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Business Voice for the Environment
Environmental Entrepreneurs Update
July 30, 2008
This Environmental Entrepreneurs (E2) newsletter is sent to all E2 members and friends of E2.
Articles in this Issue:

Rethinking Biofuels - How policy can enable both food and fuel and mitigate global warming
New England Update - Global Warming, Energy Efficiency, and Safer Alternatives
E2 Members on the Radio - Lending voices and expertise to national media campaign
New York Advocacy Update - Policies on green roofs and net metering advance
California AB 32 Milestone - Agency releases "scoping plan" for emission reductions
Northern California Global Warming Focus Meetings - NRDC's Peter Lehner discusses federal cap-and-trade policy
Endangered Species Act Protections for Wolves Reinstated - Over 100 wolves killed since de-listing
Legislative Leaders Endorse California Water Conservation Bill - Will cut urban water use by 20 percent
Saving Money on Gas Today - NRDC analysis reveals comprehensive approach
Hot Weather in the West Threatens Trout - Global warming is shrinking cold-water habitat
Judge Rules Water Projects Imperil Central Valley Salmon and Steelhead - Agencies agree to increase river flow
Calendar of Events - E2 events in California, New York, New England and the Rocky Mountains

Rethinking Biofuels
Sorghum
Due to the high biomass yields of certain types of sorghum, and relatively low input requirements, it has been identified as a potential energy crop.  These plants approach 20 feet high and can achieve 10 to 15 dry tons of biomass per acre (up to 1,200 gallons of fuel/acre). All photos courtesy of Ceres - a company developing high yield energy crops.
Biofuels provide an alternative liquid fuel to petroleum for transportation. Their projected 2008 production, at about 8.0-8.5 billion gallons, will represent about 5 percent of U.S. gasoline market volume. Over the last year, much has been written about whether this increasing volume is good or bad based on whether it may also be causing a reduction in food production, an increase in food prices, and a net increase in greenhouse gas emissions from new land coming into production or simply from petrocarbon energy needed to grow the feedstock. In this article, we will examine this issue and propose a policy framework that could encourage the development of biofuels in a way that produces a net benefit to food production while reducing greenhouse gases. The framework has three elements: (1) fully account for all land-use impacts of biofuels, (2) focus incentives towards biofuels with higher productivity and greater co-benefits, and (3) move towards an integrated food and fuel land use policy.

Background

Transportation is responsible for one-third of U.S. greenhouse gas (GHG) emissions. To address climate change, the U.S. needs a combination of: driving fewer miles, efficient vehicles and fuels that emit less GHGs. Over the past five years, E2 has written about the opportunity for alternatives to displace petroleum fuels to both reduce greenhouse gases and provide greater energy security:
In these articles, we examined the role of alternatives to petroleum fuels including: hydrogen, biofuels, algae and electricity. We discussed how fuels could be developed to scale in a manner that is cost-effective and also low in greenhouse gas emissions.

The Problem

Our articles did not consider the "indirect effects" of using land for biofuels. For example, if we replace 60,000 acres of alfalfa (used for animal feed) with sugar cane to produce 100 million gallons of fuel, what happens to the alfalfa market? Does someone else grow additional alfalfa and does that happen in a manner that causes a net increase in greenhouses gases? It may also be possible for a modern cane-to-ethanol process to produce fuel and high-protein animal feed bi-products that can replace alfalfa. Sugarcane might be grown in a way that improves the annual soil and biomass accumulation to an extent greater than what the original alfalfa crop could provide. We need to calculate the negative and positive impacts of these indirect effects.

In a January 2008 article in Science magazine, Timothy Searchinger and colleagues explored the question of indirect land-use impact on stored soil carbon. The chart below (courtesy of NRDC) illustrates a scenario for corn ethanol:

Indirect Land-Use Effects From Corn Ethanol


The article calculates that the complete annual GHG emissions of growing the corn and producing the ethanol are 2.7Mg CO2e/acre (million grams of CO2 equivalent per acre) and the gasoline avoided saves 3.4 Mg CO2e/acre for a net benefit. However, there is still demand for that lost acre of corn which causes 0.85 new acres to come into production. (The protein left over from making corn ethanol is sold as animal feed and this is why only 0.85 acres are replaced and not the whole acre.) If the lost acre of corn is replaced by corn produced from clearing new land (based on certain assumptions for a standard acre of land), 4.7 Mg CO2e/acre of previously stored carbon is released, resulting in an overall increase in GHG emissions of 3.3 Mg CO2e/acre!

