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European coal and gas power on the way out

AcidNews June 2015

In a conference in mid-May organised in the run-up to the Paris climate negotiations in December 2015, gathering corporate executives from major power companies, Gérard Mestrallet, chief executive of Engie, one of the world’s biggest power companies said that fossil fuel electricity generation indeed is on its way out in Europe.

The profitability of gas and coal power generation have deteriorated to the point that future growth is more likely to come in big emerging markets such as India and China. According to Mr Mestrallet, power companies have stopped investing in thermal power generation in Europe and instead are investing in renewables.

European power companies are adapting to a market in which renewables are more profitable. Furthermore these power companies often struggle with overcapacity and competition from the growth of subsidised renewables. However, European power companies continue to build big power plants in emerging countries: Brazil, Chile, Peru, the Middle East and Asia.

Most of the corporate executives claimed to take climate change seriously and thus wanted to see Europe as a zero emissions area in 2050, with companies such as Czech CEZ taking the lead.

Source: Financial Times, 21 May 2015

Fossil fuels subsidised by $10 million a minute

AcidNews June 2015

Fossil fuel companies are benefitting from global subsidies of US$5.3 trillion a year, equivalent to $10 million a minute every day, according to a startling new estimate by the International Monetary Fund (IMF). In per cent of GDP, global energy subsidies are estimated to increase from 5.8 per cent of global GDP in 2011 to 6.5 per cent in 2015.

The IMF describes the numbers as “shocking”. They exceed global public health spending, estimated by the WHO at US$4.3 trillion in 2013. “It is one of the largest negative externalities ever estimated”, says Vitor Gaspar at IMF.

Most subsidies (59%) are for coal. In dollar terms, the top five subsidisers are China, United States, India, Russia, and Japan. Subsidies in the European Union are similar to those in India.

Source: The Guardian, 18 May 2015

The IMF working paper ”How Large Are Global Energy Subsidies?” is available at

New Zealand city to divest from fossil fuels

The local government of Dunedin, a mid-sized New Zealand city, voted to divest from fossil fuels this week. The council’s $82.5 million fund currently holds about $1.5 million in fossil fuel shares after dumping about $500,000 more earlier this year because “outlook for those shares is not as good as it could be.” Carla Green reports.

Almost a year ago, international headlines hailed Dunedin as the first New Zealand city to divest from fossil fuels. Now, that title will finally be deserved – almost.

Back in May of 2014, the Dunedin City Council – or the DCC – voted to draft a “socially responsible investment policy.” The proposed policy would bar council fund investment in a number of industries, including pornography, tobacco, and fossil fuels.

Just under a year later, the DCC voted to approve that policy.

“Well it’s been a long time coming,” said Rosemary Penwarden, a spokesperson for Oil Free Otago, an activist group that has been campaigning for council divestment for over a year. While the Council has up to two years to implement the new policy, Penwarden sees its approval as a positive step. “It’s a very strong message that the council is quite aware of what is known as the carbon bubble. And what’s soon to be stranded assets. If we’re to keep the world below the two-degree level of warming that was agreed to by world governments in Copenhagen in 2009, we just cannot burn most of what these industries already had on their books.”

In the year that has elapsed since the initial vote last May, Dunedin has missed the metaphorical boat to be New Zealand’s first city to divest – Christchurch beat them to it.

Last year, Christchurch City Holding Limited, the company that holds the city’s investments, passed a policy not to invest in a number of industries like tobacco and “companies whose primary focus is the extraction and production of fossil fuels.”

Unlike Dunedin, though, the decision was not a public one voted on by councilors, so it mostly passed under the radar – and out of the public eye.

In any case, Dunedin Mayor Dave Cull said being the first wasn’t the point. “The ambition wasn’t to lead the way, the ambition was A, to do what we thought was the best thing, the right thing, and B, it was prompted by our community,” Cull told FSRN. “We went out for consultation, asked them about socially responsible investing. We had already an informal policy excluding tobacco and armaments, and the community came back overwhelmingly and said ‘we want you to exclude fossil fuel extraction as well.’ So we listened to that.”

The vote was close – seven councilors and the mayor for, seven councilors against – and the council’s decision isn’t without its critics. “I feel it is hypocritical when we rely so heavily – all of us – doesn’t matter what side of the argument you’re on, all of us, to get by, by using fossil fuels, by burning fossil fuels,” remarked City councilor Andrew Noone, one of the seven who voted against adopting the policy.

Plus, he said, divestment from the fossil fuel industry might discourage oil and gas companies from setting up in Dunedin. Several companies are currently prospecting for fossil fuels in offshore New Zealand waters around the country, including areas off the coast of Dunedin.

But Mayor Cull says that divestment won’t discourage oil and gas companies from coming to Dunedin, and that it shouldn’t. “There are people who believe that the issue of divestment from fossil fuel extraction and the issue of Dunedin possibly being a support base for the oil and gas exploration off our coast are linked. I personally think that’s a lot of rubbish.”

