This follows a year of exponential oil and gas exploration from China, who have recently headed into Canada, Nigeria, Iraq, their own territory, and Uganda just last week, while its interest in Ghana continues to stumble on. A few weeks back China announced that it was planning to increase oil and gas production by 27%, and to do that without eating heavily into its reserves it needs a lot of global expansion. And as the FT notes, Western companies are only too happy to partner with them considering their own core markets, still effectively recessed, are pretty stagnant.

The potential for revenue flowing out of an oil-rich nation is obvious, and Argentina is no exception; but as well as potentially channelling oil revenues towards international corporate partnerships instead of indigenous populations, China’s latest exploration announcement comes at time when their stance on emissions is cloudier than ever. Their eventual ’support’ of the already limp-wristed Copenhagen accord came last week, but it’s not a full ‘association’ with the agreement but rather a ‘listing’ in it. So they’re sort of attached to an agreement that sort of gets people to reduce their carbon emissions, while quite definitely expanding their emissions on a global scale. And this is being offset with some very unconvincing distractions in the form of alleged snubs at the conference. The tedious and ineffectual playground politics of climate change continue.

China is installing coal-to-gas plants, investing in renewables, seeing their low-carbon industries get major surges in investor confidence, and now the UK government is recognising the potential China has for UK low-carbon businesses. But none of this is enough to generate the kind of growth China is looking for, and we’re back again to the central difficulty that lies at the heart of all global climate discussions – the right for previously undeveloped countries to develop their economies. It’s absolutely China’s right to advance the wealth of its people, and it’s both immoral, impractical and as CNOOC’s tie-ups with the likes of Shell show, an impediment to business to try and prevent that. Nevertheless, and whatever the ills of already developed nations, this right is what’s taking the world from ecological precariousness to permanent damage.

Greed, with its constant recourse to the shortest distance between desire and result, will always channel efforts towards the quickest and easiest solution; it unfortunately therefore often outpaces innovation. It creates an imperative for innovation, as we can see from the aforementioned growing investment opportunities for low-carbon businesses, but its unforgiving engine doesn’t leave room for long-term concerns. If the psytrance bongo campervan crew ever had a point to make against capitalism, then this surely is it.

The Government recognise this, and have announced consumer incentives to start in 2011, around the time when there’ll begin to be a selection of EVs on the market from big auto companies like Nissan, Smart, Renault, Mini, and Mitsubishi. The recently announced Plugged In Places scheme also commits £30m for the installation of more charging points around the country, (the UK has 273 charging points, but only 54 are outside London), which is just part of the £400 million of support to encourage development and uptake of ultra-low emission vehicles. But are the government taking a broad enough view of the potential for business?

Currently there are consumer incentives that are only set to get better – no tax, no congestion charge, and some free parking. Then from 2011 there’ll be £5000 subsidies available to help you purchase an EV, and £2000 subsidies for scrapping an old car and buying an EV.

But outside of these consumer-focused efforts, the UK government is failing. American companies such as Coulomb Technologies and ZAP have benefitted from the US’s venture capital culture, having secured US $3.75 million from Estag Capital and $25 million from Cathaya Capital respectively. There’s also companies like Infotility, who develop software to manage the grid, and have received funding from the US Department of Energy for a number of joint projects. Obama’s stimulus package also committed $1 billion of support for companies making car batteries. The US government recognises that there are spaces to fill in this emerging industry, and an opportunity to capitalise on the huge opportunity for growth.

However, in the UK, the only apparent funding is in the form of a general grant scheme for established companies (not targeted at EV developers), or a 50% costs grant available to businesses wanting to install charging points. Instead, the focus of the government’s projects are on consumer incentives to drive what they call a “motoring revolution”, and on the hope that EVs might reinvigorate auto-manufacturing in Britain.

Of course, auto-manufacturing in the UK is largely dependent on the big international auto companies, so the hope is that, despite a savage fall in profits, they will plump for British factories and British workers to produce their EV lines for the European market. This is not entirely wishful thinking. At the time of writing, Ellesmere Port is in the running to produce General Motors’ ‘Volt’ model or Vauxhall’s Ampera, and Nissan’s Sunderland plant has won a £380m loan for the development of electric car technology, which could potentially generate 4,500 jobs.

Superficially this appears great news for UK economy, creating jobs at a time when unemployment figures sit at 2.46 million. But much of the revenue actually generated from the manufacturing itself is falling back into foreign hands. There’s a bigger opportunity here, and bigger potential benefit than manufacturing opportunities and consumer take up.

The transition to EVs is comparable to the emergence of mobile phone technology into the mass market, only with the added environmental benefit. Think of all the businesses which are built around mobiles – from the phone unlocking nooks on the high street to network providers. The EV industry opens up the same broad opportunity for business startups not only in manufacturing and charging points, but in anything EV owners need, not readily available in the marketplace, like charging cables, electronics maintenance, energy management technology and portable battery packs.

