The “NEVIL” award is named after Nevil Shute, author of the novel “On the beach“, which is the best known of his 24 published novels. It is a book about everybody on the planet dying from radioactive fallout after a nuclear war, which may be an appropriate metaphor for global warming considering the possibility of Venus syndrome.
I recall that Jim Hansen seems to have changed his mind about that risk. So maybe it is less likely to happen than Germany beating Brazil by 7 to 1. But global warming is a potential human extinction risk, at least more so than nuclear war. And calling attention to that risk by writing novels is what I want to do.
I feel pleased and honored to be included in a list with Paolo Bacigalupi, who in contrast to me is a professional fiction writer who knows what he’s doing.
I have started a list titled Cli-Fi: Climate Change Fiction on Goodreads, and I have read and reviewed some efforts of other authors who write about climate change. But I have yet to find one climate change novel that actually proposes a solution to our little global warming problem that might just work. I am motivated in part by doing exactly that, and “Last Week” does propose a solution, like my other two global warming science fiction novels.
The other motivation is that I would like to scare readers, since humans are by nature not suited to understand the enormity of this risk. See this 2012 post titled “Don’t Fear the Raptor” for a more detailed explanation of that point.
The largest chunk of that is oil and gas exploration. Oil exploration investment has gone up by a factor of three since 2000, but output has only increased by 14 percent.
The Telegraph article worries about these assets becoming “stranded”. They say that global warming considerations may require for most of the oil to stay in the ground, in which case it will become difficult to realize any return on these high investments.
I agree in part.
The oil industry should refrain from increasing their exploration investments in this way. Go back to the $230 billion a year they invested in 2000.
The predictable outcome is that supply will become restrained. That in turn will increase oil prices, which will lead to higher profit margins for the oil industry, as well as higher valuations of their existing reserves. And less CO2 emissions from burning oil.
I recall blogging about this briefly in summer 2011. This program wants to provide subsidy funds for renewable energy and carbon capture and storage projects. The funds come from selling 300 million EU carbon emission allowances. In 2011 one could expect EUR 4.5 billion from that, but the final result was much less. As the European Investment Bank reports, they only got an average of EUR 8.05 for the first 200 million and an average of 5.48 for the last 100 million. That adds up to 2.158 billion, or less than half the sum expected.
The awards in this second and final round were for 18 renewable energy and one carbon capture and storage project. The latter got the biggest award at 300 million. Most of the awards for renewable energy projects are one order of magnitude smaller.
EUR 2.158 billion is not much when distributed over the whole of the EU. That would be less than 5 per capita. But even small steps in the right direction should be cheered.
Blog post at the Rocky Mountain Institute.
Short version: Renewable in Japan compares to Germany like Japan’s soccer team to Germany’s. Only one of them is in the finals.
The good news for Japan is that it actually has the best renewable resources of all industrialized countries, as I learned from this article, with nine times Germany’s resources.
All it takes is some policy changes to unleash renewable power here as well.
Giles Parkinson writes at Reneweconomy about the coming visit of Japanese Prime Minister Abe to Australia and a region thereof called “Pilbara” I had never heard of until now. That region is about 502,000 square kilometers, which is around 1.4 the size of Germany, and had a whopping 48,610 in population in 2010.
As Parkinson points out, at least one group in Australia “has plans for a feasibility study” for making hydrogen from solar energy in Pilbara. That hydrogen then could be exported to Japan, if things scale up.
I recall having started a blog with the title “Hydrogen Mongolia” in 2006 with exactly the idea of making hydrogen from renewable energy in the Gobi desert. In 2012 I wrote a book titled “Energy from the Mongolian Gobi desert” about this. It is available as a free PDF file on this blog.
So I welcome the news that some Australians have plans to study the issue. Australia has great solar resources. If they start making fuel from them, the could stop exporting their stinking coal and get to supply a large part of the World’s fuel once everything has moved over to renewable.
While hydrogen is certainly one way to do it, they could also have a look at the alternative of using the limestone cycle.
The EBA has published a useless and harmful paper titled “EBA Opinion on ‘virtual currencies’” on July 4th. The EBA is the “European Banking Authority“, a regulatory body of the European Union based in London.
It lists “over 70″ risks of using virtual currencies like Bitcoin. I get the impression that they tried very hard to find anything possible to talk Bitcoin down. I don’t have time to address all of their points, but a couple of samples should give you an idea.
For example, they see it as a “risk” of the Bitcoin system that an exchange operator like MtGox has gone bankrupt. That makes as much sense as blaming the inability of Greece to pay back their debt as a “risk” of the Euro. Or even less, since while the MtGox mess was of significant volume, that volume of course pales compared to the risks of reckless state debt levels, bailouts of failed banks with taxpayer money, and other illegal abuses of the current financial system like the LIBOR scandal.
