Sunday, May 7, 2017

GWPF Newsletter: The New Pause

Europe’s Trend Of CO2 Reductions Seems To Have Stopped

In this newsletter:

1) The New Pause: Europe’s Trend Of CO2 Reductions Seems To Have Stopped
EUObserver, 5 May 2017
2) Tesla’s SolarCity’s Installations Crash Nearly 40%
Reuters, 5 May 2017
3) Tesla Shares Skid On Quarterly Loss, Analyst Concerns On Production Target
Financial Times, 5 May 2017
4) Today's Most Productive Energy Workers Are In Coal And Gas, Not Solar
Washington Examiner, 3 May 2017
5) Architect Of Paris Agreement Contradicts Campaigners Who Want Trump To Stay In Climate Deal
Daily Caller, 4 May 2017
6) Rupert Darwall: We’ll Always Have Paris, Unless the U.S. Senate Has Its Say
The Wall Street Journal, 5 May 2017

Full details:

1) Europe’s Trend Of CO2 Reductions Seems To Have Stopped
EUObserver, 5 May 2017

The EU’s statistical agency Eurostat announced Thursday (4 May) that CO2 emissions resulting from the EU’s energy use have “slightly decreased” in 2016, compared to the year before. But Eurostat’s press release did not mention that the small decrease has not made up for the small increase in CO2 emissions the year before, and that more CO2 was emitted in 2016 than in 2014.
source: Eurostat

In 2016, carbon emissions dropped by 0.4 percent compared to 2015, Eurostat said in a press release.

But in 2015, CO2 emissions had increased by 0.7 percent compared to 2014.

In other words, last year’s CO2 emissions increased by 0.29 percent compared to 2014, which means that for the second consecutive year the EU’s carbon emissions are higher than in 2014, albeit very slightly.

The flatlining contrasts with figures from 2014, when emissions dropped by 5 percent compared to the year before. In the two years before, the year-on-year decrease had also been at least 2 percent.

Full story

2) Tesla’s SolarCity’s Installations Crash Nearly 40%
Reuters, 5 May 2017

Tesla’s SolarCity reported a drop of nearly 40 percent in solar installations for the first quarter on Wednesday, the latest sign of a reversal in fortunes for the once high-flying residential solar industry.

Image result for solarcity cartoon

In an earnings report this week, Tesla said it deployed 150 megawatts of solar generation in the first quarter of 2017 compared to 245 MW in the first quarter of last year.

The company, which announced last week it was curatiling door-to-door sales, said it had prioritized higher-margin projects that generate cash up front rather than trying to sell as many installations as possible. But the dramatic drop in sales for a company that had consistently delivered double-digit growth puts it in line with a broad trend affecting the rooftop-solar industry.

Across the sector, installers report more difficulty finding customers. Subsidies have dwindled or been eliminated in some states, and many of the easiest consumers to sell to – environmentally conscious homeowners with disposable income – have already purchased rooftop systems.

“The trendsetters are kind of gone,” Tammy Goad, vice president of corporate development for California-based Valley Energy said at a solar industry conference in San Diego on Tuesday.

Stiff competition in the industry has pushed some companies out of the market, or forced them to scale back. One of the nation’s biggest rooftop solar companies, Sungevity, filed for bankruptcy earlier this year.

“Two years ago I thought I was a brilliant marketer. Today, I’m looking for answers,” said Kathi McCalligan, director of marketing for San Diego installer Baker Electric, at the conference. The gathering focused on customer acquisition and was put on by the Solar Energy Industries Association.

Rooftop solar, a novelty in many neighborhoods just a few years ago, has enjoyed dramatic growth in recent years, including a 66 percent rise in installations between 2014 and 2015, according to SEIA and research firm GTM Research.

That growth rate slipped to 19 percent last year, and the trend has worsened significantly in 2017. Not only did SolarCity post its worst quarterly solar deployments in nearly two years, residential interconnection requests at California’s three investor-owned utilities were down 35 percent in January and February, according to state data. California makes up about half the residential solar market.

Full story

3) Tesla Shares Skid On Quarterly Loss, Analyst Concerns On Production Target
Financial Times, 5 May 2017

Tesla shares were on track for their biggest one day decline in more than 2 months on Thursday after the electric automaker posted a wider-than-expected first quarter loss and as some second guessed the company’s ability to hit its delivery target.

Shares in the Palo Alto-based automaker fell 5.1 per cent to $295.47 after the company said its quarterly loss widened to $330.2m or $2.04 a share in the three months ended in March, compared with $282.3m or $2.13 in the year ago period.

That was deeper than the loss of $1.17 a share than analysts had forecast. Adjusting for one-time items, a loss of $1.33 a share was also greater than Wall St expectations.

Moreover, while Elon Musk said the company remains on track to produce 5,000 of its eagerly awaited mass market Model 3 vehicles a week by the end of this year and 10,000 a week before the end of 2018 — some have expressed the company’s doubts about meeting that goal.

