Environmental Valuation & Cost-Benefit News

Climate change is expected to lower the potential for agricultural production, according to the Little Green Data Book 2008 launched today on the occasion of the 16th Session of the United Nations Commission on Sustainable Development, which is focusing its deliberations on issues of agriculture and rural development.

This year’s World Bank Little Green Data Book shows that worldwide agricultural potential could fall by as much as 16 percent due to climate change. The drop would be particularly steep in developing countries (-20%) compared to industrial countries (–6%). At the heart of the problem are worldwide carbon dioxide (CO2) emissions: the world today produces 27.7 percent more CO2 than in 1990.

Warren Evans, Director of Environment, World Bank, said, “Climate change can be very harmful to worldwide agricultural potential, as this year’s Little Green Data Book highlights. The development community needs to take action to reverse the alarming trend of continued growth in greenhouse gas emissions.”

As the planet warms up, climate variability and extreme weather events such as floods and droughts become more likely, with negative impacts on agricultural productivity. The negative effect of warming is particularly strong in countries close to the equator, where average temperatures are already above the optimum for most crop production. The negative effects of increasing weather variability and extreme events are accentuated in low income countries, where the capacity to adapt is limited.

The situation is particularly critical in Sub-Saharan Africa (SSA), where adaptation capacity in agriculture is minimal owing to the lack of infrastructure, assets and incomes. Agricultural land on the continent constitutes 44 percent of total land area, yet use of agricultural inputs such as water, irrigation infrastructure, and fertilizers is low, making the potential impact of climate change on agricultural productivity even more pronounced.

In poor countries, the impacts of falling agricultural productivity can go beyond the negative effect on local economies and the environment. As agriculture delivers lower yields, food prices will go up and levels of malnutrition and related human diseases will increase. Impacts will be most felt in South East Asia and Sub-Saharan Africa (SSA).

“Dealing with climate change impacts is possible and win-win opportunities can be found, especially in developing countries,” said Evans. “For example planting mangroves to buffer the effects of storm surges on infrastructure near the coast, can also sequester carbon; afforestation and avoided deforestation programs prevent soil erosion and improve the micro-climate; water storage reduces flood risks, helps in drought response, and can provide clean energy from hydro”.

About the report
In its eighth annual edition, the World Bank’s Little Green Data Book 2007 is a pocket-sized quick reference on key environmental and development data for over 200 countries, based on the World Development Indicators 2007. Country, regional, and income group profiles provide a baseline for comparison on the state of the environment and its linkages with the economy and people.

This year’s edition dedicates its “focus section” on climate change and its impacts. Additional highlights from the report include:

* While high income countries today produce nearly one half of world CO2 emissions from energy, the share of developing countries is projected to increase at a faster pace in the future. In per capita terms, however, emissions in developing countries will continue to be lower than in developed countries
* Coastal areas at high risk of flooding and other severe weather events. Climate change is likely to cause increased weather variability and extreme weather events. Countries most affected by extreme weather events per continent include Ethiopia, Mozambique, Sudan, Bangladesh, and Honduras.
* Increases in the severity of natural disasters will affect access to infrastructure and water management capacity, leading to diarrheal disease, already the second leading cause of death among children. Geographically, the effects are most severe in SSA and South East Asia. Malnutrition and diarrhea take the largest toll, followed by malaria (especially important in SSA).

For more information, visit:
www.worldbank.org/environment/dataandstatistics

The World Bank www.WorldBank.org
May 13, 2008
http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:21766117~pagePK:64257043~piPK:437376~theSitePK:4607,00.html

Abstract: A considerable amount of uncertainty surrounds life expectancy at birth, the average length of life. The standard deviation in adult life spans is about 15 years in the U.S., and theory and evidence suggest it is costly. In this paper, I calibrate a standard intertemporal model to show that one less year in standard deviation is worth about half a mean life year. Differences in the standard deviation amplify measured differences in life expectancy between the U.S. and other industrialized countries, and accounting for historical gains against the standard deviation raises the total value of mortality declines during the last century by about 25 percent.