Another “high priority” risk they see is that of volatility. They completely fail to mention the little fact that anyone who has held bitcoins for more than a year has realized (on average) a more than ten fold increase in the worth of that investment, something not happening very often in financial markets. I challenge the EBA to name one (1) investment that has outperformed bitcoins over the last four years.
Anyway, there are lots of investments that are high risk in the first place and can then be leveraged into even higher risks. The Credit Default Swaps mentioned above come to mind. Since when is it the business of a regulator to worry about investment risks citizens are taking, as long as they are informed about that risk? And since when is it acceptable for a regulator to ban any investment that is not absolutely stable?
One last example, this one of a “risk” that is clearly completely fabricated, just to show to what lengths these guys go to make Bitcoin somehow look bad:
The inevitable lack of standards and definitions found in innovative products and services makes it difficult for users to gauge the features of a particular VC scheme. The units of the VC scheme bought may even transpire to be different from the expected scheme. The risk arises because anyone can anonymously create (and subsequently change the functioning of) a VC scheme, any computer file can be misrepresented as a VC and any scheme name can be given to that file, including the name of an existing, genuine VC. Once the user detects the misrepresentation, they will be unable to reverse their decision as VC transactions are not reversible, the counterparties are anonymous, no legal contracts exist, and no complaints procedures are in place. The risk is of medium priority.
Yes. Anyone can create a new virtual currency scheme. But I challenge the EBA to try to create a new scheme and trick anyone into thinking that their units of value are actually bitcoins. That would be the equivalent of counterfeiting bitcoins. No one can do that.
Their proposed short-term remedy:
To that end, the EBA recommends that national supervisory authorities discourage credit institutions, payment institutions, and e-money institutions from buying, holding or selling VCs, thereby ‘shielding’ regulated financial services from VCs.
They should shield these institutions from gambling at the Credit Default Swap casino instead. CDS are a real risk to the stability of financial systems, since there were over $25 trillion outstanding CDS contracts in 2012. Bitcoin and other virtual currencies are small in comparison. There is no way they could pose a threat to the stability of the financial system at their current market caps.
This is the equivalent of a regulator in 1994 recommending that banks refrain from dealing with the “risky” Internet, as long as there is no Central Internet Authority (CIA) that would be responsible for any concerns regulators like the EBA might want to raise.
And it is a perfect way to actually increase risks to consumers. MtGox was allowed to go bust with over $500 million in customer assets exactly because it was not regulated like a bank. If the EBA wants banks and other financial institutions to stay away from the Bitcoin network, that by definition only leaves unregulated and therefore less secure institutions to provide services like exchanges.
Way to go, EBA. You are making things worse for the citizens you are supposed to protect.
The EBA also floats the idea of a “scheme governance authority”, which would in the case of the Bitcoin network be called the “Bitcoin governance authority”. The existing Bitcoin Foundation might evolve into something like this. Again, from the paper:
It is a legal person, and is responsible for maintaining the integrity of the central transaction ledger, the protocol, and any other core functional component of the scheme. The scheme governance authority would be required to comply with regulatory and supervisory requirements of various kinds to mitigate identified risks.
I guess one could build such an institution. One could also build a Central Internet Authority.
But trying to “shield” financial institutions from the “risks” of Bitcoin until that happens is as realistic as trying to shield them from the Internet. Of course banks will need to integrate Bitcoin services, or the whole sector will be left behind in the European Union compared to the United States or Japan, who as of now don’t suffer from this kind of fear of the unknown.
Update: Ken Tindell discusses this report in much more detail here. He doesn’t have a high opinion of it either. As he explains, the authors don’t seem to understand Bitcoin, especially the fact that while everybody can build a new virtual currency, it is very difficult to match or surpass Bitcoin’s network effect advantage.
According to the Ministry, the reform is not about putting the brakes on renewable deployment (page 3 of the document). They point to the fact that under the new law the renewable share for electricity is to reach between 40 and 45 percent until 2025, and between 55 and 60 percent ten years later.
The present law requires 35 percent in 2020, 50 percent in 2030, 65 percent in 2040, and 80 percent in 2050. If one averages the goals for 2025 to 42.5 and for 2035 to 57.5 percent, that is exactly what was required by half time of the ten years’ periods under the old goals.
So yes, the new goals are the old goals, at least in the big picture.
But the new FAQ also has this to say, on page 2:
Das Motto lautet nun nicht mehr „je mehr und schneller, desto besser“, sondern „je planvoller und vernetzter, desto besser.“ (The new motto is not any more “the faster and the more the better”, but “the more planned and the more integrated into the grid the better”.
Rejecting the previous idea of “the faster the better” sure sounds like putting on the brakes.
I don’t like that. But I have voted for the Green party, which lost in the election last year. So I can’t expect to have my ideas about the matter prevail. Instead, I need to accept that the majority parties building the coalition in Germany are not interested in a speedy transition to renewable energy.
But it is also true that they have at least not reduced the speed of the big goals in Article 1 of the law.
