Program.
Environmental Entrepreneurs Update
July 29, 2004
| Opportunities for the China-U.S. Energy Efficiency Alliance were kicked-off this month as Jiangsu and Shanghai officials signed a memorandum of cooperation with NRDC to pursue energy efficiency projects. Pictured above are Mr. Zheng Long, Deputy Director of the Power Department of the Shanghai Economic Commission and Barbara Finamore, Director of NRDC's China Clean Energy Program. |
This July 2004 Environmental Entrepreneurs (E2) newsletter is sent to all E2 members, people interested in joining E2 and friends of E2. This newsletter includes brief updates on E2 and NRDC activities. In addition, each month we feature one topic in depth. This month we feature a report on Chinese energy policy.
1. China Energy Policies - China is turning to energy efficiency for solving its energy shortage.
2. Los Angeles E2 Meeting about Mercury Pollution - E2 members learn about mercury sources and the health implications of mercury contamination.
3. E2 Advocacy Update - Updates on Climate,
CALFED, and
Ocean protection
4. Capitol Insights, NRDC's Advocacy Newsletter - An update on Washington for E2 members.
5. Victory on Yucca Mountain Nuclear Waste Disposal Case - Court rules that Environmental Protection Agency illegally issued inadequate environmental and public health standards.
6. Administration Policy Roadblocks Forest Protection - Proposed forest plan is a permanent roadblock to roadless protection.
7. Calendar of Events
China's electric power consumption in 2004 will grow at a breathtaking 11% over that of 2003, with some regions growing nearly 25%. Chinese policy makers are clearly and publicly stating that the country needs to make fundamental changes to deal with its skyrocketing energy consumption. This heightened government focus on energy policy has created a rare opportunity for the solution to an economic problem to also have powerful positive impacts on the regional and global environment.
NRDC has been working in China for the past eight years. Over the last year, Environmental Entrepreneurs has been working with NRDC's staff with a goal of building a business alliance that would support NRDC's work with the Chinese government. During the week of July 12th, NRDC, with the support of the Chinese government, announced the "China-U.S. Energy Efficiency Alliance", whose goal is to improve energy efficiency and reliability in China. For more information, please visit www.chinacleanenergy.org.
Background
China's energy demand is rapidly growing as its economy continues to expand. This growth is placing enormous strains on China's limited resources, as illustrated in the electricity sector. This year, the gap between electricity supply and demand in China is estimated to reach 30,000 megawatts, which is nearly half of California's entire 2000 peak load. This shortfall has led to summer blackouts in all but seven of China's 31 provinces and major municipalities. The power shortages are particularly severe in the industrial belts of southern and eastern China, where manufacturers are being forced to cut back production and even shut down operations for days at a time.
Chinese policy makers primarily fear the potential economic consequences of the unmitigated increase in power demand. Persistent shortages and the staggering investments needed to keep up with demand threaten to bottleneck the economic growth that is at the heart of China's social stability.
The growing middle class in China is becoming more of a western-like consumer society with extensive growth in housing and air conditioning. In fact, during power shortages, it is not uncommon to shut down power to factories in order to assure that the middle class can keep their homes cool!
China's has a policy goal of quadrupling its economy by 2020 while only doubling its electricity consumption. Meanwhile, forecasters at the State Power Economic Research Center (SPEC) estimate that under business as usual, China's annual electricity requirements will nearly triple - increasing from 1,638 Terawatt hours (TWh) in 2002 to 4,400 TWh in 2020. During that period, it is predicted that China will build nearly as many coal-fired power plants as the rest of the world combined. Unless strong measures are taken to reduce demand and improve energy efficiency, the amount of total generating capacity added will equal 22 Three Gorges Dams or 400 large nuclear power plants. To China and the global community, the other frightful consequence of this power thirst is the alarming increase in air pollutants and greenhouse gases.
Why It Matters
There are at least three reasons to care about China's energy situation: (1) if one has a business interest in China, energy pricing and reliability is key to economy and business operations; (2) from a global environmental perspective, China is on track to pass the U.S. as the largest global polluter affecting global air quality and the stability of the global climate; and (3) China offers the potential to build a market for more energy efficient products which ultimately could be used in the U.S.
China recently approved passenger vehicle efficiency standards that are well above those in the U.S. According to a July 27 New York Times article "A Far-Reaching Fire Make a Point About Pollution", by 2010, a third of the smog-forming ozone in California air will originate from Asia.
What are the Solutions?