The direct GHG emissions from producing corn ethanol are very dependent on the specific refineries, but this can be reasonably measured. The State of California has published a list of GHG emissions for a variety of feedstocks and refinery techniques (see State Alternative Fuels Plan, page 32) without considering any indirect effects.

The Searchinger study examines whether the lost corn is actually replaced, the type and location of new land put into production, and what that land’s GHG characteristics were before being used for corn. The study is modeled on data from specific types of land that were converted for agriculture during the 1990’s. Assumptions about how the conversion happens and the type of agricultural practices used after the conversion are based on historic trends. Since land in undisturbed ecosystems is very good at storing carbon, disrupting that land releases carbon and creates a "carbon debt" which may take many years to recover through biofuels displacing gasoline (see "Land Clearing and Biofuel Carbon Debt" by Fargione, et. al., for details).

Increasing demand for corn ethanol has had an impact on the price of corn, but ethanol is not the only factor increasing food prices. Food price increases are also due to increases in the prices of fertilizers (derived from natural gas) and diesel fuels used to work the farm and deliver the products. Price increases are not limited to corn. Rice, for example, has increased in price dramatically and no rice is used in the production of biofuels. Global food demand is increasing, as developing economies can afford better diets, while production has lagged. Food price inflation is a complex issue on which multiple opinions exist. Biofuels alone do not explain rising food prices. (See "The Effects of Ethanol on Texas Food & Feed," Texas A&M University, for one analysis.)

Biofuels may also be helping to lower the cost of petroleum. A June 6 Merrill Lynch report, "Biofuels driving global oil supply growth," says: "On a global scale, biofuels are now the single largest contributor to world oil supply growth. We estimate that retail gasoline prices would be $21/bbl higher, on average, without the incremental biofuel supply."

Why Single Out Biofuels?

A major policy goal for encouraging biofuels is to reduce GHG emissions compared to fossil fuels. We must account for the total impact of biofuels - direct and indirect. We also must protect against shifts in land use that harm food production. There are several ways to reduce the indirect land-use GHG emissions from biofuels: (1) reduce/eliminate the land requirements, (2) increase the co-benefits of additional protein or carbon sequestration, and (3) displace more gasoline by increasing the yield per acre. Policies need to prioritize and reward biofuels that can do all three and discourage those that can’t.

There are about 440 million acres of land in crop rotation and cropland pasture, representing about 20 percent of all land in the U.S. That land and our food consumption are not optimized for either the healthiest diet or the lowest GHG emissions. Fifty percent of corn in the U.S. is used for animal feed and high-fructose corn syrup. (In 2007: 46 percent feed/residual, 25 percent ethanol, 19 percent export, 4 percent corn syrup, 6 percent other.) Cattle are fed corn - which they do not eat naturally - instead of grasses. The result is both an increase in GHG emissions and, as extensively documented in "The Omnivore’s Dilemma" by Michael Pollan, a less healthy human diet. Could we encourage a change in agricultural practices that reduces demand on land, reduces GHG emissions and produces a healthier diet? The answer is "yes" but to date, agriculture has been "off limits" as a topic of discussion. A well-designed land-use policy must ultimately balance food production, fiber production, diet and fuels. Until that policy exists, the burden of avoiding GHG increases from land-use changes will rest with biofuels.

We also need to think globally. In addition to reducing U.S. GHG emissions, we should develop technologies that can help developing countries independently meet their food and fuel needs. For example, Mozambique alone has 95 million acres of total arable land with available water, of which only about 12 million acres are in use. The government has recently completed an extensive land mapping process to make sure land use is properly allocated between food, fuel and environment, and is beginning to approve food and fuel development projects against that plan in order to meet local and export demand. These projects will provide foreign capital, jobs, food production, fuel production and general tax funds to improve the lives of people in one of the poorest nations on earth whose land and water are increasingly valuable national assets that can benefit this emerging economy. Production on much of that land can be done in a manner that not only does not release GHGs but also sequesters additional carbon (see "Biofuels, climate change and industrial development").