Clare Keen, a spokesperson from the Department for Business, Skills and Innovation, admitted that there was little support being offered to UK startups wanting to provide these services: “There’s no specific support that we provide. There’s funding available for low carbon auto projects, but it’s not targeted at startups, it’s targeted at established companies, and it’s focused around production and products. Jaguar Land Rover have just received a [£1m] grant to produce a low carbon product as part of that general grant scheme. There is nothing specific around startups connected to electric vehicles.”

The government is encouraging manufacture, and throwing money at charging points, but what needs to be developed is a supportive network for startups in the emerging EV industry, and help for existing businesses like Elektromotive, Pluginsure and Park and Power. The UK can be an incubator for many more enterprising startups, who have the potential for high growth and international expansion. But they require a better infrastructural network to work with and support in the form of an investment environment that will allow them to grow.

I divide my time between the Caribbean and Britain. When you have the option of endless summer, the predictable grey of London may seem an odd thing to look forward to. But my island in the sun (as opposed to my other soggy, snowy island) is struggling through a long drought. We have bee reduced to queuing for showers and washing clothes in water gathered from garden hoses.

Imagine a backed up toilet in 30-degree temperatures and 90% humidity: yells of “Don’t flush!” because someone has only pissed, and you sure as hell can’t bother to carry buckets of water through the house just for that. Long showers never felt so good as when I arrived back in London, settling to fill the kettle as full as I bloody well like.

Such a contrast reveals a major fault line dividing rich and poor societies; in the ‘South’, we still live largely at the mercy of nature. In rich countries, we’ve tamed it. El Nino is the proximate cause of the Caribbean’s woes, but the fundamental cause is a degraded infrastructure resulting from decades of underinvestment – pretty much par for the course in a poor country.

In a country like Jamaica, you always feel like you’re walking on a cliff-edge: come a hurricane or a Pacific weather pattern, you get pushed over.

But this precariousness may not last forever. When Hopenhagen morphed into Nopenhagen last month, pessimists groaned that the lands which will suffer most from climate change are those which did the least to cause it – that is, poor, tropical ones. But optimists insist the Copenhagen summit merely postponed the inevitable. They argue that sooner or later we’ll have no choice but to agree a global carbon-emission regime.

When that happens, the very poverty of the Third World will become an asset. The same underdevelopment which leaves a poor country praying for rain, leaves it with a lot of what economists call unused capacity. In this case, call it pollution capacity. Unused wildlife resources can be cordoned off and sold for offsets, and the returns on renewable energy will be much greater in poor countries, simply because the infrastructure must be largely created anew: opportunities aplenty, lads.

We may well be sitting on the cusp of a great wave of new investment in developing countries. The hiatus, as the world community regroups to try and forge a new regime, could be used by adventurous entrepreneurs to get ready for it.

Come they will. And that will pose a challenge for Third World governments. As Mike Smith noted in his recent feature on farmland in developing nations, easy-come doesn’t always mean easy-go.

Kieron Bryan attended the UN’s COP-15 climate change conference in Copenhagen last month. Here he reflects on the mood at the end of the conference, and its immediate aftermath; later this week John Rapley will look at the longer-term implications of COP-15.

A month on from the COP-15 conference in Copenhagen, the fingers of blame have been variously pointed at China for leaving talks early, the United States and President Obama for failing to meet the challenge the way you’d expect the Messiah would, and Denmark’s over-zealous Government for hi-jacking the talks, foisting a flawed draft text on other nations in an attempt to seal a place in the history books.

It’s easy, though largely unproductive, to apportion blame in the face of large scale failure, but all it does is mask the crippling sense of disappointment and unfocused anger experienced by everyone associated with COP-15.

When I arrived on Saturday, December 12 a massive rally was taking place in central Copenhangen, organised in the name of ‘Climate Justice Now’ by a number of activist groups.  Thousands marched, and it struck me that this was the closest thing to a consensus that anyone had arrived at over the two weeks.

On the final day of the conference the number of NGOs given access to the Bella Centre, where the COP-15 talks were being held, was reduced from 15,000 to just 90 – seemingly to keep world leaders out of the firing line of frustrated activists. It was the final example of how ordinary people had been kept at arm’s length throughout the talks.

On Wednesday, delegates were supposed to march out of the Bella Centre and join a people’s assembly. The authorities had other ideas, as delegates were forcibly held in the conference building and protests were stifled with batons and pepper spray outside. On the ground it seemed those in charge were more concerned with avoiding embarrassment than listening to people’s concerns for the planet.

