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Climate Change Gallon Letter




                 THE GALLON ENVIRONMENT LETTER
        Canadian Institute for Business and the Environment
          Institut Canadien du Commerce et de l'environnement
            506 Victoria Ave., Montreal, Quebec H3Y 2R5
              Ph. (514) 369- 0230, Fax (514) 369- 3282
                        Email  cibe@web.net
                     Vol. 3, No. 18, June 14, 1999 

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      INTERNATIONAL   INTERNATIONAL   INTERNATIONAL
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GHG EMISSIONS TRADING GROUP LAUNCHED IN LONDON

The International Emissions Trading Association (IETA), for greenhouse
gases was launched June 4, 1999, in London, U.K. It was launched at the
International Petroleum Exchange in London. Present at the launch were 
private sector representatives from all continents from industry and 
industry associations including the Canadian Chamber of Commerce, who 
was represented by Robert Redhead. The meeting was the product of 6 
months of work by Frank Joshua, head of the UN's Emissions Trading Office 
(UNCTAD - Geneva), Bjorn Stigson, President of the World Business 
Council for Sustainable Development (WBCSD), Paulo Protasio, President, 
Latin American Trading Association (Brazil) and senior executives from 
BP/Amoco and Shell International. Much of the early work done for IETA
in developing its methodology and protocol was initiated by Canada's
Maurice Strong with contributions from David Runnalls, IISD and Janine
Ferretti, Commission for Environmental Cooperation (CEC).

The main focus of the meeting was to review and approve a 12-page legal
document on the mission, objectives and structure of the IETA.  Its mission
is to be an independent not-for-profit association dedicated to "the
development and establishment of effective market-based trading systems"
that are "fair, open, efficient, accountable and consistent across national
boundaries" for business.  Among the objectives were a forum for learning
and sharing information of actual experiences; hold events for business and
decision makers to dialogue on trading rules, etc.; repository of
information on trading and other market based approaches; identify emission
trading opportunities; and be a forum for mediation of disputes between
members.  The organization clearly sees its role to be a business voice
influencing national governments and the COP process.

Initially IETA will be housed in the WBCSD offices in Geneva and 
incorporated under Swiss law.  It will directly cooperate with trading 
bodies such as Emissions Marketing Association (EMA) in the US and 
similar organizations elsewhere.  It will seek to promote the speedy 
resolution of the international negotiations on Joint Initiatives (JI) 
and Clean Development Mechanisms (CDM) as well as international 
trading. Membership fees will be $10,000 (US) for companies in OECD 
countries and $5,000 (US) for those companies from countries outside 
the OECD countries.  The First Annual Meeting of IETA will take place 
in October 1999 at Bonn as part of Kyoto greenhouse gas reduction fifth 
Conference of the Parties (COP V). More information about emissions
trading see the Technology Systems Analysis Programme (ETSAP) Newsletters 
on climate change at the website http://www.ecn.nl/unit_bs/etsap/newslet/

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TRANSALTA LTD., ALBERTA IS CANADA'S REPRESENTATIVE ON IETA

An eight person IETA Council of Management was elected at the meeting. 
It included the following senior executives on an interim basis pending the 
October 1999 meeting.

   o   Paulo Protasio (Brazil - L.A.T. Assoc.)
   o   Charles Nicholson (BP/Amoco)
   o   Aidan Murphy (Shell International)
   o   Dr. Robert Page (TransAlta - North America)
   o   Nick Aldridge (International Petroleum Exchange - London)
   o   Jed Jones (Lloyd's Register - London)
   o   John Buttle (KPMG - Australia)
   o   Simon Nyagba (Benue Cement - Nigeria)


For more information about TransAlta's work on climate change go to its 
website at http://www.transalta.com/website/homepage.nsf?OpenDatabase

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ASSISTANT U.S. EPA ADMINISTRATOR TO LEAVE AND
WORK ON CLIMATE CHANGE