Woody Crops
Short rotation woody crops like poplars, cottonwoods and aspens can grow 12 feet per year and harvested on 5 to 15 year cycles
Corn is not the answer

We do not believe corn ethanol is the long-term solution for petroleum displacement. It has created a significant ethanol market - approaching $20 billion in 2008 (assuming $2.50 average wholesale price/gallon) - and now is the time to use policies to guide the market forward with performance standards, independent of specific technologies, which have the following benefits:
  • Net GHG Reductions - significant life-cycle reduction in GHGs compared to petroleum
  • Scale - capable of scaling to displace a significant portion of gasoline and diesel demand
  • Water - does not create new demands on fresh water
  • Environmental - neutral or positive benefits for air/water quality & toxics
  • Economics - cheaper than gasoline and diesel at scale; possible benefits to small landholders
  • Land - minimal additional land required or use of marginal land
We believe solutions that aim toward these benefits will also have a neutral to net benefit to global food supply because they will not compete for land and they create competition for fossil fuels resulting in a more competitive energy market. These six benefits will need to be pooled to produce a net benefit.

Existing Policy Mechanisms

There are three primary types of policy structures currently in use for alternative fuels:
  • Distribution Requirements - A requirement for distributors to use a certain volume of alternative fuels. The federal government has established a mandate for a volume of ethanol to be purchased - typically by blending the ethanol with gasoline. The requirement includes specific environmental safeguards.
  • Performance Standards - A requirement for distributors to reduce the lifecycle GHG emissions from their fuels. The California Low Carbon Fuel Standard (LCFS) is expected to require a 10-percent reduction in the carbon intensity of fuels sold in California by 2020. The standard will include specific environmental safeguards.
  • Subsidy - The federal government currently pays $0.45/gallon as a subsidy to the blenders of corn ethanol, $1.01/gallon for cellulosic ethanol, $0.60/gallon for renewably derived alcohol fuels and up to $1/gallon for biodiesel.
A few years ago, when oil sold for $40/barrel, alternative fuels were dependent on the mandate and the subsidy. With oil at $125/barrel, the U.S. market is not necessarily dependent on either. This weakens the environmental protections because biofuels producers can profitably sell their fuel even if it doesn’t qualify under the federal requirements. This problem can be addressed by imposing performance standards (such as the LCFS or a carbon cap) on all fuels and by limiting subsidies only to alternative fuels with low GHG emissions and the other benefits outlined above.

Biofuels Land-Use Policy Proposal


The direct GHG emissions from the growing, processing and use of biofuels is relatively well understood. It is the indirect land-use impacts that must be calculated.

In June 2008, a group of scientists wrote the California Air Resource Board recommending that indirect land-use not be included in the LCFS for the next five years due to lack of understanding and scientific consensus on the issue. This was countered by a group of scientists from the University of California at Berkeley and Davis who argue that while there is uncertainty, the expected impact is not "zero." The evidence continues to show that emissions from indirect land-use impact can be large, and a policy that treats those as zero may allow bad solutions to come to market that will be harder to correct later on. We agree that it would be a mistake to treat indirect land-use emissions as zero. At the same time, the difficulty of modeling indirect land-use emissions is very dependent on the source of the biomass and the agricultural product they displace.

We propose placing biomass sources into "bins" based on their indirect land-use impacts and the type of product they displace. The "bin" determines the indirect land-use GHG penalty they are assessed and is based on the best available modeling of indirect land-use GHG emissions. We also propose a credit that can be applied against the indirect land-use GHG penalty for biofuels with significant co-benefits and yields.

Biofuels can be manufactured from a variety of organic materials. These fall into five primary bins:
  1. Agriculture and Forestry Residues (rice straw, wheat straw, corn stover, managed forest thinnings, etc.)
  2. Waste Feedstocks (waste juice, fermentation solids, manure, municipal waste etc.)
  3. Winter Rotation Crops (grown for ground cover in certain climates)
  4. Primary Energy Crops (energy cane, switchgrass, etc.) that might also have food co-products or are grown on land not currently suitable for food
  5. Food Crops (corn, soy, etc.)
The first two bins (residues and waste) use no new agricultural land and would have no indirect land-use GHG penalty. In some parts of the country, winter rotation crops can be managed in a way that has minimum to no additional land use and opportunities are likely to expand as more research is done on this approach. Primary energy crops have land-use impacts. This category needs to be further divided based on the type of existing land used. For example, crops such as cotton may be going out of production anyway and therefore the land use associated with the energy crop grown in its stead may have a small penalty, or none at all. Current food crops have a large indirect land-use penalty and that will continue unless productivity improvements can outpace demand for food and fuel resulting in no increase in total land use.

