Intellectual Property and Sustainable Development

Carbon Capture and Storage (CCS): grants, prizes, and concerns

On Tuesday, the US Dept. of Energy announced it was distributing $575 million USD in grants to 22 projects in 15 states, in an effort to deploy Carbon Capture and Storage / Sequestration (CCS) technology within the next 10 years.  The money was allocated under the Economic Stimulus package (ARRA 2009). 

The Washington Post reports that the Dept. of Energy has invested $4 billion USD in CCS, leveraging $7 billion USD from the private sector.  Interestingly, this massive investment comes as a grant – not as a prize.  The difference being that prizes reward for success, whereas grants allocate money up front, creating jobs, but not necessarily ensuring the desired outcome.  In the case of CCS, the desire outcome is an environmentally sound means of reducing carbon emissions. 

There are many concerns over the environmentally soundness of CCS, including:

• The potential for stored carbon to leak underwater into oceans, decimating marine ecosystems, including fisheries;
• The potential for stored carbon to leak into the atmosphere, undermining the mitigation potential of CCS;
• The decreased pressure to shift away from “brown” energy sources, in particular coal combustion for electricity; and
• The increased consumption of gas and coal when carbon capture is used on power plants, due to the energy intensive nature of carbon capture. 

The Washington Post only mentions the risk of asphyxiation due to a massive leak of stored CO2 near populated regions.  This is certainly a concern, but just one.

As the Deepwater Horizon disaster has shown, the ability to stop underwater leaks is very difficult.  Detection of slow leaks above and below ground is also very difficult.  The increased consumption of coal with carbon storage will correspond to increased production of mercury, requiring more effective abatement technologies than are currently available and environmentally sound storage of mercury (which is uncertain at this time), to prevent increased atmospheric emissions of mercury.

Perhaps a series of prizes to identify and design effective solutions to the environmental risks of CCS, simultaneous to or preceding the development of the technology, would be a worthwhile investment - to say the least.  In this way, ad hoc remedies may be less necessary to correct for inadequate risk assessment, as witnessed by the catastrophic disasters and series of failed corrective measures that took place in the Gulf of Mexico over the course of nearly three months.

Energy Ministers Endorse Clean-Tech Measures, Back CCS Group

Government energy ministers gathering in Washington, D.C., today launched 11 energy-efficiency and renewable energy initiatives around the world, which they claim will avoid the need to build 500 midsize power plants during the next 20 years.

via www.nytimes.com  (see http://www.nytimes.com/gwire/2010/07/20/20greenwire-energy-ministers-endorse-clean-tech-measures-b-89532.html)

Of particular note is that "the United States and a dozen other nations will create what is being called the Carbon Capture, Use and Storage Action Group to develop a strategic plan for deploying carbon-capture-and-storage (CCS) infrastructure around the world by 2020.  Hopefully the development of this "strategic plan" is transparent and allows for the participation of NGOs representing a range of interests, in particular the public interest. 

For example, one might recall the issue with lead in paint.  While not saying that lead in cement/limestone brick is analogous to lead in paint, BUT - consider the following example of what some companies are doing at the pilot scale with CCS technologies:  capturing carbon dioxide and other toxic heavy metals and forming a carbonate mineral brick that embeds the toxic heavy metals, for use in buildings and other infrastructures .

"Mercury Control: 
Coal-fired power plants represent the largest source of mercury emission in the United States, but most operate with minimal controls designed to capture particulate matter that remove less than 35% of the mercury from their flue gas. This removal percentage can increase to greater than 50% when a sulfur scrubber is added, but capture levels are dependent upon coal type. With new federal and state regulations emerging, many power plants are contemplating the use of activated carbon injection (ACI) or other additional controls to remove more mercury from flue gas. The Calera CMAP process has the potential to not only capture mercury that would otherwise be emitted, but to bind it into the mineral output in a way that will prevent leaching to the environment..As with mercury, other trace metals can be captured by the CMAP process, including lead, chromium, cadmium, selenium, zinc, and others."  Available at:  http://www.arb.ca.gov/cc/etaac/meetings/102909pubmeet/mtgmaterials102909/basicsofcaleraprocess.pdf

Studies indicate that leaching of heavy metals from the mineral, while being below US guidelines, does indeed occur.  Moreover, what happens in the case of intentional demolition?  Or, what about earthquakes stronger than the specifications of building codes?  Perhaps the settlement of the "9-11 illness" victims, including many first responders, warrants consideration? (see article on the 9-11 Settlement here)

While these toxic heavy metals may be contained for a period of time, these solutions do not appear to offer a permanent solution, to say the least.  All the more reason for transparency and public participation in the development of these "strategic guidelines" for CCS. 

