[acn-l] Gallon Report on Climate Change (fwd)

Rob Huntley (rob at acn.ca)
Thu, 28 May 1998 20:59:01 -0400 (EDT)

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---------- Forwarded message ----------
Date: Thu, 28 May 1998 16:28:33 -0300
From: "Gary Gallon, Canadian Institute for Business & Environment"
<cibe at web.net>
Subject: Gallon Report on Climate Change

THE GALLON ENVIRONMENT LETTER
Canadian Institute for Business and the Environment
Institut Canadien du Commerce et de l'environnement
506 Victoria Ave., Montreal, Quebec H3Y 2R5
Ph. (514) 369- 0230, Fax (514) 369- 3282
Email cibe at web.net
Vol. 2, No. 12, May 28, 1998

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CLIMATE CHANGE CLIMATE CHANGE CLIMATE CHANGE
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INSURERS CALL FOR CUTS IN GREENHOUSE GAS EMISSIONS

Insurance executives speaking on behalf of more than 70 of the world's
largest insurance and reinsurance companies urge strong measures for
reducing greenhouse gas emissions. Providing more than $US2 trillion
in insurance to businesses around the world, the insurance industry warns
of rapidly rising rates caused by the massive losses related to global
warming.

The insurance industry presented a paper at Kyoto that points out that
climate
change has potentially large implications for investment activities. Former
UNEP Executive Director, Elizabeth Dowdeswell, stated that, "many prominent
energy industry voices are often those that highlight the possible negative
impacts of emissions-reduction", adding that, "the insurance industry is
telling
us about the other side of the coin - about the economic costs of not
reducing
emissions. Insurers know from experience how expensive it can be when people
fail to protect themselves adequately from risks". The insurance companies
are
involved UNEP's Insurance Initiative on Sustainable Development and the
Environment. The Initiatve was launched when insurers signed a Statement of
Environmental Commitment by the Insurance Industry in 1995.

The insurance industry has suffered massive pay outs for a series of
"billion dollar" storms since 1987. This has led to a strong increase
in claims, reduced availability of insurance coverage and higher premiums.
Property insurance is particularly affected. The implications of climate
change for financial services other than property insurance are also
economically
threatened by the fossil fuel industries' continued high emissions.
Changes in human health may affect the life insurance and pension
industries. Banking may be vulnerable to repercussions from property
damage, particularly if the insurance industry reduces its involvement
in vulnerable areas. The economies of certain regions, such as coastal
areas and small islands, may be affected. In 1996, natural disasters
represent
85 per cent of insured catastrophe losses globally, or $US12.4 billion, and
these losses are on the rise. For more information contactRobert
Bisset, UNEP at ph.l+254-2-623084, fax+254-2-623692,
emailRobert.Bisset at unep.org

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WESTERN FUELS ASSOCIATION ATTACKS KYOTO

Fred Palmer, General Manager and Chief Executive Officer of the Western
Fuels Association, told the 1998 Australian Coal Conference that the U.S.
government has been dishonest regarding the Kyoto Protocol. He said, "If
the designs of those pushing Rio are realised, billions of people on earth
will

be left in poverty and the quality of life in the industrialised West,
including
Australia, will decline dramatically." He added that, "the perceived
environmental
crisis of catastrophic global warming embodied in the Rio Treaty and the
Kyoto Protocol is fictional."

Mr. Palmer stated that the Australian government of failing to act in the best
interests
of its people by not getting out of the Kyoto Agreement. He said, "To grow
the
world economy, people need to use more fossil fuels, not less. By
identifying
with energy rationing for the U.S. and the industrialised West, the
Australian
government has taken a step that will demonstrably hurt the Australian
economy."
Palmer also said that electricity demand in 41 developing countries was
projected
to triple over the next two decades. If all this went to coal this would
require an
increased coal burn of almost one billion tonnes a year and more than 1,000
new

medium-sized power plants. The majority of this new electricity generation
would
have to be fossil-based, he said. He reminded the audience that U.S. weather
balloons and satellites showed there had been very little climate warming even
as
atmospheric carbon dioxide increased by a significant amount. The Western
Fuels Association is a nonprofit fuel supply cooperative comprising consumer-
owned utilities. Website http//www.westernfuels.org/home.htm

