Issue No. 9

Contents:

1. NEWS

A. THE LIVABLE ATMOSPHERE AS A GLOBAL PUBLIC GOOD

B. WILL THE EU COMBINE MORE HEAT WITH POWER TO MEET ITS KYOTO COMMITMENT?

2. THE CLIMATE CHALLENGE TO INFORMATION AND COMMUNICATION TECHNOLOGY

1. NEWS

Quote of the week: "Operating the entire global Internet requires less electricity than New York City uses," said the Worldwatch Report 1998 on July 27, 1999, http://www.worldwatch.org/alerts/990727.html

A. THE LIVABLE ATMOSPHERE AS A GLOBAL PUBLIC GOOD

In 1994, the United Nations Human Development Report (HDR) concluded that a new framework for international cooperation was needed. This recollection by outgoing UNDP Administrator James Gustave Speth serves as the foreward to a new 500-page book entitled Global Public Goods (Oxford Univ. Press, 1999, paper $25). Indeed it was the director of the HDRO until 1995 who co-edited the book, Inge Kaul, and she has a fascinating new paradigm for international cooperation in mind. Global public goods should be more easily financeable than official development assistance ODA. "After all," Spaeth argues, "society has always been willing to spend money on national public goods." Ms. Kaul's 20 co-authors include such luminaries as Jeffrey Sachs, Amartya Sen and Joseph Stiglitz, and its own Website has been set up at http://www.undp.org/globalpublicgoods/

Two of the new book's 21 chapters cover environmental case studies. The first of them, on "Montreal versus Kyoto", was written by Scott Barrett, http://www.lbs.ac.uk/economics/faculty/barrett.htm

Some of his views on the Kyoto Protocol were given in a December 1997 RFF interview, http://www.weathervane.rff.org/pop/pop4/barrett.html (and Quote in Issue #2 https://members.tripod.com/ruddyconsult/199902.htm)

In the globalized world Barrett sees characterized by lean government, there is an anarchic space left among the domains of national sovereignties. The number of successful international treaties is surprisingly high, when one considers that they have to be self-enforcing; no authority polices and no country can be forced to sign on. Countries join in reaction to incentives, or do not join at all. This "free-rider" problem is one of the problems that the theory of public goods addresses.

Barrett claims that the "free-rider" problem is at the base of the differences he sees between the Montreal and Kyoto Protocols. With Kyoto, it will be harder to swing sticks that are credible because the stick-swingers would suffer more themselves than the enforcers stood to suffer under Montreal. Barrett counts here on the drag on economic growth that greenhouse gas mitigation brings with it, although he does not mention that explicitly. The Montreal Protocol contained trade sanctions for nonparties on CFCs and products containing them, plus threatened to ban trade in such products. "If the sanctions deter relocation of production or emissions, then the countries imposing the sanctions gain by imposing them. This, in turn, reinforces the credibility of sanctions." The Kyoto Protocol lacks such credible sanctions, he warns.

In addition to the "free-rider" problem, public goods theory deals with a second widely known model of reality called the "prisoners' dilemma". The main difference, though, Barrett says, between the "prisoners' dilemma" and the circumstances of both the Montreal and Kyoto Protocols is that in the latter cases the "prisoners" are allowed to talk to each other, and, unlike the case of the proverbial dilemma, some may well choose not to confess, but rather to continue with their pact, i.e. to abate. Barrett's own developing theory of "full cooperation" requires abatement by all parties in line with the world community's aggregate marginal benefit, whereas each individual country, left on its own, would otherwise act only as far as justified by its own marginal benefit. Barrett then describes calculations of marginal costs and benefits. Nordhaus and Cline agree in their results on costs, he says, but differ as regards benefits. The U.S. Senate found the cost/ benefit ratio to be acceptable in the case of Montreal, but not in that of Kyoto -- yet.

Whereas Barrett takes the viewpoint of the nation state in his analysis, the author of the next chapter, Geoffrey Heal of Columbia University, in keeping with current trends, concentrates on the private sector. Here, in addition to a government's questions as to how much of a public good to produce, and how much money to spend on it, the private sector requires an answer to the question: How should the burden be divided among producers? One of the most efficient answers he finds is through tradeable permits. Distribution of the quotas, though, will be critical. Developing countries and early movers deserve special compensation. Heal regards warnings of the risks posed by the free-rider effect and the prisoners' dilemma such as Barrett's as "rather cynical". Instead, he says, countries react to influences exerted by their international community; in time, they learn from mistakes, and are influenced by other considerations such as trade and technology-transfer strategies. Barrett, though, for all his skepticism, has hope in the effectiveness of credible threats, his "sticks", details of which he says will be published soon as his theory of full international cooperation. In her conclusion section to the whole volume of texts, co-editor Kaul predicts that national greenhouse gas inventories are the forerunners of the more extensive national externality accounts to come.

B. WILL THE EU COMBINE MORE HEAT WITH POWER TO MEET ITS KYOTO COMMITMENT?

The free trade zone European Union is intent upon removing barriers to competition throughout the bloc. Competition has often appeared to be distorted by rates treating preferentially the product electricity when it has been produced by the climate-friendly method known as combined heat and power (CHP) or cogeneration. The terms used are reminiscent of the "preferential or favoured treatment" and "Production Processes and Methods" PPMs that cause controversy at the World Trade Organization.