The solution will be some combination of (1) building more power plants, (2) requiring higher efficiency buildings, motors and appliances so new growth is less energy demanding, and (3) providing incentives for replacing existing technologies with more energy efficient ones. The question is what's the most economical (and environmentally friendly) combination of the three?
Because reducing energy demand is much less expensive than building new power plants, many governments have implemented"Demand side management (DSM) programs". DSM programs are utility-sponsored programs that use ratepayer funds to help customers take advantage of energy efficiency opportunities, such as high-efficiency commercial lighting, industrial motors, and commercial and residential air conditioners. There are many market barriers that block the widespread adoption of these technologies in China, including a lack of information, the higher up front costs of efficient technologies and the lack of available capital. DSM programs use tools such as rebates, investment incentives and energy audits to remove these barriers and open up the market to high efficiency technologies. DSM programs have enabled over thirty countries around the world to reduce the need for new power plants, lower customer electric bills, and improve the environment.
For example, In China, coal-fired generation costs around 6 cents/kilowatt hour (kWh) to own and operate. In contrast, a comprehensive energy efficiency DSM program typically costs less than 3 cents per kWh saved, when averaged over the lifetimes of the investments. (Typical DSM programs facilitate high-efficiency building construction, equipment replacement, and product and appliance purchasing.)
A recent study in California by Capital-E looked at 40 green buildings (which followed principles of or were certified by the U.S. Green Building Council's LEED Program). The study concluded that the average additional costs were $4 per square foot while the energy savings alone amounted to $6 per square foot and the buildings averaged 28% lower energy consumption.
Thus, for example, China could save $67 billion just by meeting a tenth of its 2020 incremental electricity requirements with efficiency measures. At the same time, China can also avoid an average of 262 million metric tons/year of carbon emissions.
Opportunities
The Chinese government is strongly interested in energy efficiency as a means to help alleviate the country's escalating energy crisis. In addition to declaring energy efficiency a fundamental national priority, China's top governmental agency recently issued national policy guidelines urging every province to develop and implement demand-side management. This high-level policy attention, along with the successful pioneering of DSM pilots in key regions, may pave the way for the introduction of DSM throughout the country.
With the assistance of the Natural Resources Defense Council (NRDC), Jiangsu Province has pioneered DSM in China over the past several years. Jiangsu, as indicative of China's overall DSM effort, has largely focused on the more readily achievable measure of load shifting, i.e. spreading out the demand over the whole day. Beyond load shifting, China can only significantly alter its current path of demand growth, hence emissions growth, if significant energy efficiency measures are adopted.
Over the next several years, the newly formed China-U.S. Energy Efficiency Alliance will support an NRDC-led expert team to work with Shanghai, Jiangsu and other local governments to realize readily achievable energy efficiency opportunities and remove market barriers to the introduction of energy efficient technologies. The Alliance and NRDC's goal is to help China achieve its own stated objective of meeting half or more of its power consumption growth through energy efficiency programs.
One of the first steps to that process is to help Chinese decision makers understand the cost and benefits of specific DSM programs and portfolios. This will be done through the analysis and assessment of multi-year DSM programs in residential and business construction and the equipment, appliance, and product markets. Policy makers responsible for establishing the DSM administrative and funding mechanisms will use the results of the assessment as the foundation and benchmark for designing and implementing future efficiency programs.
The next step will be to assist the governments in developing and instituting specific financing and cost recovery mechanisms for electricity efficiency investments. Options explored would include the promising mechanism of a specialized provincial/municipal DSM fund. In California, for example, over the last several decades, a small fraction of every California utility customer's bill (less than 3 percent) has been dedicated to improving energy efficiency, avoiding the need for more than 20 large power plants since 1975. Current funding levels amount to approximately $243 million per year. China's new DSM regulatory guidelines encourage provinces to establish similar funds.
The final step will be to assist Chinese program administrators in the development and implementation of specific initial efficiency procurement programs ranked by their cost-effectiveness.
Through this collaboration, we hope to build an enduring capability in China to integrate efficiency into China's electricity supply procurement decisions. Chinese policy makers and sector experts are eagerly looking forward to adapting and applying tools and policies that have been proven effective in other countries to develop solutions tailored to the realities in China. In Shanghai and Jiangsu, the Economic Commissions of both governments will lead their efforts. These leading commissions will also bring to bear cooperation from the provincial and municipal power companies, the Shanghai Energy Conservation Supervision Center, and the State Grid Company DSM Center.
