"2009 was shaping up to be the year the world got its environmental act together. Now it's looking like the global environment may be one of the biggest losers in the current financial crisis."

Saving the planet was never going to be easy. Avoiding the most catastrophic effects of climate changes will require cutting carbon emissions by 50 to 80 percent over the next four decades, scientists say. After years of deadlock, 2009 was shaping up to be the year the world got its environmental act together. Now it's looking like the global environment may be one of the biggest losers in the current financial crisis.

Lower prices for oil-which some analysts predict will hit $25 a barrel-is bad news for investors in green energy. But the big winner is likely to be dirty coal. It already accounts for about 40 percent of the world's emissions of carbon dioxide, the leading cause of global warming. The fuel is plentiful, and its price has fallen about one third since last summer's peak to $80 per ton. In China, the world's largest coal burner, prices have fallen by half and are likely to plummet further. All the top emitters of greenhouse gases depend mainly on coal for electric power. Dirty coal is now getting cheaper relative to other fossil fuels, such as natural gas and oil.

New "clean coal" plants would capture carbon and store it away underground, or at least to extract as much energy as possible for each kilogram of carbon pollution. The problem is that clean-coal plants are a lot more expensive than conventional "dirty coal" technology, and the financial crisis is obliterating schemes that would have paid the extra cost. Before the crisis, a team at Stanford University found that the world was investing only about 1 percent of what's needed on advanced coal technologies to meet carbon-emissions targets. Now a spate of canceled projects darkens the picture. There are lots of ways, in theory, to build low-emission power plants. One option is to turn coal into a gas and burn it in an ultra-efficient turbine. This "gasification" approach is not only highly efficient but it also produces nearly all of its carbon dioxide pollution in a concentrated stream that could be pumped safely underground, where it won't warm the atmosphere. So far, few investors are building plants that offer a model for how the technology would be deployed at scale. Before the crisis, a few power companies tried to build just the efficient gasification units, which are cheaper than the whole integrated plant, but most of those plans have evaporated in the last month. Only one large plant is still going forward in the United States, and that one won't include carbon storage.

Another route is to burn coal in pure oxygen without gasification, which also yields pure waste that can be pumped underground. A 30-megawatt demonstration plant is operating in Germany. A consortium of utilities is also testing a technology to remove CO2 from plant emissions, but no investor is willing yet to build a full-scale project. These options could double or triple the cost of a power plant.

A 300-megawatt plant that cut emissions nearly 90 percent would cost $1 billion to $2.5 billion, and the United States would need about 1,000 such plants to match its current coal-power output. China would need another 1,000. Since the 1960s, when U.S. utilities last made major investments in new plants, their average bond rating has fallen from AA to BBB, and now the credit crisis has made it all but impossible to finance any new plant, much less an expensive, clean one. The European Union has no money for its plan to build a dozen "zero-emission plants." The price of CO2 in Europe is too low to attract investors to this technology. The latest scheme to fix the problem—a giveaway of emission credits to investors who build clean-coal plants—is falling victim to the financial crisis, which has halved the price of emission permits, and thus the value of emission credits. The U.K. has been holding a contest for public funds to jump-start clean-coal technology. In November 2008 BP pulled out of the competition, citing its inability to form a successful consortium. Early in 2008 the U.S. government killed its investment in advanced coal due to exploding costs.

Environmentalists, in their opposition to coal of any kind, may provide the coup de grâce. Greenpeace, riffing on James Bond, is hawking a "Coalfinger" spoof on the Internet and is deep in a campaign to stop all new coal plants. U.S. environmental groups recently announced a campaign to expose clean coal as a chimera. Thanks to such efforts, in the United States it's now nearly impossible to build any kind of coal plant, including tests of clean technology. As the world economy recovers, nations will once again turn to their old stalwart, dirty coal.

Serious greenery is about efficiency--not only in the use of energy but also labor and capital.

