Big benefits seen in adapting to climate change

Helping developing nations to adapt to climate change such as floods or heatwaves can give bigger economic benefits than a focus on deep cuts in greenhouse gas emissions, a study indicated on Friday.

A total of $10 trillion spent on adaptation, ranging from research into drought-resistant crops to measures to limit a spread of diseases such as malaria, would provide $16 trillion of economic benefits over the coming century, it said.

"We talk immensely about cutting carbon emissions, but there are many other ways to deal with climate change," said Bjorn Lomborg, Danish author of "The Skeptical Environmentalist" who commissioned the study by Italian researchers.

"Everyone pays lip service to adaptation but in reality we rarely talk as much about it as cutting carbon emissions," he told Reuters of the study, meant to provoke debate about a new U.N. climate treaty to be agreed in Copenhagen in December.

"The authors find that...adaptation achieves more than mitigation in terms of reducing the damage from climate change," he said. Mitigation means curbing emissions of greenhouse gases and often gets most attention at U.N. climate negotiations.

The study said that the highest economic benefits would come if adaptation went hand in hand with moderate curbs on emissions. In the best case, $9 trillion spent would give $19 trillion of benefits, it said.

"The optimal strategy to deal with climate change entails the adoption of both adaptation and mitigation measures," Carlo Carraro of the University of Venice and co-authors from the Fondazione Eni Enrico Mattei in Italy wrote.



MARKET FORCES

The study also said that the impacts of climate change could also be muted by adaptation, driven by market forces. In developed nations, for instance, farmers could turn to new crops to match water availability and temperatures.

"If it rains less you will adapt and you will use drip irrigation," said Lomborg, who is head of the Copenhagen Consensus Center. "If it rains more you will grow more crops and you will end up being more productive."

Other low-cost measures could include insulation of older buildings, building new homes with higher steps to avoid flooding or siting new infrastructure inland to avoid storm surges from a creeping rise in sea levels.

"The problem from global warming is not going to be in the developed world, it will be in the developing world," he said.

Taking account of the natural market-driven adaptation, climate change could have a fractional net positive impact in developed nations, totalling a 0.1 percent gain in gross domestic product by 2100, the study said.

And in poor nations, such adaptation could limit overall economic losses to 2.9 percent of GDP from 5.3 percent.

Climate Change Could Deepen Poverty In Developing Countries, Study Finds

Urban workers could suffer most from climate change as the cost of food drives them into poverty, according to a new study that quantifies the effects of climate on the world's poor populations.A team led by Purdue University researchers examined the potential economic influence of adverse climate events, such as heat waves, drought and heavy rains, on those in 16 developing countries. Urban workers in Bangladesh, Mexico and Zambia were found to be the most at risk.

"Extreme weather affects agricultural productivity and can raise the price of staple foods, such as grains, that are important to poor households in developing countries," said Noah Diffenbaugh, the associate professor of earth and atmospheric sciences and interim director of Purdue's Climate Change Research Center who co-led the study. "Studies have shown global warming will likely increase the frequency and intensity of heat waves, drought and floods in many areas. It is important to understand which socioeconomic groups and countries could see changes in poverty rates in order to make informed policy decisions."

The team used data from the late 20th century and projections for the late 21st century to develop a framework that examined extreme climate events, comparable shocks to grain production and the impact on the number of impoverished people in each country.

Thomas Hertel, a distinguished professor of agricultural economics and co-leader of the study, said that although urban workers only contribute modestly to total poverty rates in the sample countries, they are the most vulnerable group to changes in grains production.

"Food is a major expenditure for the poor and, while those who work in agriculture would have some benefit from higher grains prices, the urban poor would only get the negative effects," said Hertel, who also is executive director of Purdue's Center for Global Trade Analysis. "This is an important finding given that the United Nations projects a continuing shift in population concentrations from rural to urban areas in virtually all of these developing countries."

