The Dark Side of Green: Gaming the global-warming fight Posted on November 4th, 2009
Climate change is the greatest new public-spending project in decades. Each year as much as $100 billion is spent by governments and consumers around the world on green subsidies designed to encourage wind, solar, and other -renewable-energy markets. The goals are worthy: reduce emissions, promote new sources of energy, and help create jobs in a growing industry. Yet this epic effort of lawmaking and spending has, naturally, also created an epic scramble for subsidies and regulatory favors. Witness the 1,150 lobbying groups that spent more than $20 million to lobby the U.S. Congress as it was writing the Clean Energy bill (which would create a $60 billion annual market for emission permits by 2012). Government has often had a hand in jump–starting a new -industry—both the computer chip and the Internet got their start in American defense research. But it’s hard to think of any non-military industry that has been so completely and utterly driven by regulation and subsidies from the start.
It’s a genetic defect that not only guarantees great waste, but opens the door to manipulation and often demonstrably contravenes the objectives that climate policy is supposed to achieve. Thanks to effective lobbying by American and European farmers, the more cost–efficient and environmentally effective Brazilian sugar-cane ethanol is locked out of U.S. and EU markets. Even within Europe, most countries have their own “technical standard” for biofuels to better keep out competing products—even if they are cheaper or produce a greater cut in emissions. Because the subsidies are tied to feedstocks, there is zero incentive to develop better technology.
Both the International Energy Agency and the Organization for Economic Cooperation and Development have asked Germany to end its ludicrous solar subsidies that will total $115.5 billion by 2013. In theory, these subsidies are designed to create viable markets for climate-friendly technology by bringing down production costs, after which subsidies could be phased out. But Germany’s solar program has been a textbook case of how subsidies achieve the opposite of their stated intention. As the share of renewable power has jumped from 3 percent in 2001 to 15 percent now, subsidies per -kilowatt-hour of renewable power aren’t going down but up, meaning that clean energy is getting more expensive. Energy economist Manuel Frondel of Germany’s RWI Institute says the country’s lavish subsidies have blocked innovation and delayed the advent of cost-competitive solar power worldwide. For several years solar-module costs stagnated because German subsidies sucked up global production at virtually any price. Only when Spain decided in 2008 to scrap a similar subsidy scheme it had copied from the Germans did the global solar bubble collapse and costs fall. The German solar case also defies the green-jobs model. The idea is that subsidies create a new industry and a lot of high-tech jobs. Yet Germany’s solar producers are downsizing. With little pressure to become efficient and cost–competitive, they are now getting crowded out by Chinese producers.
In truth, green tech is no longer the tender niche industry the public debate makes it out to be. Global wind-turbine production alone is already a $50 billion annual market. And just as the bulk of farm subsidies don’t go to farmers, but to agro-conglomerates and food giants, it’s not small green-tech ventures but big corporations that are getting the best seats on the green gravy train. DuPont, Siemens, power companies, and investment banks are hungry for a slice of the subsidy pie or the new -carbon-trading market. Defenders rightly point out that fossil fuels get a staggering $500 billion in subsidies each year. Yet 80 percent of these are consumer subsidies in a handful of developing countries such as China, Russia, and Iran, and pale in significance when you account for fossil fuels’ much higher share of the energy supply. No one denies the necessary role of governments in environmental policy. But of the 10 most cost-effective and measurable ways for the world to cut emissions, for example, subsidies for renewables don’t even make it onto the list. Much more effective is putting a price on emissions, or finding other ways to mandate reductions and letting the market decide which technologies are the best. Here’s hoping governments take the point soon.
Theil is NEWSWEEK’s correspondent in Berlin.
Cash for Clunkers Gets Another $2 Billion From Energy Loan Guarantee Program Posted on August 10th, 2009
When the “Cash for Clunkers” program was still just an idea that wasn’t even completely written as legislation, I wrote about it at Zoomilife as being a bad idea. Then it passed and the program became official, so I wrote about how the setup would fail right off the bat. I wrote another tirade about it again here, analyzing the questionable math involved in the voucher program. Then I published a reprint of what Edmunds.com had to say about the program after it immediately ran out of cash.
