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Washington – March 14, 2008)

A new Environmental Protection Agency analysis of leading climate change legislation shows that the U.S. economy can grow substantially with an ambitious cap on global warming pollution, given that the bill will continue to speed the development of advanced energy technologies.

"EPA's results for the scenario that most resembles the bill confirm what we have seen in every reputable analysis.

We can grow our economy and tackle global warming at the same time,” said Nathaniel Keohane, PhD, director of economic policy and analysis at Environmental Defense Fund. “The up-front costs EPA identifies are a sound investment for a strong economy down the road. For clean air, less imported oil, and avoiding the damage of climate change, they are a bargain."

According to EPA’s analysis of the Lieberman-Warner Climate Security Act (S. 2191), economic modeling with confident high-technology assumptions shows the U.S. gross domestic product (GDP) growing 81 percent between 2010 and 2030 without a national emissions cap – and virtually the same amount, 80 percent, with the bill’s limit on greenhouse gases.

Other key findings of the EPA high-technology model run include: * Under the Climate Security Act, annual household consumption grows by 81 percent from 2010 to 2030 – just two percentage points less than what growth would be otherwise.

• Emissions allowances would cost $22 - $35 per ton in 2015 and $28 - $46 in 2030 – significantly less than other model runs that do not account for current energy policy and market mechanisms to manage costs.
• National electricity prices would never rise more than 20 percent over 2005 levels – and that change would happen slowly over decades.

"No single model run tells the full story, but we think the high-technology run in this case represents the best single set of assumptions. It underscores the need for continuing technological innovation, and the best way to drive that is by putting a cap and trade market in place,” Keohane said. "The high technology scenario is a map to the pot of gold, and frankly the most realistic path, but the Bush Administration and Senator Inhofe have forced EPA to run other scenarios that are extremely unlikely -- just to frighten the public about doing what's necessary.

“But one key question remains unanswered: what it will cost if we don't act quickly to cap emissions. There are two sides to the ledger," Keohane added. According to recent studies by the University of Maryland and Tufts University, unchecked climate change will strain public budgets and impact jobs and competitiveness in every economic sector.

According to the University of Maryland study, the most expensive climate policy for the U.S. is not having one.

### About Environmental Defense Fund Environmental Defense Fund is at the forefront of an innovation revolution, developing new solutions that protect the natural world while growing the economy. Founded in 1967 and representing more than 500,000 members, the group creates powerful economic incentives by working with market leaders and relying on rigorous science.

For more information, visit edf.org.

he developed world should go on a climate change diet rather than lecture China over its rising greenhouse gas emissions, Chinese Foreign Minister Yang Jiechi said Wednesday.

Yang told reporters that China’s per capita emission of the gases linked to global warming remained less than one third the average in developed countries. “It’s like there is one person who eats three slices of bread for breakfast, and there are three people, each of whom eats only one slice.

Who should be on a diet?” he said at a press conference on the sidelines of parliament. “If per capita energy consumption is viewed in the context of the fundamental principle that people are all born equal, then I don’t think some people are justified in talking about the large emissions of China, as if they have the moral high ground.”

China’s greenhouse gas output has soared in recent years as its largely coal-powered economy has expanded at double-digit pace, and it now ranks alongside the United States as the world’s biggest emitter.

However China has a population of more than 1.3 billion people, compared with around 300 million in the United States. United Nations scientists and environmentalist have warned that, regardless of who is to blame, there will be devastating consequences for the world unless all countries take urgent action to fight climate change. afp

The growth in China's emissions of the primary greenhouse gas carbon dioxide, CO2, is far greater than previous estimates, making the goal of stabilizing atmospheric greenhouse gases much more difficult, finds a new analysis by economists at the University of California.

The authors of the study, Maximillian Auffhammer, UC Berkeley assistant professor of agricultural and resource economics, and Richard Carson, UC San Diego professor of economics, based their findings upon pollution data from China's 30 provincial entities.

Auffhammer said the study should serve as an alarm challenging the belief that actions taken by the wealthy, industrialized nations alone represent a viable strategy towards the goal of stabilizing atmospheric concentrations of carbon dioxide.

"Making China and other developing countries an integral part of any future climate agreement is now even more important," said Auffhammer.

"It had been expected that the efficiency of China's power generation would continue to improve as per capita income increased, slowing down the rate of CO2 emissions growth," he said.

The Jinzhushan coal-fired power plant in China's Hunan province (Photo courtesy Hunan Datang Xianyi Technology Co Ltd)

"What we're finding instead is that the emissions growth rate is surpassing our worst expectations," he said, "and that means the goal of stabilizing atmospheric CO2 is going to be much, much harder to achieve."

Previous estimates, including those used by the Intergovernmental Panel on Climate Change, say the region that includes China will see a 2.5 to five percent annual increase in CO2 emissions between 2004 and 2010.