According to the April 2005 study "Biomass as Feedstock for a Bioenergy and Bioproducts Industry" by the U.S. Departments of Agriculture and Energy, up to 1.3 billion dry tons of biomass could be made available annually. Excluding scenarios of land-use change and productivity gains, we could get up to 325 million dry tons of biomass without any impacts on existing agriculture or forestry. At a conversion efficiency ratio of 80 gallons per ton, this would be 25 billion gallons of fuel, or up to 15 percent of the 180 billion gallons currently consumed annually (the actual amount is dependent on whether ethanol, renewable diesel, or other fuels are produced; and the energy penalty associated with ethanol).

Energy Cane
Energy Cane, a variety of sugar cane selected for biomass rather than sugar, can be grown in Southern California and parts of the South East.
Productivity and Co-Benefits

The productivity of current biofuels includes corn (up to 450 gallons/acre) and Brazilian sugar cane (around 800 gallons/acre - assuming 85 tons/hectare and 85 liters/ton).

Emerging "second generation" processes can extract the fermentable sugar locked inside plant cells (cellulosic processes) or reduce them to energetic gases. These processes enable many more energy crops and much higher value per acre. Eight to 20 dry tons per acre can be produced, depending on geography and advanced genetics, and at a conversion of 80-100 gallons per dry ton, total yields can range from 640 to 2,000 gallons per acre.

Instead of converting biomass into ethanol, new companies such as Amyris and Solazyme may be able to economically convert sugars into renewable diesel, gasoline, jet fuel or the equivalent of crude oil that is then processed in a standard refinery. Converting biomass to hydrocarbons rather than to ethanol eliminates the energy penalty associated with ethanol and increases the GHG benefit by displacing more fossil fuels.

It is unclear how much dedicated energy cropland will be needed. While electricity, algae, hydrogen and biomass derived from waste materials and cover crops may play a significant role, at this point we don’t know if they will be enough and we should not discourage investment. We need to encourage innovation that focuses on very high productivity, measured in terms of tons of biomass/acre and gallons of fuel/ton of biomass, and plants that can produce both fuel and protein. For example, soybeans currently produce 0.4-0.65 tons/acre/year of protein. It may be possible for certain grasses to produce significant biomass for fuel and also 0.4-1.2 tons/acre/year of protein.

Crops with either significant biomass productivity (over 12 dry tons/acre producing 1,000 gallons/acre) and/or significant protein productivity may be able to overcome the indirect land-use GHG penalty.

Innovation Credits

The goal of the innovation credit is to give credit that can be applied against the indirect land-use penalty for crops and cropping systems that are making real steps in improving biomass productivity and/or significant protein productivity, and have potential to make larger steps. As this is largely an innovation credit, the credit would not required to be exactly proportional to the current benefits.

In our example above, the indirect land-use penalty is 4.7Mg CO2e. If a future biofuel had twice the productivity per acre of corn it would displace twice the gasoline, overcome the penalty and be GHG neutral (assuming the other factors stayed the same).

To encourage the development and deployment of highly efficient biofuels ideally with co-benefits, indirect land-use credits could be awarded. For example, initially the amount could be 4Mg Co2E/acre and that amount could decline with time. This creates an incentive to develop advanced biofuels and crops and also allows time for our understanding of indirect land-use modeling to improve and for an integrated food/fuel land use policy to be development.

Ranking Biofuel Feedstocks

Based on what we currently know, certain biofuels are clearly bad or good, or are in an ambiguous position.

Known to be Bad

Biofuels produced from deforested virgin land is clearly bad from at least a GHG emissions perspective. The common examples of this practice include palm oil produced on former forest land in Indonesia and soy from Brazil produced on former rain forest. To deal with these cases, a fuel could only participate in a mandate, performance standard or incentive if the company involved does not own, harvest or trade any virgin biomass whose source is feedstock planted on land that was detimbered at any time after the policy was first proposed, unless an independent third party has verified that the biofuel crop is improving the land and its carbon sequestration value.