Hate to say “I told you so,” but…
Congress has approved “emergency funding” for the CARS (their name for Cash for Clunkers) and Obama signed that earlier this month. This funding is another $2 billion bucks. It’s coming from the Department of Energy’s Innovative Technology Loan Guarantee Program. In other words, President Obama and Congress aren’t so much interested in future renewables as they are in making sure that current clunkers get purchased (at a cost of $20,000 each) and the auto industry gets plenty of cash injections.
I guess that since Washington (supposedly meaning us) has a huge stake in GM now, they have a vested interest in throwing more money at it. Or something. Except GM wasn’t a big winner in this–or even a real benefactor, for that matter. Ford, the only one of the Big 3 to refuse government bailouts, is the one who made out like bandits.
To give some credit, so far Cash for Clunkers is credited with adding another 7 million cars. Which is very interesting since not all of those could have received Cash for Clunkers vouchers. Not by a long shot. The most it could have really accounted for (assuming a cost of $4,500/voucher) is about 222,223 cars.
Anyway, at the cost of building newer and better windmills, more robust and efficient solar cells, and higher-return and road-ready hydrogen fuel cell vehicles, we’re going to sell more Fords. Who’s great idea was this? Oh, ya, Congress and Obama. Well, what do you expect from politicians? Logic and sense?
According to reports from Edmunds and Green Car Congress, the big benefactors of this program in July were the Ford Escape (an SUV) and the Ford Focus (small car). Neither of those is a hybrid, alt-fuel, or in any other way “green” other than they have better mileage than some of their counterparts.
So Ford’s bottom line is a little better.
That’s awesome for Ford, but what about the rest of us? That’s our money, after all. All two billion of it. Are you happy that you’re helping someone else get a new car by paying for some of it out of your own pocket? Me either. This is blatant governmental wealth redistribution. And who benefits? Not the poor, not the downtrodden, not even the middle class. The benefactors are the banks and lending institutions that get the interest on the loans they gave to buy these new cars. In other words, Wall Street once again gets another bailout.
Isn’t it time we started questioning all of this government intervention and meddling in things? It’s getting a little old.
Organic Certifications, Labels, and What They Mean Posted on July 27th, 2009
There seems to be a lot of confusion about what that “organic” sign in the grocery store means. For many of us, it merely means “same stuff, higher price.” Most Americans are aware that our produce in the grocery store has to meet specific requirements in order to be able to display the U.S. Department of Agriculture’s seal and use the word “organic” on their label.
The most vocal critique of the USDA’s organic certification is in what is considered “organic” and what is not. The mandatory participation requirement is also a big one.
That second issue is probably the greatest one, since just using the word “organic” on your product label requires that you comply with all USDA requirements before being able to state that your product is “organic.” In other words, the USDA has the power over that one word and ultimately decides what is and what isn’t defined as “organic.”
This presents a huge obstacle. Under the law, anyone selling foods and labeling them “organic” must comply with the USDA’s record keeping and onerous compliance rules. Even non-USDA certification groups for food production aren’t allowed the name “organic” unless they are part of the USDA’s system.
This means that alternative labeling certification groups, like the Certified Naturally Grown certification alliance, cannot use “organic” in their very name.
This brings to question how the costly government certification requirements can be considered the right choice for giving consumers confidence that what they’re buying is really “organic.” Since the system favors huge operations over smaller, more localized ones, it’s obviously weighted in favor of factory farms (which can be organic certified) and Big Agra.
Further, because the certification and the very use of the word “organic” is now politically controlled, it’s possible for lobbyists and insiders to manipulate how the certification is done or the requirements for it. This leads to questions of how organic those things labeled “organic” really are.
In 2005, for instance, an appropriations bill for the USDA allowed 38 synthetic ingredients to be considered “organic” when certifying foods for the USDA Organic label. Among the beneficiaries was Anheuser-Busch (Budweiser), who now use the organic label on their Wild Hop Lager.
The control of the word “organic” allows the USDA and its subsidiaries to decide who does and who doesn’t get to use this valuable marketing term. Ostensibly, of course, this means that nefarious companies who’ll use the word wrongly to get more buyers will not be able to use the term. It also means, however, that small businesses and farmers (even home gardeners) who sell their organic wares can’t call them that either.
In my mind, I have to wonder why groups like Certified Naturally Grown aren’t allowed to use the word “organic” with their members when they withhold their label for only the most stringent of organic practices.
