China is putting effort into developing its electric vehicle industry, but industry reports say it is falling behind other countries in terms of "EV readiness." (Source: Treehugger.com)

In 2010, A123 Systems, a leading advanced lithium-ion battery manufacturer, opened the first and largest U.S. manufacturing facility to produce batteries for electric vehicles (EVs). The project was supported by a $249 million grant from the U.S. Department of Energy. But when President Barack Obama called to congratulate A123 Systems on the milestone, which he said foreshadowed “the birth of an entire new industry in America,” he never would have imagined the subsequent bankruptcy of this rising star and its acquisition by China’s Wanxiang Group in 2012.

Although this overseas acquisition is one of Wanxiang Group’s highest profile actions, the company has long been quietly acquiring and investing in dozens of auto parts manufacturers. Wanxiang has expressed interest in supporting the struggling Fisker Automotive, a manufacturer of luxury plug-in hybrid electric vehicles (PHEV) and a previous client of A123 Systems. Wanxiang chairman Guanqiu Lu’s strategic ambitions to be an electric vehicle manufacturer are becoming closer to reality than ever before. According to the global consulting firm McKinsey, in 2010 China ranked third (together with Germany) in financial support for clean-vehicle technology development, just behind the United States and France.

As early as 2001, China’s Ministry of Science and Technology (MOST) had included electric vehicle technologies as a key project in the National High Technology Research and Development Program (863 Program). In order to reduce dependence on oil, compete with more developed foreign automobile industries, and reduce air pollutants, MOST proposed focusing on three types of vehicles: hybrid-electric vehicles (HEV), electric vehicles, and fuel cell vehicles (FCVs), as well as three key components: battery/fuel cells, electric motors, and power controls, with an investment of 880 million RMB (US$106 million) within five years.

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In the first two months of 2013, there were only 58 requests (according to the United Nations Framework Convention on Climate Change, UNFCCC) to register  Clean Development Mechanism (CDM) projects in the world, compared to 280 requests in January and February 2012. CDM is one of the three flexible mechanisms defined in the Kyoto Protocol that provides for emissions reduction projects with Certified Emission Reduction (CER) units, essentially credits that can be traded in emissions trading schemes. Developed countries can fulfill their commitments to reduce emissions by buying CERs from developing countries, which, in turn, achieve sustainable development by building emissions reduction projects.

The CDM provides a solution for financing low carbon projects in developing countries, as CDM projects can derive revenue from two sources: operational revenue, such as selling electricity or decomposition product, and selling the CERs from the project to Annex I (industrialized) countries under the Kyoto Protocol. For example, a wind power plant can sell its generated electricity to domestic grid companies while gaining extra income from selling CERs after achieving a certain amount of CO₂ emission reductions.

However, as shown by the lack of new CDM projects, the mechanism is failing. Due to oversupply of CERs, the price for each unit is falling rapidly. Two years ago, the CER price was above €12/ton of carbon dioxide equivalent (tCO2e) (US$15.46/tCO2e). At present, it is less than €0.5/tCO2e (US$0.64/tCO2e) (See Figure 1).

China is especially hard hit as it dominates the CDM market with the largest investment of CDM projects in the world ($220 billion, or 61.8 percent of total registered CDM projects globally). These Chinese CDM projects have supplied 738 million CERs, or 61.2 percent of all 1,200 million CERs issued from 2005 to present.

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Sometimes it looks as if the Parties to the UN Framework Convention on Climate Change have bet large amounts of money against themselves on the success of climate negotiations.

"Are we done yet?” Poland has hardly been an enthusiastic actor in UNFCCC negotiations (Source: IISD.ca)

Countries are now engaged in an excruciatingly slow race to reach an agreement by 2015, which would for the first time commit both the developed and the developing world under “a protocol, another legal instrument or an agreed outcome with legal force” (ah, the beauty of UNFCCC language…), in order to meet the goal of 2 degrees warming by the end of the century, the “safe” limit that was agreed upon at the 2009 Copenhagen summit.

Given what’s at stake, and the inefficiencies inherent to the UN process, you’d think that the world’s nations would make sure that not a minute is lost in the talks. And yet, after a Qatari Presidency that left everyone with the vivid memory of conference chairman Abdullah bin Hamad al-Attiyah literally hammering out a last-minute deal, Poland has been designated to host the 19th annual Conference of the Parties (COP19) next October.

