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Where will the money come from?



Published January 15, 2010
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I think it is appropriate to begin my 2010 columns with a few comments about the climate control conference that finished in mid-December in Copenhagen. I was just returning from a trip abroad and the conference had completed its first week of debates and political intrigue. On my last night in Europe I stayed at my usual hotel near the airport. I've been staying at this place for 25 years. I was surprised to see a new set of amenities in the bathroom and I thought how timely, given what I'd like to write about, Copenhagen and climate change.

The shampoo and bath gels are normally in classy containers. They're pretty fancy and I always stuff them in my bag to bring home. This time, lo and behold, there was something different awaiting me. Gilchrist & Soames, the supplier of the products that I had used over the years, had made dramatic changes. Their shampoo was Beekind, made with "honey and organic red clover extracts." Read the pitch: "Beekind to yourself by not using products with parabens, phthalates, or artificial colors. Beekind to your neighbors, animals, waiters, and waitresses." (OK, that's a bit much!) "Most importantly, Beekind to the environment so future generations can enjoy our planet's breathtaking beauty."

Then there was a list of the chemical composition of the shampoo, all friendly, and finally a description of the package: "This paper bottle is a 92 percent reduction in waste after use compared to plastic." Naturally, G&S finishes with the proclamation that the honey bee population is in trouble, and a portion of the proceeds from the purchase of the product will be put toward honey bee reproduction and supporting sustainable pollination research.

I loved it and it couldn't be more appropriate to this column. (By the way, I looked at the package carefully. I thought it would utilize an internal polyethylene coating or a wet strength resin like melamine or formaldehyde. It did not. It used a pure foil laminate which can be floated off in the repulping process. Someone at G&S is thinking. I was impressed).

So what about Copenhagen, and how will decisions and non-decisions affect our industry? Indeed, should our industry be concerned at all?

There is no question in my mind that Kyoto and now Copenhagen have made climate change a public and visual concern. While I'm concerned about the melting of the ice cap and the stress that this will put on the survival of the polar bear, I'm more concerned about the pollution hunger, and general life style of those who live below the poverty level. I've been to the landfill in Manila. I have driven the back roads of India and China. You are immediately struck by a seemingly impossible situation. What has Kyoto done to make changes in that kind of environment? What will Copenhagen accomplish when these cultures do not or cannot take care of their own environment and poverty?

I am very cynical about these cultures and our industry. Not only am I cynical but I'm angry. Why do India, Indonesia, Bangladesh, the Philippines, and others look to the West to bail them out? What have they done to change and improve? The infrastructure of these countries is abysmal. You can't run a small coating machine in India more than 30 meters a minute because there is insufficient power. Why? You bet I'm angry. And these countries, and many more, want the West to bail them out of the mess they have created. I'm sorry, I have a problem. India and Africa and all the countries that are screaming for money need to make sacrifices and commitments to change. Put in population control practices, start Roosevelt depression type programs, be proactive. Stop waiting for the West (and now China) to bail you out. Yes, I'm angry and frustrated.

Copenhagen has made me reflect on a variety of issues and situations. Let me see if I can present them in an orderly fashion.

Why can't we burn trash for energy? If the proper scrubbers and emission devices are installed I see nothing wrong with waste-to-energy. Certainly WTE facilities should be built in locations where they don't cause controversy with residents. And certainly facilities must operate with systems that eliminate carcinogens.

Environmental law is much more evident today, at Copenhagen, and in our industry, than ever. "Environmental law encompasses concerns ranging from air and water quality to the decontamination of hazardous waste sites and the protection of biodiversity." (Sonia Kolesnikov-Jessop). Climate change is so complicated and "the law" affects so many different issues. Second, change is occurring so quickly in administrative, legislative, and judicial branches that we can barely keep up. The complexity is incredibly challenging and I see most major corporations looking to outsource consultancies for guidance. It is just too complex. The West is far ahead of the Asia-Pacific region, without a doubt.