Outlawing this preferential treatment, though, could come into conflict with the intention of the EU to reduce CO2 emissions by "at least 7.5% by the year 2005 compared with 1990 levels. The present trend in emissions, based on the application of current policies and measures, indicates an increase in CO2 emissions of approximately 8% by 2010, which means that a reduction in real terms of 23 % may well be required". This is the motive for the European Commission according to its proposal of early 1997 entitled "A Community strategy to promote combined heat and power (CHP) and to dismantle barriers to its development", COM(97) 514 final, http://europa.eu.int/en/comm/dg17/514fi_en.htm. "CHP is one of the very few technologies which can offer a significant short or medium term contribution to the energy efficiency issue in the European Union." The communication concludes by stating the goal "to increase significantly [the EU's] total gross electricity generation by CHP by at least doubling the current share by the year 2010." The EU's budget is limited, though, and great barriers to CHP still exist at the Member State level. "While there is scope for action at [the] European level, the major responsibility for promoting CHP has to lie with the Member States." The Commission's conclusions were accepted by the European "Council resolution of 18 December 1997 on a Community strategy to promote combined heat and power" (98/C 4/01), http://europa.eu.int/eur-lex/en/lif/dat/1998/en_398Y0108_01.html

CHP proponents in Germany have come up with a scheme to overcome the barriers in their country. Dr. Klaus Traube proposes using a mandatory quota for CHP in all electricity sales, whereby tradeable permits should distribute the burden efficiently. Traube authored a German paper together with Berlin lawyer Martin Riedel at the request of several energy-conscious Laender, which appeared in Zeitschrift für neues Energierecht ZNER, 1998, no.2, along with a proposed legal text. The authors refer to COM(98)167 dated 16.3.98 as support for their idea in the European Union's intention to harmonize CHP promotion measures. That communication mentions a "system of 'green certificates' allowing consumers to purchase 'shares' of their electricity requirements from renewable sources," which could be applied to CHP equally well, http://europa.eu.int/scadplus/leg/en/lvb/l27005.htm. Instead of distorting trade as subsidies are said to, these certificates could even be traded internationally.

2. THE CLIMATE CHALLENGE TO INFORMATION AND COMMUNICATION TECHNOLOGY (ICT)

A new report entitled "Environment in the European Union at the turn of the century" provides, for the first time, an assessment of the development of environmental quality in the EU in the near future, i.e.up to 2010. It was presented to the public by Domingo Jiménez-Beltrán, Executive Director of the European Environment Agency EEA on June 28, 1999, in Brussels. Press release, http://www.eea.eu.int/Document/ArtPaper/speeches/eu98dk/index.html

Highlight from the report: "The EU target to reduce greenhouse gas (GHG) emissions by 8% [from their 1990 level] by 2008 - 2012 will not be met... Instead a 6% increase of emissions is expected."

Overview of the report's contents, http://www.eea.eu.int/Document/3-yearly/eu98/en/index.html

Computers and the Environment in the Expanding European Union

This newsletter concerns itself with a combination of two thematic areas: climate change policy and computer networks. The European Commission's Fifth Framework Programme (1998-2002) covers four thematic areas of research, one of which is the Energy, Environment and Sustainable Development Programme EESD, http://www.cordis.lu/eesd/home.html. There is a separate thematic area of research devoted to the Information Society Technologies IST Programme, which itself, though, has an environmental component, one of the five main sub-categories of its key action called "Systems and Services for the Citizen". Of course, the emphasis there is quite different from that of the research funded under EESD. Telematics, or the newer name ISTs, for the Environment is a programme of applied research and is described at http://www2.echo.lu/telematics/environ/obj-env.html

In the coming years the European Union is to grow larger, as Central and Eastern European Countries join it. Given the continuing environmental problems there, in particular transport with its relevance to CO2 emissions, a project called CAPE was carried out. Details on it are described on a news page on environmental ISTs with an update notification service based in Hungary and entitled "Information Society Technologies and the Environment in CEE" at http://www.rec.org/REC/Programs/Telematics/telematics.shtml

NEC Supercomputers for Climate Research

The Japanese NEC Corporation has a 2-page summary of its work in Environmental Management and Social Responsibility in a PDF file, http://www.nec.co.jp/english/profile/annual/1998/pdf/nec-ar-p19-20.pdf

Besides having an environmental management program, NEC is also directly active in climate change mitigation in that it has a subsidiary that builds supercomputers. One of its supercomputers was sold in recent years to climate researchers in Brazil. This year another one of them with 64 GFLOPS was used by climate modellers at the National Center for Atmospheric Research NCAR in Boulder, CO, USA. According to a June report in HPCWire, an electronic journal for High Performance Computing, simulations showed that there would be a fifty-year time lag between 2010 and 2060 before emissions reductions would begin to take effect, http://www.hstc.necsyl.com/news/news99/hpcnews06-04.99.htm

The NEC plant in Japan ranks currently as the 31st fastest supercomputer site in the world, http://www.skyweb.net/~gunter/list.html. The next news item is about a supercomputer site that is set to jump significantly in capacity in September 1999.

IBM Unveils Supercomputer to Probe Vagaries of Weather

At the U.S. National Center for Atmospheric Research in Boulder, CO, they call it the "Blackforest", the new 140-node, 280-processor cluster, of which 128 are compute nodes, based on the IBM RS/6000, with two 64-bit 200-MHz POWER3 CPUs per node. It has been described in an Economic Times-India article dated 12th August at http://www.economictimes.com/130899/13tech07.htm. Photos of the installation process are on display at the Center's Website, http://www.scd.ucar.edu/computers/blackforest/index.html