by Ryan D. Edwards
National Bureau of Economic Research (NBER) www.NBER.org
NBER Working Paper No. 14093; Issued in June 2008
http://papers.nber.org/papers/w14093

Summary: Infrastructure is the engine for economic growth. The international donor community has spent about 70-100 billion U.S. dollars on infrastructure development in developing countries every year. However, it is arguable whether these financial resources are used efficiently, particularly whether the current infrastructure procurement prices are appropriate. Without doubt a key is competition to curb public procurement costs. This paper analyzes procurement data from multi and bilateral official development projects in three infrastructure sectors: roads, electricity, and water and sanitation. The findings show that the competition effect is underutilized. To take full advantage of competition, at least seven bidders are needed in the road and water sectors, while three may be enough in the power sector. The paper also shows that not only competition, but also auction design, especially lot division, is crucial for reducing unit costs of infrastructure. Based on the estimated efficient unit costs, the annual financial needs are estimated at approximately 360 billion U.S. dollars. By promoting competition, the developing world might be able to save at most 8.2 percent of total infrastructure development costs.

by Antonio Estache and Atsushi Iimi
The World Bank www.WorldBank.org
Policy Research Working Paper WPS 4662; July 1, 2008; 44 pages
http://econ.worldbank.org/external/default/main?pagePK=64165259&piPK=64165421&theSitePK=469382&menuPK=64166093&entityID=000158349_20080707162932
http://www-wds.worldbank.org/external/default/WDSContentServer/IW3P/IB/2008/07/07/000158349_20080707162932/Rendered/PDF/WPS4662.pdf

Abstract: This paper uses annual variation in temperature and precipitation over the past 50 years to examine the impact of climatic changes on economic activity throughout the world. We find three primary results. First, higher temperatures substantially reduce economic growth in poor countries but have little effect in rich countries. Second, higher temperatures appear to reduce growth rates in poor countries, rather than just the level of output. Third, higher temperatures have wide-ranging effects in poor nations, reducing agricultural output, industrial output, and aggregate investment, and increasing political instability. Analysis of decade or longer climate shifts also shows substantial negative effects on growth in poor countries. Should future impacts of climate change mirror these historical effects, the negative impact on poor countries may be substantial.

by Melissa Dell, Benjamin F. Jones and Benjamin A. Olken
National Bureau of Economic Research (NBER) www.NBER.org
NBER Working Paper No. 14132; Issued in June 2008
http://papers.nber.org/papers/w14132

IBERDROLA RENOVABLES'Strategic Plan for 2008-2012, presented June 26, 2008 at the first General Shareholders Meeting since its stock market listing, envisages investments of €18.8 billion during the period to achieve a net profit of approximately €1 billion in 2012.

The goal of the 2008-2012 Plan is to confirm the Company’s current position as leader of the world wind power sector* and standard-bearer for clean energy worldwide. At the end of the period, it expects to remain firmly at the head of the sector worldwide and be the leading renewables group in Spain, the UK and the United States.

Investments under the Plan will be assigned essentially to international expansion, which receives three-quarters of the total. Half of the investments will be in the United States (50%), while Spain will have 23%, the rest of Europe another 25% and other countries 2%. The Company will also invest €800 million in gas storage in the United States.

Development of all renewable technologies is contemplated in the Plan, but especially wind power, in view of its current competitiveness. The Company has already lined up sites for the next seven years and turbine supplies for the next five, with contracts totalling 10,000 MW with various manufacturers (Gamesa, Alstom, Vestas, Siemens, General Electric, Suzlon, Mitsubishi, etc.).

IBERDROLA RENOVABLES also plans to boost its presence in mini-hydro developments, where it will increase installed capacity from 350 MW at present to 450 MW in 2012, as well as in solar thermal electricity where five plants of 250 MW will be built, and in biomass with three plants under construction for 50 MW in capacity, as well as other projects in offshore wind power, wave energy and solar photovoltaic energy.