The city council isn’t the only Dunedin institution to mull divestment. The University of Otago – one of the most well-known universities in New Zealand – is based in Dunedin. Its board said last month that, after receiving a letter from several high-level academics at the university, it too, was considering divestment.

The university noted that less than 1% of the fund is currently invested in the fossil fuel industry, but with a $169.1 million fund less than 1% could be over $1 million.

“The university divestment was really initiated by staff, who have got together and asked them to consider divesting,” says Penwarden of Oil Free Otago. “I don’t know where it is at now, but the students have come on board, so there’s a lot of encouragement, and a lot of support. We’re really encouraged by the support from students and from the staff about this.”

If the university does divest, it won’t be the first in New Zealand to do so – Victoria University in Wellington has already beat them to it.

Fossil fuels are the new tobacco when it comes to health risk

As future doctors we call on the Wellcome Trust and the Bill and Melinda Gates Foundation to remove their investments from fossil fuel companies. We share a responsibility to our future patients to address unmitigated climate change – described as “the biggest health threat of the 21st century” – and to advocate for a transition to a healthier, more sustainable economy. The British Medical Association has already divested and many other medical and health organisations are following suit. Continued investment in the fossil fuel industry violates health workers’ obligations to do no harm and grants the industry the social licence to explore and exploit still further reserves, resulting in catastrophic global warming.

Group representing 1m medical students backs fossil fuel divestment

Of currently listed fossil fuel reserves 80% must remain unburned to keep surface temperature warming below 2C above pre-industrial levels. Climate change threatens health both directly through frequent flooding, heatwaves and natural disasters, and indirectly by worsening food insecurity, conflict and mental health. Fossil fuels also directly harm workers and local communities by toxic exposures, air pollution and local environmental degradation.

A transition to renewable energy generation and low-carbon, active transport would prevent millions of deaths worldwide from cardiovascular, respiratory, and other diseases.

Thirty years ago, health professionals declared that investments in the tobacco industry violated their responsibility to protect and promote health. They triggered a wave of divestment that played a significant role in the tobacco control movement’s subsequent successes. The threat to public health posed by fossil fuels is even greater, but fossil fuel companies – just like the tobacco industry – continue to fund the subversion of scientific research into climate change and legislation directed at its mitigation. The arguments that led the health sector to divest from tobacco provide a still more compelling mandate for divestment from fossil fuels.

We call on the Wellcome Trust and Gates Foundation to divest from the fossil fuel industry and show the leadership we, as future health professionals, need to bring about a healthier, more sustainable economy.

Lucas Scherdel University College London and national director, Medsin UK
James Lawler University of Newcastle and president, Australian Medical Students’ Association
Agostinho Sousa President, International Federation of Medical Students Associations
Alice McGushin University of Tasmania
Karen Zhang Monash University
Natasha Abeysekera University of Tasmania
Paul Thuesen University of Wollongong
Suleman Atique Taipei Medical University
Amanda Zhou UNSW
Maud Taylor Adelaide University
Bryan Tan Monash University
Torunn Hjøllo University of Bergen
Vijendra Ingole Umea University
Nathan Cantley Queen’s University Belfast
Mustafa Uğur Özel Muğla Sıtkı Koçman University
Clarissa Soh UWA and Code Green officer, WAMSS
Steve Pan University of Notre Dame
Thomas Luckman University of Tasmania
Imtiaz Hafiz University of Dhaka
Molly Wilkinson University Notre Dame
Charlotte Holm-Hansen University of Copenhagen
Pool Aguilar León Antenor Orrego Private University
Georgia Diebold UNSW
Matteo Dameri Genova University
Jon Herriot University of Saskatchewan
Katelyn Tadd University of Melbourne
Garbrielle Fernandez University of Queensland
Isabelle Bruneau Université de Montréal
Carmen Hayward Flinders University
Claudel Petrin-Desrosiers University of Montreal
Robin Dru St George’s, University of London
Eleanor Dow University of Edinburgh and national coordinator, Healthy Planet UK
Madeleine Payne University of Edinburgh
Ryan Forrest University of Edinburgh
Alexander Lewis Wade University of Edinburgh
Roshni Patel University College London
Cameron Stocks Barts
Dr G S Mead
Dr Jo Veltman
Marcus Hollyer University of Edinburgh
Colin Irving University of Edinburgh
Peter Eves Edinburgh
Trabelsi Souha FMT
Racha Tohme University of Balamand
Wenzhen Zuo Université de Montréal and national coordinator of global health, Ifmsa-QC
Anneleen Boel Ghent University
Kelly Lau McGill University
Shang-Jung Hsieh National Yang-Ming University
Camille Pelletier Vernooy Université de Montréal
Fabian Falkenbach Ruprecht-Karls-Universität Heidelberg
Helen Zhang University of New South Wales
Alisha Patel University of East Anglia
Nina Nguyen University of Sherbrooke

The true costs of our electricity

Way Kuo says our calculation of the least costly way to generate electricity will be skewed, as long as the environmental harm of the use of fossil fuels is not properly accounted for

Smog is a major problem facing Beijing and many other places on earth today. It is also a reminder that environmental pollution has reached a critical point in human history.

