As I discussed in a previous blog, renewable energy trade disputes are becoming a particularly contentious issue between many nations. The United States and China are facing off in one of the most publicized of these disagreements. Further action was taken last week as the U.S. Department of Commerce made its second ruling of the year on this issue, placing tariffs on solar photovoltaic (PV) imports from China.

A Suntech Power Holdings employee at a Chinese solar PV manufacturing facility. The Commerce Department ruling placed a 31.22% tariff on Suntech products. (source: China Daily)

The previous Department of Commerce ruling from March 2012 placed countervailing duties on solar PV imports in order to balance what the department determined to be illegal subsidies to solar PV manufacturers from the Chinese government. The initial tariff rates, which were set between 2.9 and 4.73 percent, came in much lower than what was expected by most experts.

The new preliminary ruling comes in response to the second set of claims by the Coalition for American Solar Manufacturing (CASM) that Chinese solar companies have been dumping their products in the U.S. market at below market value. The coalition, led by SolarWorld USA, looks to level the playing field for U.S. solar manufacturers against what they see as artificially cheap imports coming from China.

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U.S. Deputy Secretary of Energy Daniel Poneman promoted international collaboration on shale gas, CCS, and nuclear. Image source: doe.gov

Last month, I attended two events on U.S. international collaboration on energy issues, both of which involved presentations and panel discussions featuring high-level representatives from government, business, academia, and non-governmental organizations. Despite some discussion of renewable energy and climate change, U.S. government and business representatives centered the discussion largely on shale gas, “clean” coal, and nuclear power.

The first event was the third U.S.-India Energy Partnership Summit, co-convened by Yale University and The Energy Resources Institute (TERI) of India. Panelists discussed experiences and opportunities for collaboration on sustainable energy initiatives, from joint research and development of technologies to promoting policies and financial mechanisms that encourage clean energy investment. The Summit was chaired by Rajendra K. Pachauri, President of TERI North America and Chairman of the Intergovernmental Panel on Climate Change (IPCC).

A forum for sustainable energy collaboration between the United States and India is especially important in the context of stagnating international climate negotiations, where the two countries have often assumed adversarial roles. Although the Summit demonstrated the promise of mutual interests, I was disappointed by the focus of several of the high-level speakers on fossil fuels and nuclear energy.

The nature of the energy partnership described by U.S. Deputy Secretary of Energy Daniel Poneman centers largely on “clean coal” technology and shale gas exploration, as well as tighter standards for nuclear energy in India. Dr. Charles Ebinger, a Senior Fellow at the Brookings Institution, reinforced this position by highlighting the central role that the coal industry plays in the Indian economy, including as a large employer. Dr. Ebinger also took a rather pessimistic view of India’s ability to expand the share of renewable energy, claiming that renewable energy could not account for more than 20 to 25 percent of the country’s energy mix by 2030 or even 2040.

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The Dow Jones Sustainability Index is the only sustainability index for investors and remains the Oscar of corporate sustainability. But does it employ an effective definition of sustainability? (Photo Source: hms.harvard.edu)

In an age where environmental awareness and climate mitigation are becoming central priorities, it’s encouraging that more than a billion people from 192 countries recently celebrated Earth Day. But what are the most effective steps we can take to reach sustainability, and how can we best track our progress in getting there?

Unfortunately, metrics and best practices for achieving a sustainable planet are failing to develop concretely. So when I discovered a webinar, “Unlocking the Mysteries of the Dow Jones Sustainability Index,” discussing the methodology behind this widely accepted tool for measuring corporate sustainability, I was intrigued to learn how the for-profit world defines and ranks businesses seeking to be more sustainable.

Launched in 1999, the Dow Jones Sustainability Index (DJSI) was the first global benchmark for sustainability. I had assumed that the Index ranked companies based on such variables as their business practices, supply chains, or some other method that would assess which companies are the most environmentally and socially responsible. But instead, the main priority of the DJSI is to rank “sustainability-driven” companies based on how viable of an investment option they are, according to their long-term fiscally sustainable growth.

The DJSI is the only sustainability index for investors, and, according to the webinar, earning a DJSI ranking remains the “Oscar” of corporate sustainability. The index looks at only the largest of the 2,500 companies in the Dow Jones Global Total Stock Market Index. Last year, of the 2,763 companies that were invited to submit an application to be considered in the DJSI, 1,443 were analyzed and approximately 320 were included in the index.

(Photo Source: "Unlocking the Mysteries of DJSI" powerpoint)

On April 10, companies were sent the requisite survey to be considered for the DJSI. Each question has a predetermined score for the answer, a weight for the question, and a weight for the overarching criteria questions are placed into. When filling out the assessment, a company does not know the point value given to different questions and criteria. This allows for every question to be answered as honestly as possible, but it also makes it difficult for companies to focus their resources in specific areas that would make them more sustainable, at least in the eyes of the DJSI.