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THIRTEEN FORTUNE 500 COMPANIES JOIN ACTION
TO REDUCE GREENHOUSE EMISSIONS

Thirteen Fortune 500 companies are joining a research and advertising
campaign by a US foundation to rally public support to reduce greenhouse
gas emissions. The pro- Kyoto companies arethe Sun Company Inc., British
Petroleum Co., Toyota Motor Corp., The Boeing Co., Lockheed Corp., Enron
Corp. United Technologies Corp., American Electric Power Co., Whirlpool
Corp., Maytag Corp., 3M (Minnesota Mining & Manufacturing Co.), US
Generating Co and Intercontinental Energy Group. All are energy intensive
companies likely to be strongly affected by regulatory and public responses
to climate change. This initiative will give them leading edge information
about GHG trends in technology, in regulation and in public opinion,
plus an opportunity to influence public policy.

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ENVIRONMENTAL COURT ACTION IN U.S. RESULTS IN
ACID GAS EMISSIONS TRADING CREDITS FINE

In a precedent setting US case, an American polluter has been fined some
of its emission trading credits. Long Island Lighting Co. will donate 500
tons of its sulfur dioxide credits to the Adirondack Council as part of a
court settlement of enforcement action related to excessive air pollution
from the LILCO power plants in New York. The Council will permanently
retire the emission allowances, reducing total emissions in the state. LILCO
will also pay a $10,000 cash penalty. LILCO built up the credits under the
US Clean Air Act's Acid Rain Control Program. This is a free market system
which allocates a limited number of sulfur dioxide emissions among power
plants to be traded on the Chicago Board of Trade commodities exchange.
A plant that keeps its emissions below a certain level can sell its extra
allowances to plants that emit beyond their allowed levels.LILCO also agreed
not to sell its remaining emission credits for use by power plants in 15
states

upwind of New York state, i.e. whose pollution causes acid rain in New York
state.

A emissions trading scheme similar to the US Clean Air Act is now
being actively considered by the European Community, as part of their
program to reduce greenhouse gases in order to fulfill their Kyoto
commitment. A very limited emissions trading program, for new motor
vehicles only, is also proposed in the new CEPA now being considered
by Parliament.

************************************************

UK MINISTER OF THE ENVIRONMENT,
URGES STRONGER ACTIONS TO REDUCE GREENHOUSE GASES

England's Minister of the Environment, Michael Meacher, stated that,
"Despite the long and gruelling negotiations, Kyoto was a huge success -
an historic turning point in the fight against climate change. It is,
however,
only the first step in the process, for several reasons. First, much greater
reductions in greenhouse gas (GHG) emissions will be necessary in the
longer term, it we are to stabilise the increase in average global
temperature.

Second, Kyoto left a lot of unfinished business such as establishing the
rules
and procedures for the flexible mechanisms within the Protocol, for example
on emissions trading. And third, the issue of future commitments for
developing

countries is crucial to the implementation of the Protocol, and one which
must
be addressed.

MEACHER WARNINGS ABOUT TRADING HOT AIR
WITH NO REALGREENHOUSE GAS REDUCTIONS

Meacham, who is also currently the European Union president warned
that, "that domestic actions must be the main means of achieving the
emissions reductions. There are two reasons for this - domestic action
allows us to our own economies that are necessary to tackle climate
change in the longer term - and it demonstrates to developing countries
our clear commitment to taking action, hopefully helping to persuade
them to eventually take on similar commitment. That is why the EU
will propose in Bonn, a limit to the amount of emissions reductions
that can be achieved through flexible mechanisms."

Meacham added that "there is the issue of the so-called ‘hot-air'. This is
where some countries under the Protocol have targets significantly less
demanding than their business-as-usual projections - I don't think I need
to mention names here. If these countries sell this "surplus" (or "hot-air"),
there is an overall environmental loss since the two countries involved
(the buyer and the seller) do not take any actions to reduce actual
emissions.
There is a real concern here - that "hot-air" would set an unwelcome
precedent for developing countries, many would invariably end up with
less than challenging targets which would undermine both the overall aim
of the Protocol, and the system of trading in emissions permits. Visit the
UK Environment Ministry Website, http//www.environment-agency.gov.uk.

