Government Watch "The implications are most serious for renewable energy projects where cost-effective emissions reductions can only be had by amortizing our investment over the entire life of the project," Newcombe says. Wind, solar, and small-scale hydro projects tend to have long lifetimes and high up-front capital costs, and they require a payback period on the order of 25 years, explains Johannes Heister, an environmental economist for the PCF. This has not been widely appreciated by UNFCCC negotiators, Heister says. The current status of funding for renewables is a disappointment to some developing nations. "Our main issue for PCF is land use and forestry and renewable energy," says Fatima Dia Toure, director of Environment and Establishments for Senegal, one of 23 developing nations working with the PCF. But whether land use and forestry projects will become eligible for CDM funding and which rules would apply is unclear and may not become much clearer when parties meet again in The Hague, Heister says. To encourage renewable energy and other relatively small projects under the CDM, COP 6 negotiators should agree to streamline the project approval process for small projects, as well as clarify that renewable energy projects can earn credits over the project's lifetime, says Nancy Kete, director of climate, energy, and policy for the World Resources Institute. "As far as I can tell, no delegation or special interest would oppose this, given renewable energy's broad benefits." If COP 6 negotiators made a decision soon on the emission reduction targets for the time period after 2012 and clarified what rules would apply then, it would help project developers like the PCF "tremendously," Heister agrees. Despite its difficulties in funding some renewable technologies, the PCF has been successful in funding other less well-known technologies and energy efficiency projects. For example, the first PCF project will capture
is little more than bottled tap water and roughly one-third contains contaminants that exceed state or industry standards, according to the Natural Resources Defense Council, an environmental organization.
At present, technologies like solar photovoltaics are unintentionally disfavored under the Kyoto Protocol's clean development mechanism.
methane from a Latvian landfill. "The cost of emissions reduction from landfills is not as sensitive to the length of the crediting period as it is in the case of, say, a wind farm where the payback periods are significantly longer," Heister explains. Methane generation in landfills is faster in the first 10 years than the last 20 years, he says. Because the payback period issue emerged over time, the PCF pipeline includes some renewable energy projects. Endorsed projects include an effort to replace diesel generators with small hydro dams in Uganda's West Nile region, an energy efficiency effort in the Czech Republic, and bagasse-based cogeneration by sugar mills in Guyana. In time, carbon insurance may help ameliorate the situation. "The fact that the price of carbon is so uncertain and will remain so for the next eight years at least makes carbon valuation difficult," explains Justin Mundy with Aon Global Risk Consultants Ltd., one of a handful of companies that are insuring the price of carbon credits. Whether the payback issue and its implications for the viability of renewable technologies will be rectified at COP 6 is unclear, Newcombe says. "We're now saying it's an issue—the implications . . . are that the very technologies that [the COP 6 negotiators] regard as the important technologies for technology transfer, the low- and no-carbon renewable energy power-generating sources, are going to be disfavored in this process." —KELLYN S. BETTS
China toughens air pollution laws In early September, a revised law intended to step up the attack on China's rampant air pollution took effect. The law allows the governments of heavily polluted cities like Beijing to adopt more stringent control measures and sets fines for excessive discharges. Although China's air pollution laws have been in effect since 1987, 40% of the 338 cities whose air was regularly monitored in 1999 were severely polluted, according to the State Environmental Protection Administration (SEPA) of China. A 1998 World Health Organization report found that seven of the world's 10 most polluted cities are in China; Beijing ranks third. A SEPA spokesperson says China's atmospheric pollution problems are mainly attributable to outdated energy resources that rely primarily on coal and a sharp increase in automotive and industrial pollution. The top pollutants plaguing Chinese cities include N0 2 , particulates, and S02, according to SEPA. China leads the world in sulfur emissions. The amended law will target coal burning, according to newspaper reports, and it encourages oil refiners to formulate cleanerburning gasoline. It will set up a "total volume control system" that simultaneously considers all sources of air pollution, as well as a "pollutants discharge certification system". The law also calls for governments at all levels to double efforts to plant trees in urban areas as a buffer to air pollution.
NOVEMBER 1, 2000/ENVIRONMENTAL SCIENCE & TECHNOLOGY / NEWS • 4 5 7 A