Role for Environmental Entrepreneurs
E2 is actively encouraging members with specific interest in China to support the China-U.S. Energy Efficiency Alliance as part of their E2 membership. E2 also encourages members to discuss the Alliance with non-members who are interested in China's economic development. In addition, E2 member Peter Liu is organizing a way for individual businesses to participate. We are planning a series of briefings on NRDC's China Energy work in New York, New England and California (see calendar of events for details).
Conclusion
China is one of the most promising areas in the world for significant advances in energy and environmental policy. Such advancements will result in tremendous environmental and energy sector benefits to China and indeed the world. However, beyond such benefits, China's leaders recognize that alleviating the rise in energy demand is central to furthering economic growth. Assistance from the Alliance is therefore received at powerful levels of government - the centers for economic policy making. We believe that this powerful support holds the promise of strong policy execution and significant results.
Los Angeles E2 Meeting about Mercury Pollution
On July 20th, E2's Southern California chapter met for a Focus Meeting about mercury pollution at the state, national and international levels. Linda Greer, NRDC's Public Health Program Director, and Gina Solomon, NRDC Senior Scientist, led the discussion, explaining various mercury sources, the health implications of mercury contamination, and NRDC's efforts here and abroad to tackle the problem. Throughout the evening, valuable suggestions were offered by E2 members and their guests about ways to raise greater public awareness of mercury contamination. We encourage everyone to log on to NRDC's quick and easy mercury calculator web site to tabulate their personal and family members' monthly intake of mercury through fish consumption. Your findings may startle you.
July was a busy month for E2's Advocacy efforts. On the Federal front, after much preparation for another Senate vote on the Climate Stewardship Act, it now seems unlikely that there will be an opportunity for the bill to come up again this year. California water legislation (CALFED) also seems to be on hold for the moment. At the same time, we are making progress on Oceans legislation - two bills have already been introduced, and a third is on its way.
Climate Stewardship Act
Early in July it became clear that parliamentary procedures have effectively prevented the Climate Stewardship Act from coming back to the Senate floor this year. Senator McCain and Senator Lieberman will continue to push for a vote on this bill before Congress adjourns for the year, but with a tight legislative schedule, they are unlikely to find an opportunity for a vote. E2 members have been working hard in the past months to advocate for passage of this bill in the Senate and for its twin bill, introduced by Representatives Gilchrest and Olver, in the House. Our members have been meeting with legislators, speaking at hearings and briefings, circulating E2's support statement, identifying additional business community support for global warming legislation and highlighting the economic benefits of the bill both at the national and in particular at the state levels. Most importantly, the research we sponsored shows that states are economically better off with the Climate Stewardship Act.
Thanks to all of you who have signed our E2 support statement, contacted senators, representatives and others, and participated in briefings, hearings and press events. With your support, we will continue to make progress on this important issue.
CALFED
Last week in Washington DC, Barry Nelson, co-director of NRDC's Western Water Project, helped distribute E2's letter to Senators Boxer and Feinstein regarding H.R. 2828, the California water policy legislation that passed the House recently. CALFED is an ambitious joint state-federal water program designed to address water supply, water quality and ecosystem restoration issues in the San Francisco Bay-Delta system. Senator Feinstein (S. 1097) and Congressman Calvert (H.R. 2828) introduced bills to authorize federal implementation of CALFED. The House bill recently passed through Congress contains damaging provisions that will undermine the CALFED plan, harm the environment and waste taxpayer money.
Specifically, H.R. 2828 would: (1) allow the Department of Interior, rather than Congress, to authorize the construction of billion-dollar dam projects in California -- overturning a century of congressional oversight and accountability;(2) allow federal ecosystem restoration dollars to be used to pay federal water contractors to comply with the Clean Water Act; and (3) introduce major new obstacles to federal ecosystem restoration. (For more information on CALFED please click here.) This bill is not being well-received in the Senate. E2's concerns are broadly shared among Senate Democrats and Republicans as well as by the Administration and at least one California urban water district.
Senator Feinstein is trying to persuade the Senate to pass her far superior bill (S. 1097) by unanimous consent. There is little floor time remaining in Congress this year, which presents a significant challenge to the passage of a California water bill. There are two possible routes forward at this time. The first is that the Senate passes Senator Feinstein's S 1097, leading to a conference committee. The second is that Senator Feinstein negotiates with House and Administration representatives in an attempt to "pre-conference" a bill that would be passed unchanged by the Senate and then the House. It is not clear if the House leadership will be willing to abandon the provisions of H.R. 2828 to which E2, the Senate and the Administration object.
