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Trees Best Left To Generate Carbon Credits
Taxpayers are losing money on native forest logging in NSW. It makes better financial sense for the native forests of southern NSW to remain un-logged and left to generate carbon credits, a new report suggests. NSW taxpayers would be able to generate carbon abatement, conservatively valued at about $222 million over the next 2½ decades, and use some of the money to fully compensate timber companies, according to the analysis by think tank The Australia Institute. The NSW government disagrees, saying the report is based on an unrealistically high carbon price. Cut carbon not trees. Photo: Michele Mossop Taxpayers are presently losing money on native forest logging. ”Stopping harvesting and using the native forests of the Southern Forestry Region to generate carbon credits offers a viable alternative to commercial forestry,” the report said, citing public data about the profitability of all current logging operations, government subsidies, and company tax received from logging corporations. The NSW government has reviewed the report, but said it used incorrect assumptions. “One such error identified is the assumed net financial benefits from carbon sale quoted at $222 million,” a spokeswoman for Primary Industries Minister Katrina Hodgkinson said. ”This estimate is over-inflated and based on a carbon price of $9 increasing at 2.5 per cent real from 2015, where in reality the carbon price is likely to be around $5 flat.” While most sawmillers turn small profits, the industry overall loses money, and the losses are largely borne by the government-run Forestry Corporation of NSW. The details of their contracts remain commercial-in-confidence, but net losses via subsidies between now and 2033 are estimated to be about $77 million. ”Under current and likely future market conditions, the harvesting and processing of native logs in the Southern Forestry Region is likely to generate substantial losses, and the aggregate net financial benefits are likely to be significantly higher if commercial harvesting is stopped and the native forests … are used to generate carbon credits,” the report said. The main glitch in the proposal is that native forestry logging operations are not yet eligible to generate carbon credits under the federal government’s Carbon Farming Initiative. However, both the government and the federal opposition have said they intend to expand the scheme soon. ”The growth in eucalypt plantations has been massive, and these are now coming online and muscling in on native forest logging,” said the report’s co-author, Andrew MacIntosh, associate director of the Centre for Climate Law and Policy at the Australian National University. Read more: http://www.smh.com.a…l#ixzz2Ye9Nl6LU Continue reading
BP, Shell Biofuel Investments Hit Seven-Year Low
July 9, 2013 Big oil companies in Europe including BP and Royal Dutch Shell have cut back on biofuel research , which will slow efforts to find a sustainable alternative to gasoline that does not involve food-based supply, Fuel Fix reports. BP and Shell have stopped funding four different projects because they say the technology to generate fuel from woody plants and waste will not be economically viable until 2020 or later. This funding cut brought biofuel investments from a high of $7.6 billion in the last quarter of 2007 to a low of $57 million for the first quarter of this year — the lowest it has been since 2006. Such reductions will make it unlikely that the US and the EU will meet their targets to wean people off of gasoline any time soon, Fuel Fix says. The International Energy Agency says biofuels must supply 27 percent of the fuel for vehicles by 2050 so the US and EU can meet climate change targets. So far, most of the 1.9 million barrels of biofuel produced daily comes from corn or sugar, which in turn has pushed corn prices up and led to food-versus-fuel worries that this will take away food supplies from the poor. Research into next-generation biofuels may open up opportunities to tap non-food sources like jatropha, switch grass and corn stalks, and waste sources like paper. But BP and Shell, both considered among the most open to alternative fuels, scuttled their programs because they found their technologies could not be scaled up to commercial production levels in an economical manner. However, BP says it will continue to work with DuPont on biobutanol and has jointly opened a $520 million wheat-to-ethanol plant in the UK. In a parallel situation in the US, Exxon and Chevron have also cut back on biofuel spending . Chevron explored 100 feedstocks for viability before it shelved plans, while Exxon invested $100 million on algae but could not find a commercially viable solution, Fuel Fix reports. Global biofuels output last year fell for the first time since 2000 due to weakness in the US, BP reported last month. In May, the EPA proposed changes to the Renewable Fuel Standard program that include new renewable fuel pathways aimed at enhancing the ability of the biofuels industry to supply advanced biofuels, including cellulosic biofuels, to the market. Cellulosic biofuels will likely remain well below targets set by the Energy Independence and Security Act of 2007 , according to a February statement by the US Energy Information Administration. Continue reading
Breath Of Life For Europe’s Emissions Scheme
Whether Europe can truly fix its broken emissions trading system remains to be seen, but for now, at least, it isn’t prepared to see the thing die. Instituted in 2005, the Emissions Trading System was intended as a key mechanism for driving down the amount of CO2 that EU countries were spewing into the atmosphere. The idea was that over time, the ceiling would gradually be lowered, in the process allowing market forces to find the best emissions-reducing mechanisms as companies traded permits to release greenhouse gases. But then the Great Recession happened. Slow economic growth (and even retraction) since 2008 has left Europe awash in carbon allowances, with prices too low to incentivize investment in low-carbon technologies. Still, by passing the fix the EU parliament avoided virtually abandoning the system. “Across all continents, Europe’s experience of a market-based system for reducing CO2 emissions is being considered, and seen as a credible option, as most recently in China. We shall not let the ETS be the victim of short-term concerns. Structural reform of our Emissions Trading System will follow to ensure it remains the cornerstone of EU’s climate policy.” Continue reading
