It is one of the truisms of negotiating that you are far more likely to find yourself being outmanoeuvred by the other party when you are in the wrong.

Go in with a ridiculously low offer and in most circumstances the other party will simply tell you where to go. Get it wrong the other way and go in way too high and you have will have lost before the negotiations have even begun.

Hence, with precisely 100 days to go before the start of the UN's climate change conference in Copenhagen, the negotiators working on behalf of the world's rich nations once again find themselves being comprehensively outmanoeuvred in the court of global public opinion by their counterparts from emerging economies.

When last we left the men and women entrusted with saving the planet at the close of this month's Bonn talks, the negotiating process was once again in deadlock. It is a gross simplification of a mind-bendingly complex situation, but in essence the rich nations were demanding that the likes of China and India do more to tackle climate change, while poorer countries were demanding that the West face up to its historic responsibility and agree to deeper emission cuts and more generous clean tech funding.

The problem for the rich countries is that they keep backing themselves into a corner. They keep asking for greater demonstrations of commitment from emerging nations and they keep getting exactly that.

In the past few weeks, China has passed its first climate change resolution, laying the legal framework for a full blown climate change strategy (contrast this with US legislators apparent inability to fast track their increasingly anaemic climate change bill), hinted strongly that it accepts the need to set emission targets in the not to distant future, introduced some of the world's most generous renewable energy incentive schemes and given the go-ahead for a raft of new low carbon projects.

Meanwhile, India, which had been flirting with the position of negotiating blockade formerly occupied by the US, has given its clearest signal yet that it will introduce serious efforts to cut emissions in the form of a wide-ranging energy efficiency programme. And Indonesia, the other big emitter from the developing world, has put EU talks of 20 per cent emission cuts to shame by acknowledging that with the right support it could cut emissions 60 per cent by 2030.

The rich nations are likely to respond by arguing that this is all well and good, but means little unless large polluters such as China and India agree to binding emission goals.

But again you can see how simple it will be for China and India to repel this gambit. "Fine, we'll have targets," they will say. "But they have to be on a per capita basis. You say a human life is worth the same whether they are in the rich or poor world, so prove it." My maths may be a little hazy, but that would basically mean most western nations committing to emission cuts in excess of 40 per cent by 2020, while emerging economies would be able to continue to grow their emissions steadily for another 10 years or so.

Like I say, it is easy to outmanoeuvre someone when they are in the wrong, and the rich world is morally, tactically and strategically in the wrong on this one.

Posted by James Murray on August 28, 2009 | Permalink | Comments (1)

Oh dear, oh dear, oh dear.

I have now moved beyond the initial wave of shock and anger, and am simply sitting at my desk, shaking my head ruefully, wondering if civilisation will ever claw its way out of the rabbit hole it slipped down some point in the not too distant past. I'm sure the impotent rage will return pretty soon.

In case you missed it, the US Chamber of Commerce, a group representing three million businesses, has filed a request with the EPA for a public hearing on the scientific evidence behind its decision to declare climate change a threat to human health.

The group is absolutely unequivocal about its intentions - it wants a Scopes Trial on the science of climate change, a full blown "trial of the century" complete with millions of miles of column inches, cross questioning of scientists, and a final decision on whether global warming is manmade. And there you were thinking the quality of scientific debate and rational thought might have moved on since the famous 1925 case that saw evolution pitted against the creationists.

As William Kovacs, the chamber's senior vice president for environment, technology and regulatory affairs, puts it: "It would be evolution versus creationism. It would be the science of climate change on trial."

It must be tempting for environmentalists and climate scientists to respond with a resounding "bring it on"; to seize the opportunity to once and for all lay to rest all the myths surrounding climate change. After all the legendary lawyer Clarence Darrow - who if you listen carefully you can hear spinning in his grave this morning - won the Scopes Trial, defeating the creationists in open court.

But let's be clear here, this is an absolute no-win scenario for the EPA and the scientific establishment.

They have debunked the sceptics time and time again, dismissing virtually every objection using solid evidence and peer-reviewed reasoning, they have uncovered the links between many climate sceptics and industries with vested interests in the carbon intensive status quo, they have made it clear that there are enormous associated benefits to curbing carbon emissions besides tackling climate change, and it is still not enough. They would win, but there is nothing to be gained from repeating the exercise in a public hearing. After all, Darrow and co won the Scopes Trial and there are still plenty of people out there who believe in creationism.