Oceans Bills
During our May 2004 trip to DC, E2 members talked with legislators about creating and supporting oceans policies based on the recommendations of two recent high-level national commissions that reviewed U.S. ocean policies; the independent Pew Oceans Commission and the congressionally established U.S. Commission on Ocean Policy. Our top three priorities are: (1) to create a national ocean protection policy; (2) to reform fisheries governance by separating allocation and conservation decisions, broadening representation on management councils and reducing conflict of interest; and (3) to establish a network of protected areas for the ocean similar to our land-based system of national parks.
Progress on this issue is definitely being made both in the House and in the Senate. Following is a brief overview of ocean governance bills that have already or are about to be introduced in Congress:
Oceans Conservation, Education, and National Strategy for the 21st Century Act: This bill -- known as "Oceans 21" -- was introduced on July 23 by Representative Jim Greenwood (R-PA) and the three other bi-partisan co-chairs of the House Oceans Caucus: Sam Farr (D-CA), Tom Allen (D-ME), and Curt Weldon (R-PA). This bill provides a national vision for protecting, maintaining and restoring oceans; provides necessary mechanisms for ensuring an ecosystems-based approach to oceans management; and creates national ocean science and education programs to better coordinate management decisions and heighten public awareness of the importance of healthy oceans and coasts.
National Ocean Protection Act: This bill, soon to be introduced by Senator Barbara Boxer (D-CA), will address a number of issues related to ocean health and the nation's approach to ocean ecosystems, including ocean governance, pollution, fisheries management and marine habitat restoration.
National Ocean Policy and Leadership Act (S 2647): This bill, which was introduced on July 13 by Senator Ernest F. Hollings (D-SC) and co-sponsored by Senators Ted Stevens (R-AK), Daniel Inouye (D-HI) and Judd Gregg (R-NH), seeks to establish the following: 1) a national policy for a coordinated, comprehensive, and long range program for ocean research and management, focused on several marine related issues ranging from sustainable stewardship of fisheries to protection of property from natural hazards; 2) an independent agency, the National Oceanic and Atmospheric Administration (NOAA), with a purpose, structure, and systems for eco-regional and international coordination; and 3) mechanisms for inter-agency coordination around ocean research and conservation priorities, including the establishment of a council in the Executive Office of the President.
Fisheries Management Reform Act of 2004 (HR 4706): This bill, which was introduced on June 24 by Rep. Nick Rahall (D-WV) and co-sponsored by 15 others, undertakes crucial reforms to the nation's fisheries management system. The bill seeks to: 1) broaden representation on the fisheries management councils beyond fishermen (who currently account for more than 80 percent of all council members); 2) reduce conflict-of-interest with voting members who have a financial stake in the issues; 3) decrease the role that fishermen play in scientific decisions regarding how many fish can be caught to lessen political and economic pressures on the scientists who are determining sustainable catch levels; and 4) require training in fisheries science and relevant legal requirements for new council members.
NRDC News
Capitol Insights, NRDC's Advocacy Newsletter
Each month, NRDC's Advocacy Center publishes a newsletter that highlights current federal environmental issues. E2 Members can view the July issue of Capitol Insights by using the following member-only link . This publication sometimes contains sensitive information, so we ask that you not forward this on to your colleagues. If you're interested in signing up to receive this update from the Advocacy Center, please email Christine Koronides at ckoronides@nrdc.org.
Victory on Yucca Mountain Nuclear Waste Disposal Case
On July 9, a federal appeals court ruled in favor of NRDC, other environmental groups and the state of Nevada, finding that the Environmental Protection Agency illegally issued inadequate environmental and public health standards for the proposed Yucca Mountain nuclear repository site. Specifically, the EPA proposed rules regarding radiation leaks that would be limited to the site's first 10,000 years. At the same time, government reports suggest that by about 300,000 years, radiation doses to people at the site boarder could exceed the legal limit. While both of these numbers may just sound as if they're too far in the future to care about, we must make important decisions now about how to protect future generations both in the near and far terms, from radiation if we are to have any impact.
"On one of the most crucial issues in the Yucca case, the court has sent EPA back to the drawing board to write a radiation protection standard that safeguards public health," said Geoff Fettus, the NRDC attorney that argued the case for the environmental groups. "When dealing with a project of the magnitude of a nuclear waste repository, the law requires that EPA do it right rather than rush it through."
For more information on this victory please see NRDC's press release, and an article from the New York Times, "Court Deals Blow to Effort to Bury Nuclear Waste in Nevada." The court's decision is available at decision.