Saving face turned out to be the order of the day as hopes of a meaningful deal faded. On what was supposed to be the final day of negotiations, I spoke to Andy Atkins, executive director of Friends of the Earth; he argued that an agreement to set dates for legally binding targets was the best outcome he could hope for.

His modest expectations were shared by the representatives of most of the groups I spoke to. By the end of the fortnight though, even a timetable for change was beyond our short-sighted leaders; the naysayers were proved right and the slow negotiations of climate talks in the previous two years had scuppered COP-15.

There is one meeting left for Copenhagen’s climate wake-up call to be heeded, which convenes in Mexico at the end of the year. It is the final chance to make a legally binding international agreement that can avert catastrophic climate change above 2 degrees – an increase which would condemn millions to abject poverty, extreme weather conditions, or worse. Lessons must be learnt, most certainly by the politicians who have let us down in the name of preserving our economic aspirations, but also, the activists and NGOs as well.

As George Monbiot pointed out in an article recently, “we no longer have movements; we have thousands of people each clamouring to have their own visions adopted.” Activist groups must pool their resources better to arrange peaceful protest and direct action under the same banner; failure to do so in Copenhagen led to mixed messages and undermined efforts to pressuring politicians into a fair deal for the planet.

Copenhagen was a failure and the spectre of missing such an opportunity will linger for a while yet. But it’s crucial all parties are honest with themselves and strive to do better this year. We have little other option.

Most ideas on display in this public space are based on transport; the renewable energy technology sector is mostly ignored. Given that much of the investment coming out of Copenhagen will be in renewables, it’s strange that more emphasis isn’t given to the development of solar and wind power technology here – explaining their increasing efficiency and the extent to which they can replace fossil fuels. But Hopenhagen Live is about fun, and getting ordinary people engaged with climate change – showcasing green transportation is more exciting, and much easier to relate to than Siemens’ development of Smart Grid technology. Smart Grid is therefore given only one small panel in one small cabin, despite being something that the U.S. will invest $4 Billion of stimulus package money in.

Locals will be interested by a project funded by the City of Copenhagen: the ‘Copenhagen Wheel’, which will appeal to the 40 per cent of people in the city who commute by bike. Developed by MIT’s SENSEable City lab project, it’s the cycling version of the Nike Plus iPod-linked running shoe. The wheel harvests energy when cyclists brake, powering an electric motor, In the wheel, sensors monitor traffic, pollution, noise, and temperature information, all of which is broadcast wirelessly via smartphone, and the data collected for the commuters, their friends, and for the city. The MIT inventors will be hoping that a commitment to huge emissions cuts is made at the conference will necessitate greater investment in technology that’ll achieve those cuts. The wheel is a niche technology, but forward-thinking innovation in urban transport is essential with cities accounting for two-thirds of global emissions.

Private entrepreneurs also showcased their work, including Shai Agassi, ex-President of SAP (one of the three sponsors of Hopenhagen), and one of Time magazine’s top 100 influential people. His company Better Place provides electric car infrastructure services, and here in Copenhagen they exhibit their products and charging stations: quiet cars for a quiet city, which could provide emission cuts much greater than bike-based innovation if successfully rolled out.

Agassi demanded that governments agree an ambitious deal in a pre-conference video; he and all the green entrepreneurs hope that a comprehensive deal at the conference will be the impetus for further public and private investment. Al Gore explains that a comprehensive UN deal demanding strict emission cuts, and which offers financing for the developing world, will “unleash capital and innovation.” Whether or not the final UN deal ends up being the “Real Deal” that activists are calling for (and that looks increasingly unlikely), there will still be financing made available by the developed world to help their industries and help the developing world transition towards clean economies.

Making greentech developments accessible and fun, as Hopenhagen does, seems one way innovators are doing good work to improve city dwellers’ lives and draw ordinary people into the complex debates surrounding climate change. But away from the Science Museum sheen of Hopenhagen, windmills and tweaks to national grids will provide greater savings over time, and will likely continue to attract the majority of investment.

The hearing, at which I was present, sought to challenge the Treasury for not keeping to the regulations stated in their spending criteria procedures, under a so-called ‘Green Book’ assessment. These procedures state that all investments of public money must take into account ‘environmental impacts’ and social issues ’so as best to promote the public interest’.

The three campaigning groups – World Development Movement (WDM), People and Planet and PLATFORM – therefore argued if the government holds the majority stakehold of a company abusing these criteria, it has a duty to intervene. A recent report commissioned by the groups has exposed how RBS’s investments have fallen seriously short of fulfilling these ethical criteria, and warrant government intervention.

