate is unequivocal; further, that average northern hemisphere temperatures during the second half of the 20th century were very likely higher than for any other 50-year period in the past 500 years and likely the highest in at least the past 1300 years.

The panel has also determined that most of the observed increase in temperatures since the mid-20th century is very likely due to the increase in anthropogenic greenhouse gas concentrations.

But climate change is not taking place in a smooth, linear fashion. For instance, the frequency of heavy precipitation events has increased over most land areas and so also the duration and intensity of droughts, particularly in the tropics and subtropics.

Climate change is likely to add to several stresses that already exist in the poorest regions of the world and affect the ability of societies in these regions to pursue sustainable livelihoods.
By 2020 between 75 million and 250 million people are projected to be exposed to an increase in water stress due to climate change in Africa. Coupled with increased demand, this will adversely affect livelihoods and exacerbate water-related problems.

Another sector likely to be affected adversely in some of the poorest regions of the world is agriculture. It has been assessed that agricultural production in many African countries and regions would be severely compromised by climate variability and change.

The area suitable for agriculture, the length of growing seasons and yield potential - particularly along the margins of semi-arid and arid areas - are expected to decrease. In some countries yields from rain-fed agriculture could be reduced by up to 50 per cent by 2020.
Another serious impact of climate change is the melting of glaciers all over the world, and this has serious implications for South Asia and parts of China. Glacial melt in the Himalayas is projected to increase flooding and rock avalanches from destabilised slopes and affect water resources downstream within the next two to three decades, due to decreased river flow as the glaciers recede.

Water availability is projected to be affected in Central, South, East and South-East Asia. Given the fact that population growth and increasing demand resulting from higher standards of living would require larger quantities of water, the impact of climate change could adversely affect more than a billion people in respect of water availability in Asia by the 2050s.

Climate change and its impacts in the most vulnerable regions require a careful evaluation of humanitarian assistance across the globe. Increased resources will be required for adaptation to climate change.

This undoubtedly would be a far better approach for the global community to pursue than to provide emergency assistance in the event of catastrophes and extreme events.

There are equity dimensions to climate change that also deserve attention. While adaptation is inevitable and urgent, the increase in emissions of greenhouse gases, if not mitigated by the developed nations, will lead to much higher temperatures and much more serious impacts. It is, therefore, essential to ensure that strategies involving both adaptation and mitigation are pursued.

The cost of mitigation, as assessed by the climate change panel, is very modest in relation to the cost of impacts across the world. If mitigation is not implemented, then income and wealth disparities between nations will increase, and the existence of poverty on a large scale, which should be ethically unacceptable, could pose a threat to global security and stability.
The possibility of large numbers of people becoming environmental refugees is not only a humanitarian problem of serious proportions but also has the potential for social disruption that needs to be avoided.
Stringent mitigation needs to be undertaken immediately, and existing technologies and methods are available for this. Adaptation to climate change, particularly involving the poorest communities in the world, assumes urgency.

In view of the new knowledge provided by the panel, the world needs to take climate change as a serious problem that needs a humanitarian approach.

Monday, October 15, 2007

Nobel Peace Prize shared by IPCC and Al Gore

The Chairman of the Intergovernmental Panel on Climate Change credited the hundreds of scientists that contributed to the reports, which represent a consensus view of the state of the climate, and which won a Nobel Peace Prize, together with Al Gore.

“This is an honor that goes to all the scientists and authors who have contributed to the work of the IPCC, which alone has resulted in enormous prestige for this organization and the remarkable effectiveness of the message that it contains,” said R.K. Pachauri, chairman of Intergovernmental Panel on Climate Change.

The fourth IPCC report came out in three installments this year. The reports spelled out the scientific consensus on how the climate works, how climate change is affecting life on earth and how the world can adapt to and mitigate those changes. Next month, the IPCC will release a synthesis report, that combines elements of each. In December, the U.N. meets in Bali to begin discussions on a world strategy for reducing emissions of greenhouse gases after the Kyoto Protocol expires in 2012.

Two U.S. scientists involved in the IPCC reports said the Nobel Peace Prize should help build additional hard-won credibility for the IPCC among any lingering skeptics, and that it should show the public at large that global warming “isn’t just some kind of scientific phenomenon and help people and society as a hole that climate change really has the potential to disrupt how the society operates,” as Catherine O’Reilly put it.

O’Reilly, a professor at Bard College in New York, studies climate change and other factors affecting the fish and African fishing cultures of Lake Tanganyika, one of the world’s largest lakes. She was a contributing author of the IPCC report on how the world’s environment is changing, and will continue to change, due to global warming.

“The IPCC report is itself a widely respected body of scientific literature that really summarizes how the world is responding to climate. But just knowing all that information doesn’t really make anything change. In order for any kind of adaptations to occur, society has to recognize the fact that climate change has the potential to affect our lives, and other people’s lives,” O’Reilly said. “Without society’s acknowledging that climate change is more than some kind of increase in temperature, I don’t think changes are going to be made.”

She is optimistic that the Nobel Peace Prize will help convince people of that, and that the Bali discussions will produce positive results. So is Gavin Schmidt, a NASA scientist who reviewed the IPCC’s latest report on the physical science basis of climate change. His work involves developing computer models to simulate various aspects of climate.

“I think people have learned a lot of lessons from Kyoto,” Schmidt said. “There were a lot of missteps at the beginning because this is such a new approach, and so hopefully lessons have been learned and the next phase will go forward with a little more expertise as to how to get things done.”