With nearly 1 billion of the world's poor living on less than $1 a day, extreme events can have a devastating impact, he said.

"Bangladesh, Mexico and Zambia showed the greatest percentage of the population entering poverty in the wake of extreme drought, with an additional 1.4 percent, 1.8 percent and 4.6 percent of their populations being impoverished by future climate extremes, respectively," Hertel said. "This translates to an additional 1.8 million people impoverished per country for Bangladesh and Mexico and an additional half million people in Zambia."

A paper detailing the work will be published in Thursday's (Aug. 20) issue of Environmental Research Letters. In addition to Diffenbaugh and Hertel, Syud Amer Ahmed, a recent Purdue graduate and a member of the development research group for The World Bank, co-authored the paper. The World Bank's Trust Fund for Environmentally and Socially Sustainable Development funded the research.

The team identified the maximum rainfall, drought and heat wave for the 30-year periods of 1971-2000 and 2071-2100 and then compared the maximums for the two time periods.

The global climate model experiments developed by the Intergovernmental Panel on Climate Change, or IPCC, were used for the future projections of extreme events. The team used an IPCC scenario that has greenhouse gas emissions continuing to follow the current trend, Diffenbaugh said.

"The occurrence and magnitude of what are currently the 30-year-maximum values for wet, dry and hot extremes are projected to substantially increase for much of the world," he said. "Heat waves and drought in the Mediterranean showed a potential 2700 percent and 800 percent increase in occurrence, respectively, and extreme rainfall in Southeast Asia was projected to potentially increase by 900 percent."

In addition, Southeast Asia showed a projected 40 percent increase in the magnitude of the worst rainfall; central Africa showed a projected 1000 percent increase in the magnitude of the worst heat wave; and the Mediterranean showed a projected 60 percent increase in the worst drought.

A statistical analysis was used to determine grain productivity shocks that would correspond in magnitude to the climate extremes, and then the economic impact of the supply shock was determined. Future predicted extreme climate events were compared to historical agricultural productivity extremes in order to assess the likely impact on agricultural production, prices and wages. Because the projected changes in extreme rainfall and heat wave events were too large for the current model to accept, only the extreme drought events were incorporated into the economic projections, making the projected poverty impacts a conservative estimate, he said.

To assess the potential economic impact of a given change in wages and grains prices, the team used data from each country's household survey. The estimates of likely wage and price changes following an extreme climate event were obtained from a global trade model, called the Global Trade Analysis Project, or GTAP, which is maintained by Purdue's agricultural economics department.

Purdue's GTAP framework is supported by an international consortium of 27 national and international agencies and is used by a network of 6,500 researchers in 140 countries.

Large reductions in grains productivity due to extreme climate events are supported by historical data. In 1991 grains productivity in Malawi and Zambia declined by about 50 percent when southern Africa experienced a severe drought.

Diffenbaugh said this is an initial quantification of how poverty is tied to climate fluctuations, and the team is working to improve the modeling and analysis system in order to enable more comprehensive assessments of the link between climate volatility and poverty vulnerability.e effects of climate on the world's poor populations.

Climate change campaign creates carbon crimes

Customs agents this week arrested nine people in the London area suspected of a multimillion dollar fraud in trading carbon permits, bringing attention to a rich new field for crime sprung from the fight against climate change.

The arrest confirmed fears among law enforcement officers that swindlers — operating from the trading floors of Europe to the tropical forests of the Pacific — are being attracted to a market that has grown to more than $100 billion.

A few years ago, carbon dioxide, for most people, was just the breath you exhaled. Today it's more likely to be seen as a pollutant derived from fossil fuels that needs regulation, making permission to produce it a commodity that can be traded like gold, oil or hog futures.

Trade in CO2 permits has expanded exponentially since the European Union required thousands of industries to limit carbon emissions to specified targets. Industries exceeding their ceiling can buy credits from companies that have held their emissions below target, acting through commodities exchanges. The average price this year for a ton of carbon is about $15.