And there is plenty to lose. Further delays to US legislative attempts to curb carbon emissions would inevitably result, climate sceptics would be given the perfect platform to spread their misinformation (they must be like pigs in muck this morning) and an awful lot would be resting on a judge's ability to comprehend complex scientific arguments.

Moreover, the Chamber of Commerce has already inadvertently revealed that it will not accept any decision that does not get it what it wants - namely the scrapping of plans to regulate carbon emissions.

Writing on the Chamber's blog, Bob Peck offered an "aw shuck's, we just want some transparency" defence of the group's position, in which he offered up one of the most fist-chewingly moronic sentences I have ever read. Insisting that the call for a hearing was entirely reasonable, he argued that "to enact effective policy we need transparency and scientific data which is beyond question, not data deemed beyond questioning".

Well while we're wishing for stuff that can never exist why stop at "scientific data which is beyond question", let's have world peace and a perpetual motion machine as well.

By definition, there is no such thing as "scientific data which is beyond question". It does not exist, that is the nature of science, you question everything, test everything and then draw conclusions based on the best available evidence. Those conclusions can then change if the evidence changes. It's messy and complicated, but it is what gives us scientific progress.

Of course, the real Machiavellian genius at the heart of this call for a public hearing is the fact that the EPA has been backed into a corner: engage in this farce and you waste time establishing what reams and reams of the best available evidence already tells us, but tell the Chamber where to go (as seems likely) and you will be accused of running scared by the climate sceptics, further fuelling their sense of a giant global conspiracy.

So what can be done?

Well it is businesses, through the US Chamber of Commerce, that have caused this problem and it should be them that try to solve it.

As we have argued here before, the nuts and bolts of climate science are hugely important, but for businesses climate change is primarily a risk rather than a scientific issue.

Imagine that back in 2007 the vast majority of the world's economists had told you that there is a huge bust coming, it will start in mid- to late-2008, several of the world's largest banks will collapse, governments will intervene to prop up their economies running up massive deficits in the process, the US and Europe will be hit worst, and a deep global recession will result. They could not predict this with absolute certainty on the grounds that time travel is impossible, but if almost all the world's finest economic minds were telling this same story it would be a dereliction of corporate duty not to try and identify the areas of greatest risk, implement policies and legislation that attempt to avoid the crash, and generally prepare for the worse.

Now the vast majority of scientists are telling us something very similar about the climate, except that theirs is not an "inexact science", they are dealing with physical laws and are far more certain that their models are accurate than economists could ever be. There is a vanishingly slim chance that they could be wrong, but it would again be a dereliction of corporate duty not to try and avert potential disaster. Any vaguely intelligent business executive, shareholder, investor, politician or legislator knows this, just as they know that the fringe benefits of carbon legislation in terms of energy security, more stable energy prices, cleaner air and new clean tech industries will be massive regardless of climate change.

As such any business that is a member of the US Chamber of Commerce and recognises climate change as a long term threat to their operations should immediately tear up their membership in protest at one of the most misguided and potentially harmful lobbying campaigns in the long undignified history of misguided and potentially harmful lobbying campaigns.

Meanwhile, it is now time for those businesses that understand the critical importance of addressing climate change risks to deliver one almighty slap down to the Chamber of Commerce. They must start giving the emerging green business groups the funding and public backing they need to fight back, and offer on-the-record condemnation of the way in which the Chamber of Commerce and its dream of a Scopes Trial on climate change is wilfully damaging America's long term economic prospects.

Just as politicians are now being asked to match their rhetoric on climate change with real action it is time for our businesses leaders to do the same. They might not like getting their hands dirty on controversial issues like this, but this time the row is too important not to get involved. So, Chrysler, Ford, GE, GM, Google, HP, IBM, JPMorgan, Microsoft, Wal-Mart, et al, where are you? We need you.

Posted by James Murray on August 26, 2009 | Permalink | Comments (6)

With his boss away on holiday, a more daring chancellor than Alistair Darling would currently be casting around for a headline grabbing pronouncement or two with which to mark his week in the Downing Street hot seat.

As luck would have it the British Retail Consortium (BRC) managed to give him just what he should have been looking for yesterday in the form of a letter to the chancellor calling on him to scrap VAT on green and energy saving products.

In one swoop the chancellor could, if he so chose, do more for the UK's carbon footprint and green businesses sector than all the transition plans, incentive schemes and R&D funds put together - providing a sizable fillip to the economy in the process.