It may not be obvious, at first sight, why Poland hosting the climate talks seems like a step backwards. After all, the ambitions around COP19 are not to come up with a global agreement, but rather to make substantial advances on pressing issues in preparation of the Durban Platform deadline, fixed for 2015 (and a very likely French Presidency). But it helps to remember that the last COP on the road to the rather underachieving Copenhagen Conference in 2009 took place in Poznań, which could say something about the capacity of a Polish COP Presidency to pave the way for ambitious deal-making. These fears, of course, are not enough to dismiss Poland as a valuable host. What weighs heavier is that the country does have a history of blocking progress in climate negotiations, particularly at the European Union level.

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CARICOM's Energy Programme Manager Joseph Williams with Worldwatch Institute Program Manager Mark Konold and Research Associates Evan Musolino and Katie Auth.

In the face of the many challenges inherent in getting 15 countries—each with their own resources, priorities, and political complexities—to agree to anything, let alone a comprehensive regional energy policy, the Caribbean is now on the brink of taking a significant (and impressive) step forward. For the past half decade, a Draft Caribbean Community (CARICOM) Regional Energy Policy—designed to address critical issues like energy security, affordability, energy efficiency, and renewable energy—has been circulating among CARICOM’s 15 member states, continually being revised to reflect the concerns of individual members, but never finalized.

Last week, a team from Worldwatch joined CARICOM Prime Ministers, Energy Ministers, government representatives, technical experts, and international organizations in Trinidad & Tobago for the Forty-First Special Meeting of the Council for Trade and Economic Development (COTED). On March 1, after more than five years of lengthy deliberation, delegates at the event provisionally adopted both the Draft Energy Policy and Worldwatch’s Sustainable Energy Targets for the region, marking an important step forward in the development of renewable energy and energy cooperation in the Caribbean.

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A team of Worldwatch researchers spent last week in Haiti meeting with energy sector stakeholders and visiting important energy project sites. The stakeholder meetings were incredibly enlightening and we learned a great deal about the obstacles to achieving improved and more widespread energy services throughout the country.

One successful energy project in Haiti is the solar installation on the roof of Hôpital Universitaire de Mirebalais. (Photo Credit: Matt Lucky)

Overall, there are a lot of determined people doing great work in Haiti, with the hope that they can improve the energy sector, including helping to expand electricity services beyond the 25 percent of the population that currently receives these services. A major barrier to expanded energy services, however, and something that was a common theme throughout our stakeholder meetings, is that Haiti currently lacks a clear and long-term energy framework.

While many energy plans have been developed by various government agencies, institutions, and consultancies, they remain interim, uncoordinated, and lack a common vision. As a result, plans often go unfulfilled or only accomplish isolated goals on a short-term basis. It is true that Haiti needs plans that can provide rapid results, as it is still recovering from the devastating 2010 earthquake and dealing with a number of other urgent, immediate challenges. However, Haiti is also in dire need of long-term and stable infrastructure development that will help it to prosper in the future, and a forward-thinking energy framework will go a long way in helping Haiti to accomplish this goal.

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Smog in Beijing recently reached record levels. (Source: Flickr user michaelhenly)

China recently announced that it would be joining the International Renewable Energy Agency (IRENA), as a global leader in terms of installed capacity and investment. This acknowledgement of its status as a clean energy leader may come as a surprise to some, given the recent headlines about the country’s astounding air pollution. But in 2012, China invested US$ 68 billion on developing renewable energies, 55 percent greater than U.S. investments, making it the largest clean energy investor in the world. Installed capacities for hydro and wind power rose to 249 and 63 gigawatt (GW), achieving another two global “top spots.” Looking into 2013, with aims to add 21 GW of hydro, 18 GW of wind and 10 GW of solar power in a single year, it seems that nothing can stop China’s clean energy ambition.

However, what matters to the energy sustainability is not only the scale of clean energy products, but also the environment-friendly approaches through which the sector is built and operates. While clean energy is certainly not to blame for the large portion of pollution problems, China’s efforts to develop renewable energy so quickly have generated some environmental problems, too. A lack of effective environmental policy-making and regulation has led to unsustainable practices in the renewable energy sector that cast a shadow on those “top spot” numbers.

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Worldwatch's Shakuntala Makhijani presents early findings of the Sustainable Energy Roadmap for Jamaica.

Recently, members of Worldwatch’s Climate & Energy program traveled to Kingston, Jamaica to conduct a Stakeholder Consultation for the ongoing Sustainable Energy Roadmap project. The workshop comprised a morning session where the Roadmap’s early findings were presented to members of the country’s electricity sector followed by an afternoon dialogue addressing some of the key questions at the heart of the team’s ongoing research. The consultation came at a very key time as Jamaica is in the midst of some significant changes in the electricity sector while it faces an ongoing energy crisis.