That carbon market will get a lot bigger if the U.S. Congress passes its own cap-and-trade bill, the central component of President Barack Obama's climate and energy policies.

And it will grow bigger still if a new international climate change agreement will include financial incentives for countries to protect their forests. Negotiators from 192 countries hope to conclude a global warming accord at a major U.N. conference in Copenhagen in December.

On Wednesday, 130 British customs agents raided 27 properties in and around London for evidence of a "carousel fraud" believed to have robbed the treasury of 38 million pounds ($63 million) in unpaid value-added tax. Seven men and two women were arrested and released on bail.

Customs spokeswoman Sara Gaines said it was the first time the scam has been uncovered in the carbon market, expanding from the more established trade in mobile phones and computer chips.

The carousel fraud, also known as a missing trader scheme, exploits VAT-free commerce between countries. Conspirators import goods free of tax, sell it domestically with VAT to another company, which exports the products to third country. Rather than pay the VAT owed to the government, the merchants pocket the tax and disappear.

In July, France, the Netherlands and Britain initiated action to pre-empt the swindlers. France and Britain set a zero VAT rate for carbon trading, while Holland transferred the obligation to pay VAT from the seller to the buyer.

"We saw big possibilities of fraud," with a potential loss of hundreds of thousands of euros, said Marcel Holman, a spokesman for the Dutch tax authorities. He declined to say whether the Finance Ministry's financial intelligence unit had actually uncovered a carousel fraud in operation.

The British Treasury also warned last month that Britain would become a major target of tax theft in carbon emissions permits in the next few months.

The London office of global accounting firm KPMG said suspicions of VAT fraud surfaced last May when the volume of carbon trade rose on the Paris BlueNext exchange from 27.2 million tons in October, spiking six months later at 186 million tons.

Andrei Marcu, a former head of BlueNext and former president of the Geneva-based International Emissions Trading Association, said the risk of fraud can be high in any new commodities market, and CO2 is no different in the need for high regulatory standards.

When the carbon market was getting started, big companies were involved and the traders knew each other, he said. But it has grown so fast that small unknown operators are now doing big business, making self-policing more difficult.

Marcu, now a consultant for a Canadian law firm, declined to comment on the specific activity at BlueNext.

A different set of problems threaten the trade in credits derived from halting deforestation.

Forests store vast amounts of carbon, and release it when trees are cut or burned. Scientists say deforestation contributes about 20 percent of all the carbon leeching into the atmosphere.

By measuring the amount of carbon held in a forested area, a value can be placed on that carbon and owners can be compensated for preserving them. Carbon offsets, purchased by airline passengers or concert-goers who voluntarily want to cut their carbon footprint or big corporations that need to meet emissions targets, buy the credits from the forest owner.

But shady brokers already are moving into this field. They persuade landowners, especially forest dwellers with little understanding of modern commerce, to sell a share of the rights to the carbon stored in their trees, counting on a hefty profits later.

"These carbon cowboys should be rounded up," says Kevin Conrad, the chief climate change negotiator for Papua New Guinea, a Pacific Ocean nation with hundreds of indigenous tribes living in its deep forests.

In July, the head of Papua New Guinea's Office of Climate Change and Environmental Sustainability, Theo Yasause, was suspended pending an investigation for allegedly issuing some 40 tons of carbon credits for preventing deforestation. Such credits do not yet exist for governments to sell since there is no mechanism in place to measure and verify that forests are being preserved.

U.N. talks aimed at a new global warming agreement in Copenhagen are seeking ways to scale up efforts to avoid deforestation to make it worthwhile for governments like Brazil or Papua New Guinea to save their rapidly depleting rain forests.

Negotiators are working on ways to verify that logging trends have been reversed, largely through satellite imagery, and on raising billions of dollars to compensate rain forest countries — with the carbon market as one possibility.