Entitled ‘Royal Bank of Sustainability’, the report states that since 2006 RBS has been a dedicated investor in Arch Coal, the second largest coal producer in the US, who conduct mountain-top mining operations in the Appalachian mountains, Canada. It reveals how these operations have led to the disappearance of 300,800 acres of biologically diverse forest and contaminated rivers, poisoning the fish that serve as one of the local indigenous communities main food supplies. Furthermore, George Monbiot has revealed RBS  recently lent £8 billion to other companies in Canada who are mining the tar sands, an operation he has critiqued as the “biggest single industrial cause of carbon emissions”.

Another example of misplaced, damaging investments is the Irish company Tullow Oil, who earlier this year used RBS capital to embark on an oil exploration mission in a region of Africa that’s being subjected to a resource-driven civil war: the conflict over natural resources on the border of the Democratic Republic of the Congo and Uganda has led to the displacement of over 30,000 people, adding to the existing 1.4 million displaced people in the area.

In my view, these questionable investments, which are facilitated by public money, provide a compelling case for the Treasury to intervene.

However, compared to many environmental organisations, who offer strong critiques but rarely provide viable solutions, WDM, People and Planet and PLATFORM are working within the constraints of a market economy; the recommendations we have put forward, which propose mandatory environmental assessments on all RBS investments, are based on the realities that we are approaching peak-oil and that governments will very soon have to commit to more serious emission cuts.

We propose that RBS could use these changes to market their green investments and improve their reputation, thus attracting new customers, and contributing to a more environmentally stable planet. Our report offers evidence that renewable energy investment can be economically beneficial, using more sustainable banks such as the Co-operative Bank and Troidos Bank as examples.

Unfortunately, despite the evidence laid out in the report, Judge Philip Sales did not decide in our favour. He stated that the complaints over the unfulfilled ‘Green Book’ regulations were erroneous, since the criteria is open to interpretation. Furthermore, in reaction to our demand for the compulsory environmental assessment of investments he said such activities would “handicap” the sector.

We believe, however, that our case for RBS to change from the ‘Oil and Gas’ Bank to the ‘Royal Bank of Sustainability’ could be just and beneficial for all involved and we have therefore decided to appeal this decision. An appeal date is not yet set but is likely to take place within the next two months.

Saoirse Fitzpatrick works in the Campaigns and Networks department of WDM. You can keep up to date with the case at www.wdm.org.uk.

CCS is actually an umbrella term for a number of complex processes all designed to ‘clean coal’. This can involve chemically washing coal or turning it into a gas before removing minerals and impurities, or chemicals can be used in the flue (big chimney stack) of a power plant to separate the carbon dioxide. Whatever the method, the result is the same – electricity from coal with fewer harmful emissions. The separated CO2 can then be transported through pipes or in containers and pumped into old oil wells or deep under the ocean floor where it can’t leak into the atmosphere and heat our planet. This process transforms the most damaging fuel into one of the cleanest.

There’s certainly no doubt that the world needs to tackle emissions from coal, and soon. The United States produces half of its electricity burning coal and China a staggering 80%; it’s no coincidence that they are the world’s two biggest polluters. Coal is abundant and relatively cheap to extract and as a result the Independent Energy Agency predict a heavy rise in coal use over the next twenty years – China is building new coal-fired power plants at a rate of two a week. The problem of emissions will only get worse unless coal can be cleaned up.

But, whilst the energy production of the United States and China is alarming, it doesn’t explain why Britain is pursuing a ‘clean coal’ future. Having announced a CCS competition in 2007, with a potential prize of £1 billion to fully-fund a demonstration CCS plant, Gordon Brown went further in his latest, and probably final, energy bill by including a fund of £9.5 billion (levied from our electricity bills) to encourage CCS in the UK.

Although coal has long been marginalised on these shores in favour of cheaper and cleaner gas, there hasn’t been a new coal-fired power station built here for thirty years. Why return to the dark arts of coal energy now?

David Kidney, Parliamentary Undersecretary of State for the Department of Energy and Climate Change (DECC) tells me that aside from being in the international community’s best interests, “Virtually all of the expert advice available suggests that CCS will be necessary as an option for electricity generation if carbon dioxide emission targets are to be met.” So the Government insists it’s acting on advice, no doubt from the energy corporations like Scottish Power and E.On who are leading the drive for CCS in the UK.

Jonathan Smith, E.On’s Media Relations Manager, told me that to ensure the lights stay on we will need some coal energy. With gas and oil prices becoming increasingly volatile the UK is aiming for a third of its electricity to come from renewables by 2020 and Labour recently announced plans for 10 new nuclear power stations. But, there’s still a problem when the wind doesn’t blow and what to do if the substantial investment for 10 nuclear plants fails to materialise, which is where CCS comes in to play; “It’s not about putting all of our eggs into a coal basket… our aim is to ensure we provide cleaner and more secure energy supplies,” Smith tells me.