David Gardiner, the EPA assistant administrator for policy, is leaving 
the Environmental Protection Agency to become senior policy adviser 
to the White House Task Force on Climate Change. He worked for U.S. 
EPA Administrator, Carol Browner at the agency and will now help the 
President work on measures to meet the Kyoto Protocol targets. Source, 
Washington Times, 8 June 1999. For more information on the U.S.
Climate change program go to the website http://www.usgcrp.gov/

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ENERGY EFFICIENCY MEASURES RAISE PROPERTY VALUE

By improving energy efficiency, the real estate investment and management 
firm Scribcor significantly increased the asset value of a bank office 
building for sale in suburban Chicago last year. At about $3 per square foot 
a year, energy bills for the 108,000-rentable-square-foot building had been 
running at least $1 per square foot a year higher than normal considering the 
area's high utility rates. An energy audit by Sieben Energy Associates of 
Chicago included analyzing utility bills, interviewing building staff, and 
surveying the building on-site. SEA first focused on operations and 
maintenance measures like tweaking equipment based on existing problems or 
potential new operating strategies. Next, the auditor identified load 
reduction opportunities and finally looked at more significant and generally 
more costly retrofit measures. SEA identified ten no- and low-cost measures 
projected to save between $10,000 and $20,000 annually and seven more 
expensive retrofit measures costing $300,000 to install but saving over 
$100,000 a year. Of these, the largest and most cost-effective opportunities 
were a lighting retrofit and air handling system measures. SEA used an hourly 
energy-simulation model for what-if analysis and accurate sizing of capital 
equipment. In all, the energy efficiency measures Scribcor put in place 
reduced the building's energy costs to $1.90 per square foot a year, a 
reduction of about 40 percent or $130,000 a year. Assuming a cap rate of 10 
percent, such an increase in net operating income may have increased the 
building's value by as much as $1.3 million. Source, Environmental Design & 
Construction, May-Jun 99, p 44, by Roger Hill and Helen J. Kessler.
Visit the SEA website at http://www.siebenergy.com
For the full text of hte report go to http://www.edcmag.com/mayjune99_toc.html

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THE U.S. MAY YET AGREE TO MEET KYOTO REDUCTION TARGETS
 
Chief United Nations climate official Michael Zammit Cutajar 
said that despite disagreement between Europe and the United  
States on how to achieve the reductions of greenhouse gas emissions 
outlined in the Kyoto treaty, he expects a broad deal to emerge by the 
time the U.N. hosts the COP-6 meeting  in The Hague at the end of 
next year.  The United States favors making allowances for countries 
that help poorer countries reduce their emissions, while Europe wants 
limits  to be placed on "`emissions trading'" to force countries to reduce 
pollution at home. Source, the article, "U.N. Official Expects Global-
Warming Accord, Cites Need of U.S. Cuts for Success."  Washington 
Times, June 11, 1999. For more information about the U.S. energy 
efforts go to the U.S. Dept of Energy's Office of Energy Outreach's
website at http://www.doe-oeo.org/

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GLOBAL WARMING TALKS TO BE HELD BY NATIONS'
MINISTERS, NOVEMBER 2 TO 4, 1999, IN BONN

Ministerial talks on climate change are set for 2-4 November 1999
in Bonn, Germany at COP 5 (fifth meeting of the Convention of the
Parties). The ministers of environment and the ministers of energy

will attempt to come to some agreements that are currently being
hammered out by senior ministry officials from both the developed
and developing countries. They just finished meeting for two weeks
ending June 11 and will go back to work in Bonn from October 25
to November 2, when at that time, the ministers will arrive and 
finalize the deals to meet the greenhouse gas reduction commitments
made at Kyoto. The last meeting was attended by some 1,500 participants 
from 147 governments and 152 intergovernmental and non-governmental 
organizations.

The main outstanding issues must be finalized at the COP's Sixth
Session, which will take place in late 2000 or early 2001. An offer 
by the Government of the Netherlands to host COP-6 in The Hague 
was welcomed by the participants. Many governments are awaiting 
the outcome of this vital conference before ratifying the Protocol and 
thus finalizing their acceptance of it.