The new University of California analysis puts that annual growth rate for China to at least 11 percent for the same time period.

Based upon these findings, the authors say current global warming forecasts are "overly optimistic," and that action is urgently needed to curb greenhouse gas production in China and other rapidly industrializing countries.

The study is scheduled for print publication in the May issue of the "Journal of Environmental Economics and Management," but is now online.

The researchers' most conservative forecast predicts that by 2010, there will be an increase of 600 million metric tons of carbon emissions in China over the country's levels in 2000. This growth from China alone would dramatically overshadow the 116 million metric tons of carbon emissions reductions pledged by all the developed countries in the Kyoto Protocol.

The protocol was never ratified in the United States, which was the largest single emitter of carbon dioxide until 2006, when China became the largest emitter.

The projected annual increase in China alone over the next several years is greater than the current emissions produced by either Great Britain or Germany.

Researchers traditionally calculate the CO2 emissions for a region or country from data on fossil fuel consumption. Existing models then use those emission figures and factor in such variables as population size, a society's affluence and technology developments to forecast the growth of greenhouse gas emissions.

The Shentou-2 coal-fired power plant in China's Shanxi province (Photo courtesy Skoda Export)

In explaining the startling differences in results from previous estimates for China's carbon emissions growth, the UC researchers point out that they used province-level figures in their analysis to obtain a more detailed picture of the country's CO2 emissions up to 2004.

"Everybody had been treating China as single country, but each of the country's provinces is larger than many European countries, both in geographic size and population," said Carson.

"In addition, there is a wide range in economic development and wealth from one province to the next, as well as major differences in population growth, all of which has an effect on energy consumption that cannot be easily addressed in models based upon aggregate national data," he said.

Since data on fossil fuel consumption is not reported at the province level in China, the researchers used waste gas emissions, available from China's state environmental protection administration reports, as a proxy for CO2 emissions in this paper.

Moreover, the researchers said, the majority of other studies forecasting China's CO2 emissions relied upon information from nearly a decade ago. During the 1990s, per capita income was growing faster than the use of energy in China, which typically relates to slower growth in carbon emissions.

"A notable shift occurred in China around the year 2000, around the time when hope for an agreement with the U.S. on the Kyoto Protocol began to diminish along with external pressure for China to reduce its emissions," said Carson. "Energy use started to grow faster than income, and much of the energy that was used wasn't efficient."

The authors also pointed out that after 2000, China's central government began shifting the responsibility for building new power plants to provincial officials who had less incentive and fewer resources to build cleaner, more efficient plants, which save money in the long run but are more expensive to construct.

"Government officials turned away from energy efficiency as an objective to expanding power generation as quickly as they can, and as cheaply as they can," said Carson. "Wealthier coastal provinces tended to build clean-burning power plants based upon the very best technology available, but many of the poorer interior provinces replicated inefficient 1950s Soviet technology."

"The problem is that power plants, once built, are meant to last for 40 to 75 years," said Carson. "These provincial officials have locked themselves into a long-run emissions trajectory that is much higher than people had anticipated. Our forecast incorporates the fact that much of China is now stuck with power plants that are dirty and inefficient."

Copyright Environment News Service (ENS) 2008. All rights reserved.

 

MELBOURNE, Mar. 25, 2008 (Reuters) — Australian grape growers reckon they are the canary in the coalmine of global warming, as a long drought forces winemakers to rethink the styles of wine they can produce and the regions they can grow in.

The three largest grape-growing regions in Australia, the driest inhabited continent on earth, all depend on irrigation to survive. The high cost of water has made life tough for growers.

Some say they probably won't survive this year's harvest, because of the cost of keeping vines alive. Water prices surged above A$1,000 a megaliter last year from around A$300.

"On the back of three very ordinary years, this year is probably the worst that could have occurred with the drought and the high costs of water," said Michael de Palma, a mid-sized grower in Redcliffe near Mildura in the Murray Valley, one of the country's three big wine regions.

A farm worker hand prunes Merlot vines on an irrigated farm near Griffith, 490 km (305 miles) west of Sydney, August 22, 2007. Australian grape growers reckon they are the canary in the coalmine of global warming, as a long drought forces winemakers to rethink the styles of wine they can produce and the regions they can grow in. REUTERS/Tim Wimborne

"In this depressed situation, growers have only two choices, stick it out as long as they can or to cut their losses and get out," said de Palma, who is part-way through a weather-influenced early harvest on his 40-hectare vineyard.

Recent rains have bypassed the country's parched inland wine regions, and have fallen half-way through the harvest in eastern Australia, too late to help the berries and instead causing a mildew-like disease.