Let’s not kid ourselves though, companies like E.On are not only concerned about securing a clean energy future for the UK, and Smith revealed an ulterior motive: “There’s undoubtedly money to be made from clean coal, if it was perfected by (E.On) then clearly we would be the experts in CCS.”

But it’s not just the energy companies who could profit either, and the scale of CCS could mean new opportunities for the UK economy. Jeff Hardy, from the UK Energy Research Centre, explains: “The supply chain to deliver [CCS] is a very broad one… there will be opportunities for all players, large and small, [in] engineering, chemical, oil and gas companies, compression specialists, gas and fluid specialists, pipeline companies and research expertise.” AEA, an independent energy research group, submitted a report to the DECC in December last year stating that the UK could benefit by £1 billion to £2 billion a year from CCS and other capture technologies from now until 2030, with CCS creating nearly 30,000 jobs in the process. New business and possibly new jobs is the kind of positive economic news the Government has been desperate to hear since last year.

So, it appears CCS solves the problem of coal. We can reduce emissions, provide everyone with enough electricity and create new jobs and business as well; great, let’s all go home and sit in front of a roaring (coal) fire.

Of course, it isn’t that simple. Joss Garman, nemesis to the aviation industry and now a Greenpeace spokesperson, has a very different view; “‘Clean coal’ doesn’t exist. CCS technology is often presented as a silver bullet to the problem of emissions from fossil fuel plants. Yet CCS has never been proven at a commercial scale anywhere in the world.”

The Government launched a CCS competition in 2007 offering full-funding for a 300MW clean coal plant by 2014 to encourage development; the idea being that as technology and efficiency improve, CCS will be commercially viable by 2020. They have tried to allay environmental fears by insisting that any new coal plants must be built ‘capture ready’ with at least a quarter of emissions captured from day one. This isn’t enough for most environmental groups, who claim that the Government’s plans are too not strict enough. Martin Cullen from Friends of the Earth says: “Proposals to approve new coal stations that are ‘capture ready’ are a dangerous distraction. The emissions from new coal plants would lock the UK into a high carbon pathway for many decades.”

The Government’s position wasn’t helped when Stuart Haszeldine, a geologist at Edinburgh University and a leader in carbon capture research, said the CCS competition was “dead on its feet.” Two of four original competitors have quit; BP pulled out of the competition last November because it couldn’t find a ‘power generator’ to partner with, whilst RWE npower cited ‘timetabling’ problems ruling them out of the race. Of the remaining two competitors, E.On’s controversial Kingsnorth plans have been fiercely challenged by environmental groups since day one, halting any meaningful progress. The aforementioned £9.5 billion levy announced a few days after Haszeldine’s outburst was designed to allay fears and reignite the UK’s CCS investment – but if the 2014 target for a working plant is missed, it’s unlikely that CCS will be considered ‘viable’ by anyone come 2020. Only Scottish Power’s Longannet bid is currently still in the competition; the episode shows how prohibitively expensive CCS infrastructure can be.

A 200MW clean coal plant in Tianjin, China is due to be completed next year at the cost of US $1 billion – a standard coal plant of 800MW, producing four times the energy, only costs around $1.4 billion. It’s not just building expenses either; because of the energy intensive ‘cleaning’ processes, CCS plants use more coal to produce the same amount of energy as their dirty counterparts. E.On estimates that even with a carbon tax of €40 per tonne, like that of Norway (the highest in Europe), CCS would still be more expensive than nuclear power and only slightly cheaper than onshore wind power. ‘Clean coal’ requires large corporate and state investment to become a reality and, as BP found, finding partners wealthy enough to support you isn’t easy.

And with no plans for a UK carbon tax, prepare to shell out a few more pennies for your energy bills: “The costs will be passed on to consumers. A low-carbon energy system is not a cheap energy system in the short-term, but it’s cheaper in the long term when the costs of climate change are built in”, Hardy explains.

The business opportunities for ‘all players large and small’ might be some way off too, despite the fact that CCS will rely on collaboration between industries. Let’s take Scottish Power’s partnerships for example: they fund CCS research at Edinburgh University and are trying to secure a similar relationship with Imperial College in London which is great from an academic perspective but does little in the short-term for the economy. Its consortium partners for the Longannet bid include Shell, National Grid and the Norwegian-based engineering firm, Aker Clean Carbon. These companies are global leaders and none could be described as ‘small’ players. Yet, these corporate powerhouses still need financial backing to make CCS a reality. The new jobs and economic benefits of CCS promised in the AEA report, rely on the UK being a leader in the field and doing it quickly – which will mean more pressure on our wallets for some time yet. Environmentalists say that subsidies and investment would be better spent on developing proven renewable technologies and could also provide new jobs and industry immediately – the recently unemployed workers from Vestas would probably agree with them.