In the U.S. gas sector, which generates financial synergies with the renewables sector, the Company plans to manage 5,4 bcm (billion cubic metres) in gas storage as against 3.4 bcm at present. These are large volumes, as borne out by the fact that all underground gas storage capacity in Spain amounts to about 1.6 bcm.

The goal is to achieve a capacity in renewable energy of 13,500 MW in 2010 and 18,000 MW at the end of the period, with an average annual installation rate of 2,000 MW. The Company also expects to triple production during the period, rising to 42,300 gigawatt hours (GWh).

Results similar to those of IBERDROLA in 2001

Meeting these business goals under the Strategic Plan will allow IBERDROLA RENOVABLES to achieve gross operating profit (Ebitda) of €2.4 billion in 2010, four times that in 2007, and net profit of €800 million which would be seven times that of last year and similar to the entire profit of the IBERDROLA Group in 2001.

These magnitudes rise in 2012, the final year of the Strategic Plan, when IBERDROLA RENOVABLES projects Ebitda of €3.4 billion and a net profit of €1 billion. Gas storage business is projected to contribute around €240 million to Ebitda in 2010 and €270 million in 2012.

The Company expects achieve greater diversification and balance in the origin of its financial results, coming in equal parts from Spain, the United States and the rest of the world. More than two thirds of Ebitda is projected to origínate outside Spain in 2012, fruit of the Company’s international expansion.

These results would allow IBERDROLA RENOVABLES to increase the proportion of net profit assigned to dividends (payout) from 25% to 50% in coming years, reaching a similar ratio to the IBERDROLA Group.

The Company expects to maintain its solid financial foundations during the period, with estimated asset growth of 75%, shareholder equity of €14 billion and a financial gearing below 50%.

Forecasts for 2008

As regards results for the first half of 2008, to be finalized shortly, net profit of IBERDROLA RENOVABLES will be approximately €170 million and Ebitda €570 million. During the period, a total of 851 MW have been installed in eight countries which, added to the 1,600 MW currently under construction, will allow the Company to surpass its goal of installing 2,000 MW a year.

For 2008 as a whole, prospects are for an Ebitda of around €1.3 billion, double that of 2007, and a net profit of €400 million, which would be 3.5 times that obtained in 2007.
____________________________
* Source: New Energy Finance (December 2007)

...
Forward-looking statements are not guarantees of future performance. ...

Press Release dated June 26, 2008
http://www.iberdrola.es/wcorp/corporativa/iberdrola?IDPAG=ENMODULOPRENSA&URLPAG=/gc/en/comunicacion/notasprensa/080626_NP_JuntaRenovables.html
Iberdola Renovables www.iberdrola.es

On July 7, 2008 Mayor Michael R. Bloomberg today announced the long-term action plan to reduce energy consumption and greenhouse gas emissions from the City's municipal buildings and operations by 30 percent by 2017, as promised in PlaNYC. The long-term plan is a comprehensive guide to reducing the City's carbon footprint, through making City buildings more efficient, improving preventative maintenance, capturing energy potential at wastewater treatment plants, and more. The plan was developed by the Energy Conservation Steering Committee created by an Executive Order signed by Mayor Bloomberg in October, 2007 and chaired by Deputy Mayor for Operations Edward Skyler. Today's announcement was made at St. Mary's Recreation Center in the Bronx, a Parks Department facility that, under the plan, will receive energy-saving retrofits to fix outdated heating and cooling systems, insufficient ventilation, and windows and doors that leak heat in the winter and cooled air in the summer. The Mayor was joined by Deputy Mayor Skyler; Ashok Gupta, Air & Energy Program Director of the Natural Resource Defense Council; and Gil Quiniones, Acting Chief Operating Officer of the New York Power Authority.