Copenhagen has reinforced the debate on financial responsibility for cleaning up the world. The European Union wants to put $7 billion into a clean-up package for developing nations. The developing nations want $100 billion. As of this writing, the United States' lead climate negotiator, Todd Stern, is equivocating. He realizes that his nation will have to participate in a financial contribution but hasn't made a commitment. He also recognizes that any commitment must be approved by the US Congress and that puts us back into the political arena. Certainly Stern has drawn a line in the sand by stating there will be no financial commitment to China. His point, reading between the lines, is that China is no longer a developing nation. That country causes as much greenhouse gas as any other place in the world and has the resources to make change. I agree.

China approaches climate change very practically. They have stated that they will cut their "carbon intensity" by 40 to 45 percent by the year 2020. The government has even calculated what it will cost the average family. I love this. It is so simple. If we want to change we must all contribute. Each Chinese family will have to spend 440 yuan ($64) to reach the national goal by 2020. Do the arithmetic: 1.5 billion times $64. Pretty simple, right?

When you're in China you read the local newspapers – China Daily, Shanghai Daily, and the like. Published by the Communist party, the lead articles shout out the glory of the state. How about, "Chinese Rise to the Climate Challenge," with a picture of the Nepalese cabinet meeting below Qumolangma Mountain to emphasize glacier melting caused by global warming. Right next to this picture is a "people graph" showing that 68 percent of the Chinese population will pay more to fight climate change. Only 51 percent of the Mexican population will pay more. There was no mention of the US. Hmm.

Carbon trading was a major discussion point in Copenhagen. Europe has already legislated cap and trade and I believe we'll see some form of the same in the USA in the not too distant future. Australia, on the other hand, had planned to set up one of the first carbon trading systems to cut greenhouse gases but a political battle has changed that effort. Australia is a small greenhouse gas polluter in global terms, but one of the worst per capita because it relies heavily for its electricity on its abundant reserves of coal, which makes it the world's largest exporter of this polluting fuel. And the beat goes on.
Here's a summary of who wants what in Copenhagen, although I acknowledge that there is so much horse trading that one wonders if this is accurate:

Indonesia, the No. 3 emitter of carbon dioxide because it won't stop deforestation, wants funding to cut its emissions by 41 percent by 2020. (Where will the money come from?)

Russia doesn't make climate change a big priority. They want to change their old industrial infrastructure to improve efficiency and this will allow them to improve energy efficiency by 40 percent by 2020. (Where will the money come from?)

Africa blames developing nations for greenhouse gases but if they get funding they will make changes. Mind you, the African continent is under such stress with poverty, over-population, drought, conflict, and general mismanagement of resources that their immediate focus has to be survival. (Where will the money come from?)

India says it is finally ready to cut emissions. However, it won't accept binding targets. It needs outside funding to improve and says that the West must provide the same because they caused the problem. (Where will the money come from?)

The EU says it will cut CO2 emissions by 20 percent by 2010. Wealthy nations will make contributions proportionate to their emissions. The western countries will contribute more than the eastern countries. (Where will the money come from?).

And last but not least, the United States, if it can muster a legislative quorum, believes it can cut emissions by 17 percent by 2020. Of course, there are conditions: They want commitments by others, particularly India and China. The US also wants strict standards with regular auditing and reporting. (Where will the money come from?)

I could go on, but those of you who have made it this far don't deserve any more. I'll just leave you with one last story. Europol, the EU's law enforcement arm, has just admitted that a "carbon trading fraud" has cost the government €5 billion. The fraud involved adding the EU's value added tax to the price of carbon dioxide permits sold to businesses. Fraudulent brokers then disappeared before repaying the government. I thought something like this could only happen in America.

From where I look it appears there's a global epidemic. We have an awful lot to do before we will be successful with climate change. None of the countries that committed to change at the Kyoto conference are compliant with emission levels. Will this change with Copenhagen? Time will tell. Will our industry improve? Time will tell.

Back to the question: "Where will the money come from?" Let's stop pointing fingers and work together as a glove to make this a better world. Happy, happy New Year everyone and go 2010!

Another Letter from the Earth.
Calvin Frost is chairman of Channeled Resources Group, headquartered in Chicago, the parent company of Maratech International and GMC Coating. His email address is cfrost@channeledresources.com.



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