This lack of transparency prevents an accurate and effective evaluation of the assessment tool as well. For example, it is widely accepted that one of the most effective ways to reduce energy demand while also mitigating climate change is to improve energy efficiency—yet it’s not clear how the efficiency of, say, a company’s buildings or facilities, plays a role in the DJSI rankings.

One gets a sense of the index’s priorities when looking through the DJSI guidebook. The document lists the many reasons why a company may be removed from the index even after having been awarded a ranking. The first reason is poor business practices (tax fraud, money laundering, antitrust, balance sheet fraud, corruption cases, etc.) followed by human rights abuses (discrimination, forced resettlements, child labor, etc.), layoffs or workforce conflicts, and, lastly, catastrophic events, which include ecological disasters.

Examples of companies being taken off the list are BP, following the Deepwater Horizon oil spill of 2011, and more recently Olympus due to an internal financial scandal. The fact that poor financial conduct—not careless environmental and social behavior—is the very first reason given for why a company may be removed from the DJSI shows just how relative the definition of sustainability is.

It’s been more than 20 years since the Brundtland Commission defined “sustainability” as “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” The fact that, still today, the most widely regarded sustainability metric in existence is a financial investment tool that values economics more than environmental and social impacts shows that we are not yet where we need to be. Investments deemed worthwhile by the DJSI are based on expectations of long-term economic growth and expansion, which, if done irresponsibly, are largely counterproductive to what environmental sustainability is.

Despite the well-intentioned effort of the DJSI, a lack of transparency in how the index’s questions are weighted and a focus on underlying financial priorities that may be contradictory to environmental sustainability make it difficult to determine if a company is truly sustainable and if it is being labeled correctly. For investors attempting to invest intelligently and sustainably, there is a need for a clearer and more all-encompassing definition of sustainability in the DJSI.

Global fossil fuel subsidies most likely total between US$750 billion and $1 trillion per year—significantly more than the widely publicized estimate of $500 billion, according to Steve Kretzmann, founder and Executive Director of Oil Change International.

Kretzmann, who has been an advocate for environmental, social, and corporate responsibility for 25 years, sat down with Worldwatch last week to discuss fossil fuel subsidy reform efforts in the United States and around the globe. He founded Oil Change International in 2005 to educate the public about the true impacts of fossil fuels, expose troublesome oil industry practices, change patterns of public and private finance around the energy industry, and “separate oil and state.” [Below, watch a brief interview featuring Kretzmann and Worldwatch Climate and Energy Director Alexander Ochs.]

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Last week I wrote about the Environmental Protection Agency’s (EPA) new proposed standard for carbon dioxide (CO₂) emissions from fossil fuel power plants. The long-awaited regulation would limit emissions to 1,000 pounds of CO₂per megawatt-hour (MWh) of electricity produced, essentially guaranteeing that no new coal power plants will be built in the U.S. without carbon capture and storage (CCS) technologies.

Almost 30 percent of U.S. greenhouse gas emissions come from coal power plants. Image source: epa.gov

In an effort to minimize opposition to the proposed standard, the EPA emphasized the limited negative impact on industry, as utility companies are already choosing to invest in natural gas rather than coal plants for new capacity. This is due mostly to abundant new reserves of relatively cheap shale gas extracted through hydraulic fracturing.

So just how accurate are the EPA’s claims that the proposed regulation is in line with industry business-as-usual? Other projections of future coal plant construction support the overall claim that the industry was already moving away from investing in new coal power.

The U.S. Energy Information Administration (EIA) projected there would be “virtually no new coal in [the] reference case [scenario] following several CCS demos.” The EIA reports that there are 9.3 gigawatts (GW) of new coal capacity currently planned by 2015, and none thereafter. Nearly all of this new capacity will be built within the next 12 months and will therefore be exempt from the proposed CO2 standards. Any plants scheduled to begin construction in more than a year will need to include CCS technologies in order to comply with the 1,000 pounds of CO₂ per MWh limit of the proposed EPA regulation. Power plant emissions can be averaged over a 30-year period to meet the regulations, so it is also possible for power producers to build coal plants in the near-term provided they install CCS systems in the future.

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Worldwide, the total square footage of green buildings (defined here as LEED certified buildings) is doubling every year, and 85 countries now have their own green building standards. But are we doing enough to harness the overwhelming benefits that come from boosting energy efficiency in buildings?

On January 25, Greg Kats, President of Capital E and the author of Greening Our Built World, presented on “Sustainable Solutions for the Planet’s Energy Challenge” as part of a new series from the Woodrow Wilson Center’s Environmental Change and Security Program. In his talk, he discussed the many ways we can move sustainability forward in three target areas: transportation, industry, and building efficiency, which account for 28 percent, 26 percent, and 40 percent of U.S. energy use, respectively.

Among the obvious solutions to promoting a more sustainable economy, Kats noted, are increasing the production tax credit for renewable energy, pumping more money into energy efficiency financing, and incorporating more renewable energy into building and city designs. He pointed to positive patterns already emerging in the field of low-carbon technology: solar photovoltaic technology, for example, has seen an 80 percent price reduction in just four to five years. Similarly, the price of a plug-in hybrid vehicle is now near that of a non-hybrid in a similar class.