I guess that’s good news under the circumstances.
The reform of the German Law on Priority for Renewable Energy that recently passed the German Parliament (Bundestag) is a long text with many interesting aspects. Understanding all the details requires some serious efforts. Energy lawyer Matthias Lang reports he had an intern running away from his internship when he asked him for help studying this issue.
I for one don’t plan on running. But it is of course also impossible to discuss all aspects of this reform in one blog post. For anyone who wants a short overview I recommend this post by Craig Morris.
The way to go ahead is to look at the new law and discuss interesting points in separate posts.
With this post, I would like to point to Article 29 Paragraph 4 Number 3 of the new law. It introduces for the first time the possibility to increase solar feed-in tariffs.
Paragraph 1 sets a goal of between 2.4 and 2.6 GW a year of new capacity. Wind has the same goal in Article 28 Paragraph 1, except that for wind all capacity abandoned in that year is added, so the goal is a net increase.
If there is less than 1 GW new solar capacity, the feed-in tariffs go up by 1.5%. As far as I know that is a new idea. Solar feed-in tariffs only ever moved in one direction.
There was already a ceiling of 52 GW solar capacity before this reform. And Germany already has 36.5 GW as of 31 May of this year. There are only 15.5 GW left until that ceiling is reached. It doesn’t matter ever so much now how fast that will happen. 70 percent of the goal of 52 GW is already achieved.
But it is still worth noting that this law does not want the remaining 15.5 GW to take much more than six years. And it resorts to the unheard of extreme measure of increasing feed-in tariffs if the speed goes down too much.
Update: As Paul Gipe kindly pointed out by mail, the possibility of increasing feed-in tariffs for solar actually already existed before. I should have checked this and regret the mistake. A look at Article 20b of the Law in its current state confirms this.
Damn. So much for my attempt to find any good news.
The German newspaper Welt has collected some reactions by Energy Commissioner Oettinger on the Ålands Vindkraft decision of the European Court of Justice I blogged about yesterday. Thanks to this Tweet by Heiko Stubner for the link.
The headline is that Oettinger asks for a EU-wide “subsidy scheme” as a consequence.
That impresses me as kind of cheeky. The Court of Justice just said a couple of days ago that no, Member States are free to restrict their support schemes to renewable energy generated inside of their territory, so as to be able to plan the cost for those schemes exactly, and in consequence make sure that those schemes stay in place over the long term, to achieve investor confidence in the stability of these support schemes.
So how is that ammunition for the Commission position in their useless and harmful “Guidelines on State aid for environmental protection and energy 2014-2020” (Paragraph 122) that Member States are required to open their support schemes?
The logic goes like this. Since the Court has made it clear that there is no legal obligation to open these markets, it is all the easier to get Member States to cooperate voluntarily with this position.
I agree. Much of my opposition to the EU Commission’s position here is motivated by an intense distaste for the fact that they think they get to decide on these matters instead of the Parliaments of the Member States, who are actually elected by citizens and have the competence to decide about these matters under current European Union rules. If the Commission drops this position and argues for their point of view on the merits, it’s a completely new situation.
And there actually may be some merit to open support schemes. All things equal, having an internal market leads to more competition and more efficient production. That is true for renewable energy as well as for any other sector.
The decisive reason against doing this right now is, as noted by the Court, that Member States need to make sure the cost of their support schemes remains under control.
The way to deal with that problem is to have some kind of mechanism to distribute costs. If there is a lot of wind energy from Denmark coming into the German market, that would not be a problem if Germany and Denmark agree on how the associated costs are distributed between the two countries. Such agreements are possible under Directive 2009/28 already, which addresses this question in recital 25:
Member States have different renewable energy potentials and operate different schemes of support for energy from renewable sources at the national level. The majority of Member States apply support schemes that grant benefits solely to energy from renewable sources that is produced on their territory. For the proper functioning of national support schemes it is vital that Member States can control the effect and costs of their national support schemes according to their different potentials. One important means to achieve the aim of this Directive is to guarantee the proper functioning of national support schemes. as under Directive 2001/77/EC, in order to maintain investor confidence and allow Member States to design effective national measures for target compliance. This Directive aims at facilitating cross-border support of energy from renewable sources without affecting national support schemes. It introduces optional cooperation mechanisms between Member States which allow them to agree on the extent to which one Member State supports the energy production in another and on the extent to which the energy production from renewable sources should count towards the national overall target of one or the other. In order to ensure the effectiveness of both measures of target compliance, i.e. national support schemes and cooperation mechanisms, it is essential that Member States are able to determine if and to what extent their national support schemes apply to energy from renewable sources produced in other Member States and to agree on this by applying the cooperation mechanisms provided for in this Directive.
Articles 6 to 8 of the Directive provide the framework for joint support mechanisms, and Article 9 extends that to joint projects with third countries (for example Northern African countries building capacity in the Sahara desert, Desertec).