What Obama Means by "Clean," part 3

Environmental details of Obama's budget proposal:

1. Environmental Protection Agency (EPA) - $10 billion overall
   
   • $1.1 billion for clean air and gloabl climate change programs
   • • $21 million to catalog Greenhouse Gas (GHG) emitters
     • $5 million for EPA to write permitting guidance for GHG reduction technologies
     • $6 million for mobile-source climate regulations
     • $7 million to investigate performance standards regulations
     • $6 million for Carbon Capture & Sequestration (CCS) related work
     • $25 million for state air pollution agencies process GHG permits from large-industrial emitters
2. Interior Department - $171 million overall for adaptation initiative (25% increase from 2010 levels)
   
   • $14 billion for 8 climate-science centers
   • US Geological Survey (USGS) - $78 million
   • • $2 million for carbon sequestration projects
     • $8 million for climate change and wildlife center
       
   • Fish and Wildlife Services - $9 million for landscape conservation cooperative
3. Department of Commerce
   
   • National Oceanic and Atmospheric Association (NOAA) - Creating a climate change office to help inform local communities and businesses about climate change (see www.climate.gov)

However, Obama's goals on climate change have some signficant hurdles, besides congressional approval of the budget. 

Domestically, the US Chamber of Commerce is contesting the legal authority of the EPA to regulate GHG emissions under the Clean Act, despite a 2007 Supreme Court ruling stating that the government does indeed have the power to regulate GHG emissions, if they pose a threat to human welfare (Bloomberg article).

Internationally, key parties at the table with the US in negotiating the last-minute Copenhagen Accord - Brazil, China, India and South Africa - are pushing for a "two-track process" on reaching a binding climate treaty, which might incorporate some, all or none of the Copenhagen Accord and the Negotiator Level Text (BASIC Group Statement).   For a very informative guide on National Positions on the Copenhagen Accord, see:  The US Climate Action Network:  Who's on Board with What?

What Obama means by "clean," part 1

Perhaps misinterpreting our earlier post, President Obama named these "clean" technologies as critical to ensuring American competitiveness and recovery from abysmal employment levels (minute 23 of yesterday's state of the union address):

• Nuclear
• Clean Coal, i.e. Carbon Capture and Sequestration (CCS), i.e. finding somewhere other than the atmosphere to dump CO2
• Opening new areas for off-shore oil & gas development
• Biofuels

The Intergovernmental Panel on Climate Change (IPCC) has provided estimates of air emissions from various CCS plant designs. While CO₂ is drastically reduced (though never completely captured), emissions of air pollutants increase significantly, generally due to the energy penalty of capture.  Some proposals suggest dumping carbon masses deep into the oceans, exacerbating the problem of ocean acidification, which is due to anthropogenic carbon being in the atmosphere in the first place.

US biofuel production is predominantly corn-based ethanol, which raises numerous concerns regarding pollution, net generation of greenhouse gases, and food security.  Internationally, deforestation - especially of biodiversity-rich forests in South America and South East Asia - is also a major concern. 

Not exactly what environmentalists were hoping for. 

The Weather in Massachusetts

US health care is not the only issue that might suffer from the stunning defeat of US Democrats' in the special election to replace Teddy Kennedy's senate seat.

With the loss of a filibuster-proof majority in the Senate, the chances of having US climate change legislation that both caps greenhouse gas (GHG) emissions and puts a price on GHG emissions appears abysmal.  A recent editorial in the NY Times briefly lays out some of the reasons that the US Congress must pass a climate change bill.

However, the NY Times fails to mention an issue dear to the heart of this blog: technology.   The US taxpayer has invested tens of billions of dollars in climate change-related technology research through the American Recovery and Reinvestment Act of 2009 (ARRA), colloquially known as the "US stimulus bill."  These investments include:

• Smart grid development (US$ 11 Billion)
• Establishing an Office of Federal High Performance Green Buildings (US$ 4 Billion)
• Local and State investments in clean energy (US$ 6.3 Billion)
• Carbon Capture Experiments (US$ 3.4 Billion)
• Upgrading housing and infrastructure (US$ 14 Billion)
• Renewable Energy Research, unspecified (US$ 2.5 Billion)
• Electric Vehicle Research and Purchase (US$ 2-3 Billion)
• Geothermal Energy Research (US$ 0.4 Billion)
• Funding for various government research institutions (US$ 8.9 Billion)

As a return on this investment, US politicians - Democrats, Independents and Republicans, alike - must ensure that there is a market for these technologies, once developed. 