(Excerpt) The winds of economic destruction are flattening not just retirement accounts but also naive visions for a green economy. Public support for costly new green mandates is weakening, and government budgets to fund them are bleeding red ink. Plummeting prices of oil and other fossil fuels have made it harder for green to compete in the marketplace. IPOs of firms working on "clean tech" green energy that have fueled fantasies of the coming energy revolution have crashed to a halt. In all the bad economic news, a new face of green is coming into focus. Whereas the old view of green tech was based on many small, decentralized sources of power and a green economy that harnessed the power of the marketplace, the new version will rely more heavily on regulation and subsidies. It will also embrace the wisdom, true in most of the energy business, that bigger is better for weathering economic storms.

As the pro-market "Washington Consensus" has unraveled, this decade has seen the emergence of two new Latin American trends: One group of countries favoring continued liberalization (Brazil, Chile, Mexico), and another opting for increasing state intervention (Argentina, Ecuador, Venezuela). Energy policy tells some of the story behind these two trends. This talk will focus on energy policy for three Latin American countries-- Brazil, Mexico, and Venezuela-- within the context of a larger fifteen-country study on National Oil Companies. The speaker will address how oil has both facilitated greater state control and created, though typically to a lesser degree, some pressures for market liberalization, as well as suggest some implications from recent oil market trends (new oil field discoveries in Brazil, falling oil prices globally) for state control in the region. 

President-elect Barack Obama will inherit an Iraq that has experienced substantial improvements in security, but remains rife with unresolved internal issues. If not handled carefully, Iraq's fragile progress could dissolve and the country could become a dangerous foreign policy minefield for yet another American president. Here are the top 10 issues the next administration must address:

1. Determination of Objectives: The Bush administration invested vast resources in the hopes of achieving maximalist aims in Iraq. Though the results in Iraq have clearly fallen short of those aims, the Obama administration needs to formulate a policy that is more comprehensive and nuanced than "end this war." What can the U.S. realistically achieve? What are the outcomes that the U.S. can or cannot live with? How does Iraq fit in to a cogent strategy for the broader region, including Afghanistan, Pakistan, and Iran?
2. Approach to Withdrawal: The Status of Forces Agreement moving forward between the U.S. and Iraqi governments, combined with the urgent need for reinforcements in Afghanistan, will shape the contours of withdrawal. But what if Baghdad wants to change the schedule? Will changing conditions on the ground affect the pace and process of withdrawal? Is Washington willing to extend or accelerate the current "time horizon" if the security situation significantly deteriorates?
3. Management of the Security Transition: Earlier attempts to transfer security responsibility to Iraqi forces in 2006 encountered many problems. Do current assessments of when provinces will be ready for transition accurately reflect conditions on the ground? Can the U.S. effectively "thin out" its forces, while maintaining robust enabling capabilities (intelligence, air support, medical evacuation) in critical areas?
4. Development of the Iraqi Security Forces (ISF): America must help the Iraqi forces foster competence and professionalism and prevent the reemergence of sectarianism in the ranks. To make this happen, U.S. military advisors will likely be needed for years to come, particularly to help develop support capabilities that the Iraqis currently lack. Is this advisory effort effective as currently organized and prepared? How will advisors be allocated to meet growing demands in Afghanistan as well as Iraq? Can the Defense Department accelerate its Foreign Military Sales program to provide the ISF with badly-needed equipment?
5. Sunni Reintegration: The Sunni Awakening and Sons of Iraq groups are facing an uncertain future as they transition from American control to Iraqi payroll and command structures. How can the U.S. help ensure that Sunnis are reintegrated into Iraqi society so they have a stake in the political system and do not return to the insurgency?
6. Status of Kirkuk: Kirkuk, the oil-rich city of northern Iraq claimed by both Kurds and Arabs, will be a flashpoint for continued conflict. What role can the U.S. play to minimize the potential for re-escalation of Arab-Kurd violence over Kirkuk? Should U.S. policy emphasize indefinite postponement of this issue, broker a territorial compromise, or encourage Iraqis to "give" the city to one side and focus instead on sharing oil revenues?
7. Dealing with Iranian influence: As Iraq's neighbor, Iran has a natural interest in influencing Iraq's domestic affairs. However, Tehran's political obstructionism and support for militants ultimately undermines Iraqi as well as American interests. How much and what types of Iranian influence in Iraqi affairs can the U.S. tolerate? How can the U.S. help Iraqis counter the most destabilizing and pernicious Iranian influences?
8. Future of Political Relations with Iraq: How does the U.S. envision its relations with an emerging sovereign Iraq that is likely to exhibit erratic behavior on the international stage? How and to what extent should America insert itself in Iraqi politics? Should the U.S. government actively seek a balance of power between Iraq's major factions, so as to spread the risk and avoid linking itself to the fortunes of any one group? Or should it remain on the sidelines, so as to extricate ourselves as best we can?
9. Economic Development: Iraq's economy is currently 90 percent dependent on oil exports, resulting in substantial volatility in revenue. How can the U.S. help Iraq diversify its economic base? How can the U.S. encourage greater foreign investment in the Iraqi economy beyond the energy sector? What incentives could Baghdad provide provincial and local officials to improve transparency and revenue sharing mechanisms?
10. Return of Refugees: Huge numbers of Iraqis fled to Jordan and Syria to escape sectarian violence. Does Baghdad owe those nations financial aid? As refugees return, what is the best way to handle this influx? Is America committed to reestablishing the mixed-sect districts that existed prior to 2006? Is a level of sectarian separation necessary to keep the peace?

