Tag Archives: china
‘Climate Bomb’ Warning Over China Coolant Release
http://www.ft.com/cms/s/0/1c273ab0-dbe4-11e2-8853-00144feab7de.html#ixzz2X7AUUxXp By Kathrin Hille in Beijing A “climate bomb” of potent greenhouse gases 15,000 times more damaging to the climate than carbon dioxide is set to be released by some of the world’s leading producers of refrigerants following a ban on climate credits. The companies, the majority of them in China, argue that a ban on trading of climate credits for the incineration of HFC-23 makes it no longer financially viable to destroy the gas, which is a byproduct of a substance used in air conditioners and refrigerators. A warning by the Environmental Investigation Agency in a report to be released on Monday will raise the pressure on China to ban such gases and end economic incentives for their production in multilateral talks. Some 19 factories – 11 in China – making HCFC-22 have been receiving climate credits under the UN’s Clean Development Mechanism for installing and operating incinerators to burn HFC-23 that is created during the manufacturing process, instead of venting it into the atmosphere. Facilities in developing countries can sell emission reduction credits to buyers in developed countries to allow the latter to meet their targets under the Kyoto protocol. However, the European Emissions Trading Scheme, the world’s largest carbon market, banned trading in those credits last month after finding that the financial incentive drove companies to produce more HFC-23 instead of curbing it. Other climate exchanges have said they will follow, causing substantial revenue streams for the producers to dry up. The EIA said an investigation had shown that most of China’s non-CDM facilities were emitting HFC-23 already. “If all of these facilities [under the CDM] join China’s non-CDM and vent their HFC-23, they will set off a climate bomb emitting more than 2bn tonnes of CO2 equivalent emissions by 2020,” it said. People involved in the sector in China said this was likely to happen. “If there is no more funding, the CDM plants could start venting as well,” Mei Shengfang, deputy secretary-general of the China Association of Fluorine and Silicone Industry, said. He added that authorities were considering offering support. An executive at China Fluoro Technology, one of the largest Chinese CDM plants, said: “Our company is still incinerating the HFC-23 now. If the money is used up, we can stop incineration. We can’t go on doing this, we can’t afford it and we have no duty to do it.” Releasing HFC-23 into the atmosphere is not illegal. China has been blocking proposals for a ban as part of multilateral talks under the Montreal Protocol to phase out hydrofluorocarbons, which continue on Monday in Bangkok. China raised hopes this month when President Xi Jinping and President Barack Obama of the US said at a summit that they had agreed to work together to reduce the production and consumption of hydrofluorocarbons. “This is a reversal of China’s attitude, and all eyes are on China now to see if it’s for real,” said Alexander von Bismarck, executive director at EIA. Additional reporting by Li Wan Continue reading
Farmland Values Are Cooling After Years Of Explosive Growth
http://www.stltoday.com/search/?l=50&sd=desc&s=start_time&f=html&byline=By%20Georgina%20Gustin%0Dggustin%40post-dispatch.com%0D314-340-8195 The boom in farmland values, which triggered frenzied auctions and record sale prices, is over. That’s the bad news for Midwestern farmers. The good news is there’s no bust on the horizon, economists believe. Midwestern farmland values have soared in the past five years, along with grain prices, climbing as much as 20 percent two years in a row — something that’s never happened before. In some areas land prices rose 25 percent. One Iowa parcel sold for a record $20,000 an acre, and in Illinois, prices were reaching the mid-teens. Missouri farmland was fetching up to $5,000 an acre, up from $500 or $600 a quarter-century ago. The rise in values drew not just farmers, but outside investors who began to see American farmland as a safer investment than the stock market. But now, economists believe, the boom is cooling off. “We’re talking about the first slowing in the rate of increase,” said Chris Hurt, an agricultural economist with Purdue University. “There’s a leveling off in farmland values, and with anything that’s had a strong upward slope, you’d expect this. The primary driving forces of this period of rapid increase are beginning to come to a close.” Government mandates for ethanol and demand for grain from developing countries have been the major drivers behind record grain prices in recent year, which have stoked land prices. But now these and other factors are waning. Mandates under the Renewable Fuel Standard call for 13.8 billion gallons of corn-based ethanol this year. But because most cars only take a 10 percent ethanol blend, ethanol is hitting what’s known as the “blend wall” — the limit at which ethanol can be added to the gasoline supply. “We use about 133 billion gallons of gasoline,” Hurt said. “Ten percent of that is 13.3 billion, not 13.8 billion, so we’re running into a policy dilemma. We just don’t need a lot more corn.” At the same time, economists say, demand from developing countries is tapering off. In China, where a growing middle class is newly flush with cash for grain-intensive proteins, incomes are declining slightly — and that has meant a slight slowdown in demand for American soybeans, Hurt said. “Their incomes aren’t growing by 10 percent; they’re growing by 7 percent,” Hurt said. “There’s still very rapid growth, but it’s slowing.” China, and other countries, are also buying grain from countries where farmers have expanded grain acres in response to high grain prices. With drought and rain curtailing American harvests and driving up prices over the past three years, those farmers — particularly in South America — have been able to capitalize. “When prices of agricultural things get high, you see a supply response, and the response is really showing up now,” Hurt said. “We’ve seen multiple years of this explosion to the upside, particularly with short production. If we can get back to normal supplies in the U.S., we’re going to moderate these basic farm prices — and those prices are what drive