What's more, the returning prime minister could hardly complain too long and loud (not in public at least) as it was kind of his idea in the first place.

Back in his final budget as chancellor in 2007, Gordon Brown said that he would write to his counterparts across the EU urging them to cut VAT on energy efficient products. He then revisited the topic in early 2008 teaming up with French President Nicholas Sarkozy to call on other EU leaders to back VAT cuts for green products.

Then, like so many of the prime ministers good intentions, the idea drifted into the political ether never to be spoken of again.

But why was this proposal allowed to die? And what is there to stop the Chancellor resuscitating it?

As the BRC observed scrapping VAT on green products would slash carbon emissions by 1.3 million tonnes a year by 2020 and would also spark a clean tech arms race between companies as they battle to ensure their products qualify for zero rate VAT. Perhaps more importantly, such a move would eradicate the price premium that is typically associated with many green products, removing the last excuse many businesses and consumers use to avoid buying sustainable products.

The Treasury has argued that it cannot make changes without the approval of other EU member states, but this is not strictly true. Under EU rules it cannot unilaterally scrap VAT on a product, but it can slash rates to as low as five per cent and it certainly had no problem cutting the standard rate from 17.5 to 15 per cent last autumn as part of its economic recovery plan.

There are also plenty of precedents. A quick glance down the list of goods and services that are either exempt from VAT or subject to the reduced rate of five per cent reveals that with the exception of gambling virtually every product or service can be judged to be in the public interest - an argument that could easily be extended to green products.

Donations to charities or charges for cultural events, for example, are VAT free, while newspapers, books, certain food stuffs, sports activities and children's clothes are all famously zero-rated. More pertinently for the campaign for lower rates of VAT for green products, a raft of renewable energy and energy efficient products, including solar panels, combined heat and power units and energy saving materials installed in residential or charitable properties, face only a five per cent VAT rate.

The argument that we would need to act in harmony with our European neighbours to extend this five per cent rate to other energy efficient products is a political fig leaf of microscopic proportions.

Concerns that implementing an effective VAT cut on green products could prove difficult are slightly more valid. Any cuts would have to be backed up by a robust and continuously updated system for rating new products and services and ensuring only the greenest, most energy efficient products qualify for the five per cent rate. But while this would undoubtedly be challenging there are plenty of existing schemes out there (not least in the form of the government-backed Energy Saving Trust labelling scheme) which could be adapted for the purpose.

So why are we still paying standard rate VAT on products that the government should be doing everything in its power to accelerate the development and roll out of?

The answer lies partly in the woeful state of the public finances, but mainly in the Treasury's status as Whitehall's last unreconstructed bastion of anti-environmental thinking.

It is true that the public finances currently have the bloodied visage of Ricky Hatton after 12 rounds, but as the BRC calculates the £507m a year in lost VAT receipts that would result from scrapping VAT on green appliances is equivalent to that lost in little more than two weeks as a result of the across-the-board VAT reduction introduced last December.

Moreover, removing the price premium on many green products is arguably a more effective means of encouraging investment in their clean tech development than the millions the government has ploughed into various low carbon funds and subsidies over the years.

The real reason for the failure to give the VAT proposals due consideration lies in what the outgoing chair of the Sustainable Development Commission, Jonathon Porritt, rightly diagnosed as the Treasury's record of having "killed a lot of the energy around sustainable development".

Porritt's description of the Treasury as "startlingly arrogant" will have chimed with any green business or environmental group having to deal with Whitehall and it is undoubtedly this ingrained desire to downplay environmental issues that has put paid to the VAT proposals, just as it managed to neuter calls for a Green New Deal last year, and continues to put a brake on efforts to cut emissions across the public sector.

It is about time the Chancellor banged some of his mandarins' heads together and there are few better places to start than by ordering them to scrap VAT on green products - not only would he give one almighty kick start to the UK's green businesses, he might even get some positive press out of it for his week in charge.

Posted by James Murray on August 18, 2009 | Permalink | Comments (0)

There is something uniquely tantalising about the concept of geo-engineering and the climate altering technologies it promises. If the history of civilisation is the story of mankind's steadily increasing dominion over the natural world, then the ability to tinker with the climate is arguably the final chapter. It takes us to the summit of Mount Olympus, rubbing shoulders with the gods.