Small farms and food makers who wish to use the CNG label are required to not only keep their operations at the highest of organic standards, but are randomly audited by other members in the CNG to ensure that they are doing so.
By comparison, a USDA Certified Organic operation must keep costly and tedious records from seed to harvest, must pay for organization membership and for all inspections, etc. This is costly and works only for large-scale commercial operations, but for smaller operations—especially those that do not focus on one or two crops, but grow several—this is quite onerous.
Further, seed-saving and similar practices are not allowed under the USDA’s program unless the farmer doing so is also a certified seed supplier. Even if it’s just for their own use!
CNG farmers follow the same basic rules of the USDA program, but the record keeping can be tailored to meet their needs. Further, their farms are required to be open to public access (full time or by appointment) to allow any consumer or interested party to also come to the farm and see operations. This encourages public discourse on the CNG certification and also allows consumers to see where their groceries are coming from. Most CNG participating farms agree that this actually increases sales and local consumer interest in their operations.
Finally, the CNG runs entirely on free-will donations and volunteer, grassroots efforts. The USDA is a government-mandated, forced participation edict. Not only does this give the USDA full ownership of the word “organic,” but it gives them the power to decide how it’s defined and who gets to use it.
You tell me which you think is better.
Find out more about the Certified Natural Growers Association at their website by clicking here.
Find out more about healthy foods from this simple foods chart from the Health Ranger at NaturalNews.com.
Read more about the What Why and How of Organics in this informative article by MyQute.
Wal-Mart Creating Eco-Ratings for Products Posted on July 21st, 2009
A couple of days ago, I talked about the Cradle to Cradle Certification program for products and processes to measure their impact on the environment. Now I’ve found out that Wal-Mart is planning to do something somewhat similar for the products they sell.
Wal-Mart is currently working on the index for those ratings, but has let their suppliers know that they will be expected to produce information on each of their products for Wal-Mart to use in these ratings. Being the largest retailer on the planet, I guess Wal-Mart can make demands like that. They already do so with their supply line, shipping, and so forth.
The program was announced on Thursday, July 16 and is in its first phase. Wal-Mart is asking suppliers to answer 12 key questions about key topics in the environmental impact of their manufacture. These include water use, emissions, and so forth. Wal-Mart has put together a consortium of 12 universities to work together on getting the scientific data and building the new design and index standards for this eco-labeling.
Ultimately, the shelves of Wal-Mart will feature labels on every product that tell consumers, at a glance, what the eco-rating of that product is and thus how much environmental impact it’s had before getting into their shopping cart.
It will be several years before this comes to fruition, but Wal-Mart seems interested in keeping the process open and transparent to the public so we’ll be able to tell whether they’re green washing or really trying to make something of this.
Most of the costs for this program will rest with suppliers, not Wal-Mart, once it’s implemented. We’ll see how well it works out. At the very least, it’s good to see the world’s largest retailer taking the lead with something like this. Perhaps it will create an ad-hoc industry standard.
Cradle to Cradle Certification Posted on July 18th, 2009
McDonough Braungart Design Chemistry has a new certification program called Cradle to Cradle Certification for materials and products. The certification has four levels of achievement, similar to the LEED program for buildings: Basic, Silver, Gold, or Platinum.
A Cradle to Cradle Certified product is measured by several factors to achieve this certification. The materials to make the product are gaged by their environmental impact, sustainability, etc. as well as how utilized/re-utilized they are (aka how much recycled material goes into making them and how recyclable they are after use). The certification also tests the amount of energy used to produce the product (including its source: renewable or not), the efficiency of water use (if any) in making the product, and so forth.
The certification is meant to be a sort of United Laboratories (UL) listing for how “green” a product really is.
You know what the UL is, right? Ya, it’s that totally non-governmental agency that everyone trusts to certify that electrical products are safe for use. I’m hoping something like this Cradle to Cradle idea catches on for green before some government bureaucrat decides it’s his job to decide what’s “green” and what’s not. Probably based on criteria that has little to do with the environment and everything to do with politics…
MBDC is a Virginia-based firm, founded in 1995, that specializes in intelligent design and eco-effective solutions for manufacture. The firm’s founders, William McDonough and Michael Braungart, work to show companies how to produce products and systems that contribute to both economic and environmental prosperity.
You can find out more about Cradle to Cradle Certification by visiting the MBDC website at this link.
