Carbon Monitor

Volume 12 Issue 8 September 2007

California Sets Compelling Targets?

California's global warming law and the associated
carbon-related opportunities and risks are substantive.
This law promises to affect nearly every single
business, government entity, and household in
California...and other states are following in
California's footsteps. The magnitude of the problem,
the opportunity, and the risks are huge. Consider that:
By 2020 California has committed to reduce CO2
emissions by ~177 million tons while the state's
population will have grown by ~42%
Experts predict that a carbon tax of between $150 and
$200 per ton is needed to forestall disastrous climate
change by 2050.
Domestic CO2 reductions are transacting for between
$4 and $12/ton.
Some early actors will do very well....others will end
up investing in projects that produce little in the way
of tradable CO2e.
While Governor Schwarzenegger has vowed to use the
power of the market to address California's global
warming problem, a powerful democrat has promised
that he "..won't let Wall Street traders control our fight
against global warming."
www.cantorco2e.com
EU Price Update
The Dec08 eased further to close down at 19.83 Euro
while the Dec09 firmed at 20.37 up from 12 in March.
www.leba.org.uk
Food Crops don’t make Good
Biofuels
Biofuels, hailed by many as the green solution to
offset a coming oil shortage and reduce greenhouse
gas emissions, are not a cure-all solution, experts at a
water conference in Stockholm warned this week.
Biofuels, which are made from crops, require huge
amounts of water, a resource that is already in short
supply in many parts of the world. Bioenergy could
thus end up diverting water resources desperately
needed for food crops.
"When governments and companies are discussing
biofuel solutions, I think water issues are not
addressed enough," Johan Kuylenstierna, director of
the World Water Week conference, told AFP.
The annual gathering is being attended by some 2 500
water experts from around the world.
In the future "food production will need to increase,
water consumption will increase dramatically in the
agriculture sector and biofuels will increase. This
doesn't add up for the water perspective",
Kuylenstierna added.
"Where will the water to grow the food needed to feed
a growing population come from if more and more
water is diverted to crops for biofuels production?"
asked Stockholm International Water Institute (SIWI)
spokesperson David Trouba.
According to SIWI, in 2050, the amount of additional
water needed for bioenergy production will be
equivalent to the amount required by the agricultural
sector to feed the world properly.
"Biofuels are not 'the' solution, but one of the
solutions," Kuylenstierna stressed.
'Good as an idea, bad in practice'
Meanwhile Sunita Narain, the head of the Centre for
Science and Environment in India and a prominent
expert at the Stockholm conference, said biofuels were
"good as an idea, bad in practice".

2 Carbon Monitor
EITG
Environmental Intermediaries & Trading Group Limited
The main priority should not be how to develop
biofuels, but rather how to put a halt to society's
increasing fuel consumption, she insisted.
She said it was "asinine" to believe that the world
would be able to continue to consume as much biofuel
in the future as it does fossil fuel today.
"If you want to use water for it (biofuel production),
you must cut down on the consumption of biofuels,"
she said, suggesting that ethanol be used for collective
transport such as buses to reduce the number of cars
on the road.
In addition to the water shortage issue, experts said
they also feared that large-scale biofuel production
would lead to a sharp rise in the price of food staples.
"Biofuel production could be a great competitor to
food production. Global food prices could increase,"
Kuylenstierna explained.
That thought was echoed by Narain, who criticised
price pressure on foodstuffs and cited the case of the
recent "tortilla war" in the United States.
An increase in US production of ethanol, made of
maize, in early 2007 led to a rise in the price of the
crop on the international market, which in turn
prompted a surge in the price of tortillas, a corn-based
bread that is a staple among Mexicans.
The United States is investing heavily in developing
its ethanol production, which now accounts for five
percent of fuel volumes sold in the country.
For 95 litres of pure ethanol, some 200kg of maize are
needed, or the equivalent of enough calories to feed a
person for an entire year, SIWI noted.


Contact Details
Terry Quilty ph 64 21 250 6789
fax 64 9 920 1093
skype terryquilty
email terry.quilty@eitg.co.nz
Richard Hayes ph 64 21 310 301
fax 64 9 920 1093
skype richardshayes
email richard.hayes@eitg.co.nz
Simon Baillieu ph 27 82 558 9616
skype sbaillieu
email simon.baillieu@eitg.co.nz
‘
Carbon Monitor’ is a client service of EITG.
EITG develops, facilitates and engineers Carbon Mitigation
projects and strategies.
EITG corporate advisory provides high-level briefings and
advice on building robust responses to emerging regulatory
structures.
EITG provides trading platforms and strategies based on
extensive mitigation and avoidance platforms under JI and
CDM, with matched offset packages for emitters.
EITG is part of an international consortium with representation
in Asia/Pacific, UK, USA and South Africa

Environmental Intermediaries and Trading Group Limited
phone 64 21 310 301 fax 64 9 303 0610
P.O.Box 9185 Newmarket Auckland, New Zealand
www.eitg.co.nz

To subscribe email Richard Hayes with your full contact
details.
Portions © 2007 Environmental Intermediaries &
Trading Group Limited all rights reserved
www.eitg.co.nz