land values.” But most Midwestern farmers should be in fine financial shape. During the last agricultural bust, in the early 1980s, farmers were heavily in debt and many lost farms. But since then, lenders have been especially cautious, lending only a small percentage of a sale price. Besides, farmers have been making record incomes, and that means they’ve been paying with cash — if they’ve been buying land at all. “There’s a lot of talk of a possible bubble in land values,” said Ron Plain, an agricultural economist with the University of Missouri. “But the good news is we haven’t sold a lot of land, so not a lot has been purchased at these high prices. A lot of farmers have pretty good cash flow, so the land that’s been sold hasn’t been sold with a lot of debt.” A stronger stock market, Plain said, has sent investors back to Wall Street. “I would guess we’re not going to see a lot of investors buying farmland.” So, if farmers get what they want in the next couple of years — good weather and good harvests — farmland values could come down, Plain said. But in the meantime, they’re just growing at a relatively modest 2 or 3 percent. “We’ve had weather, huge demand growth, changes around the world. What’s normal these days? We’ve lost our base of understanding,” Hurt said. “We’re going to learn what’s normal in agriculture in the next few years.” Continue reading
Ernst & Young: Energy Bill Slow Progress Hinders UK’s Investment Potential
30 May 2013 The UK is missing out on a unique opportunity to become the market of choice for investment in renewables in Europe as political infighting delays the Energy Bill becoming a reality, according to the tenth anniversary edition of the Renewable Energy Country Attractiveness Indices (RECAI), released by Ernst & Young this week. At a time when investment in most other European markets is wavering, further delays in delivering a stable framework in the UK are weakening the country’s promising prospects and holding back investment . “We are at a stage where the UK is presented with a unique opportunity to become a safe harbour for renewable energy investment in Europe,” said Ben Warren, Environmental Finance Leader at Ernst & Young . “The foundations are there, reflected by the UK’s consistent performance in our index and its current 5th place ranking, as well as its huge offshore wind potential. “However, competing visions and strategies within the Government about the country’s future energy mix, pose serious questions amongst investors about whether we can compete for capital on a global level,” added Warren. “Although we are starting to see nods towards a more stable investment environment through initiatives like the Green Investment Bank (GIB) attracting significant foreign investment, more needs to be done to help the UK realise its full potential,” he said. The latest RECAI index includes a revised methodology to reflect the shift in investment and deployment drivers and the maturing of the sector since the report’s creation ten years ago, according to Ernst & Young. Key changes include an increased focus on the role renewable energy plays in each country’s energy mix, energy supply and demand, the cost competitiveness of renewable energy, the importance of decarbonisation and an increased emphasis on the economic and political stability of each particular market. The index sees the US regain the top spot, as high barriers to entry for external investors realign China into second place. However, growth prospects for the sector in China remain strong with continued GDP growth, increasing energy demand, and the ongoing strategic importance of the sector to the local economy providing solid foundations for the future. South America continues to grow in prominence, thanks in part to its growing energy demand. Chile’s project pipeline includes 300-400MW concentrated solar power plants, while Peru has entered the index for the first time due to good natural resources and a strong investment climate. However, new policy measures and tender cancellations in Brazil are likely to temper the rapid growth seen in the region over the last 18 months, said the authors. High levels of project activity and investment interest in Japan and Australia give the Asia Pacific region a stronger presence at the top of the index, said the company. Thailand also joins the index in this issue, boasting strong solar resource and a healthy project pipeline, as well as stable fiscal and regulatory support measures. In Europe, Romania became the latest to slash its subsidies, reinforcing the relatively sombre mood in Eastern Europe as policy makers try to find the balance between growth and sustainability, the report found. A number of the Middle East and North Africa countries, including Egypt, Tunisia and the UAE, have fallen out of the top 40 due to a slow recovery from the Arab Spring and an absence of clear policy frameworks delaying capacity deployment, according to Ernst & Young. Deal activity in the sector has been characterised by both incumbents and new entrants driving industry consolidation. There is also a strong appetite from Far East construction groups and original equipment manufacturers (OEMs) seeking development pipelines of solar and wind assets to provide a distribution channel for their products. Factors driving the levels of investment in renewables include divestment needs, market restructuring and the entry of new investors into the sector. Utilities and financial buyers are finding greater value in buying operational plants than investing in plant construction. “The mismatch between project sponsors’ capital expenditure plans and the corporate capacity to finance this investment will continue to drive more asset disposals,” said Warren. “Both financial investors and OEMs under pressure from overcapacity are likely to remain the most active buyers of operational assets and development assets respectively.” “Further consolidation can be expected in the supply chain. Depressed pricing, reduced fiscal support for renewables and continued overcapacity are all going to contribute to additional casualties in the year ahead,” Warren concluded. “However, with the shift in power democratising the energy sector and increasing the power of the consumer, the future role of renewables in the energy mix is bright.” Continue reading