Known to be Good

Biomass produced from agricultural residues and waste products can be individually inspected and demonstrated not to have any indirect land-use effect.

Ambiguous - but likely

In the "ambiguous but likely to be good" category is biomass produced by winter cover crops and biomass from forests and logging residue. Winter cover crops in areas where there is sufficient precipitation are used to protect and replenish the soil between growing seasons. The crops selected for this purpose have not been optimized to also produce biomass that could be used for biofuels. In one model (see Khosla: "Where will biofuels and biomass feedstocks come from?"), assuming cover crops were used in 50 percent (159M acres) of crop land and they supplied an average of four dry-tons/acre and the crops were converted to fuel at 80 gallons/dry-ton, 50 billion gallons of fuel could be produced by 2030 (or six times this year’s corn ethanol production). While many would consider this scenario to be optimistic, even one quarter of this result would be significant. It may be possible to integrate biomass-optimized cover crops into current agronomic practices in a way that has minimal impact on the ongoing land use in geographies where there is sufficient precipitation to support year-round biomass growth.

Ambiguous

Biofuels that replace other crops or are on new land would require overcoming the indirect land-use GHG penalty by having significant productivity increases and/or other co-benefits. They would be aided by a declining indirect land-use GHG credit.

Summary

First-generation biofuels have established a significant market for alternative fuels, but as demand has grown and the price of oil has increased rapidly, it is apparent that current policy is inadequate to protect against possible adverse effects of biofuels and does not go far enough to ensure that biofuels are done well. We recommend policies that focus on achieving benefits in
  • Net GHG Reductions - significant life-cycle reduction in GHGs compared to petroleum
  • Scale - capable of scaling to displace a significant portion of gasoline and diesel demand
  • Water - does not create new demands on fresh water
  • Environmental - neutral or positive benefits for air/water quality & toxics
  • Economics - cheaper than gasoline and diesel at scale; possible benefits to small landholders
  • Land - minimal additional land required or use of marginal land
Our framework has three elements: (1) fully account for all land-use impacts of biofuels, (2) focus incentives towards biofuels with higher productivity and greater co-benefits, and (3) move towards an integrated food and fuel land use policy. Ultimately, significant emissions from agriculture, forestry and land use need to be part of a total cap on emissions. If that happens, indirect land-use emissions from biofuels production will no longer need to be a special case and the world will be able to find - and benefit from - better solutions.

Acknowledgements

E2 members Paul Zorner and Anna Halpern-Lande, and NRDC staff Nathanael Green and Dan Lashof, contributed to this article. We would like to express our gratitude to the following people who provided critical feedback: Tony Bernhardt, John Dawson, Allen Dusault, Will Gardenswartz, Larry Gross, Dan Kammen, Richard Plevin and Dan Sperling.


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New England Update

Global Warming Solutions Act Expected to Pass in Massachusetts
Pictured at the July 30 press conference are (from left): Berl Hartman, E2 Chapter Leader; Senator Pam Resor; Senator Marc Pacheco; Sue Reid, Staff Attorney, Conservation Law Foundation; and Dave Miller, E2 Chapter Leader and Executive Managing Director, Clean Energy Venture Group.


Late in the day on July 30, the Massachusetts House of Representatives was in the process of passing the Global Warming Solutions Act (GWSA) which will require economy-wide greenhouse gas emissions limits - up to 25 percent of 1990 levels by 2020 and 80 percent of those levels by 2050. The bill requires the Secretary of Energy and Environmental Affairs, Ian Bowles, to design a plan to achieve the 2020 emissions limit by creating new regulations for electricity generation, fuel supplies, heating and cooling of buildings, and vehicle emissions. The Secretary would also be required to establish an emissions registry and reporting system to monitor emissions in the Commonwealth by 2014. The bill recently garnered support from both Speaker of the House Sal DiMasi and the Patrick Administration and is expected to pass in both the House and the Senate before the legislative session ends on July 31 and be signed into law by the Governor.

E2 has been actively involved in the fight to pass the climate legislation for over a year, and has stepped up its activity recently. On July 22, E2 member Dave Miller spoke at a press conference at the State House in support of the bill. Dave focused on the results of his MIT research which showed that a price on emissions was the most effective policy tool to spur the growth of the clean energy industry. State Senator Marc Pacheco, Chair of the Senate Committee on Global Warming and Climate Change, read a letter of support from former vice president Al Gore urging action by the House on the bill. Last week E2 distributed its GWSA letter of support to all 160 members of the Massachusetts House of Representatives.