Over the past two weeks, government officials have paid a great deal 
of attention to the challenge of how the Protocol's three "mechanisms"
for emissions trading, clean development, and joint implementation 
should function. A closely linked issue is the development of credible 
compliance procedures. Delegates have agreed on some of the guiding 
principles for a compliance system and have produced a questionnaire 
for obtaining the written views of governments in time for COP-5.
For more information contact Michael Williams at ph. +41-22. 917 8242/44, 
fax  (+41-22. 797 3464, e-mail mwilliams@unep.ch. Official documents are 
available on the Internet at the website http://www.unfccc.de 

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PROPOSED PRINCIPLES FOR AIR EMISSIONS REDUCTION

The Leonardo Academy has sent letters to the environmental agencies 
and energy offices in all 50 states and the District of Columbia, asking 
them to incorporate the Cleaner and Greener Principles into all future 
pollution reduction programs, including U.S. EPA-required plans to 
reduce nitrogen oxides (NOx, a pollutant that causes ground level ozone), 
fine particulate matter (PM2.5), and haze. The objective is to achieve 
full recognition of the environmental benefits of increased energy 
efficiency, renewable energy, combined heat and power, and sequestration 
in all air pollution reduction programs–including currently committed 
emission reduction requirements, and all other future reduction programs.
It recommends that all emission reduction plans, programs, and regulations 
should,

     o     use a cap-and-trade approach to reduce emissions so that 
            emission reductions receive their true market value. 

     o     reward all building owners and others for emission reductions 
            delivered by their energy efficiency, renewable energy, combined 
            heat and power, and sequestration (for pollutants where
sequestration 
            is possible) projects. Reward these actions with emission
allowances  
            from under the emissions cap. 

        o   allocate enough emission allowances to reward all emission 
             reductions from these actions. 4.  Use a multiple pollutant 
             emission reduction reporting system to provide "one-stop" 
             reporting of reductions of sulfur dioxide, nitrogen oxides, 
             particulate matter, mercury, greenhouse gases, and other 
             pollutants. This makes it easy for owners and implementers 
             of energy efficiency, renewable energy, combined heat and 
             power, and sequestration projects to get credit for all emission 
             reduction benefits they deliver. 

       o   give credit for early emission reduction actions from projects 
            implemented 1990 or later. 

For more information on the Cleaner and Greener Principles for 
Pollution Reduction Programs, contact, Leonardo Academy Inc., 
1526 Chandler Street, Madison, Wisconsin  53711, Ph. 608.280.

0256, Fax: 608.255.7202, email  info@cleanerandgreener.org,  
visit website  http//www.cleanerandgreener.org/CGPrinciples/ 

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CANADA'S $150 MILLION CLIMATE CHANGE FUND

The Climate Change Action Fund (CCAF) was established by the 
Canadian government to help Canada meet the commitments it made 
in December 1997 at the Third Conference of the Parties (COP3), an 
international climate change meeting, in Kyoto, Japan. The CCAF 
was announced in the 1998 federal budget, where $150 million was 
allocated over three years to support the development of an implementation 
strategy to meet these commitments and to facilitate early action to 
reduce greenhouse gas emissions. Activities under the CCAF have 
been divided into four components. Click on each of the following for 
a description of each component and its business plan. The first one is 
"Foundation Analysis", which includes the development of Issue Tables. 
It involves the development of a national implementation strategy via a 
multi-stakeholder consultation process. The second is "Science, Impacts 
and Adaptation". It targets research to better understand climate processes 
and to assess the impact of climate change on the regions of Canada 
and the options for adaptation. The third is "Technology Early Action 
Measures." It involves cost-shared support for the development and 
deployment of emission-reducing technologies. The fourth is "Public 
Outreach", which involves using public education and outreach activities 
directed at informing Canadians about climate change and encouraging 
them to take action. 