Full story

4) Today's Most Productive Energy Workers Are In Coal And Gas, Not Solar
Washington Examiner, 3 May 2017
Mark J Perry

In an April 25 New York Times article ("Today's Energy Jobs Are in Solar, Not Coal") reporter Nadja Popovich wrote that "Last year, the solar industry employed many more Americans [373,807] than coal [160,119], while wind power topped 100,000 jobs." Those energy employment figures are based on a Department of Energy report ("U.S. Energy and Employment Report") released earlier this year that provides the most complete analysis available of employment in the energy economy.

But simply reporting rather enthusiastically (see the NYT headline again) that the solar industry employs lots of Americans, more than twice as many as the number of coal miners and utility workers at electric power plants using coal, is only telling a small part of the story. Here are some important energy facts that help provide a more complete picture about how much energy is being produced in different sectors, how many workers it takes to produce a given amount of electric power, and which sectors receive the most generous taxpayer handouts.

To start, despite a huge workforce of almost 400,000 solar workers (about 20 percent of electric power payrolls in 2016), that sector produced an insignificant share, less than 1 percent, of the electric power generated in the United States last year (EIA data here). And that's a lot of solar workers: about the same as the combined number of employees working at Exxon Mobil, Chevron, Apple, Johnson & Johnson, Microsoft, Pfizer, Ford Motor Company and Procter & Gamble.0:42
In contrast, it took about the same number of natural gas workers (398,235) last year to produce more than one-third of U.S. electric power, or 37 times more electricity than solar's minuscule share of 0.90 percent. And with only 160,000 coal workers (less than half the number of workers in either solar or gas), that sector produced nearly one-third (almost as much as gas) of U.S. electricity last year.

The graphic above helps to quantify the significant differences in electric power output per employee for coal, natural gas and solar workers. In 2016, the coal sector generated an average of 7,745 megawatt hours of electric power per worker, more than twice the 3,812 megawatt hours of electricity generated per natural gas worker, and 79 times more electric power per worker than the solar industry, which produced only 98 megawatt hours of electricity per worker. Therefore, to produce the same amount of electric power as just one coal worker would require two natural gas workers and an amazingly-high 79 solar workers.

Bottom Line: The goal of America's energy sector isn't to create as many jobs as possible (as the NYT article would apparently have us believe) especially the politically-favored and heavily-subsidized renewable energy jobs. Rather, the economic goal is to produce as much electric power as possible at the lowest possible cost, and that means we want the fewest number of energy workers!

It's a common mistake of politicians and the media to treat jobs as an economic benefit, when in fact, jobs are an economic cost or price of production. As Milton Friedman explained nearly 40 years ago, the appropriate economic objective is to have the fewest number of workers producing the greatest amount of output.
When it comes to solar energy, we are employing a very large number of workers who produce a very small amount of electric power – a sure sign of economic inefficiency.

As the graphic above clearly demonstrates, today's most productive energy workers are in coal and natural gas, not solar. And there's only one reason that the solar workforce has been increasing so rapidly (25 percent gain last year) despite its dismal record of worker productivity and minuscule share of U.S. electric power — government policies that have subsidized the solar industry nearly 350 times more than fossil fuels per unit of electricity production.

Only in the fantasy world of the Beltway does it make sense to spend billions of taxpayer dollars to artificially support an energy source that is so labor-intensive that it requires a workforce 79 times greater per unit of energy produced than coal, and nearly 40 times greater than natural gas. If I could re-title the New York Times article, I think a better choice would be "Today's Most Productive Energy Workers are in Coal and Gas, Not Solar."

5) Architect Of Paris Agreement Contradicts Campaigners Who Want Trump To Stay In Climate Deal
Daily Caller, 4 May 2017
Michael Bastasch

A key architect of the Paris climate agreement says countries are not allowed to scale back their pledges, which undercuts arguments made by supporters of the global warming accords.

One of the arguments for staying party to the Paris agreement is the deal allows countries to weaken their pledges to cut greenhouse gas emissions. This argument has been advanced by pro-Paris Republicans and former Obama administration officials with an interest in keeping the U.S. in the agreement. But Laurence Tubiana, France’s climate diplomat in 2015, said the Paris agreement does not allow countries to weaken their pledges, despite what Paris supporters argue.

“The text is very clear,” Tubiana told E&E News. “The sense of the direction is really progress; it’s not going backwards.”

She cited Article 4.11 of the Paris agreement: “A party may at any time adjust its existing nationally determined contribution with a view to enhancing its level of ambition.”

Tubiana was backed up by former Indian environment minister Jairam Ramesh.

“The absence of clear legal language precluding downward adjustment cannot mean that downward adjustment is possible,” he told E&E News. “This will defeat the soul and spirit of the Paris Agreement.”

