Environmental Challenges for the Food and Beverage Industry
Climate change and water scarcity will have a big impact on the food and beverage industry in Asia, due mainly to the changes in growing conditions for key agricultural inputs. That’s the primary finding of WRI’s forthcoming report: Weeding Risk, due out in October.The current drought in India could be a harbinger of things to come. A 2 month long drought has afflicted almost half the country during this summer’s rainy (monsoon) season. The monsoon rains that are critical for crops such as rice, soybeans, and sugarcane, are 85% below normal. As a result, India’s sugar crop in 2008 was 45% lower than the previous year, and this year’s crop is expected to be the same or worse.Overall food prices in India have risen 10%, owing largely to the drought. And global sugar prices have reached a 28-year high, in part because of lower production in India (India is the 2nd-largest sugar producer, in part because of growing demand for ethanol. Climate change’s impact on precipitation patterns is predicted to make droughts such as this year’s more common and prolonged than in the past. What does this mean for investors in the food and beverage industry? WRI’s forthcoming Weeding Risk report attempts to answer those questions by examining the impact that climate change and water scarcity would have on key sub sectors, including aquaculture, dairy, poultry, tea, sugar, starch and confectionery and edible oils. The report’s main findings are that climate change and water scarcity can have the following impacts on the sector:

1. Raise agricultural commodity prices and increase price volatility by decreasing yields.

2. Increase processing costs through operational disruptions and treatment costs.

3. Create food safety challenges and conflicts with local communities over resource use

Leading F&B companies will find ways to build corporate and supply chain resilience to potential risks. Companies that understand the risks they are facing, and are actively building their resilience to the impacts, are better long term investments.

A First-Hand View of China’s Carbon Capture and Storage Actions
A first-hand tour of CCS sites in China suggests possibilities for cooperation with the United States—to their mutual benefit.Carbon capture and storage (CCS) technology involves capturing carbon dioxide emissions from fossil fuel use (coal, oil, and natural gas) and some industrial processes, (such as cement production) and storing it permanently underground. As the world’s two largest CO2-emitting countries, the United States and China are in a unique position to act together to advance CCS deployment worldwide. Both Peng China (PDF) and the U.S. already have significant CCS R&D programs, but there is growing consensus that China and the U.S. together could develop CCS more quickly than if they acted alone. The announcement last week by Energy Secretary Chu of a U.S.-China Joint Clean Energy Research Center—with CCS as one of the research tracks—is a good step forward.

Climate Science: Major New Discoveries
Summary of Climate Science: 2008
This annual WRI review highlights the latest major research and innovations in climate change science and technology. It presents a timely synthesis of current understanding of global warming at a critically important time for the United States and the world. The international community is negotiating a new global agreement to reduce emissions of greenhouse gases for the period post-2012, while the U.S. Congress is drafting landmark climate and energy legislation to reduce domestic emissions. Our review of select peer reviewed 2008 science and technology publications, including those from key general scientific journals and technical journals, aims to inform policymakers and legislators, the NGO community, and the media, by:describing the wide-ranging potential ramifications of human-induced climate change; documenting the impacts that are already occurring as a result of increased global temperatures, altered precipitation patterns, sea level rise, and other changes in physical and hydrological systems; and identifying important advances relating to technologies that could help to reduce greenhouse gas emissions in the future.

Bottom Line on Regional Cap-and-Trade Programs
What is happening on the regional level and why is this significant?
Twenty-three U.S. states and four Canadian provinces are actively participating in the design and implementation of three regional cap-and-trade programs to reduce greenhouse gas emissions. Participating U.S. states account for one-half of the U.S. population and Gross Domestic Product (GDP), and one-third of all U.S. greenhouse gas emissions. The Canadian provinces account for more than three-quarters of the Canadian population and GDP, and nearly one-half of Canadian GHG emissions. These efforts are formally observed by another 14 states and provinces across the United States, Canada, and Mexico.

Regional cap-and-trade programs account for the most significant domestic greenhouse gas regulatory efforts to date. In developing these programs, the regions have demonstrated innovation in policy design and program implementation that will inform national climate policy development in the United States and Canada. For basic information on cap-and-trade programs, please see The Bottom Line on Cap-and-Trade.