"Our long-term plan will cut City government's annual output of greenhouse gases by nearly 1.7 million metric tons, which also will greatly improve air quality, and take a 220-megawatt bite out of peak demand for electricity," said Mayor Bloomberg. "We can achieve these results by using cost-effective existing technologies. The City is doing its part, I hope the private sector follows our example and finds conservation savings of their own."

"This plan is the most in-depth and comprehensive ever look at the energy used by the City, which is the largest property manager in the City, as well as the operator of the largest municipal vehicle fleet in the nation," said Deputy Mayor Skyler. "We have identified a number of ways to make real energy savings, and the investments we make today will start paying for themselves immediately, and be fully recouped in just a few years."

"Today's announcement confirms that significant reductions in energy usage to achieve the 30 percent reduction requirement in global warming pollution by 2017 is not only achievable but it will also save taxpayers money," said Ashok Gupta of the of the Natural Resource Defense Council. "Especially during this period of high energy costs, deploying energy efficient lighting, air conditioning, motors, and office equipment, along with improved Operations and Maintenance, makes economic sense and it is to the City's credit and Mayor Bloomberg's leadership that existing public buildings will be showing the way. The public is watching and counting on the City to now deliver on the promise."

"The New York Power Authority has a long history of working with the City of New York, our largest electricity customer, on projects to advance energy efficiency and clean new energy technologies at public facilities in the City," said Gil Quiniones of the New York Power Authority. "Now, in line with Governor David Paterson's ambitious '15 by 15' energy efficiency plan and his renewable energy initiatives and the leadership of Mayor Bloomberg in implementing PlaNYC, we're poised to build on that partnership to help create a Greener and Greater New York."

City government accounts for approximately 6.5 percent of New York City's total energy usage and 10 percent of its peak electricity demand. The projects in the long-term plan will be partially funded by an annual commitment of 10 percent of the City's energy budget, which in fiscal year 2009 will be $100 million. In total, the plan will require an estimated $2.3 billion investment over the next nine years, of which roughly $900 million has been committed by the City, and another $80 million was already spent in fiscal year 2008. Additional funding is being sought from external sources, including state and federal programs, private foundations and through energy performance contracts. The City is expected to break even on its investment in 2013 on an annual cash flow basis, and by fiscal year 2015 it is projected that the City will have saved more on its energy bills than it has spent on all the planned investments to that point.

To meet its 30 percent reduction goal by 2017, the City must produce 1.68 million fewer metric tons of carbon dioxide equivalents (CO2e) annually versus 2006 levels. This will be achieved through an aggressive capital improvement program for the City's facilities, and significant enhancements to its current operations and maintenance practices.

The largest single opportunity for reductions, 57 percent of the total, is through upgrades to existing buildings, like firehouses, police precincts, sanitation garages, offices, and courthouses. Planned improvements include upgrading facility lighting, refrigeration units, boiler upgrades office equipment, and heating, ventilating, and air conditioning (HVAC) systems. There are other savings to be found in the way buildings are operated, including developing and implementing preventive practices in buildings that consume large amounts of energy. For example, leaking pipes, clogged steam traps, and inefficient air distribution, pumps, or fan systems will be systematically identified and repaired. The plan also includes retrocommissioning, a process that identifies the most wasteful inefficiencies that technicians can correct in a cost-effective manner.

Energy-saving projects at wastewater treatment plants account for the second largest opportunity for greenhouse gas reductions, 17 percent of the total. Wastewater treatment plants decontaminate sewage and storm water runoff through a series of physical, chemical, and biological processes, and release the water back into the environment once it has been cleaned. These processes generate significant amounts of methane gas, one of the strongest greenhouse gas emissions sources. Projects in this group include fixing methane gas leaks, using recaptured methane to power electric generation equipment, and making general efficiency improvements to other specialized equipment.