On July 30 E2 members Berl Hartman and Dave Miller spoke at another press conference which focused on the economic impact of climate change and the cost of inaction. The press release issued by the Senate Committee on Global Warming and Climate Change quoted E2 members Dave Miller and Berl Hartman in support of the bill.

Decoupling Ruling Encourages Energy Efficiency

Until recently, utilities in Massachusetts had a strong incentive to sell their customers more gas or electricity. Their profitability depended on it. Now, under an order issued on July 16 by the Massachusetts Department of Public Utilities (DPU), that will no longer be true. The ruling requires all gas and electric utilities to "decouple" sales from revenues, a move that will eliminate a long-standing disincentive for utilities to help their customers save energy and lower their bills. The decision is a natural complement to the passage of the state’s innovative Green Communities Bill, which requires utilities to purchase all cost effective efficiency that is less expensive than supply. The Decoupling Order will make it easier for utilities to follow the mandate and support efficiency programs that help consumers use less energy and lower their bills.

E2 played a significant role in advocating for this policy. E2 members Berl Hartman and Dave Miller testified at the DPU hearings where they appeared on panels that were questioned for several hours by DPU commissioners and staff. Their testimony was backed by an E2 letter signed by 71 E2 members and supporters, and an article in the Boston Herald in which E2 members Berl Hartman and Tedd Saunders expressed support for the measure.

Support for Safer Alternatives for Toxic Chemicals

E2 has also played an active role is supporting a bill intended to reduce the presence of harmful toxic chemicals in products sold in Massachusetts. The bill, which passed by voice vote in the state Senate but has not been acted on in the House, establishes a science-based process that identifies chemicals of concern, their presence in our economy and the existence of possible alternatives. Based on this evidence, state authorities can decide if substitution is warranted and assist Massachusetts businesses with the transition away from the toxic chemical. E2 members have testified at hearings and sent letters on this issue in the past. This month, E2 sent a letter of support to members of the House urging them to take action on the bill.


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E2 Members on the Radio
E2 member David Noble
In the week leading up to the Senate floor debate on the Lieberman-Warner Climate Security Act, several E2 members agreed to participate in radio interviews around the country. The goal was to reach a wide audience of voters in key states to promote E2’s message that a strong federal carbon policy will promote economic growth and create jobs in America. Ohio E2 member Dave Noble was one of those who stepped up to the mike and eventually did 12 radio interviews on both local and national stations. You can listen to one of Dave’s interviews on a Florida station.

Of his experience, Dave writes: "It’s surprising how much misinformation is out there. Being able to answer questions from the people who called in was satisfying. It’s important to get the E2 business perspective out there. The story that’s not being told is that there’s economic opportunity associated with climate policy." Dave also felt well-supported by the NRDC Communications team, who managed the booking and scheduling of the interviews. "Everything went smoothly. I knew in advance what I’d be talking about, when and for how long."

E2 members will have more opportunities to do media outreach in the coming months as we build a new collaborative effort with NRDC’s Washington, DC, Communications team. At this critical juncture in climate and energy policy, E2’s "Independent Business Voice for the Environment" has a crucial and strategic role, serving as a counterpoint to the special interest lobbies that are now engaged full-force on Capitol Hill.


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New York Advocacy Update
Right before the end of this year’s legislative session, New York lawmakers passed two policy initiatives that will greatly help cut energy costs and reduce rainwater runoff and greenhouse gas pollution. Governor David Paterson has pledged to sign them into law. Both bills have been priorities for NRDC and E2.

The first, a green roofs tax incentive bill (S. 7553 / A. 11226), would give New York City building owners a tax credit for the installation of vegetation on their rooftops. The compensation will be equivalent to roughly $4.50 per square foot of green roof space, or about a quarter of the cost typically associated with a green roof’s materials, labor, installation and design. Green roofs could potentially save $5 million in cooling costs, reduce energy use and greenhouse gases, and prevent stormwater overflow that would otherwise overwhelm sewage treatment facilities and pollute city waterways. This initiative would also jumpstart the creation of green collar jobs. (See press release.)