The Sustainable Energy Roadmap for Jamaica is part of a multi-year project sponsored by the International Climate Initiative of the German Ministry of Environment. Worldwatch is examining recently assessed renewable resource potential, current energy policy frameworks, the potential for adding energy efficiency measures, technical challenges to renewable energy integration and underlying economic factors to try and help decision makers understand the choices available for making the country’s electricity sector more sustainable. Not surprisingly, the country has a tremendous solar resource, an average of 5 to 7 kilowatt-hours per meter squared per day (kWh/m²/day), similar to the Southwest of the United States. It also has strong wind potential including some significant locations off the Southeast coast of the island.

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Despite its small size and population, Belize is one of the most culturally, ethnically, and linguistically diverse countries in Central America. As a member of the Caribbean Community (CARICOM) as well as the Central American Integration System (SICA), it is the only Central American country with strong ties to both the Caribbean and Latin America. In the initial phase of our project in the region, the Worldwatch Institute is assessing the existing barriers to and opportunities for a socially, environmentally, and economically sustainable energy system in Belize—an outcome that could connect these two neighboring yet culturally distinct communities and provide tangible benefits to both.

Source: Public Utilities Commission of Belize

With a population of only 350,000 and a national economy of US$1.5 billion in 2011, Belize does not consume large amounts of energy. Peak electricity demand in 2010 was 80.6 megawatts (MW), well below the U.S. state of Vermont’s peak energy demand of 953 MW in 2011. Belize’s low energy consumption makes it a suitable location for further development of clean, indigenous energy sources.

Currently, Belize depends heavily on foreign energy sources. In 2010, the country imported more than a third of its electricity from the Mexican power provider, Comisión Federal de Electricidad. In addition, Belize spent approximately $129 million, or 18.2 percent of its total import expenditures, on imported fuels. Not only has this raised energy prices for consumers, but if Belize continues to rely largely on imports to meet its energy demand, it will be highly susceptible to fluctuations on the international market. The Belizean government must explore other, local energy resources to strengthen and stabilize the country’s energy sector.

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By Wenna Wang and Haibing Ma

Source: EIA | Distribution of China's shale gas basins.

On June 27^th, 5 shares of shale gas reached their daily limits at Shanghai Composite Index, the largest stock market in China, lifting the whole Oil & Gas sector above the otherwise decreasing Chinese stock market. This was stimulated by a signal from the nation’s Ministry of Land and Resources: the second round of shale gas exploration rights is expected to open for bidding in September, and this time it will be open to private investors.

Shale gas, which is natural gas found in hydrocarbon rich shale formations, is one of the most important unconventional sources of natural gas and represents a rapidly expanding trend in onshore gas exploration and production today. The deposits are mainly extracted through hydraulic fracturing and horizontal drilling. Though it is not an ideal alternative to conventional energy sources, shale gas can be a key to energy independence and a lower carbon footprint, since it produces 43 percent and 30 percent less carbon dioxide emissions than coal and oil per thermal unit produced, respectively. However, not everything about shale gas is an improvement, as its extraction process may contaminate ground water and release volatile compounds into the soil, while the use of shale gas will still lead to greenhouse gas (GHG) emissions. The main mining techniques used for extraction, horizontal drilling and hydraulic fracturing, have been linked to various problems like water shortages, groundwater contamination, methane gas seeps, micro-earthquakes and coal fires. Sample surveys show that methane concentrations were 17-times higher on average (19.2 mg/L) in shallow wells located in active drilling and extraction areas than in wells located in non-active areas (1.1 mg/L on average). In addition, there are studies showing properties with shale gas wells were valued down due to the fracturing.

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Last week, I attended a Washington event on Arctic energy; I was hoping for some insights on the challenges ahead, namely greenhouse gas emissions, diplomatic tensions, and indigenous rights. Since Arctic exploitation hasn’t yet enjoyed a “Keystone XL” level of public attention, it seemed healthy to get some first-hand information from Arctic experts, as major oil players like Shell are getting closer to full-scale commercial exploitation. After all, a generation’s treasure chest often turns out to be another generation’s ticking bomb.

Instead, I ended up listening to lengthy presentations by analysts, consultants, fellows and executives talking about climate change “removing constraints”, “effective diplomatic work” being made, and “supply chain complexity” hampering the process, for a solid two hours. There’s a saying in the marketing industry that ‘eco-friendly’ should be the third button to push when advertising a product, after, say, affordability or quality. In this discussion, ‘eco-friendly’ was clearly the fourth or fifth button, if it was mentioned at all. One should have expected this, however, as the event invitation used no apparent irony when announcing in the same sentence that Arctic experts would examine “what nations can do to protect the environment andincrease production” (my emphasis).

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