Further reductions will be achieved through accelerating the purchase of more energy efficient vehicles, adopting best practices to economize vehicle miles traveled, and improving vehicular management programs. Also, 250- and 150-watt street lighting fixtures will be replaced with models that maintain equal lighting levels, but use one-third less wattage. The City will also expand on-site electricity generation at City facilities. Leading examples of this technology include solar panels and combined heat and power systems known as cogeneration. The City will also adopt energy-efficient technologies in new building construction and explore the use of new technology.

In December, the Steering Committee released a short-term action plan that included 132 projects throughout all five boroughs that will reduce greenhouse gas emissions by an estimated 34,000 tons annually. The projects in that plan include lighting replacement and sensor installation; heating, ventilation, and air conditioning improvements; water and sewer equipment upgrades; and vehicle replacements. The City committed $80 million in fiscal year 2008 to implement the short-term action plan issued last December.

The Steering Committee includes the Office of Operations/Long-Term Planning and Sustainability (OLTPS), Office of Management and Budget (OMB), Economic Development Corporation (EDC), Department of Design and Construction (DDC), and Department of Citywide Administrative Services (DCAS). Earlier this year, the City enlisted a technical advisory team comprised of the energy consulting firms AECOM Technology Corporation and KEMA, Inc. to conduct extensive technical research, interviews, and analysis on the various reduction opportunities available to the City.

The City of New York www.nyc.gov
Press Release PR- 264-08 dated July 7, 2008
http://www.nyc.gov/portal/site/nycgov/menuitem.c0935b9a57bb4ef3daf2f1c701c789a0/index.jsp?pageID=mayor_press_release&catID=1194&doc_name=http%3A%2F%2Fwww.nyc.gov%2Fhtml%2Fom%2Fhtml%2F2008b%2Fpr264-08.html&cc=unused1978&rc=1194&ndi=1

European officials proposed scaling back drastically on their goal of increasing Europe’s use of biofuels, a major about-face on a central environmental and energy issue.

Until recently, European governments had sought to lead the rest of the world in the use of biofuels, aiming to derive 10 percent of Europe’s transportation fuels from biofuels by 2020. But the allure has dimmed amid growing evidence that the kind of goals proposed by the European Union are contributing to deforestation, which speeds climate change, and helping force up food prices.
...
In the United States, one quarter of the corn crop goes to biofuels. An energy bill passed last year requires that 36 billion gallons of biofuels be produced annually by 2022, but criticism of the policy is growing, including calls to end tax breaks for corn-based ethanol.

A major reason is that over the last 18 months, studies have shown that the current generation of biofuels — reliant on food crops like canola, corn and soybeans — helps drive up food prices by using agricultural land, as well as aggravating deforestation, and may be worse for the climate than conventional oil once the cost of production and transport are taken into account.

Most of the world’s biofuel is extracted from corn in the United States, sugar in Brazil, and both grain and oil-seed crops in Europe.

Europe’s reversal on biofuels had gained significant momentum in recent days. Over the weekend....

Britain, one of the biggest proponents of increased biofuel use, signaled a new course Monday. Ruth Kelly, the British transport minister, said the introduction of biofuels should be slowed down, citing a newly released report warning that current goals for biofuel production could cause a global rise in greenhouse gas emissions and an increase in poverty in the poorest countries.
...
The Environment Committee of the European Parliament voted Monday to approve the measure and send it to the full Parliament. Members of each major political bloc on the committee called for a much lower target — 4 percent — and said the measures should be reviewed in 2015.
...
Under the alternative proposals that the committee voted on, 20 percent of renewable transport fuels would have to come from feed stocks, like algae, that do not compete with food for cropland.
...
New Energy Finance, a research group in London, said in May that prices had risen 8 percent for grains and 17 percent for oils as a result of biofuels policies. It found effects on the price of sugars had been negligible.

By James Kanter
FOR FULL STORY GO TO:
http://www.nytimes.com/2008/07/08/business/worldbusiness/08fuel.html?em&ex=1215662400&en=305ffd12e0b0fab1&ei=5087%0A
The New York Times www.NYTimes.com
Published: July 8, 2008