The operation of the CCAF is based on a number of principles, including 
building where possible on existing initiatives and mechanisms;  early 
spending on immediate priorities while not prejudging the outcome of the 
national implementation process; leveraging and cost-sharing with the 
provinces and the private sector;  concrete milestones and demonstrable 
results; and the development of a transparent process that engages all 
relevant federal departments and agencies and external stakeholders. 
Contact, David Oulton, Head, Climate Change Secretariat 55 Murray 
Street, Suite 600,  Ottawa, Ontario K1N 5M3,  ph. 613-943-2671, 
fax 613-943-2694 e-mail ccaf@climatechange.gc.ca Visit their 
website at http://www.climatechange.gc.ca/

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CANADA'S BCNI WARNS ABOUT ATTEMPTS TO MEET 
KYOTO REDUCTION TARGETS

As Canada's own voluntary measures flounder and its efforts to
undertake serious greenhouse gas reductions lag, the Business Council
on National Issues (BCNI) questions, "whether or not the arbitrary 
target of Kyoto makes sense...". BCNI states, "...that it does not believe 
such a commitment is realistic for Canada". And questions, "whether 
Kyoto can be reconciled with the other goals we have as a country".
What is interesting is that the economic impact analysis by BCNI takes 
the traditional position of measure impacts on the energy and resource
industries, those industries which are major energy consumers. BNCI's
economic analysis did not take fully into account the economic benefits
of energy efficiency and technology innovation leading to competitive
advantage. BCNI's position and the full opinion can be found in the 
Business Council on National Issues, newsletter called, "Opinions", 1999, 
Number One, entitled, "Meeting the Climate Change Challenge", 90 Sparks 
Street Suite 806, Ottawa, Ontario K1P 5B4, Ph. (613) 238-3727, fax (613) 
236-8679. Contact John Dillon at email jdillon@bcni.com,

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STUDY ON GLOBAL AVAILABILITY OF GHG TECHNOLOGIES

Canada's Climate Change Secretariat, under the direction of David Oulton,
is conducting a study entitled, "An Assessment of the Global Availability
of Greenhouse Gas Mitigation Technology", for its Issues Table #1 on
Technology. The study will help the issue table develop a workplan for

Canada which is assessing the global availability of such technologies and
assessing the need for these technologies in Canada for companies working
in both the domestic and international markets, and assessing measures
 that have already been used either in Canada or aborad to advance technology
innovation. Based on the Climate Change Secretariats findings from the 
Technology Table, an options paper will be prepared for the federal 
government to consider in meeting its Kyoto Protocol commitment.
For more information visit the Climate Change Secretariat's website at
http://www.climatechange.gc.ca/

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INSURANCE AND FINANCE COMPANIES TAKE NEXT STEP
ON ENVIRONMENT AND CLIMATE CHANGE

Over 120 financial services executives (insurers, investment companies, 
banks, brokers and pension funds) from Africa, Asia, North America and 
Europe are met in Oslo, Norway, with the United Nations Environment 
Programme (UNEP), June 10 and 11, 1999, to discuss the insurance and 
investments industries and the global environment. Entitled "Natural 
Capital at Risk", this year's annual meeting of the United Nations 
Environment Programme's Insurance Industry Initiative will explore 
the linkages between critical environmental issues and global economies 
affected by environmental issues like global warming. Klaus Toepfer, 
UNEP's Executive Director said that, "it is time for aware and active 
insurers and banks, acting as responsible global citizens, to move 
from assessing the environmental challenge to implementing solutions." 

The UNEP Insurance Industry Initiative has launched a study on the 
possible implications for insurers of the Kyoto Protocol to the UN 
Climate Change Convention in the second half of 1998 and the 
findings will be officially presented today. It suggests that the 
implementation of the Kyoto Protocol offers business opportunities 
for the insurance sector once the modalities have been adopted. "The 
climate debate remains one of the most important issues for the 
insurance sector", says Age Korsvold, President and CEO of Storebrand 
Insurance, host of the meeting. The insurance industry reports that 
environmental disasters around the world annually caused the death 
of 50,000 people and cost an estimated US $90 billion to the nations' 
economies." Dr. Juergen Zech, Chairman of the Gerling Group, stated 
that, "insurance managers should feel encouraged to take a leading role 
in the post-Kyoto dialogue. Economic and financial expertise is required 
in the political discussion and insurers and banks would contribute 
from an almost neutral position as their business is fairly clean."