Conrad said the climate negotiators are trying to build safeguards into the Copenhagen climate agreement to limit the opportunity for criminals. Chief among them is postponing any payment for avoiding deforestation until inspectors verify that tree-cutting trends had been reversed.

Peter Younger, the Interpol officer who deals with environmental crime and wildlife smuggling, says illegal logging and tax fraud is bound to grow as the market expands.

"Given the interest already by criminal groups in illegal logging as a business in itself, if there is money to be made in carbon credits or tax evasion ... then somebody is going to get on board with this stuff," he said.

FEATURE-Carbon traders bet on California redwoods

A stand of young redwoods, survivors in what was once a magnificent forest of towering giants, could play a small part of the battle to slow global warming -- and forms part of an emerging market.The trees, which trap quantities of the carbon dioxide that is warming the planet, are sold as living carbon traps or "sinks" rather than cut for timber, a model that could go global. But the prospect of a worldwide market could also attract hustlers eager to make a quick buck without making a difference to the planet."It's easy to game it," said forest owner Chris Kelly of the developing forest carbon market. "We just have to figure out how to do it right."Deforestation accounts for a fifth of greenhouse gas emissions that are heating up the earth so slowing its pace is a relatively cheap way to limit global warming. That's why preserving forests is a top agenda item of international climate change talks scheduled for December.But devising a fair way to reward those who own and control forests for their true contribution to the atmosphere has proved difficult and complicated.The United States, which has lagged in addressing global warming, leads the world in developing a market for forests that soak up carbon dioxide emissions. The Garcia forest presents a test case of how the system could work -- or fail."When we talk about deforestation, we've already done it here," said Louis Blumberg of the Nature Conservancy, which helped plan carbon sales at the Garcia project. Some 95 percent of old-growth redwoods are already gone in California, and the state must better manage what has grown back."We moved carbon out of the ground and the trees into the air. We need to hit the reset button," said Blumberg, who directs the environmental group's California Climate Change project.With its towering redwoods and gurgling streams, the Garcia forest looks wild and healthy -- but it's a shadow of what it once was. Six-foot-(2-meter) wide stumps hint at its former grandeur a century or two ago.Ninety percent of the wood it once held is already gone. If managed like most commercial forests, it would probably stay at roughly its current size. However, the non-profit owners have sharply reduced timber harvesting and are making some of their profits by selling carbon credits, so the forest may recover, at least partially.Climate change can be slowed in two ways:-- cutting emissions from industry, automobiles, airplanes and other tools of industrial society, or-- soaking up more emissions once they are in the air.For forest projects to succeed, the world must find a way to stop emerging economies like Brazil and Indonesia from cutting down tropical jungles. U.S.-based projects, which focus on growing bigger trees and holding more carbon, could help a little but cannot in themselves solve the problem.But the U.S. plan could offer a direction and an example for others to follow.VOLUNTARY MARKET IS THE STARTUnder a cap-and-trade system, the main global mechanism for addressing climate change, polluters face limits on how much they can emit. To meet those limits, they can manage their own emissions, buy credits from companies who emit less than their cap, or buy offsets.Forests are not part of the biggest regulated carbon market, in Europe, but California's law to open a regulated market for carbon pollution in 2012 includes them, and so does a federal plan being debated in the U.S. Congress.A voluntary market has sprung up in the meantime."These projects take time. It's not the kind of thing that you can turn a switch and you've got millions of acres of forests sequestering CO2," said Eron Bloomgarden, president of environmental markets at Equator LLC, a for-profit venture creating forest carbon projects.California forest projects fetch $5 to $12 a CO2 ton, more than in other parts of the world and other types of sequestration, because they meet California's developing rules, the closest thing yet to regulations for an official forest market, said Lenny Hochschild, a managing director at environmental brokerage Evolution Markets.For-profit forest owners increasingly are being tempted to sell carbon, joining non-profits pioneers, he said."If you incentivize folks to clean up the environment, they'll clean up the environment," he said.Voluntary deals and trade on platforms like the Chicago Climate Exchange doubled last year to more than $700 million, according to Ecosystem Marketplace and New Carbon Finance.Forest credits were a fraction of that. But a U.S. Environmental Protection Agency analysis of a draft national plan projects more than 100 million tons of forest offsets in 2015, rising to well over 400 million in 2050.Nations gathering in December in Copenhagen to negotiate a follow-up to the Kyoto climate change treaty could introduce forest credit trade to cut developing nation deforestation.THE GARCIA EXAMPLETimber and carbon prices both have plummeted since the Conservation Fund bought Garcia with grant money and a low interest loan, but the carbon credit sales have been enough to pay interest on the loan.The largest tree in the world by volume, a California redwood, is nearly 275 feet (84 meters) high with a diameter of more than 17 feet (5 meters), testimony to what might grow on Garcia -- in 1,000 years. But the danger to the Garcia project, and investors, is vivid: charred trunks of trees destroyed in a fire last year. Very little wood was lost because redwoods are flame resistant and ridges acted as fire breaks. The experience was enough to make Kelly wary of projects in regions with less hearty trees.The Conservation Fund keeps a reserve of credits in case of disaster, and the state is debating whether to create a pool of credits that could be doled out in emergencies. Something like that will be needed for a fool-proof, disaster-proof system.At some point coal plants may be buying forest offsets by the millions of tons, Kelly said. "You want to make sure that if they lose half that forest, there is some makeup of the balance," he said

