EPA Makes Plans to Curb Plane Emissions

The Obama Administration has initiated talks on restricting the aerospace industry’s greenhouse gas emissions, stating that it might take some time before exact regulations take effect.

According to the EPA, like the automobile industry and power plants, airplanes also negatively impact human health; thus, restrictions are necessary. Creating the regulations will take some time — nothing will be enacted while Obama is in office, and will be the next president’s responsibility.

The EPA is waiting for the International Civil Aviation Organization (ICAO), which is tasked with creating international aviation regulations, to develop worldwide carbon emission rules. The deadline is February 2016; ICAO members are obligated to enact international regulations approved by the agency. The EPA is collaborating with multiple international agencies, like the ICAO, to create aerospace regulations.

Environmentalists would like the EPA to issue their rules before February 2016 because they worry that the ICAO — an agency that works with both the EPA and airline industry — will be biased and present lenient restrictions. Environmental groups want the US to lead the way.

Per the Flying Clean campaign, flights in and out of the US constitute almost one-third of the world’s airplane emissions; airline emissions will likely double by the end of 2020 if nothing is done soon.

Of course, Republicans have their issues with Obama cutting airplane emissions, specifying that airfare prices will skyrocket and hurt domestic air travel. Airline companies agree, explaining that they have already done so much to curb emissions, including using fuel alternatives, enhancing aerodynamics, and using lighter inflight materials. As reported by the International Air Transport Association, decreasing an airplane’s weight by 5.5 pounds is equivalent to a one-ton cut in yearly carbon emissions.

But the aviation industry continues to grow: more and more people are flying each year. Although air flights only comprise 2 percent of worldwide emissions, it’s projected that by 2020, international flights can reach 70 percent above 2005 numbers, regardless of whether fuel efficiency is advanced by an annual 2 percent.

To combat this, in the past, the EU tried to enact the Emissions Trading System, which was subsequently banned by the US, China, and other countries. With the support of both Democrats and Republicans, Obama even passed the European Union Emissions Trading Scheme Prohibition Act of 2011, which banned American airlines from partaking in the EU’s system.

Airlines have pledged to limit their emissions by 2 percent every year until 2020, when emission growth will cap. The ultimate goal is for the aerospace industry’s emissions to be at half 2005′s numbers by 2050.

At this point, using newly-made airplanes that have better fuel economies are our best bet. Boeing has introduced its new 787 Dreamliner and Airbus has introduced the A350, both of which are more fuel efficient but not in wide use just yet.

(From New York Times)

Developed and Written by Dr. Subodh Das and Tara Mahadevan

June 16, 2015

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“London Metal Exchange Wins Court Appeal in Aluminum Dispute” – Wall Street Journal, 8 October 2014

The London Metal Exchange (LME) has been in court with Russia-based aluminum manufacturer United Co. Rusal PLC since December, due to Rusal’s opposition over a new set of rules LME is introducing that will alleviate bottlenecks at metals warehouses. A lower court ruled in favor of Rusal in May; the suit was then brought to the UK Court of Appeal, which ruled in favor of the LME. The LME is now set to enact its new rules on February 1, 2015.

Recently, metals warehouses — such as those owned by JPMorgan and Goldman Sachs in the US — have been under heavy fire because of backlogged inventory. Many claimed that by creating bottlenecks and backlogging inventory, warehouses were making a profit from extending the rent that manufacturers and metal owners pay to store metal. In 2013, a case was brought against the Wall Street banks, accusing them of purposely creating a traffic jam in the warehouses. The suit was dropped this past summer, though the warehouses will continue to be surveilled by regulatory commissions, such as the US Department of Justice and Commodity Futures Trading Commission.

Metal warehouses, like the ones that JPMorgan and Goldamn Sachs own, are part of an international network of LME warehouses. Sometimes aluminum orders were so backlogged that customers waited two years to be sent their aluminum. Others have had to spend additional money on premiums to obtain their orders faster.

Last summer, in an attempt to decrease backlogs, the LME proposed new guidelines that allowed warehouses that had bottlenecks of over 50 days to send out more aluminum than they accepted until the bottlenecks were minimized.