Administration Policy Roadblocks Forest Protection
On July 12, Agriculture Secretary Ann Veneman announced a forestry plan that will require governors to petition the federal government to block road-building in remote areas of national forests. This rollback will effectively wipe out the nationwide Roadless Area Conservation Rule, a policy prohibiting destructive logging and road construction on 58.5 million acres of pristine national forests. (Please see LA Times Editorial: "Road to Forest Ruination." )
"The Bush administration's sham forest plan is a permanent roadblock to roadless protection. This new policy eliminates one of the most popular and most important land conservation measures in history," noted Amy Mall, senior forest policy specialist at NRDC. "A vast majority of Americans who have spoken on the roadless rule are in favor of protecting these pristine places. But the Bush administration has ignored these pleas while continuing its efforts to strip away roadless protection."
Calendar of Events
Tuesday, August 31, 2004 (12:00 PM - 1:30 PM) Focus Meeting
If you have any questions, please contact Christine Koronides at ckoronides@nrdc.org
San Francisco: Energy Efficiency in China
Please join us on Tuesday, August 31 from 12:00-1:30 for a lunch briefing with David Goldstein, Co-Director of NRDC's Energy Project and a recent recipient of a MacArthur Fellows "Genius" Award, . Following our March focus group on this topic, David will discussion the progress of China's national regulations on demand-side-management (sponored programs that use ratepayer funds to help customers take advantage of energy efficiency opportunities). He will also discuss NRDC's current work at the national level in China and with local municipalities in several regions to develop and implement effective DSM programs. E2 member Peter Liu, who has been working closely with NRDC's China Energy team will talk about how E2 members are helping this cause. Invitations will be sent in August.
Thursday, September 9, 2004 (12:00 PM - 1:30 PM EDT) EcoSalon
If you have any questions, please contact Ying Li at yli@nrdc.org
Boston: China Energy Policy with Barbara Finamore
Please join us for a lunch briefing with Barbara Finamore, Director of NRDC's China Clean Energy Project on Thursday, September 9th. Barbara will lead a discussion on the development of China's first national regulations on demand-side-management (sponsored programs that use ratepayer funds to help customers take advantage of energy efficiency opportunities). She will also discuss her current work at the national level in China and with local municipalities in several regions to develop and implement effective DSM programs. Invitations will be sent in August.
Friday, September 10, 2004 (12:00 PM - 1:30 PM EDT) Focus Meeting
Please contact Ying Li at yli@nrdc.org should you have any questions.
New York: China Energy Policy with Barbara Finamore
Please join us for a lunch briefing with Barbara Finamore, Director of NRDC's China Clean Energy Project on Friday, September 10th. Barbara will lead a discussion on the development of China's first national regulations on demand-side-management (sponsored programs that use ratepayer funds to help customers take advantage of energy efficiency opportunities). She will also discuss her current work at the national level in China and with local municipalities in several regions to develop and implement effective DSM programs. Invitations will be sent in August.
Friday, October 1, 2004 (7:00 PM - 10:00 PM PDT) Benefit
Please contact NRDC for more information at (415) 875-6100.
NRDC's San Francisco Benefit 2004: A Night with Larry David
On Friday October 1, 2004 NRDC will be hosting their 2004 San Francisco Benefit: A Night with Larry David. Larry David, Creator and Star of Curb Your Enthusiasm and Co-Creator of Seinfeld, will be interviewed live onstage by KQED-FM's Michael Krasny as part of the City Arts and Lecture Series at Herbst Theatre. Reception and Dinner with Larry will follow the interview.
Thursday, October 21, 2004 (5:30 PM - 7:30 PM EDT) EcoSalon
Boston: Green Building Event with Dan Tishman
Our Fall green building event is scheduled for Thursday, October 21st. Speakers include: Dan Tishman, President and CEO of Tishman Construction and builder of one of the most sustainable skyscrapers in the world, the Conde Nast Building in Times Square, New York. David Clem, Managing Director of Lyme Properties, one of the country's biggest developers of life sciences properties. Lyme developed the Genzyme Center in Cambridge which is a showcase of green building technology. More details will be available in the coming months. Contact Ying Li at yli@nrdc.org if you have any questions.
E2 Membership
We hope you'll tell your friends about E2 and NRDC. To learn about E2 and our programs please go to www.e2.org. Information about NRDC can be found at www.nrdc.org.
Thanks for your support. Comments, questions and introductions to possible new members are always welcome! Learn how to join E2 at how to join. To learn more about the leaders of E2 please read about the E2 co-founders.
Bob
Epstein and Nicole Lederer, Editors
bob@bobepstein.to nicole@nicolelederer.com