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US $100 MILLION ENVIRONMENTAL INVESTMENT 
BY FINANCIAL INSTITUTIONS

Dr. Juergen Zech, Chairman of the Gerling Group announced that 
eight major financial institutions had agreed to launch a joint US $100 
million investment initiative called, "Sustainability Investment Partners"
(SIP). "Gerling believes that there are important opportunities in the 
sector, especially when we can combine the expertises of such a broad 
group of leading companies. We have decided to invest in the new 
Sustainability Fund because we believe that sustainable companies are 
generally better managed", he said. The Oslo conference is expected to 
mark a watershed in the evolution of the insurance industry's stance on 
the environment. Insurance executives who have worked in cooperation 
with UNEP since 1995 are now advancing to a higher level of partnership. 
For more information contact, Aiko Bode, Co-ordinator UNEP Insurance 
Industry Initiative, Tel.+41.22.917-8197; email  aiko.bode@unep.ch or 
Robert Bisset, UNEP Information Officer, Nairobi, email
robert.bisset@unep.org

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NEW YORK REQUESTS GREEN TECHNOLOGY PROPOSALS

The New York State Energy Research and Development Authority 

(NYSERDA)  is now accepting proposals for residential, commercial, 
and institutional building projects that develop, evaluate, demonstrate, 
or introduce green technologies in New York State. NYSERDA has 
US $500,000 available to support three types of projects; first, projects 
that develop and demonstrate innovative tools, protocols, and practices 
for designing or evaluating green buildings; second, projects that develop 
or demonstrate innovative green building products; or third, projects 
involving detailed engineering feasibility studies of commercially available 
energy efficient technologies to make new or existing buildings greener. 
NYSERDA will fund up to 50 percent of a project's total cost, but all 
proposed projects must yield energy, environmental, and economic benefits 
in New York State. NYSERDA is accepting short proposals through July 12 and, 
after review, will request full proposals due in September. For specifics, 
email Bob Carver rmc@nyserda.org  Other NYSERDA opportunities can be found at 
the website http://www.nyserda.org/rddopps.html  Source, GreenClips,

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NUCLEAR ENERGY INSTITUTE ACCUSED OF "GREENWASH"

WASHINGTON, D.C. December 10 -/E-Wire/-- The Better Business 
Bureau of America ruled that a Nuclear Energy Institute (NEI) advertising 
campaign, which touted nuclear energy as "environmentally clean," was
inaccurate. The BBB recommended that the nuclear industry trade group 
refrain from making such claims. The NEI's advertisements, which have 
been published in the New York Times, the Washington Post and other 
major newspapers and magazines, make the claim that "Nuclear energy 
generates electricity without polluting the air and water" and that it is
"environmentally clean." The BBB, however, concluded that nuclear 
plants do cause thermal water pollution and that the processes needed to 
produce the uranium-enriched fuel for nuclear plants cause air pollution. 
The Better Business Bureau recommended that water and air pollution 
claims be carefully qualified to avoid any potential for consumer 
confusion and that broad, unqualified claims that nuclear energy is 
`Environmentally Clean' or produces electricity `without polluting 
the environment' be discontinued."