America should take the lead in climate change legislation.  This commitment would encourage other countries to take similar steps, helping to expand markets for US technologies, potentially reducing US trade deficits.  It would ensure that US investments result in a competitive advantage, thereby securing US domestic jobs at a time of double-digit unemployment.  US climate legislation will encourage the US private sector - one of the world's most innovative in the world - to continue to invest in environmentally-sound technology research.  Most importantly, it is vital to preventing a global humanitarian crisis in many small-island states and developing countries who face the increasing risk of droughts, floods and other disasters. 

The situation in Haiti reminds us all that precaution and prevention is a worth-while investment.  It is time that the US Congress ensures that there is a return on the investment in climate-related technologies. 

Green Wars?

The launch of the Sputnik I satellite in 1957 ushered in the “space race” between the US and former USSR, a period of new political, military, technological, and scientific developments, including the missile defense program that was to be known as “star wars.”  As the space race has slowed, nearing a halt, the race in other technological fields has recovered from the recent financial turmoil to regain their earlier momentum.  The People’s Republic of China has quickly emerged as the Soviet analogy in the race to develop commercially viable green technologies. 

In the world of “green” – all things cleaner and/or more efficient – former titans of green innovation, the US, Japan and EU, are quickly being eclipsed by China.   The Chinese manufacturing capacity for green products is no surprise, given their current dominance in nearly all other manufacturing sectors.  Recently, China overtook the US to become the world’s larger manufacturer of solar panels.   However, the Chinese government’s investment in green technology R&D is beginning to bear fruit in significant ways. 

An article in last month’s New Yorker chronicles China’s rise to engineering prominence in high-growth markets like solar, wind and “clean” coal.  Most interesting is the author’s comparison of the innovation policies of the Chinese and American governments. 

Given China’s recent rise from manufacturing epicenter to burgeoning R&D hub, one might be perplexed by the Chinese position at last month’s Climate Change talks in Copenhagen.  It is still too early to speculate about what results the “Copenhagen Agreement” will produce.  The negotiations, however, showcased China’s continuing reluctance to curb greenhouse gas (GHG) emissions, despite what is now apparent as their capacity to finance, design, and manufacture their own emissions reducing technologies. 

Chinese green technologies have proven to be highly-competitive and are ripe for global deals and licensing royalties.   China stands to gain the lion's share of manufacturing activity resulting from a new "green" economy, regardless of the origin of the design.  So, why China’s hesitation to encourage other countries to adopt policies that would further open markets for green technologies – before relevant Chinese patents, trade secrets and other competitive advantages lapse?  It has been reported that 95% of solar thermal water heating patents are held by Chinese entities. 

One possible explanation is a fear of “clean” coal technology, e.g. Carbon Capture and Sequestration (CCS), not proving to be commercially viable or environmentally sound.  Over 65% of China’s electricity demand comes from coal, and the majority China's coal is needed for for industrial, i.e. manufacturing, purposes.  China is currently the world’s largest consumer of coal, with consumption expected to rise at an unbridled 3.5% per year through 2030 to meet Chinese manufacturing and global consumer demand.  Alternative energy is far from being a viable alternative to China’s coal-based energy needs.  Moreover, current levels of funding for green technology development and deployment are not expected to be sufficient to reduce GHG emissions to non-catastrophic levels.  

However, China is not alone in their coal-based energy needs.  The US alone accounts for 48% of the coal consumed by all OECD countries (which does not include China or India).  The US department of energy (DOE) expects coal-based electricity production to decline from 49% in 2006 to 47% by 2030, while growing at 0.7% per year.  The US and China each have two of the three the largest national coal reserves in the world.  The World Bank expects that much of the world's GHG reduction by 2050 will be attributed to CCS technology coming on board.

Both the US and Chinese governments are funding R&D in CCS technology, to varying degrees.  In what might become the “Green Wars” - to design and develop viable CCS and other green technology - it appears that, in a reversal of historical roles, China has taken the lead designing and developing the needed technology.  Government R&D funding has waned since the days of the space race, allocating much of the responsibility to the private sector.  Indeed, General Electric, a dominant force in US wind-turbine technology, is also active in developing CCS, but results have been limited.  The Obama administration has vowed to reignite R&D in the US, taking many first steps through allocations of Stimulus Package funding, which will hopefully bear fruit.

The New Yorker relates that, drawing on 20% increases in R&D funding for the past 20 years and a research system modeled on the US’s NIH (health) and DOD (defense), China has developed a far superior coal-gasification technology and plans to unveil the worlds first coal-fired, near-zero emissions plant in 2011.  The project, "GreenGen," was originally slated to begin operation in 2009.  Plans in the US for similar plant, “FutureGen,” were withdrawn near the end of the Bush era, in what a Congressional investigation revealed to be a “public relations ploy for Bush Administration officials to make it appear that the US was doing something to address global warming.”  