With Britain committed to a carbon captured future, environmentalists have asked, what happens if the new coal fired power plants fail to meet expectations and never live up to the ‘clean coal’ billing? You can’t simply turn the power station off if CCS turns out to be an expensive mistake. David Kidney told me that there were various contingency plans being considered including an annual cap on emissions or running coal plants for a limited number of hours but went on to add that “[these] measures should be determined following an independent review to be completed by 2020.” Or, a problem to be dealt with by the next Government. 

Everyone, including environmental groups, recognises the need to tackle the problem of dirty coal. Aside from the potential environmental benefits CCS carries the prospect of employment and could invigorate the UK’s burgeoning Greentech economy. For others, including our electricity producers, the issue is more prosaic; without coal we won’t keep the lights on. But, there are a lot of uncertainties; not least that nobody knows how successful ‘clean coal’ will be, or how quickly it will become cost-effective. The Government has sided with the prospect of economic benefits in the long term and has wrapped it up in a need for a global solution for coal as soon as possible. With nearly £10 billion of our money invested in the experiment already, and time running to make the UK a leader in carbon capture and, more importantly, to avert catastrophic climate change, the hope is that CCS turns out to be the solution and not a costly, carbon-belching mistake.

Two months on and it appears salvation will have to wait a little bit longer.

The major 2009 climate talks in Bonn, Bangkok and most recently Barcelona were blighted by a reluctance to compromise on all sides. Tensions reached a tipping-point when the G77 staged a walk out at the Barcelona talks, blaming the developed nations for setting feeble emissions targets.

Bargaining positions have been clearly defined all year – the poorest nations, most vulnerable to the consequences of climate change despite contributing least to the problem, want money for development and technology to ‘green’ their economies. They reckon US $400 billion a year should cover it, a figure baulked at by richer nations during these difficult economic times. Most EU nations agree on a minimum 20% reduction of emissions on 1990 levels by 2020, but this can’t become a global target until the US passes a climate bill of its own, which won’t happen until after Copenhagen. Without the US on board, the emerging superpower (and now world’s largest polluter), China, has argued that before the People’s Republic commits to anything that might curb its rampant economic growth and growing market dominance, the US has got to get its act together.

Back in October, the US Climate Change Envoy, Todd Stern, issued a portentous statement on Channel 4 News, saying it was “certainly possible that there won’t be a deal” in Copenhagen. The US has been dithering on climate change since the Kyoto Protocol and the eight years of denial and damaging environmental policy has not abated in the post-Bush era. Obama’s manifesto of change has forced the main parties further apart than ever; the GOP continues to bury its head in the tar-sands and block climate change legislature, making environmental reform impossible until next year.

So it came as little surprise when the day after talks broke down in Barcelona, Stern issued a statement that a legally binding deal at Copenhagen wasn’t “on the cards.” The UK followed suit as Ed Miliband, Secretary of State for Energy and Climate Change, moved the UK’s position from securing a legally binding deal to laying the ground work for one in 2010. APEC leaders appeared to deal the final blow in Singapore a couple of weeks ago as they issued a joint statement, that time had run out to obtain global consensus.

So far, so depressing. But it isn’t all doom and gloom for Copenhagen; in the past couple of weeks there have been some serious reasons to be cheerful.

Talks between Obama and Jintao in Beijing week sparked hopes of “green tech-sharing” between the world’s two biggest polluters, and both said that Copenhagen should be the start of a deal to “rally the world.” China was already one step ahead of the US having announced a “carbon intensity” target which was rumoured to curb emissions’ intensity by around 40% by 2020. Last week the figure was made public, confirming the speculation. China’s target isn’t legally binding and “will be dealt with internally” – which essentially means it’s up to them whether they they fulfill their promises. But, in recent years China has reduced 1.5 giga-tonnes of CO2 through voluntary green initiatives. If they deliver on their 2020 target a further 4 giga-tonnes of planet warming gas will be contained.

As a result of the talks and not wanting to lose the moral and political high-ground to China, Obama was ready to announce targets of his own; 17% reduction of emissions on 2005 levels in ten years, incrementally going up to 83% by 2050. The 2050 target is a 70% reduction on 1990 levels, which is still short of what most scientists say is required, but suggests the US might finally be taking responsibility for being historically the worst carbon offender. The initial target is low but that’s because Obama needs to get a bill through a hostile House and Senate.

Pressure on the US political elite isn’t only coming from Asia though; Brazil recently pledged emissions cuts of at least 36% and a dramatic reduction of deforestation by 80% over the next 10 years, which has environmentalists and the Amazon rainforest sighing with relief. There’s never been more pressure on the US’s cumbersome political system to deliver a ‘Carbon Bill’ as soon as possible, if they want to avoid looking more sheepish than a lamb wearing a Christmas woollen.