Election likely to reset Japan climate target

When Japan elects its next government this month, climate change campaigners will be watching closely to see which party takes the levers of power in the world's second-largest economy.

Japan drew scorn from environmentalists when Prime Minister Taro Aso in June announced a greenhouse gas reduction target of eight percent from 1990 levels by 2020 -- far below the European Union pledge of a 20 percent cut.

Activists mocked Japan's conservative premier as "George W. Aso" and charged that the Asian industrial powerhouse would worsen global warming and speed the pace of melting ice caps, rising sea levels and changing weather patterns.

Environmental group Greenpeace accused Aso of kowtowing to Japan Inc's heavy industry, calculating that Aso's goal could help doom the earth to catastrophic warming of three degrees Celsius (5.4 degrees Fahrenheit).

The man who is now seen likely to replace Aso in the top job after the August 30 vote, Democratic Party of Japan (DPJ) leader Yukio Hatoyama, has promised a more ambitious target -- a 25 percent cut by 2020.

Hatoyama's centre-left DPJ has enjoyed a strong poll lead over Aso's business-friendly Liberal Democratic Party (LDP) which has ruled Japan for more than 50 years except for one 10-month stint in opposition.

Japanese environmentalists have cheered the DPJ target, which Japan would present at international talks in Copenhagen in December aimed at agreeing a follow-up treaty to the Kyoto Protocol which expires in 2012.

"I hope for a change of government," said Yurika Ayukawa, a green activist and professor at the Osaka University Research Institute for Sustainability Science. "If the LDP stays in office, nothing will change."

"Japan needs a drastic change in its policy on climate change," she told AFP, suggesting the next government introduce environmental taxes and compulsory emission cut targets for Japan's massive corporate sector.

Conservation group WWF has argued that the issue of climate change could help swing the election, especially among the large number of undecided voters, estimated in some surveys at up to a third of the electorate.

The WWF said that a recent survey, commissioned by global campaign network Avaaz, found that 50 percent of respondents supported the DPJ's 25 percent target against 29 percent for Aso's eight percent target.

But the numbers can be misleading, experts warn.

While the DPJ's target -- like those of the United States and EU -- includes gains from carbon-trading schemes and reforestation, the LDP's figure does not.

Shuzo Nishioka, a senior researcher at the National Institute for Environmental Studies, said if carbon trading and tree-planting were excluded, the DPJ's goal would drop to a 15 percent cut.