No panacea exists for Iraq's remaining ills, and no amount of planning will account for all of its complex and sometimes contradictory dynamics. But with America's direct influence likely to wane as its troop presence diminishes, it is increasingly important to anticipate the full spectrum of difficult issues and choices ahead, in order to devise the best way forward for the United States and Iraq.

Brian M. Burton is a research assistant at the Center for a New American Security and a graduate student at the Georgetown University Security Studies Program. John Paul Schnapper-Casteras is a predoctoral fellow at Stanford University's Center for International Security and Cooperation.

Carbon Capture and Storage (CCS) technologies form a key piece of virtually all roadmaps for global carbon dioxide (CO₂) emissions reductions-many studies predict that CCS will contribute 20-50% of the necessary CO₂ emissions reductions by 2100. To assess actual progress of CCS projects towards fulfilling these expectations, the PESD Carbon Storage Project Database tracks all publicly announced CCS projects worldwide.

Through careful examination of numerous information sources, we grouped all CCS projects into three categories according to the probability of their completion: currently operating (100% likelihood), possible (estimated 50-90% likelihood), and speculative (estimated 0-50% likelihood).

We find that even under the aggressive scenario that all "possible" projects are indeed realized, this will result in about 80 Mt CO₂/yr of reductions worldwide by 2025, far short of the 350 Mt CO₂/yr of reductions that are projected as technologically feasible using CCS by 2030 in the US alone.

Looking worldwide, then, total carbon storage activity might need to be on the order of 1 billion tonnes CO₂/yr just for carbon storage to play a big role as one of a portfolio of technologies deployed so that the overall energy system cuts emissions on a path consistent with 500-550ppm. Our study shows that the actual deployment plans are on track to deliver less than 1% of what's needed.

We've then gone a step further and looked at the design of each carbon storage project in our database. We find that the vast majority of the most likely projects are associated with Enhanced Oil Recovery (EOR), sweetening of natural gas, and the production of synthetic natural gas (SNG). That is, the most interesting niche financially is associated with making more fossil fuels. While that investment pattern is understandable, it has huge implications for carbon storage in the power sector (which is where everyone thinks carbon capture and storage, or "CCS", is very attractive for cutting emissions) for the simple reason that only a tiny fraction of carbon storage investment plans envisions the use of CCS at scale. Our guess is that carbon storage will be developed through niche markets in EOR and SNG and then spread, perhaps, to CCS. But that pathway will be slow to unfold and suggests that visions of large scale near-term CCS will be hard to materialize without much greater investment in developing the technologies.