A delay in a global deal is definitely unwelcome but not surprising after a year of frustrated and failed negotiations. After the debacle in Barcelona the Chair for the Group of the Least Developed Countries, Bruno Sekoli said, “We do not want a compromise deal. A bad deal is not good for… vulnerable countries.” That from the man who represents those with the most to lose if climate change continues unabated – and it’s important his richer peers take note. But although nothing will be signed, and Obama won’t be there for crucial final days,  the Copenhagen conference could still be a game-changer.

Some synapse-freaking numbers for you: Buffett spent $26.6bn yesterday, but he already owned 22.5% of Burlington, so the company is now valued at $34bn, plus Buffett has taken on $10bn of the company’s debt. And Berkshire Hathaway, Buffett’s holding company, still has $20bn to play with, and play with it he will. 

It’s a turnaround for Buffett, who was slagging off rail in the middle part of this decade – now, while acknowledging that rail requires constant injections of capital to keep it rolling, Buffett is putting his faith in rail being a growing sector. And away from the pell-mell of the stock markets and debate over whether the economy is going to pick up enough to warrant this investment, the most interesting part of this deal is what it says about America’s environmentally-conscious future.

On the one hand, Buffett is putting his faith in coal with this deal. Burlington hauls enough coal to power one in every ten American homes – it’s their second-largest revenue generator after consumer products. Buffett is keen to point out that coal from the American West, which Burlington serves, is “more competitive, it’s lower-sulfur coal than in the East”, and while he admits that “over time, coal is going to diminish somewhat”, he’s still gone into this deal because he knows America will be running on coal for many years to come. He plays up his green credentials, citing his use of wind power, but he also runs 11 coal-fired power stations through MidAmerican Energy. If the Oracle says coal is profitable, then it’s profitable.

On the other hand, his faith in rail implies a lack of faith in road haulage. With oil prices set to rise, it makes sense for Buffett to invest in the most fuel-efficient means of transportation – he said yesterday that one gallon of diesel can haul a ton of goods for 471 miles with BNSF trains. Lower fuel costs mean lower haulage prices, which means a competitive advantage. Indeed, if oil prices continue to rise, “long haul trucking could be a dinosaur”, as Scott Edward Anderson told Fox News yesterday – Anderson, of Greenskeptic.com, said that a likely scenario is of long-haul rail linking with short-haul hybrid vehicles. Buffett, along with his investment in Chinese auto and electric car battery manufacturer BYD, is clearly shoring up Berkshire for a post-carbon future. Buffett is only following larger trends, but the sums of money he’s spending are so large and his influence so strong, that he himself is accelerating these changes in American energy habits. 

Though of course it could be that the main reason for Buffett buying up the railway is that it’s because he knows about the impending removal of global borders, and is therefore planning to better do business in what were formerly known as Canada and Mexico. Yeah, that’s probably it. 

Photo: Art Comments

Perhaps equally as encouraging as the carbon-minimising farm itself is the fact that Centrica have also done a deal with private equity firm TCW to sell off 50% of two of its existing wind farms. Good news for Centrica, who now have an extra £50m to play with, but good news for the renewable energy industry, as its clear that investors regard it as a stable growth area. Private equity legend Guy Hands is also throwing his weight around trying to take control of AIM-listed Novera Energy. 

More good wind news as well in the Guardian today, with Vestas announcing that they’ve invented a turbine blade that doesn’t interfere with radar. Aviation concerns are a major inhibitor of wind turbine development – they can appear as aircraft on radar, cluttering up the place and confusing those who are having to work out what is actually a plane (well, it’s the ones that are moving, but I can see how annoying it could get). These new blades will hopefully clear the red tape surrounding a lot of potential wind farm developments.

What isn’t becoming easier is persuading the British public that this is the way forward. This week has seen a rash of NIMBY activity, blocking wind developments in Cambridgeshire, Suffolk, the East Riding, and Northumberland. While it’s understandable that people don’t want to live right next to a turbine, and their beauty or ugliness undeniably a deeply subjective perception, these are communities as small as nine houses. And the essential NIMBY argument made by one person this week, that “the damage they do to the local area and its people greatly outweighs the tiny contribution they might make to the country’s renewable energy needs” is totally flawed – it’s like saying there’s no point voting because one vote won’t make a difference. It needs a collective effort. Switching to wind power is the best chance of reducing carbon output over the short to medium term, and so ”the effect that such a scheme would have on the rare breeds programme at Linton Zoo”, as one campaign group is worried about, might just pale in significance next to a rise in global temperature.