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WRI RESPONSE TO CLIMATE CHANGE CRITICS

The World Resources Institute (WRI), an economics resources think
tank based in Washington, D.C. addressed a number of concerns regarding
climate change. This is how they presented it.

THE MYTH ON SCIENCE

The science on global warming is too inconclusive to act now.

THE FACTS

Over the past century, human agricultural and industrial activities have
led to the buildup of carbon dioxide and other greenhouse gases. Since
preindustrial times, global carbon dioxide concentrations have increased
almost 30 percent, from 280 parts per million (ppm) to about 360 ppm today.
Scientific evidence indicates that average global temperature has increased 1
degree Fahrenheit in the past century. The Intergovernmental Panel on Climate
Change (IPCC) concluded in 1995 that "the observed warming trend is unlikely
to be entirely natural in origin," and that "there is a discernable human
influence
on global climate. While it is difficult to predict the long-term impacts of
global
warming they are likely to be serious. Human health, water and food supplies,
coastal development, and the viability of natural systems will all be
affected.

For more info see, Climate Protection and The National InterestThe Links
Among Climate Change, Air Pollution, and Energy Security, October 1997.
by Dr. James MacKenzie, Senior Associate, WRI

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THE MYTH ON HIGH COSTS AND ECONOMIC CHAOS

Returning U.S. and Canadian greenhouse gas emissions to 1990 levels would
require a cut in energy usage of more than 20 percent. This will result in
price
increases for most types of energy, which will wreak havoc on the economy.

THE FACTS

Economic predictions of the impact on the U.S. economy from reductions in
greenhouse gas emissions vary widely as a result of the differing assumptions
built into the economic models. Models based on worst case assumptions
predict
a reduction in gross domestic product (GDP) growth, while others based on
best-
case assumptions predict stimulated economic growth. People need not accept
all
the best-case or worst-case assumptions. It is reasonable to predict that
with
sensible public policies and international cooperation, greenhouse gas
emissions
can be reduced with minimal impacts on the economy. For more info see, The
Costs
of Climate ProtectionA Guide for the Perplexed. June 1997. Dr. Robert
Repetto,
Vice President and Senior Economist, and Duncan Austin, Associate, WRI
**********************

THE MYTH ON DEVELOPING COUNTRIES

The Kyoto treaty is not truly global since some countries get off. Canadians
and Americans will have to cut emissions while 132 of 166 countries,
including
India, China, and Mexico, will get off free.

THE FACTS

Developing countries have ratified the Framework Convention on
Climate Change. As parties they have agreed to general commitments
to reduce their greenhouse gas emissions. Developing countries are
already taking significant steps to reduce the growth in greenhouse
gas emissions. Brazil, India, and Mexico, for example, have dramatically
increased their energy prices and have launched specific programs to
improve energy efficiency, ranging from new standards to subsidies for
the development of renewable energy. Most of the emissions in developing
countries result from the provision of basic human needs for their growing
populations, while those in industrialized countries contribute to growth in
a standard of living that is already far above the average worldwide. For
more info see, "Are Developing Countries Doing as Much as Industrialized
Nations to Slow Climate Change?", July 1997. Dr. Walter V. Reid, Vice
President, World Resources Institute, Washington, D.C.

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THE MYTH ON COMPETITIVENESS

The proposed global climate treaty would hurt U.S. and Canada's industry's
international competitiveness. As a result, energy-intensive industries
would flee to developing countries that have much weaker environmental
standards than our own, leading to significant job loss.