The benefits of building green

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In the fall of last year, the U.S. State Department permit review for construction of the Keystone XL pipeline by energy company TransCanada gained significant attention in the media and political debates. If built, this pipeline would move bitumen, thick and heavy oil, from the Canadian province of Alberta through the American Midwest to oil refineries on the Gulf Coast of Texas. In October, hundreds of environmentalists, including famously outspoken NASA scientist James Hansen, and Bill McKibben, founder of 350.org, were arrested for civil disobedience while protesting the pipeline outside the White House. With climate change and clean energy as major drivers, environmentalists have focused on the Keystone XL pipeline protests as a means of preventing the transportation of oil to consumers and ultimately the extraction of tar sand.

TransCanada’s planned and existing oil pipelines (source: The Economist)

Tar sand is a mixture of bitumen, sand, clay, and water, which must be processed and refined to extract oil from the surrounding substances. Roughly twenty percent of the U.S. crude oil imports are from Canada, much of which is derived from tar sands. In order to satisfy the steady U.S. demand for oil, TransCanada plans to build the Keystone XL pipeline to extend the existing pipeline system and transport bitumen to U.S. refineries. The Keystone XL pipeline has been a source of disagreement for several years between environmental groups and the oil industry. The main environmental concerns are threats to water quality from potential pipeline leaks and increased greenhouse gas emissions from burning and extracting the bitumen. In a well-to-wheel analysis, tar sands emit roughly ten to forty five percent more greenhouse gases than standard petroleum.

Pipeline supporters counter that the Keystone XL pipeline would provide the U.S. with a steady supply of oil from a politically stable nation.  Proponents also argue that constructing the pipeline would create thousands of American jobs. Amid all the controversy, a Rasmussen poll found that fifty three percent of likely American voters at least somewhat support construction of the pipeline. 

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The president of COP 17, Maite Nkoana-Mashabane, speaks at the final plenary session of the climate change meetings in Durban, South Africa (Source: Worldwatch).

As the new year begins, climate negotiators have begun to move on from their engagement at the United Nations Climate Change Conference in Durban, South Africa. After two weeks of intense negotiations on the future of the international regime to combat climate change, they bring home pieces of an ambiguous mandate—but also some critical steps forward. Below, we discuss some of the outcomes of those exhilarating talks in early December.

Symbolic survival of the Kyoto Protocol

Under European Union leadership, signatories of the Kyoto Protocol agreed to enter a second commitment period for reducing their greenhouse gas emissions, extending the treaty terms through 2017 or 2020. This symbolically salvaged the agreement—the only existing climate treaty with internationally binding reduction targets. However, the 27 EU countries, together with Australia, New Zealand, Norway, and Switzerland, are the only countries to take on these targets, and they agreed to do so only under the condition that all major countries agree to a new, truly global and comprehensive climate treaty, if necessary outside the Kyoto structure.

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The 17th Conference of the Parties to the United Nations Framework Convention on Climate Change begins today in Durban, South Africa (Source: UNFCCC).

This week the 17th session of the Conference of the Parties (COP17) to the United Nations Framework Convention on Climate Change (UNFCCC) begins. In Durban, South Africa, delegations from countries around the world will continue negotiating greenhouse gas reductions in order to prevent global warming from spinning out of control. So it is just in time that the International Energy Agency (IEA) releases its latest statistics on global CO₂ emissions.

The provided figures contain CO₂ emission source breakdowns by fuel, sector and region over the period 1971 to 2009. According to the data, nearly two thirds of worldwide emissions come from two sectors – electricity and heat generation (41 percent) as well as transport (23 percent). Remaining emissions come from industrial processes (20 percent), residential (6 percent), and a multitude of additional sources (10 percent). Regarding energy, coal is the leading CO₂ emission source, accounting for 43 percent of those emissions, followed by oil at 37 percent and natural gas at 20 percent.

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Yesterday, the Worldwatch Institute joined Representative Rush Holt (D-NJ), Representative Edward Markey (D-MA), the Renewable Energy Policy Network for the 21^st Century (or REN21), and a panel of energy experts to celebrate the launch of Renewables 2011 Global Status Report, an integrated analysis of the state of renewable energy around the world. First published in 2005, REN21’s annual report has since become the most heavily cited analysis of renewable energy business and policy.

According to Alexander Ochs, event moderator and Director of Climate and Energy at the Worldwatch Institute, renewable energy today already accounts for about 25 percent of total global power capacity and 20 percent of actual electricity production, percentages that continue to grow quickly. Over the five-year period from the end of 2005 through 2010, total capacity of many technologies including wind, solar, geothermal, hydro and biomass  grew at rates averaging 15 - 50 percent per year. Total global capacity of solar photovoltaics (PV) in 2010 was up as much as 72 percent from just the year before. Little noticed, approximately half of the estimated 194 gigawatts (GW) of new power capacity that was added globally in 2010 were renewables.

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