The second version of the PESD Carbon Storage Project Database, developed by PESD researchers Varun Rai, Ngai-Chi Chung, Mark C. Thurber, and David G. Victor, was released on 12 November 2008. The previous version was released on 30 June 2008.

Major international crises often produce tectonic shifts in international relations. Under pressure from key European counterparts, President Bush has agreed to a "new Bretton Woods" summit on Nov. 15.

It would be hard to overstate the potential significance of this meeting. The first Bretton Woods, in 1944, set the rules for monetary relations among nations, and it created the International Monetary Fund (IMF) and the World Bank.

While European leaders are pushing for greater regulation and a major overhaul of the international financial order, US policymakers have been lukewarm, emphasizing the preservation of free-market capitalism. This transatlantic drama has obscured the more fundamental problem—how to accommodate the historic shift of economic power away from the West toward Asia.

Including India, broader East Asia encompasses more than half of the world's population. The region already accounts for about one-third of global economic output, oil consumption, and CO2 emissions, and this is only likely to grow in the future. Over the course of the 21st century, Asia's economic and geopolitical weight in the world will, in all likelihood, come to rival that of Europe in the 19th century. Asian problems will become increasingly indistinguishable from global problems.

In the face of such dramatic change, the IMF and World Bank are becoming relics of a bygone era. At the time of their creation, by US and European negotiators, the major challenge was to get capital flowing from the US to war-ravaged Europe. The days of the US as creditor state are long gone—our massive current account deficit is financed by importing nearly $1 trillion in foreign capital every year. Major US banks are being rescued by sovereign wealth funds and financial institutions from the Middle East and East Asia. China and Japan alone held over $600 billion of securities issued by Fannie Mae and Freddie Mac, making the bailout of those institutions a major foreign policy issue.

Despite these changed realities, both Bretton Woods institutions remain dominated by the West. By convention, the IMF is led by a European, the World Bank by a US national. The US is the only country with veto power over important decisions in either body.

My analysis of voting shares in the IMF indicates that the Allied powers of World War II have been consistently overrepresented compared to Axis powers despite the passing of more than 60 years since the end of that war. Studies show that IMF lending is biased in favor of recipients with strong economic and diplomatic ties to the US and key European states at the expense of other members.

This unbalanced representation had real consequences during the Asian Financial Crisis of 1997-98, when the IMF, as part of its rescue operation, implemented policies widely viewed as contrary to Asian interests. During the crisis, Japanese financial authorities proposed an Asian Monetary Fund as a potential alternative source of liquidity. This proposal was rejected by US officials, who feared dilution of IMF authority. However, over the past decade, East Asian states have stockpiled foreign currency reserves and developed regional cooperation that may eventually develop into a credible alternative to the IMF.

The IMF and World Bank should be reformed to better reflect the interests and concerns of rising economic powers. Voting shares need to be further redistributed to reflect underlying economic realities. Decisionmaking rules should be modified to give greater weight or agenda-setting authority to regional actors—the US may have a strong interest in loans to Mexico, but Japan may have a greater stake in Indonesia. Assignment of the top positions should be made truly competitive. Core functions should be decentralized—both institutions are headquartered in Washington, impeding employment of top talent from Asia and limiting intellectual exchange.

An international financial architecture that fragments or remains centered on the West as Asia rises will probably prove grossly ineffective. Europe attempted much the same during the turbulent period between the two World Wars, resurrecting a system based on British hegemony even as Britain was in relative decline. Those were scary times, with free riding and beggar-thy-neighbor policies feeding mutual distrust and economic catastrophe.

This will not be the last financial crisis we face. Next time, ad hoc cooperation by the US and Europe may prove insufficient. Franklin Roosevelt had the foresight to include China on the United Nations Security Council long before that nation became a geopolitical heavyweight. Similar foresight should be brought to bear as world leaders debate the future of the international financial architecture.