THE FACTS

Over two-thirds of U.S. trade and investment is with other industrialized
countries that generally have higher energy prices and are also bound to
the same emissions reductions under the climate treaty. U.S. foreign direct
investments in energy-intensive sectors are not flowing to developing
countries with low-energy prices, bur rather to other industrialized
countries
with higher energy prices. Among U.S. industries that produce goods that
can be traded, less then 2 percent of jobs are in energy intensive sectors.
In fact, 90 percent of these jobs are concentrated in sectors where energy
costs equal less then three percent the value of sales. Since 1990, energy
prices in developing countries have risen dramatically. This price rise is
the result of on-going energy sector reforms that will continue regardless
of commitments made in Kyoto. For more info see, "US Competitiveness is
Not At Risk in the Climate Negotiations", October 1997. Dr. Robert Repetto,
Vice President and Senior Economist, WRI Crescencia Maurer, Associate,
World Resource Institute.

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THE MYTH ON THE BENEFITS OF DELAYING ACTION

It is better for the United States to wait to take action rather than rush
headlong into signing a treaty in Kyoto. Time will be needed to make
appropriate changes in the economy*s capital stock. Making emissions
reductions in the future will also be cheaper because technology will be
more advanced.

THE FACTS

Early policy action is needed to establish a credible commitment to climate
protection. A promise to take action only after many years have passed will
not be credible. Only with credible policies in place will the appropriate
changes in investment toward less carbon-intensive energy alternatives and
technologies occur. Delay by the U.S. will have global implications since
other countries will not take action unless the United States does so. The
longer
we wait, the greater the accumulation of fossil fuel dependent capital
stock,
and the more disruptive and costly future greenhouse gas reductions will be.
Without early action, the potential benefits from climate protection
policies,
such as improved air quality, increased savings from energy efficiency, and
enhanced energy security, will be lost. For more info see, "Climate
Protection
PoliciesCan We Afford to Delay?", November 1997.by Duncan Austin,
Associate, WRI; and "Climate Protection and The National InterestThe Links
Among Climate Change, Air Pollution, and Energy Security", October 1997.
Dr. James MacKenzie, Senior Associate, WRI

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THE MYTH ON BENEFITS AND COSTS

The costs of mitigating climate change are too high while the benefits are
distant and uncertain.

THE FACTS

WRI and the World Health Organization conducted the first study ever of the
global impact of fossil fuels on public health. Adoption of climate policies
that reduce carbon emissions relatively modestly can yield enormous,
immediate
benefits to public health in both developed and developing countries. It is
predicted that by the end of the second decade of the next century, more than
8 million avoidable deaths will occur due to particulate air pollution
associated
with the burning of fossil fuels, if business as usual continues. The
number of

lives that can be saved in the developed world each year about equals the
number
of lives lost to automobile injuries. In the U.S. nearly half a million lives
overall
could be saved by 2020 if climate protection measures are implemented. The
IPCC estimates that benefits, such as reduced air pollution, could offset
between
30 and 100 percent of climate abatement costs. For more information see,
"Worldwide Deaths Related To Fossil-Fuel Consumption," The Lancet,
November 8, 1997. by Dr. Devra Davis, Director, Health, Environment, and
Development, WRI; Climate Protection and The National InterestThe Links
Among Climate Change, Air Pollution, and Energy Security, October 1997.
Dr. James MacKenzie, Senior Associate, WRI.

The following information with links to source material is available from
WRI's website at http//www.wri.org/wri/cpi/climyths/ Contact, World
Resources Institute, 1709 New York Avenue, NW, Washington, DC 20006,
Tel202-638-6300, Fax202-638-0036, website at http//www.wri.org/wri/climate/

*********************************************************

FOR THOSE RESEARCHING CLIMATE CHANGE

You should know that the New York Times has all of its climate change
articles on line at website
http//www.nytimes.com/library/national/warming-index.html

*******************************************************************

IISD ONE OF THE BEST CLIMATE CHANGE WEB SITES

The International Institute for Sustainable Development (IISD) has one
of the best and most informative websites on climate change. During its
coverage of Kyoto, it logged 45,000 hits a day, twice as many as the UN
Climate Change Secretariat's official site. The IISD site is funded by 14
governments, and posts the daily Earth Negotiations Bulletin reports in
English, French and Japanese, streaming video, digital photos. Currently,
the IISD site is providing the most advanced information on the preparations
for Bonn and Buenos Aires meetings on post Kyoto goal attainment. The site
is managed by Langston James "Kimo" Goree VI, Managing Director, IISD
Reporting Services, Earth Negotiations Bulletin, Emailkimo at iisd.org/.
Website http//www.iisd.ca/linkages/climate/ba/.