Post-Copenhagen, we’re likely to see a lot of this kind of argument – that it’s pointless doing anything in the face of India and China raising their emissions (which is going to happen no matter what agreements are made). It’s defeatist logic that will lead to defeat. A momentum is building behind wind power, from private equity firms to government subsidies to technological innovation, and it’s pointless and damaging to try and push against it now. And the UK, densely populated though it is, needs to be part of the effort.

Photo: ChaunceyDavis818

Last week Dow Jones reported that Exxon had got the deal in the bag, securing Kosmos’s 23.5% stake in the field for an undisclosed amount (though people are muttering about $4bn). One analyst they spoke to said it was the start of Exxon’s ongoing development in the area, mooting that they might try and take over Andarko and/or Tullow, the two other companies holding stakes in the field. That would leave them in a strong position to sail across the whole potential strip of oil south of the Ivory Coast and ferry it back to Uncle Sam, while getting American Idol stars to chuck some cursory malaria tablets at the mainland.

But it turns out that while the deal is done, the Ghanaians are ready to cancel the contract if a better one comes along. And a better one might from CNOOC, China’s national offshore oil company, who have been heading into Nigeria, Venezuela, Canada and Iraq of late to fuel their rampant industrialisation. The Wall Street Journal reports today that their offer is being “taken seriously” by Ghana, as it apparently offers a better package of infrastructure investment than Exxon are providing; Exxon however can begin production sooner though, so that might swing it for them. They could be further hampered by claims from the Ghana National Petroleum Corporation that Exxon’s transaction was “illegal”.

It does feel strange to have the power struggles of the previous century played out in a corporate arena on African soil, colonialism with reality TV stars blurring the edges. But there’s no place for cynicism when this could be a genuine chance for coastal African nations to receive investment and income to haul their respective societies out of poverty. Some are saying that Ghana has a better chance than most to effectively hold on to and fairly redistribute its newfound oil wealth; in the past revenue has ended up in the hands of a tiny few, or been spent on arms rather than schools. Ghana’s president John Atta Mills was yesterday calling for transparency over the next few years so that the money doesn’t end up in a businessman’s pocket, and reminded multinationals of their social responsibilities.

But if the comments of Rwandan president Paul Kagame yesterday are representative of Africa’s wider feelings towards the West, you can expect China to be holding onto more of Africa’s oil in the future – he said that while the West “polluted Africa to a large extent”, China was more forthcoming with investment for infrastructure and society. It could be that the West’s cavalier, profit-focused attitude towards the continent could come back to haunt them in the race for global energy security.

Photo: Stig Nygaard @ Flickr

Up for renewal are 16 licences, though a further seven blocks of oil whose licences are ongoing are also being discussed, potentially causing friction between CNOOC and private western companies. Nigeria rejected China’s initial offer, but is allowing negotiations to continue - Tanimu Yakubu, economic adviser to the Nigerian president, said that the Chinese “are really offering multiples of what existing producers are pledging [for licences]. We love to see this kind of competition.” Apparently China is bidding with $50bn. Despite the potential cultural spats, despite the legal changes in Nigeria that demand more national autonomy with their oil assets, and despite previous failures by the Chinese to secure stakes, it looks like they might push the whole thing through via the sheer weight of cash.

In the last month, China has invested in Venezuela, with a $16bn oil exploration deal; in Canada’s potentially lucrative but logistically tricky oil sands; and in the Democratic Republic of Congo, where they’re mining cobalt and copper. Their recent move into Iraq, with Chinese workers rather than Iraqis and with little to no investment in the area, highlights the local cultural tensions that will inevitably rise along with China’s expanding oil exploration.

It’s also going to create wider diplomatic tensions too. The US is used to having Venezuela as its bitch, but Chavez is up for a “multi-polar world” in which the US’s power is diminished and shared with the likes of China, which I’m sure the US will just love. Then there’s the whole Iran issue. 15% of China’s oil comes from Iran, who have actively courted China to secure their business and, they hoped, a political ally. While China, like Russia, is keen to be accepted in the western corner of the global diplomatic playground, it also really needs that oil. Hence the lack of pressure on nuclear sanctions this week, which shows that Iran’s courtship has paid off, at least for the time being.

China’s involvement in Nigeria is also fractious for the US, as America is traditionally a big importer of Nigerian oil to guard against having to rely too heavily on the Gulf; China diluting the American share of Nigerian oil will mean the US has to look elsewhere. There are also inevitable, fairly paranoid howls about national security in the wake of the Canadian sands deal.

It’s in China’s political interests to have a very diverse energy portfolio – over-reliance on one country could lead to a dangerous lack of energy security and independence, so we’re likely to see more and more expansion into places like Africa, Brazil and so on, who in turn will appreciate the more diverse range of business they’re receiving. Though while the economists might “love to see this kind of competition” in Nigeria, getting that to translate into infrastructure and investment in local economies is the most important step.