The second policy initiative (S. 8481 / A. 11582) will significantly expand the state’s net metering law, which allows electricity customers with qualified renewable energy systems to sell excess energy back to their local utilities. The changes allow for increases in the size of eligible solar photovoltaic systems to 25 kilowatts (KW) for residential customers, and up to two megawatts (MW), or the customer’s peak load, for commercial customers. The changes for wind power allow for non-residential wind power generators to net meter up to the lesser of their peak load or two MW. It also increases the maximum size of wind facilities for farm operations from 125 KW to 500 KW. In addition, the size of eligible bio-mass electricity generating systems on farms will be increased from 400 KW to 500 KW. The expansion of net metering paves the way for greater independence and cost-savings for New York’s energy consumers, and promotes non-polluting, alternative energy resources. For an insider take on this win from NRDC New York Legislative Director Rich Schrader, go to NRDC’s Switchboard blog.

Net metering was one of E2’s main priorities during this year’s Albany advocacy trip. E2 is delighted with its outcome and the progress made on other issues such as electronic waste recycling and vehicle tire efficiency. Although bills on electronic waste recycling and tire efficiency ultimately got struck down, our advocacy helped raise the visibility of the issues with legislators and their staff, and set the stage for further efforts next session.


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California AB 32 Milestone
On June 26, the California Air Resources Board (CARB) released the much-anticipated draft plan for implementing AB 32. Less than two years after AB 32 was signed into law, California is on track with the law’s timeline and is well on the way with a draft plan to curb global warming while growing the state’s economy. E2 and NRDC worked closely with allies in the environmental and business communities, and behind the scenes with CARB, to structure the draft "scoping plan" and its release. Media coverage of the draft plan’s release was broad and often highlighted the importance of California’s continuing leadership (click to hear NPR program quoting Audrey Chang, Director of NRDC’s California Climate Program).

Overall, the draft blueprint is an excellent start (see NRDC’s press release) and includes many of the policies NRDC considers essential for a comprehensive response to global warming. The draft plan’s foundation is the continuation and expansion of the state’s successful regulatory policies and performance standards throughout all sectors, which are expected to provide 80 percent of the overall reductions needed to meet the state’s 2020 limit, supplemented by a multi-sector cap-and-trade program as a backstop to provide the remaining 20 percent of overall reductions. Over the coming months, our team will continue to press CARB to improve on the draft scoping plan before its finalization by the end of the year. For more information, visit E2C2’s website.


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Northern California Global Warming Focus Meetings
From left: NRDC Executive Director Peter Lehner; E2 Co-founder Nicole Lederer; E2 members Sass Somekh and David Welch
On July 22 in Palo Alto and San Francisco, E2 Northern California members and guests joined NRDC Executive Director Peter Lehner for a discussion about "Global Warming Legislative Trends." Peter summarized what happened on the Senate floor in early June with the Lieberman-Warner Climate Security Act and the overall politics of climate and energy in Washington, DC. He then delved into what’s ahead in the next three to six months for U.S. global warming policy, including the need to transition into a "New Energy Economy" and effectively handle the current oil-price crisis and the communications challenge of countering the messages of those who prescribe more domestic oil drilling as the solution. Peter then discussed what NRDC is doing to meet these challenges and where NRDC sees opportunities for the corporate sector to lend a hand. NRDC Climate Center Director Dan Lashof was also on hand at the San Francisco focus meeting to discuss the finer details of cap-and-trade policies.

E2 thanks E2 member George Cogan for hosting our Palo Alto focus meeting at his Bain & Company offices.


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NRDC News

Endangered Species Act Protections for Wolves Reinstated
A federal judge in the U.S. District Court in Missoula, Montana issued a preliminary injunction on July 18, 2008, reinstating the protections of the Endangered Species Act for gray wolves. The killing of over 100 wolves since the government took them off the Endangered Species List on March 28, 2008 prompted conservation groups, including NRDC, to sue the U.S. Fish and Wildlife Service on the grounds that the indiscriminate killing of wolves in Idaho, Montana, and Wyoming risked putting them back on the brink of extinction.