**********************************************************

U.S CHINA, RUSSIA AND JAPAN BIGGEST CO2 EMITTERS

A survey by the International Energy Agency (IEA) found that the United
States, China, Russia, and Japan produce nearly half of overall man made
global carbon dioxide emissions. The United States ranked first with 23.7%
of total carbon-dioxide emissions in 1995. "China's carbon dioxide emissions
under the business as usual scenario will produce 2,380 million tons of
carbon in 2020, nearly three times the 800 million tons in 1995" says the
World Bank report. SourceWashington Times, November 15, 1997.

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AUSTRALIA'S GLOBAL WARMING GAS EMISSION CUTS

Australia has been seen as one of the slowest OECD countries to come round
to serious global warming gas emission cuts. remained committed to cutting
greenhouse gas emissions and planned to cut emissions growth by one-third
of forecast levels from 1990 to 2010 through its new five-year, A $180
million
(US$124 million) greenhouse plan. "These measures will reduce our net
emissions growth from 28 to 18 percent in that period, or some 39 million
tonnes of emissions," While per capita emissions would be reduced,
Australia's
total emission output would grow partly because the population was expected
to
rise 30 percent between 1990 and 2020, compared with less than three percent
growth in Europe. Howard said developing countries could also be included
if a
programme of individual reduction targets was adopted at Kyoto, which would
be
far more beneficial as action by developed countries only would have little
effect
on global warming. By Jane Nelson (c) Reuters Limited 1997.

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ELIMINATING ECONOMIC WELFARE FOR ENERGY AND
TRANSPORTATION INDUSTRIES WOULD HELP REDUCE CO2

The first and easiest free enterprise action to be taken to normalize
greenhouse
gas emissions, is to stop distorting the market with energy subsidies. That is
one of the findings of the Washington-based environmental group Friends of
the
Earth (FOE). It identified 11 key subsidies in the United States stating that
their
elimination would cut CO2 emissions by 27 million tonnes by 2010. The FOE
report pointed to subsidies going to gas-guzzling cars and programs to
develop
fossil fuels as among the eleven worst schemes costing taxpayers $10 billion
over the next five years.

The FOE report highlighted such subsidies as a law that allows the petroleum
industry to waive a 12.5 percent royalty to the Treasury on offshore drilling
leases in deep waters. The waiver will coast taxpayers about $400 million.
The
report also urges that light-duty trucks such as minivans, sport utility
vehicles
and automobiles heavier than 6,000 pounds no longer be exempt from the "gas
guzzler tax." The tax is imposed on new cars that have a fuel economy
rating of

less than 22.5 miles per gallon. "Automobile pollution accounts for
approximately
22 percent of U.S. CO2 (carbon emissions). FOE reported, however, that the
U.S.

automobile fleet is getting less fuel efficient, largely because of the
increasing
popularity of vans and trucks exempt from the gas guzzler tax," said the
report.
The report also calls for the end of funding for the Department of Energy's
(DOE)
Coal Research and Development and the Petroleum Research and Development
programs, which would save $750 million over five years. Deductions on
drilling costs and on oil wells that approach empty were also mentioned in
the report. FOE said the $10 billion saved over five years by cutting these
programs could be used to adopt more energy efficient technologies and
programs. "Federal subsidies artificially create lower prices for petroleum
products such as gasoline. Low prices have created a disincentive to conserve
energy or to switch to energy and transportation options that emit less
carbon
dioxide," McDow added. FOE Washington, D.C., Visit the Friends of the Earth
websitehttp://www.foe.org.

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xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Copyright (c) 1998 Canadian Institute for
Business and the Environment, Montreal
All rights reserved.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Gary Gallon
President
Canadian Institute for Business and the Environment
506 Victoria Ave.
Montreal, Quebec H3Y 2R5
Ph. (514) 369-0230, Fax (514) 369-3282
email: cibe at web.net