De Palma, the chairman of Murray Valley Winegrowers, said he would wait to see the results of his harvest before deciding whether to sell up or hold on to his vineyard, which mainly supplies Foster's Group, Australia's largest wine company.

He estimated around 40 percent of grape growers in the Murray Valley who had access to water trading couldn't afford to buy water last year, while most of the others had to borrow to do so, going deeper into debt.

Industry groups estimate up to 1,000 winegrowers out of around 7,000 may be forced to leave the industry this year because their vineyards are no longer financially viable.

"There's a Darwinian economics going on at the moment, and the outcome remains to be seen," said Paul Henry, general manager of market development at Australian Wine and Brandy Corp.

"One might say we're guilty of the charge of being slow to change thus far, but the experience of this harvest will change the outlook for Australian producers."

In some regions, such as the Murray Valley, wine grape yields are down 30-40 percent.

Australia's harvest is forecast to be down on average years, which may cut into exports in the A$6 billion industry.

Wine exports total some A$3 billion. Australia is the number one supplier of imported wine in the United Kingdom with a market share of 23 percent and it is second in the United States.

The smaller 2008 vintage, made worse by a record-breaking heatwave which withered grapes on the vines, is expected to push up prices and spell the end of cheap bulk wine after a three-year glut that produced a rash of no-name brands called "cleanskins."

WARMER AND DRIER

Scientists say Australia's vast inland winegrowing districts face the greatest degrees of warming.

These are the Riverland on the Murray River in South Australia, the Murray Valley, and the Riverina on the Murrumbidgee River in New South Wales.

And it is the grape-growers in these semi-arid areas that already face the greatest hardship, with calls to rural financial counseling services soaring in recent months.

"We believe there are 800 to 1,000 growers predominantly in Murray Valley and the Riverland in South Australia who are going to have to make a decision this year about whether they stay or go," said Wine Grape Growers chief Mark McKenzie.

A landmark study by the Commonwealth Scientific and Industrial Research Organization (CSIRO) found these areas would warm by 2.5 degrees Celsius by 2030.

Last year was one of the warmest on record for southern Australia, where all of the nation's winegrowing regions lie, as well as one of the driest.

And that is enough to change harvesting times as berries ripen earlier, which can also affect their quality.

"Climate change is the biggest issue we face. Relatively small changes in temperature and precipitation do have reasonably large impacts in terms of wine style," said Winemakers' Federation Chief Executive Stephen Strachan.

"Wine is a bit of a bellwether in terms of some of the very immediate impacts you see from climate change."

According to the CSIRO, grape quality could fall by 23 percent by 2030 because of the climate changes, and suitable land for viticulture could be cut by 10 percent.

The solution may be for cooler climate areas, such as the bayside Mornington Peninsula south-east of Melbourne and the Yarra Valley to the east, to expand the varieties they grow.

The southern island state of Tasmania is also attracting attention as a region that could dramatically boost its grape cultivation, with its mild weather closer to that of New Zealand than the parched mainland.

Indeed, wine-growers in neighboring New Zealand are upbeat about a future that includes climate change, because higher temperatures are expected to make cold areas of New Zealand more temperate and better suited to grape growing.

CHANGING TASTES

Warmer temperatures and less rainfall will also mean changes in the grape varieties the traditional growing areas produce.

"Styles in existing regions will change," said Strachan of the Winemakers' Federation.

"Most regions can produce most grape varieties, but whether they can produce them to quality levels that the market expects is the big question."

While Australia's signature shiraz fares quite well in a hot climate, cabernet, pinot noir and merlot among the reds and chardonnay, sauvignon blanc and riesling among the whites may have a tougher time.

"Merlot is relatively intolerant of water stress, and it doesn't cope well with periods of very high temperatures," said Snow Barlow, a winemaker and the chairman of the agriculture school at Melbourne University, who co-authored the CSIRO study.

Experts say Australian growers need to experiment with tougher varieties from Spain and Sicily. Tempranillo from Spain is one of Australia's fastest-growing varieties, while along the Murray river, the Corsican grape Vermentino is being planted.

"Wine companies build up brands. Whether we can convince the world to take to Australian Sicilian varieties in same way they take to Australian shiraz, that's quite a big commercial question," said Barlow.

Barlow, who owns the boutique Baddaginnie Run vineyard nestled in the foothills of the Strathbogie Ranges in Victoria state, said climate change shaped his decisions on what varieties to plant when he started his vineyard 10 years ago.

Even so, merlot has proved problematic and he did not produce a merlot last year because of poor quality. His $20 merlot has won awards in better years.

Over time, different root stocks that are able to provide good fruit with lower water requirements will become more common.

But it can take months or years to import new varieties through Australia's strict quarantine system, and three to four years to establish new rootstock for commercial production.

For grape growers already deep in debt, that is simply too long to wait.

(Editing by Megan Goldin)