However, Chinese scientists have come under great scrutiny for proven allegations of falsified data.  In fact, a recent joint venture was announced between China and Peabody Energy, a US corporation, for the "GreenGen" project, perhaps indicating more difficulty than anticipated was encountered by Chinese officials in developing the necessary technology for CCS.

Could the development of a viable CCS platform by only China or the US tilt the balance of power such that consensus on a Climate Change agreement with legally binding commitments or meaningful emissions reductions obligations would be near impossible?  Or rather, is certainty regarding the feasibility of CCS required for any binding or meaningful commitments?

Even if it does not, this scenario is still yet another strong argument for the fruits of publicly funded R&D being exempt from patent protection, given the underlying rationale of patents to stimulate investment.  Or even yet, perhaps CCS is an excellent area for a collaborative joint-venture between the US and Chinese governments, similar to the symbolic Apollo-Soyus Test Project, which culminated in the docking of a US and Soviet spacecraft in orbit in 1975.  Placing our eggs in one basket, like Peabody Energy, is a risky move for the US government, considering the global public good nature of our environment.

World Bank discusses Trade and Climate Change

The World Bank, along with two other NGOs, held a panel discussion today on the trade implications of the ongoing climate negotiations.  The final presentation, on Technology Transfer and Climate Change was the most substantive, as detailed below.  The presentations did not address either labeling schemes, standards, border carbon adjustments, or subsidies.  For an in depth discussion of these topics, please see the 2009 CIEL publication, Is World Trade Law a Barrier to Saving our Climate?, available at: http://www.ciel.org/Publications/ClimateTradeReport_foee-ciel_sep09.pdf

Richard Baldwin began by discussing possible implications of Copenhagen outcomes for the world trading system, and coping policies to minimize conflicts in the trading system.  In order to prevent what he called a "train wreck" in the making, he encouraged Industrialized Countries and Emerging Economies like Brazil, India, China and Russia, to agree upon climate change rules for trade outside of the WTO system.  He especially emphasized not letting the WTO's Dispute Settlement Body take up the issue of climate related trade measures.

Dominique van der Mensbrugghe, Lead Economist at the World Bank, followed with an outline of some of the probable changes in patterns of international trade that rising global temperatures might precipitate.  His primary emphasis was on the implications of climate change on agriculture.  A representative of the World Health Organization (WHO) questioned why the health related aspects, i.e. the human rights implications of climate change, were not being addressed by the presentation, which was not answered by Mr. van der Mensbrugghe.

Aaron Cosbey of the International Institute for Sustainable Development discussed technology transfer and development assistance.  In using the IPCC 4 definition of Technology Transfer, he argued that weakening IPRs to stimulate the transfer of climate technologies is insufficient for the dissemination of these technologies to developing countries.   Rather, Mr. Cosbey emphasized the need for developing countries to have  enabling environments in place for investment.  He suggested learning from the experience of the trade regime, vis-a-vis Aid for Trade, to improve the investment climate in these countries, rather than looking at the experience of the WTO in handling another global challenge - access to medicines - with the Doha Declaration on Public Health.  He cited three reasons for the relative insignificance of IPRs in the dissemination of climate technologies: (1) the requirement for trade-secret protected know-how to implement patented technologies; (2) the significant barrier of a poor investment climate in many developing countries; and (3) the inapplicability of public health and IP lessons to energy-related technologies. 

However, in response to a question posed by CIEL, Mr. Cosbey did acknowledge that his analysis did not account for either patents on the most cutting edge of alternative energy technologies (i.e. cleanest), or the expected emergence of Carbon Capture and Sequestration (CCS) for "Clean[er] Coal."  These advancements will be covered by patents for several years to come, and likely will not have the same level competition enjoyed by current climate technologies.  The World Bank, in its 2010 Development Report, projects that about 25% of the necessary reduction of greenhouse gasses (GHGs) by 2050 will come from CCS technology, which is expected to be an exceptionally concentrated industry. 

Indeed, his hypothesis on the impact of IPRs assumes a sufficiently competitive environment, where alternative suppliers of solar panels, wind turbines, etc, are readily available.  This is the case with older technologies that are in the public domain.  However, in order to reduce greenhouse emissions to 350 PPM, the World Bank, IPCC, and other researchers are united in stating the necessity that more efficient technologies be developed, deployed and disseminated to developing countries.  Thus, it is entirely possible that as advancements in energy generation/GHG reduction are developed (in large part with public funding) the importance of patents held by the private sector will increase tremendously.