Squeezing More Juice From Concentrating Solar Thermal
Australia and other nations rich in solar resources should invest in concentrating solar thermal (CST), a key low-carbon technology.Australian Prime Minister Kevin Rudd recently announced plans to build the world’s largest solar energy project.

Previously, the Rudd Government announced it would invest nearly US $3.5 billion in a Clean Energy Initiative to support the growth of clean energy generation technologies, reduce CO2 emissions, and stimulate economic activity. Under this initiative, the Rudd Government is investing US $1.2 billion in solar technologies, including US $1.1 billion in the new Solar Flagships program. The tender specifications will be announced later in 2009 and the successful bids in 2010, but based on Rudd’s outline, the Program will develop up to four solar generation plants for 1GW of generating capacity—three times the capacity of the largest operating solar project in the world. The projects can use solar photovoltaic or concentrating solar thermal power (CST).CST uses reflective material to concentrate the sun’s rays to power steam turbines or engines. When combined with thermal storage—which enables a plant to produce power under cloud cover and after the sun has set—CST can generate electricity on demand, not just when the sun is shining.Given Australia’s solar resources, the announcement of the Flagships program is an important step toward meeting Australia’s 20% by 2020 renewable energy

Rules for Fuels: Biofuels and Climate Change Impacts
As biofuel production ramps up, counting all the associated greenhouse gas impacts is critical to good energy and climate policy.
Below is an interview with WRI economist and biofuels expert Liz Marshall.

Undisclosed Risk: Corporate Environmental and Social Reporting in Emerging Asia
In a world where the physical impacts of environmental degradation are already being felt, and most governments have embraced some form of regulation to mitigate further damage to the environment, environmental concerns are increasingly relevant to companies’ bottom lines. Companies will both impact and are dependent on the environment and current environmental trends will present companies with both risks and opportunities. In its report Emerging Risk, World Resources Institute (WRI) identified the critical trends that countries in emerging Asia face; trends that have a material financial impact on key sectors in the region (see Box).

At a Glance: Environmental Trends
1. Deforestation
2. Water Scarcity
3. Climate Change
4. Food Security
5. Energy Security
6. Air Pollution
7. Urbanization
8. Population Growt

Countdown to Copenhagen: Technology in a Global Climate Agreement
A consensus is emerging on technology transfer in an international climate agreement, though sticking points remain.

What are the key technology issues under discussion at the UNFCCC?
Enhanced international action on technology development and deployment, as outlined in the Bali Action Plan, is an important component of the post-2012 climate negotiations. Key elements include:

• How an international agreement can incentivize innovation of next generation low-carbon technologies, and accelerate and scale up diffusion of existing technologies to developing countries.
• Whether the structure of the international regime should include a new technology body or bodies and/or a new technology fund, or should build on existing mechanisms.
• How to solve divisive intellectual property rights (IPR) issues.

Fact Sheet: Climate Change, Forests and Finance
Reliable, long-term funding from the U.S. and other developed countries could help maintain forests and mitigate climate change.
Download fact sheet(PDF, 2 pages, 113 Kb).
Q: Why is preserving tropical forests essential to curbing and adapting to climate change?
A: Healthy forests are critical both to mitigating climate change and helping people and communities adjust to the impacts of climate change. Deforestation increases greenhouse gases, contributing to climate change, but intact forests can store carbon and thus can be part of the solution.

World Resources Institute Releases

Fact Sheet: The Role of Adaptation
Examining the role of adaptation in U.S. climate legislation and an international climate agreement. Download fact sheet as PDF
Developed and developing countries are now grappling with ways to slow greenhouse gas emissions, but global warming is already causing more severe storms, unpredictable planting seasons, and melting glaciers around the world. Adaptation means learning to live with these changes – and preparing for other changes that are unavoidable – in order to minimize harm from climate change impacts.

The Biosequestration Challenge
WRI recently convened leading experts to examine the issues and policy options surrounding carbon biosequestration.
Projects that increase and maintain carbon sequestration in the forest and agriculture sectors are likely to play a significant role in national climate programs in the United States and Canada. Recent U.S. federal proposals have called for offsets from a variety of forest and agriculture projects that sequester carbon, such as afforestation and agricultural soil sequestration. Furthermore, all three North American regional trading programs (i.e., the Northeastern Regional Greenhouse Gas Initiative, the Western Climate Initiative, and the Midwestern Greenhouse Gas Reduction Accord) are all developing offset programs that have some role for biological sequestration projects.