Moreover, the BBB said that the "environmentally clean" claim is
"premature at best," because as yet there is no permanent disposal
system for highly radioactive waste created by nuclear plants.
"Given the potential health and safety problems associated with
exposure to radioactive materials, until the questions regarding
a permanent repository for radioactive waste are resolved, NAD
recommends that the advertiser refrain from using overly broad
claims that nuclear energy is `Environmentally Clean' or produces 
electricity `without polluting the environment.' " For more 
information contact Auke Piersma, ph. 202-546-4996, Ext. 318 or 
Booth Gunter, ph. 202-588-7741 Go to the website for the full 
story at http://ens.lycos.com/e-wire/December/dec109803.html

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GREENHOUSE GAS REDUCTIONS IN DEVELOPING COUNTRIES

It is clear that the UN Framework Convention on Climate Change and 
the Kyoto Protocol affirm that "differentiated" responsibilities should 
be borne by industrialized and developing countries. Yet it is equally 
clear that fulfilling the objective of these agreements -- preventing 
dangerous climate change will necessarily require developing countries
and those from the Eastern block to participate in the solution. The 
resulting stalemate between nations over the timing and nature of 
developing country and Eastern country participation has led to an 
increasingly acrimonious negotiating atmosphere. The stalemate 
stems, at least in part, from a default assumption evident in the current 
political debate that a developing country commitment would take the 
same basic form as an industrialized country commitment -- a limitation 

on the absolute level of GHG emissions. Of course, one key difference 
is assumed -- a developing country commitment would likely be expressed 
as a "growth cap" set at some level above the country*s current emissions 
level to allow for economic development. In this workshop, The World
Resources Institute (WRI) has presented an alternative to "growth caps" in 
the form of a greenhouse gas intensity indicator, which expresses a country's 
emissions per unit of economic output. For more information about WRI's 
ongoing climate change activities, visit http//www.wri.org/wri/.  The
full article, "What Might a Developing Country Climate Commitment Look Like?" 
at http//www.wri.org/wri/climate/commit.html

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EUROPEAN AUTO INDUSTRY VOLUNTEERS 25% CUT IN GREENHOUSE GAS EMISSIONS

The European Commission endorsed an offer by the European 
auto industry to voluntarily cut carbon dioxide (CO2) pollution 
from its cars by about 25% by improving fuel consumption.
The voluntary deal was reached after European Union governments 
threatened to impose legally-binding pollution limits on vehicle 
manufacturers. The members of the European Automobile Manufacturers'
Association (ACEA) voluntarily agreed to cutting the amount of CO2 
in exhaust fumes to an average 140 grams per km by 2008.
The Commission said the current average in the 15-nation EU was
186g CO2/km in 1995. The voluntary agreement will oblige car makers 
to reduce the average fuel consumption of their fleet to six litres per 
100 kilometres for petrol engines and 5.3 litres per 100 km for diesel 
vehicles. ACEA said it believed it could bring CO2 emissions down to 
165- 170g/km by 2003, when it would see if it could meet the tougher
target sought by the EU of 120g CO2/km by 2012.

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EU CONFERENCE ON PROMOTING RENEWABLE ENERGY,TO REDUCE GHG

A Kick-off Conference for the European Union Renewable Energy
Strategy, entitled, "Implementing Renewable Energy in the 21st
Century", was held May 1999. The objective is to double the use of
renewable energy in the European Union from the current 6% of 
energy use to 12% by the year 2010. This objective was set out in 
in the European Commission White Paper for a Community Strategy 
and Action Plan. The European Commission will establish the 
framework, provide some financial and technical assistance, and co-
ordinate actions. Both public and private sector contributions will 
be enlisted to meet the objectives which tie in with the efforts to 
reduce greenhouse gas emissions per the Kyoto reduction targets. 
Included in the GHG reduction goals are to provide,

     o   One million Photovoltaic systems
     o   15 million metres squared of solar collectors
     o   10,000 MW of wind turbine generators
      o   10,000 MW  of CHP biomass installations
      o   One million dwellings heated by biomass
      o   1,000 MW of biogas installations
      o   5 million tonnes of liquid biofuels

For more information you can contact Mariàngels Pérez-Latorre
Head of section, New and Renewable Energy Sources, European 
Commission DGXVII email sustain@emml.co.uk
Go to website http://www.emml.com 

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