Thursday, October 11, 2007

Renewabe Energy Investment increases by 67%

The renewable energy market saw another record year of Venture Capital (VC) and Private Equity (PE) investment, with $18.1 billion invested in companies and projects in 2006. This is a 67% increase over the $10.8 billion invested in 2005, according to a new report released last week by the London based research and analysis firm, New Energy Finance.

The annual report, Cleaning Up 2007, examines these investment trends in 2006 and the first half of 2007—and identifies 1,859 investors who have either made investments or stated their intention to do so. The company recorded 193 funds that invest in clean energy, and analyzed 521 VC and PE deals in 2006, totaling $8.6 billion for companies and $9.5 billion for projects.
This trend has continued, with a total of $10.6 billion invested in the first half of 2007.

However, this rapid growth tells only half the story: during 2006, clean energy VCs invested only 73% of the total money available to them, with $2 billion residing in funds and waiting to be invested. This is a symptom of a market where demand for deals is higher than supply, which is driving up company valuations.

"2006 saw a modest amount of technology investment with increasing PE investment in later stage companies and more asset intensive sectors, such as wind and biofuels. Overall it was a good year. Although some company valuations are on the high side, a number of interesting companies are attracting investment. Investors' appetite for clean energy continues to grow," said Michael Liebreich, CEO and founder of New Energy Finance.

According to the report, all regions across the globe experienced significant growth in 2006. The Americas saw investment of $7.1 billion—an increase of 83% from 2005—as mainstream investors woke up to the opportunities in renewable energy, especially in biofuels. There was a 62% increase to $9.2 billion in funds invested in Europe, Middle East and Africa, mainly driven by PE investment in companies and projects.

Companies and projects in the Asia & Oceania region received $1.8 billion in investment, up 26%, driven by pre-IPO PE investments in Chinese solar companies and clean energy activity in countries such as India.

At a sector level, wind at $8.4 billion; biofuels at $4.7 billion; and solar at $2.3 billion attracted 86% of VC and PE investment between them. Mature technologies, such as onshore wind and first generation or corn-based ethanol, attracted PE money for expansion and roll-out of production capacity.

Solar raised a significant amount of money via the public markets, but also attracted the highest level of classic VC investment at $428 million—typically in thin film and non-crystalline silicon technologies. VC investment in second generation biofuels technologies, including cellulosic ethanol, also increased to $235 million.
Of the total VC & PE investment of $18.1 billion, 61% ($11.1 billion) represented new money into the renewable energy sector. The remaining money, $7 billion, was used to finance company buy-outs, and re-finance and acquire projects. Encouragingly the report noted the average VC deal size has increased in the past year at almost each development stage. Average series C/third round investment rose 29% to $14.8 million and average series D/fourth round deal size almost doubled to $20.7 million indicating investor confidence in companies with technologies closer to commercialization.

The highest concentration of VC/PE funded development stage companies is in the solar sector, accounting for almost 20% of all development stage VC/PE funded companies, followed by wind, demand-side efficiency, biofuels, and biomass & waste. These five sectors together account for almost 65% of all VC/PE funded companies. Of the 67 development stage companies known to be actively fundraising, 17 are within the solar sector, 13 in biofuels and 10 in demand-side efficiency.New Energy Finance estimates that the total VC and PE invested in clean energy will grow at an annual compound rate of approximately 17% through 2013, during which time the company forecasts over $262 billion worth of VC and PE funded deals to be completed, absorbing over $146 billion of equity. The money will go to later stage deals, buy-outs and project financings, although the recent squeeze in the credit markets may slow down growth in some areas.

Wednesday, October 10, 2007

Record Ice Withdrawl in Arctic Sea

Arctic sea ice shrank to the smallest area on record this year, US scientists have confirmed. The National Snow and Ice Data Center (NSIDC) said the minimum extent of 4.13 million sq km (1.59 million sq miles) was reached on 16 September.

The figure shatters all previous satellite surveys, including the previous record low of 5.32 million sq km measured in 2005.

Earlier this month, it was reported that the Northwest Passage was open. The fabled Arctic shipping route from the Atlantic to the Pacific is normally ice-bound at some location throughout the year; but this year, ships have been able to complete an unimpeded navigation. Arctic sea ice loses area in summer months and regrows in the winter cold.

The researchers at NSIDC judge the ice extent on a five-day mean. The minimum for 2007 falls below the minimum set on 20-21 September 2005 by an area roughly the size of Texas and California combined, or nearly five UKs.

Speaking to BBC News on Monday this week, Mark Serreze, a senior research scientist at the NSIDC, said: "2005 was the previous record and what happened then had really astounded us; we had never seen anything like that, having so little sea ice at the end of summer. Then along comes 2007 and it has completely shattered that old record."

He added: "We're on a strong spiral of decline; some would say a death spiral. I wouldn't go that far but we're certainly on a fast track. We know there is natural variability but the magnitude of change is too great to be caused by natural variability alone."

The team will now follow the progress of recovery over the winter months. Modelled decline
In December 2006, a study by US researchers forecast that the Arctic could be ice-free in summers by 2040.

A team of scientists from the National Center for Atmospheric Research (NCAR), the University of Washington, and McGill University, found that "positive feedbacks" were likely to accelerate the decline of the region's ice system.

Sea ice has a bright surface which reflects 80% of the sunlight that strikes it back into space. owever, as the ice melts during the summer, more of the dark ocean surface becomes exposed.
Rather than reflecting sunlight, the ocean absorbs 90% of it, causing the waters to warm and increase the rate of melting. Scientists fear that this feedback mechanism will have major sequences for wildlife in the region, not least polar bears, which traverse ice floes in search of food.

On a global scale, the Earth would lose a major reflective surface and so absorb more solar energy, potentially accelerating climatic change across the world.

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