"Green Stimulus" at the G20

Leaders of the world’s largest economies are meeting this week in London to take on the daunting task of getting the global economy back on track. By coincidence, international climate negotiators are also meeting this week in Bonn attempting the same for the global climate.
There is an essential link between economic recovery and addressing climate change, since both will require massive, well-crafted spending and investments. There is great urgency to both stave off further economic damage and reduce greenhouse gas emissions quickly. Therefore, the "stress test" for every government stimulus package should be whether it will reduce emissions and build communities’ resilience to climate impacts.
Fortunately, the majority of the G20 economic recovery packages announced to date include "green stimulus" measures. These include the United States, China, Japan, Germany and others. When you add them up, some 14 percent of stimulus packages are climate-friendly.
However, as Lord Stern suggests, this figure should be even higher. Stern suggests that 20% of the total stimulus should be "green," with more spent in countries where more opportunities lie, and less in countries that have already made significant investments.
Stern argues that in order to get us on the right "green" track, the G20 must focus on seven strategic areas:
1. improve energy efficiency;
2. upgrade physical infrastructure;
3. support clean technology markets;
4. initiate flagship projects;
5. enhance international R&D;
6. incentivize investment; and
7. coordinate G20 efforts around these.

EPA Establishes Mandatory Greenhouse Gas Reporting

The EPA is creating a nationwide database of greenhouse gas emissions, an important first step on the path to reducing U.S. emissions.

The Environmental Protection Agency released a proposed “Mandatory Greenhouse Gas Reporting Rule” for sixty days of public comment, with a final rule expected in late 2009. The proposal would cover 85 to 90 percent of US greenhouse gas emissions. This process is the result of legislation passed in December, 2007 that directed the EPA to design a national, mandatory GHG emissions registry. EPA’s work on a national registry lagged under the previous administration, but has received fast-track priority under incoming Administrator Lisa Jackson.

Counting the Carbon in Overseas Investments

By Kirk Herbertson on governance

In a landmark settlement, two U.S. government agencies are now required to consider the climate change impacts of overseas financing.

The environmental NGOs Friends of the Earth and Greenpeace, along with the city of Boulder, Colorado, originally brought the suit to court in 2002. They alleged that the Export-Import Bank and the Overseas Private Investment Corporation (OPIC) provided more than $32 billion in public financing for overseas projects that—between 1990 and 2003—cumulatively produced CO2 emissions, equivalent to over 7% of the world’s annual emissions in 2003. Three California cities—Arcata, Santa Monica, and Oakland—later joined the suit, arguing that the climate change caused by these overseas projects would harm them.

Video: Protecting Coral Reefs

By Lauretta Burke on ecosystem services

Reef ecosystems face both local and global threats. Here is what needs to be done to ensure the world’s corals and mangroves are preserved.

This video talks about the upcoming Reefs at Risk Revisited project, and how placing an economic value on coral reefs and mangroves can help make the case for conservation.

Agriculture and Climate Change: The Policy Context

Agriculture and Climate Change: The Policy Context is the first in a series of two Farm Bill Policy Notes that look at opportunities and reasons for the U.S. agriculture industry to participate in climate policy discussions. This note analyzes the impact of climate change on U.S. agriculture, discusses sources of greenhouse gas (GHG) emissions from the agricultural sector, and explains the possible roles for agriculture in proposed climate change legislation. U.S. agriculture producers stand to benefit from proposed climate policy, but only if they become active participants in the climate policy dialogue. With public perception and understanding of climate change at an all-time high, this is an opportune time for farmers to act so future legislation is in their best interest.

The Importance of the USCAP Blueprint

Here is why WRI supports the USCAP Blueprint, which provides a framework to shift the U.S. to a low carbon economy, and a more secure energy future.

USCAP Emissions Reduction Targets
97-102% of 2005 levels by 2012
80-86% of 2005 levels by 2020
58% of 2005 levels by 2030
20% of 2005 levels by 2050

WRI signed the USCAP Blueprint for Legislative Action launched January 15, 2009. The USCAP blueprint is the product of two years of rigorous work by a unique partnership of big business and non governmental organizations committed to urgently enacting climate legislation in 2009.