After the LME’s initial proposal, Rusal protested, claiming that the new guidelines would financially hurt the company. But now, since the Court of Appeal overturned the lower court’s decision, bottlenecked LME warehouses are already increasing their number of shipments. The Court of Appeal fined Rusal and has banned the company from appealing; however, Rusal still plans to file an appeal with the UK’s Supreme Court.

The original intent of the LME was to provide a forum to balance global and regional  aluminum supply and demand, and inventory management. However, the LME has taken  new unwanted dimensions — accelerating volatility in the global aluminum market leading to more speculation as opposed to manufacturing actions.

Read more:
A Shuffle of Aluminum, but to Banks, Pure Gold
Aluminum Probe Focuses on Costs to Users
Wall Street Banks Get Rid of Aluminum Price Fixing Suits

Developed and Written by Dr. Subodh Das and Tara Mahadevan

October 8, 2014

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“EU Climate Targets to Stop Short of Ambitions” – Wall Street Journal, 16 January 2014


Wall Street Journal

The European Union’s economic downturn actually helped its 28 member states reduce their carbon emissions; however, the EU is still lagging behind on its proposed climate goals. Following a global climate change agreement, the EU’s main goals were to cut carbon dioxide emissions and increase renewable energy use, like wind and solar power. These targets were set to help the EU reach its pledge to curb its CO2 emissions by 80% by 2050.

There is more concern for the downturn rather than the EU’s environmental goals. The union’s 28 governments have also constantly butted heads on the proposed climate policy targets.

The European Commission presented the EU’s climate change targets. While some of the member states were hoping the commission would relent on some of the proposed regulations, the commission maintained that the EU must reduce carbon emissions by 40% by 2030; and that clean energy sources, such as wind and solar power, compose 27% of the EU’s entire energy use by 2030. Though there is disagreement on the subject of shale gas between the member states, the commission also outlined regulations for tapping into shale rock reserves.

The proposed regulations and guidelines require support from the 28 member states and the European Parliament before they are fully enacted, so we can be sure that it will take some time for the laws to go into effect.

The EU’s 20-20-20 targets are still being enforced. The EU governments pledged to curb CO2 emissions by 20% by 2020, use 20% more renewable energy sources by 2020, and increase energy efficiency by 20% by 2020.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

March 21, 2014

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“The Real Climate ‘Deniers’ Are the Greens” – Wall Street Journal, 2 February 2014

Europe’s strategies to use more green energy have mostly failed, causing some countries to accumulate enormous debt. Germany and Spain, for example, have both decided to reduce their renewable energy subsidies—for Germany, renewable energy subsidies have been estimated at costing $32 billion per year for consumers.

According to the Center for European Policy Studies, European steelmakers pay two times as much for electricity and four times as much for natural gas than US steelmakers; electricity costs for homeowners in Denmark have also skyrocketed, costing over three times the average rate in the US.

While the term “climate denier” has been applied to those who don’t believe in the effects of climate change, the term should now be used for environmentalists who incessantly promote renewable energy and its positive outcomes, like job growth.

‘Climate deniers’ refuse to believe in the high costs that renewable energy subsidies have cost Europe; they refuse to believe in the advantages of the US’s natural gas boom; and they refuse to believe in the difficulties of lowering global carbon dioxide emission levels.

Natural gas has had a large positive environmental impact in the US: in 2013, we saw a 41% increase in US natural gas production from 2005. This boom in natural gas reduces the US’s need for coal, thus curbing emission levels. According to the EPA, coal power plants expend twice the amount of emissions than natural gas power plants. Moreover, the US’s emission levels are diminishing at a faster rate than the EU’s: from 2005-2012, the US’s carbon dioxide emissions dropped by 10.9%, while the EU’s emissions only fell by 9.9%.

Instead of turning to natural gas to decrease debts, coal-use and emission levels, countries are using more and more coal. Global coal consumption has risen by almost 55% during the last ten years, as both populations and demand grow; global carbon dioxide emissions have also risen by 32% over that ten year span. Germany is likely to turn to coal as the country continues to shut down its nuclear power plants. China too will gravitate towards coal, its carbon dioxide emission levels having increased by almost 3.6 billion tons since 2005.

What we can gather from this information is that the US knows how to successfully implement carbon policy, what Obama has introduced as the Climate Action Plan. The US has been able to simultaneously cut emissions while fostering a natural gas boom.

Developed and Written by Dr. Subodh Das and Tara Mahadevan

February 23, 2014

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