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Legislative Leaders Endorse California Water Conservation Bill
California Senate pro Tem Don Perata and Assembly Speaker Karen Bass announced on July 14 that they intend to send AB 2175, a landmark water conservation bill sponsored by NRDC, before Governor Schwarzenegger this year. Co-authored by Assembly Members John Laird (D- Santa Cruz) and Michael Feuer (D- Los Angeles), AB 2175 directs the state of California to reduce per capita urban water use by 20 percent by 2020 and also requires agricultural users to employ efficient water management practices. NRDC Senior Policy Analyst Ronnie Cohen wrote the concept paper that sparked this critical legislation and is heavily involved in negotiations over its key provisions. Additionally, the announced legislative package includes SB X2-1 (Perata), which appropriates over $800 million from existing bonds to improve water quality, conservation, supply reliability, flood management and ecosystem restoration.


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Saving Money on Gas Today
While high gasoline prices continue to inflict pain at the pump, a new report from NRDC outlines smart strategies that Americans can employ to save an average of $800 per year while driving the cars they currently own. The report, "Tune Up America: Real Relief for High Gas Prices," demonstrates that proper vehicle maintenance, smooth driving and the use of alternative transportation once a week can provide significant fuel savings. Using all 256 automatic transmission passenger vehicles sold in the U.S. from model year 2000, the analysis lays out the enormous potential savings Americans could realize through efficiency. Specifically, by keeping engines tuned up, tires inflated properly, using the manufacturers’ recommended motor oil and avoiding aggressive driving patterns, car owners can expect to see improved fuel economy. The report was produced through a collaborative effort led by Brian Siu, Peter Altman, and others within NRDC’s Energy Program and Climate Center.


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Hot Weather in the West Threatens Trout
Rivers and streams across the West are getting hotter and drier, making it increasingly difficult for trout to feed and spawn, according to a new report by NRDC and Montana Trout Unlimited. The report, "Trout in Trouble: The Impacts of Global Warming on Trout in the Interior West," says global warming is shrinking cold-water habitat, threatening the survival of trout and a billion-dollar recreational fishing industry. The report found that loss of habitat is resulting in fewer opportunities for anglers to enjoy sport fishing and could cause more serious economic losses for those who depend on the fishing, recreation, and tourism industries for their livelihoods. Scientists project that for trout and other cold-water aquatic species, a nearly five-degree Fahrenheit temperature increase could reduce trout habitat throughout the Rocky Mountain region by 50 percent or more by the end of the century. The states particularly at risk include Colorado, New Mexico, Montana, Utah and Wyoming.

Solutions include enacting federal and local climate change legislation, using water more efficiently, and limiting logging and road building near trout streams to ensure enough shade to maintain cooler water temperatures. Theo Spencer, Senior Advocate for NRDC’s Climate Center, was a co-author of the report.


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Judge Rules Water Projects Imperil Central Valley Salmon and Steelhead
A federal judge ruled on July 18 that the operations of state and federal water projects in California’s Central Valley must be modified to safeguard against unlawful threats to threatened and endangered fish species. NRDC Senior Attorney Kate Poole was part of the plaintiff coalition that launched the legal challenge in order to protect salmon and steelhead trout. This year’s closing of all California salmon fisheries and the general collapse of the Central Valley’s salmon population in recent years highlights the importance of having a smart water management plan that accommodates the needs of agriculture and development while preserving river habitat. Agencies agreed to open a dam and increase river flow in certain areas to mitigate the extensive habitat loss to steelhead and salmon. The case dates back to 2005 when a coalition of tribal groups, conservationists and fishermen challenged the federal government on its management of the State Water Project (SWP) and Central Valley Project (CVP), which correlated strongly with fish declines at the time.

On July 24, shortly after the ruling, NRDC released a report confirming that the SWP and CVP indeed contribute to declining salmon populations. The analysis, "Fish Out of Water - How Water Management in the Bay-Delta Threatens the Future of California’s Salmon Fishery," also makes recommendations on how California can meet its water needs and restore the health of the affected fisheries.


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E2 Membership

We hope you’ll tell your friends about E2 and NRDC. To learn about E2 and our programs please go to www.e2.org. Information about NRDC can be found at www.nrdc.org.


Thanks for your support. Comments, questions and introductions to possible new members are always welcome! Learn how to join E2 at how to join. To learn more about the leaders of E2 please read about the E2 co-founders
Bob Epstein and Nicole Lederer, Editors
bob@e2.org nicole@nicolelederer.com

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