But former Obama administration officials argue the U.S. can weaken its pledge, despite the language being ambiguous at best on that issue.

Todd Stern, Obama’s former climate envoy, said U.S. diplomats “painstakingly negotiated language in advance of Paris to allow countries to modify their commitments in either direction” to ensure it survived in the long-run, E&E News reported.

Sue Biniaz, a former State Department official involved in crafting of Article 4.11, said “a party can change its target even after it has been submitted.” Other sources familiar with the 2015 climate talks in Paris, France told E&E News a similar story.

“While Parties are encouraged to make changes in the more ambitious direction, there is no prohibition on changing in the other direction,” Biniaz said.

Pro-Paris White House officials and Republican officials are telling Trump he can remain party to the Paris agreement, but change the U.S. commitment to fighting global warming. President Barack Obama joined the Paris accords in 2016, pledging to cut U.S. emissions 26 to 28 percent by 2025.

But Paris critics say the Stern-Biniaz legal argument makes no sense. It would make no sense for Trump to be allowed to submit a weaker pledge to rapidly expand coal, oil and gas production.

“That interpretation is bizarre,” wrote Marlo Lewis, a senior fellow at the libertarian Competitive Enterprise Institute.

Lewis wrote “the Agreement is set up to encourage each party’s reach to exceed its grasp, with the expectation that many or most may fail to deliver on all components of their [pledges].”

Full story

6) Rupert Darwall: We’ll Always Have Paris, Unless the U.S. Senate Has Its Say
The Wall Street Journal, 5 May 2017

Is the climate accord binding even without Congress’s approval? Why risk finding out?

Expect some clarity soon on America’s future participation in the Paris Agreement on climate. Several cabinet members, including Secretary of State Rex Tillerson and Defense Secretary Jim Mattis, want to stay in, but at a rally in Pennsylvania Saturday, President Trump called Paris a one-sided deal that would shrink the economy by $2.5 trillion over 10 years.

According to reports this week, Mr. Trump is leaning toward withdrawal, but aides warn that he could face trouble in U.S. courts if he fails to uphold the Obama administration’s commitments under Paris. But there is a third approach—submitting the agreement to the Senate for ratification.

Some advocates of staying in argue that America’s moral and political commitment under the agreement is not legally binding because the accord doesn’t have an enforcement mechanism. But neither the North Atlantic Treaty nor the 1992 U.N. Framework Convention on Climate Change has an enforcement provision, and both were submitted to the Senate. Neither of them have a compliance mechanism either — unlike the Paris Agreement, which provides for one in Article 15.

But does an international agreement have legal force at all if the Senate hasn’t ratified it? That’s unclear. During Senate Foreign Relations Committee hearings on the 1992 U.N. climate convention, the administration of George H.W. Bush pledged to submit future climate protocols to the Senate. Senior Senate Republicans might now wish Paris would go away, but letting it stand without Senate consent would create a standard that would have permitted “accepting” — the word President Obama used for joining the Paris Agreement — the U.N. climate convention and the 1997 Kyoto Protocol without Senate consent. A senatorial prerogative written into the Constitution would be lost.

And an administration that has already had three executive orders blocked by the courts should assume it will face litigation over any loosening of emissions regulations. Will judges view Paris as legally binding? No one disputes that under some circumstances, the president can bind the U.S. by a unilateral executive agreement. The conundrum is determining at the outset whether the Paris Agreement falls into that category. Sending it to the Senate would provide an answer; not doing so cannot guarantee that it is not binding.

In U.S. v. Belmont (1937), the Supreme Court ruled that an international compact — in that instance one requiring the federal government to seize assets on behalf of the Soviet Union — “is not always a treaty which requires the participation of the Senate.” Ultimately the legal standing of the agreement depends on what the British legal philosopher H.L.A. Hart called “the internal point of view” of those applying and interpreting the law, one that lies outside the law itself.

In deciding what to do about the Paris Agreement, the president faces a more extreme situation than George W. Bush when he repudiated the Kyoto Protocol in 2001. Four years earlier, the Senate had unanimously adopted the Byrd-Hagel resolution effectively vetoing Kyoto. By not allowing the Senate to administer the protocol’s coup de grĂ¢ce, Mr. Bush brought all the political opprobrium on himself.

In joining the Paris Agreement without Senate consent, Mr. Obama unilaterally nullified precedent and extinguished specific executive-branch pledges. Mr. Trump can restore the constitutional balance and further his own policies by submitting the Paris Agreement to the Senate. Tell senators why it is such a bad deal for the U.S. — and then let the Democratic senators, especially the 10 who are up for re-election next year in states he carried, explain why they support shrinking the economy.

Mr. Darwall is author of “The Age of Global Warming: A History” (2013).

The London-based Global Warming Policy Forum is a world leading think tank on global warming policy issues. The GWPF newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at

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