The idea that we can respond to rising global temperatures by simply re-engineering the climate - which was given fresh impetus last week by the release of a new report from Bjorn Lomborg's Copenhagen Consensus Centre arguing that geo-engineering techniques could prove far more cost effective at lowering temperatures than curbing carbon emissions - plays into an appealingly optimistic understanding of modernity in which humankind has the technical answer to every problem it faces.

It is extremely tempting to sign up to a school of thought that runs, "we screwed the climate, but it's alright because all we have to do is re-engineer it and everything will be fine". It certainly has more immediate appeal than the increasingly depressing predictions from the world's climate scientists that we might just be doomed.

And yet you do not have to be a student of Greek mythology to understand that human beings with God complexes rarely fare too well - just watching a couple of James Bond films ought to be reminder enough.

Those who support geo-engineering may like to characterise its critics as modern day Cassandras who take perverse delight in bleak predictions and are fearful they will be out of job as soon as the climate change crisis is resolved. But this cheap cliché soon founders on the rocks of entirely legitimate concerns about the technical and moral efficacy of geo-engineering.

Take the proposal for "cloud ships" endorsed by Lomborg and the new Copenhagen Consensus Centre's report as the most promising geo-engineering technology. It certainly has a lot going for it. We know from the clouds that form behind shipping lanes that using ships to spray salt water into the air will form high level clouds that would serve to reflect back some of the sun's energy. Moreover, at a cost of around $9bn such a project would be extremely cheap in the grand scheme of things, while unlike proposals to pump particles into the atmosphere we could quickly stop the experiment if it had adverse effects.

But major problems still remain. First up, you barely need a GCSE in geography to understand that the weather and ocean current systems that shape our societies are influenced by both delicate variations in ocean temperatures and the difference between air temperatures over sea and land. Tinkering with these temperatures could have unforeseen and disastrous side effects thousands of miles from where the clouds are created.

Speaking to Lomborg last week, he admitted that more research was required into the likely side effects of cloud ships, but added that the proposed fleet would aim to operate in the Pacific in an attempt to reduce the impact on those rainfall systems that make landfall.

Of even greater concern is the fact that the project would only serve to mask the effect of climate change, not reverse it by addressing concentrations of greenhouse gases in the atmosphere.

This is worrying on a number of fronts. Firstly, it would mean that we would be signing up to maintaining and operating a fleet of cloud creating ships indefinitely, with all the future costs and risks that go with that.

Secondly, the failure to address rising concentrations of CO2 in the atmosphere would mean that the acidification of the oceans would continue to accelerate regardless of the project's success. When this point was put to Lomborg he suggested that the biggest environmental challenge put forward by green groups was rising global temperatures and as such it was "disingenuous" of them to highlight a different issue in response to a potential solution to global warming. Lomborg has a long history of windiong up environmental groups, but quite how raising awareness of the acidification of the world's oceans and the resulting collapse of an ecosystem that supports billions of people globally can be described as "disingenuous" is still not entirely clear.

Finally, the creation of any successful geo-engineering system would simultaneously create an unprecedented political and security challenge as world leaders attempted to negotiate who gets to play God and control the technology. Not that I wish to sound like those Bond villains, but whether it is cloud creating ships or "artificial trees" capable of capturing carbon from the atmosphere we are talking about technologies that could prove as powerful and destructive as a slow motion nuclear arsenal. If the UN's largely failed attempts to check nuclear proliferation have taught us anything it is that mistrust and posturing are the default setting when it comes to world-ending technologies and there is no reason to think geo-engineering will be any different.

Of course, none of these concerns are an argument to immediately end all research into geo-engineering and Lomborg and co may be right in calling for more research into geo-engineering as a last best hope of avoiding climatic disaster. But none of the proposals under discussion are in any way viable in their current form and if there is to be more research it has to be undertaken with no expectation of success lest the work serves to distract from the crucial fight to curb carbon emissions.

The only proposals on the table that could help address both rising temperatures and ocean acidification are sci-fi style "artificial trees" capable of extracting carbon dioxide from the atmosphere and storing it underground. But we already have a tried and tested way of creating larger carbon sinks - it is called afforestation and it has been shown time and again to be the most cost effective means of tackling climate change.

Equally, even the most successful geo-engineering technologies would do nothing to address the increasing level of energy insecurity that characterises our reliance on carbon intensive fuels. Again, we already have the proven technologies for simultaneously cutting carbon emissions and bolstering energy security in the form of everything from solar panels to hydroelectricity, and wind turbines to biomass plants.