LDP-ruled Japan has long argued that the country, the world's fifth largest emitter of greenhouse gases, has already achieved a highly energy-efficient lifestyle and industrial infrastructure.

Aso's government has this year promoted hybrid car technology through incentive schemes, which have helped make Toyota's Prius the top-selling passenger car on the Japanese market in recent months.

It has also pledged to increase solar power generation in Japan 20-fold by 2020 and 40-fold a decade later.

On the other side, the DPJ, despite its tougher mid-term greenhouse gas reduction target, has also made campaign promises likely to raise some pollutant loads in the atmosphere.

One of its key pledges is to abolish expressway tolls and special car taxes.

A group called the Coalition of Local Government for the Environment Initiative estimates that scrapping road tolls and cutting car taxes will result in an annual increase of at least 9.8 million tonnes of carbon dioxide.

Nishioka, who sat on the expert panel that calculated Japan's target announced in June, said "there is some ambivalence in the DPJ's policies on climate change, such as the free expressways."

"As a scientist I want the new government, whether it is led by the LDP or the DPJ, to do more to cut emissions," he said.

"Our scientific studies show Japan can technically cut emissions by 25 percent by 2020 even if it excludes carbon trading and planting forests

Green power safer for workers than fossil fuels

As if helping to save the world from the worst effects of climate change were not enough, renewable energy may also curb workplace injuries and deaths.
That's because fossil fuels – as the term suggests – have to be dug or drained from underground, and mining is one of the deadliest of industries. Oil and gas extraction account for 100 deaths each year in the US alone, coal another 30, not to mention many more non-fatal injuries.
Carbon-sparing energy sources such as solar panels and windmills, on the other hand, are unlikely to take such a toll on the workers who build and maintain them, argues Steven Sumner, a physician at Duke University Medical Center in Durham, North Carolina. "Extracting the fuel, generating the power and distributing the power are more dangerous in fossil fuel energy than renewable energy."
That sounds like common sense, but there's little hard data on the health costs of producing green energy compared with extracting fossil fuels. One study, a 2005 European Union assessment of the external costs of different energies, found working with wind power was safer than working with coal or oil. And US Department of Energy researchers put solar's occupational health costs in the same ballpark as nuclear, though they ignored the potential for long-term harm from nuclear radiation and catastrophes such as meltdowns.
"We don't know very much," Sumner admits. But as green energy make up a ever-larger chunk of global power supplies, firmer data on workers' health should follow.
Beware biofuels
Vasilis Fthenakis, a photovoltaic researcher at Brookhaven National Laboratory in Upton, New York, agrees that greener energies are generally safer to produce than fossil fuels. Increased demand should make that difference even starker, as renewable energy manufacturing become more efficient and automated. "The picture keeps improving because the technology keeps improving," he says.
Not all green energies are inherently safer for workers than fossil fuels, though. "Rates of injury in agriculture are high, therefore we suspect that biomass energy that comes from crop production is likely to have high risks," Sumner says.

Chinese emissions could peak in 20 years

A THINK tank with links to the Chinese government has predicted that the nation's carbon emissions could peak in 2030. This conclusion, in the 2050 China Energy and CO2 Emissions Report released by the Energy Research Institute, is at odds with the government's insistence that the country's rapid economic growth will mean that emissions cannot decline before 2050.
If China adopts an "enhanced low carbon scenario" with very stringent policies, emissions could peak in 2030 and fall to 1.4 billion tonnes in 2050, equivalent to their 2005 level, the report says. This would be "difficult but doable", says lead author Jiang Kejun.
Pan Jiahua, director of the Chinese Academy of Social Sciences' Research Centre for Sustainable Development and the nation's leading climate economist, says that rapid progress in developing clean technologies means China could reduce emissions earlier than 2050. "But I would think it would be safer to set the peak time at 2035," he says.
Pan says the report could put pressure on the government to compromise on its refusal to adopt emissions cuts in the run-up to the UN climate negotiations in December.