WRI believes that USCAP has outlined an environmentally-sound, workable, and cost-effective framework to reduce U.S. emissions contributing to global climate change. Taken together, its provisions will facilitate the transformational change required to shift our nation toward a low carbon economy and a more energy secure future.

Can the U.S. and China Cooperate on Coal?

Energy Secretary Stephen Chu’s testimony reminds us that the coal challenge is global, and its solutions must be global too.

In his testimony before the Senate Energy and Natural Resources Committee two weeks ago, Energy Secretary Dr. Steven Chu gave a succinct but eloquent insight into how we might effectively address the daunting global challenge of coal:

“Two-thirds of the known coal reserves in the world lie in only four countries: the United States, first and foremost, followed by India, China and Russia. India and China, Russia and the United States, I believe, will not turn their back on coal, so it is imperative that we figure out a way to use coal as cleanly as possible. And so for that reason, I think again, my optimism as a scientist, we will develop those technologies to capture a large fraction of the carbon dioxide that is emitted from coal plants and safely sequester them. So if confirmed as Secretary of Energy I will work very hard to extensively develop these technologies so that the United States and the rest of the world can use them.”

Corn Stover For Ethanol Production: Potential and Pitfalls

This study uses a national agro-environmental production model to evaluate the environmental and economic impacts of introducing a market for corn stover to support a stover-based ethanol industry.

When A Tree Falls Illegally In The Forest

By Jonathan Lash on deforestation

Soon, everybody may hear. The world’s first ban on illegal wood imports could be a breakthrough on climate change.

One of the most interesting and overlooked environmental victories in 2008 came in the form of an amendment to a 100-year old U.S. statute. The Lacey Act, as it is known, has been a mainstay in fighting wildlife crime by banning the U.S. import of illegally sourced (according to laws in the country of origin) animal products. Lacey’s most recent amendment—passed on May 22nd, 2008—places a similar ban on plants, including trees, and lumber products such as paper, furniture and flooring. In other words, the updated Lacey Act is now a potent weapon in the fight to reduce illegal logging and global deforestation.

Global Stimulus, Human Rights and the Environment

International project financing primarily intended to generate jobs and growth should not ignore social and environmental safeguards in the name of economic stimulus.

One case in point: the International Finance Corporation (IFC), the World Bank’s private sector arm, is launching four new facilities for bank recapitalization, infrastructure financing, trade facilitation, and refocused advisory services. Combined with financing mobilized from others, these new facilities could provide more than US$30 billion over the next three years. The Bank’s Multilateral Investment Guarantee Agency (MIGA) will also provide much needed risk mitigation for flows of private finance to developing countries. These new facilities are meant to attract developing member client countries which may be facing difficulties moving forward with large-scale capital-intensive infrastructure projects such as roads, highways, power stations and industrial zones.

Earlier project experiences and evaluations indicate that environmental safeguards are indeed necessary to prevent widespread environmental damage associated with unregulated economic growth.

Many public financial institutions, such as the World Bank Group, require their clients to meet these “safeguards” as a condition of financing. But civil society organizations and community groups have argued that safeguards have weakened recently. Some financial institutions are adopting broadly worded policies that are unenforceable and unmeasurable, while others are applying the safeguard to only a small portion of their activities.

The Asian Development Bank (ADB) is currently in the process of reviewing and adopting its safeguards policy. We ask all international financial institutions to guard against dilution of environmental and social guidelines, particularly in proposed large-scale infrastructure and energy projects. Instead, the ADB should double its efforts to strengthen these guidelines and ensure full compliance with internationally accepted environmental and human rights standards.

In particular we are asking the ADB to:

Incorporate the UN Declaration on the Rights of Indigenous Peoples into the ADB Safeguard Policy Statement.
Require free, prior and informed consent for all projects potentially affecting indigenous peoples.
Provide further policy criteria for the establishment of project-level grievance mechanisms.
Strengthen the role of the ADB Accountability Mechanism in the safeguard system.
Improve the process for adopting Country Safeguard Systems into ADB operations.
WRI believes attention to ecological, social and health impacts of development projects, particularly to affected communities ultimately minimizes risks and boosts the projects’ chances at being successful and sustainable.

To read the full text of WRI’s submission to the ADB, please click here.

To learn more about the issue, read WRI’s report, Development Without Conflict: The Business Case for Community Consent.