The failure to roll these technologies out quickly enough should spur us on to act faster, not serve as a green light for another reckless gamble on technologies that are unlikely to ever work and will only create fresh problems even if they do. If there is one lesson that both Greek Myths and Bond films have in common it is that if something looks too good to be true, it almost invariably is.

Posted by James Murray on August 10, 2009 | Permalink | Comments (1)

I am always wary of making predictions, particularly when my recent attempts at crystal ball gazing include such classics as, "this Twitter nonsense will never take off", "Brown will be gone by the summer", and "Newcastle United are gonna get relegated". Actually, I got that last one right, but then again it was never in much doubt.

However, my patchy soothsaying record aside, it looks increasingly safe to say that the clean tech sector has already put the worst of the recession behind it.

Hailing the presence of green shoots is a high risk art and it should be noted that any number of variables could yet blow the fragile recovery off course. The Copenhagen talks could still collapse, undermining much of the political certainty many clean tech businesses have been built on; as yet unidentified banking scandals could kill off any signs of encouraging activity in the wider economy; and the chances are the price of carbon in the European Emission Trading Scheme could get worse before it gets better. But let us not be in any doubt - for the global clean tech sector the recovery is now underway.

The most compelling evidence for this optimistic outlook comes in the form of the recent figures from Dow Jones VentureSource showing that global venture capital investment in clean technology rose 73 per cent during the second quarter of the year, to $572m across 48 deals.

It might still be well down on the bumper investment levels recorded during 2008, but it still marks a dramatic recovery on the first three months of the year and provides a good gauge of the confidence flowing back into the sector.

It's worth remembering that venture capitalists are not exactly well known for their refined sense of sentiment. These guys (and they are almost invariably guys, but that's a whole other story) are all about making money and the fact that after a chastening year they are flocking back to the clean tech sector rather than more established industries suggests the optimistic predictions for the industry that were commonplace prior to last summer have not lost any of their resonance during the downturn.

Meanwhile, the green shoots in the investment sector are being mirrored in other parts of the clean tech ecosystem.

The Obama administration's approval ratings might be enduring the inevitable journey back from deity to mere mortal, but the president still deserves considerable kudos for the breakneck speed with which the multi billion dollar stimulus package has been pumped into the low carbon economy. While on this side of the Atlantic the government has finally backed up its always impressive rhetoric with some workable financial support mechanisms, not least in the form of the £1bn in new financing now on offer to wind farm developers.

Even some of the potential dark clouds that dot the horizon for the wider economy could provide a boost to the clean tech sector.

Fears that oil prices will soar as demand increases might spell bad news for motorists and carbon intensive businesses, but it is only good news for low carbon technologies that look ever more attractive each time the price of a barrel of oil rises.

Similarly, each time Republicans in the US argue that climate change legislation and the shift to renewables will lead to higher energy costs they only serve to remind astute business executives that the best way to insulate yourself against rising energy bills and volatile fossil fuel prices is to cut energy use and identify a diverse mix of fuel supplies.

Even concerns that the recovery will be undermined by future high levels of national debt and public sector spending cuts are unlikely to bother clean tech execs. In the UK, the current political debate is dominated by talk of government spending cuts, and yet proposals for electrified and high speed rail links, the world's largest tidal energy project, increased support for electric cars, and a huge expansion in offshore wind energy are still gaining support across the political spectrum. The transition to a low carbon is a top priority for most governments and as such clean tech firms know that spending on green infrastructure projects will be protected almost regardless of how tight public finances get.

Unfortunately, the clean tech recovery will not be a case of a rising tide lifting all ships. It might not seem like it given this week's announcements of multi-billion pound bankers' bonuses, but the world has changed in the past year. Investors and customers will increasingly demand technically proven, commercially viable green products, and it is the more mature firms that have already made the transition from development to delivery who are most likely to prosper during the recovery.

Equally, with any recovery in consumer confidence still six months off at best those clean tech firms focused on the low carbon infrastructure projects beloved of governments are more likely to lead the recovery than the firms with the latest green gadgets.

But all in all the outlook for the global clean tech sector during the second half of 2009 and the whole of 2010 looks pretty bright. Or at the very least, it looks a damn sight brighter than it does for Newcastle United.

Posted by James Murray on August 6, 2009 | Permalink | Comments (0)