The recent documentary Under the Dome, an in-depth report on environmental problems in China by Chai Jing , has triggered a heated debate over the credibility of its sources. But the debate has sidestepped one of the critical issues facing humanity: greenhouse gas emissions and their impact on the environment and the sustainability of earth.

Energy is a necessity in modern life. Our dependence on electricity has left noticeable carbon footprints on nature. Of the broad spectrum of energies, fossil fuels (coal, natural gas and oil) are still the major energy sources for electricity generation, accounting for 67 per cent of world electricity production as of 2012, in spite of pledges by governments around the world to increase the use of renewable green energies. The rest comes from cleaner energies like hydroelectric (17 per cent) and nuclear (11 per cent).

According to the Intergovernmental Panel on Climate Change, approximately 37 per cent of total carbon dioxide emissions are from electricity production, especially from burning coal. The level of atmospheric carbon dioxide is building up and that build-up is accelerating as electricity demand is expected to increase by 43 per cent over the next 20 years.

Nuclear energy, in comparison, ranks among the lowest of any electricity generation methods in terms of greenhouse gas emissions and is comparable, on a life cycle basis, to wind, hydropower and biomass energy. It emits one-fifteenth and one-thirtieth as much greenhouse gas as natural gas and coal respectively.

And yet, nuclear energy has been a controversial topic ever since its adoption for commercial use. There are as many opinions about this problem as there are experts. While it is praised as one of the possible solutions to the energy shortage, it is condemned by others as “an unbearable inheritance” for future generations. The nuclear accident at Fukushima Daiichi nuclear plant in 2011 brought the safety concerns sharply into the public eye again.

People are haunted by the fear of nuclear disasters when, in reality, nuclear energy has a strong safety record. Nuclear power plants achieve a high degree of safety by using what is called the “defence-in-depth” approach with multiple physical barriers built into their operation. These physical barriers prevent operational disturbances or human failures and errors, which have been found to be the cause of 80 to 90 per cent of mishaps. Even the Fukushima nuclear accident, triggered by a magnitude 9 earthquake and catastrophic 14-metre-high tsunami, has been defined as “a profoundly man-made disaster”.

According to a report published in the March 2013 issue of Environment Science & Technology by scientists from Nasa, nuclear power has made greater contributions to the welfare of humankind than all other energies in use. The report pointed out that, even taking into account the serious consequences of the three biggest nuclear disasters in history, the benefits derived from the use of nuclear power between 1971 and 2009 have helped to prevent 1.8 million deaths resulting from causes related to the use of fossil fuels, especially coal.

Also, according to a December 2013 Lancet article by Chen Zhu, China’s former minister of health, and his colleagues, air pollution causes 350,000 to 500,000 premature deaths on the mainland each year. The main polluters are industry, coal and vehicles. This is believed to be a conservative estimate, and provides further evidence that carbon dioxide reduction is a necessity.

At present, nuclear power plays a significant part in a spectrum of energies in producing base-load power (a dependable source that can meet minimum demand) and this will continue for the foreseeable future. The other energy sources used for base-load power are fossil fuels.

In the past, increased use of nuclear energy to replace fossil fuels has contributed to a reduction in carbon dioxide emissions. Therefore, it will be devastating to continue the use of fossil fuels for base-load power instead of cleaner energies.

People demand nuclear safety, and yet tend to turn a blind eye to the adverse environmental impact of fossil fuels and the millions of deaths caused by coal mining. With modern technology and increases in oil prices, non-traditional fossil fuels such as oil sands in Canada, pre-salt deposits in Brazil and shale oil in the US have been discovered in abundance since the beginning of this century. Yet the development of this new generation of fossil fuels will do nothing to reduce water and air pollution but in fact will create more severe pollution than traditional oil because of the extraction methods.

There is no free electricity. Given that different energies involve different levels of risk and environmental pollution, we should adopt a rational and scientific approach to policymaking. The cost of using electricity must take into account the economy, the costs of electricity generation, transmission and transformation, the sustainable well-being of the environment, safety, reliability, and other social and psychological factors.

Consumers could choose what combination of various sources of electricity they are willing to accept and then be charged in accordance with the declared percentage, the amount of the electricity consumed, the production cost and the cost of the risk.

We cannot afford to continue to overlook the phenomenon of global warming. The true cost of electricity should be shared by everyone.

Professor Way Kuo is president of City University of Hong Kong and a member of the US National Academy of Engineering. This article is based on a recent talk delivered by the author at Peking University

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