Cool Earth

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Cool Earth

• Linking Capital to Climate

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Our Purpose
Cool Earth puts a fair economic value on the
globes critical environmental resources. By
drawing on the capital value of these resources,
Cool Earth promotes conservation, communities
and climate stability.
Surface temperature anomalies vs. 1961-90 mean
Changes in surface temperature since 1970
Source Brohan et al., 2006
See note 1.
Source Prowse, 1994
3
The Earth is already committed to profound
climate change

• Half of all carbon released from fossil fuel into
  the atmosphere since the Industrial Revolution
  has been generated in the last twenty years. The
  carbon dioxide generated last year from burning
  the equivalent of 1.4 billion tonnes of coal will
  still be trapping heat in 100 years time.

• This means that with todays atmospheric CO2
  concentrations at 380 parts per million (ppm)
  compared to pre-industrial levels of 280 ppm - we
  are already committed to profound climate change.
  The question is now, when will concentrations
  create catastrophic and irreversible
  environmental damage.

Variations in CO2 concentrations
Sea surface temperatures and tropical storm
frequency
Source Laskof and Hare, 1999
Source IPCC and Murphy, 2006
4
At what point does climate change become
catastrophic?

• If current practises are maintained across the
  world, CO2 concentrations will reach between 700
  and 1,000 ppm by the latter half of this century.
  Even optimistic modelling suggests this would
  create an average global temperature rise of 3C
  - enough to slow the Gulf Stream and flood the
  worlds coastal cities. There is no clear
  consensus when the point of no return will fall.

• The relationships between CO2 emissions, their
  atmospheric concentrations and global temperature
  rises are not straightforward. Anything from 440
  ppm could be catastrophic. Adopting the IPCCs
  target of stabilising concentrations at no more
  than 550 ppm by 2025 suggests we have less than
  20 years to save the planet.

Atmospheric CO2 concentrations
Ongoing impacts of climate change post-CO2
stabilisation
Source Baumert and Pershing, 2004
Source IPCC Murphy, 2004
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Options are limited ahead of 2025

• Reduction in net carbon emissions can be achieved
  in two ways abatement of practises that
  generate green house gases (GHGs) or creation of
  resources that sequester GHGs into oceanic,
  sub-surface or biological sinks. Sequestration
  will be an important strategy over the long-term
  but the immaturity of storage technology (only
  one demonstration project exists) and the slow
  rate of capture mean its contribution to
  balancing the carbon budget ahead of 2025 is
  limited.

• Equally, the ambition of decarbonising the
  worlds energy supply is at best a long term
  goal. If we were to rely on renewable energy
  sources to achieve a brake on emission, 950 MW of
  generation capacity would need to be added daily
  until 2050 - the equivalent to building over
  2,000 large wind turbines. The long replacement
  cycles of existing generation capacity2 and slow
  adoption of renewables mean infrastructural drag
  will maintain GHG emissions from fossil fuels.

Anthropogenic CO2 emissions by sector
US energy sources by type since 1850
Source Lecocq and Chomiiz , 2001
Source Wernick and Irwin, 2005
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Existing carbon policy fails to recognise role of
land use change
Anthropogenic CO2 emissions from fossil fuels and
LUC

• The focus upon fossil fuels and industrial
  emission of GHGs within Kyoto and regional carbon
  markets reflects the prioritisation that has been
  given to abatement in developed nations. What
  this focus ignores however is that almost one in
  five tonnes of anthropogenic atmospheric carbon
  comes from land use change (LUC), of which three
  quarters relates to tropical deforestation. These
  emissions from the developing world represent the
  most manageable part of the worlds carbon budget

Emissions profile by gas
Developed nations Developing Nations
Least Developed Nations
Source Baumert and Pershing, 2004
GWP Global Warming Potential gases such as SF6,
PFCs and HFCs
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Deforestation is the most manageable component of
the carbon budget

• If the world is to stabilise CO2 concentrations
  at 550 ppm and avoid catastrophic environmental
  damage controlling deforestation will play a
  central role. If existing practises are
  maintained, population and economic growth will
  see global emissions rise from the current 34
  billion tonnes of CO2 to 50 b.t.CO2 by 2025 and
  concentration would reach 800 ppm.

• Allowing for the inertia within investment
  cycles, if realistic reductions in emissions from
  energy generation, transport, industry and
  agriculture of 10 vs. 2000 levels are achieved,
  concentrations will still reach 650 ppm. In order
  to stabilise concentrations at 550 ppm the
  contribution from land use change in general and
  deforestation in particular must be halted within
  the next 20 years

Required emission reductions in order to achieve
550 ppm concentrations by 2025
Global CO2 emissions Surface Temperature vs.
1980 CO2 concentrations
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Capitalising carbon stores, conserving
environmental resources

• The purpose of Cool Earth is to attach a fair
  value to those environmental assets that are
  critical to global climate stability. As already
  noted, the contribution of land use change to
  global warming comes entirely from the developing
  world where a combination of shifting
  agriculture and engrained poverty is doing as
  much to destabilise climate as the US and China
  combined.

• By recognising the role that ecosystems in
  sub-Saharan Africa, the Amazon Basin and
  Indonesia can play in balancing the worlds
  carbon budget, the sort of radical emissions
  control that is necessary to avert catastrophic
  climate change is achievable. The first step is
  establishing a direct monetary relationship
  between the guardians of such ecosystems and the
  responsible investors.

CO2 emissions from land use change by region
Forecast change in CO2 emission by development
level
Source Wernick and Irwin, 2005
Source IPCC and Murphy, 2006
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Cool Earths first project Capitalising
rainforest
The first Cool Earth project will focus upon
South American and Asian Rainforest by
channelling funds into the long-term conservation
of the most endangered habitat. Rainforest is an
unrivalled environmental resource in terms of
biodiversity, water generation and carbon
sequestration.
Most importantly, the density of its biomass
means one hectare of rainforest locks up over 600
tonnes of CO2.Cool Earths initial target is
500,000 hectares of rainforest. Additional
tranches will follow but this initial investment
is equivalent to 10 of Europes annual CO2
emissions.
Opportunity cost of land by nation
Fossil fuel and land use change emissions in
S.America
Source FAO, 2005 GTAP, 2001
Source FAO, 2005
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Monitoring and protecting forest resource and
carbon rights
The carbon value of existing environmental
resources is currently excluded from Kyotos
definition of Clean Development Mechanisms. In
the event of existing proposals from the
Coalition of Rainforest Nations to the UN
Convention on Climate Change (supported by China,
Australia and the EU) being adopted, tradable
carbon rights would accrue to the lessees.

• By leasing rainforest over 50 years with options
  for renewal, the land value is secured upfront
  for provision of health, education and social
  investment for local communities. Cool Earths
  local subsidiary takes responsibility for
  protecting and monitoring the rainforest using
  local people, with subscribers able to view their
  holdings remotely, through real-time satellite
  tracking, or in person through guided visits.

Charitable Cool Earth Foundation
Corporate Individual Shareholders
Cool Earth plc
Cool Earth Operating Subsidiary
Cool Earth Operating Subsidiary
Cool Earth Operating Subsidiary
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Key metrics
Source Brown and Lugo, 1984 Bundestag,
1990 Bolin et al, 1986 DeFried et al, 2002
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Notes

• The two main reason for the poles experiencing
  more heating are a. Meridional Overturning
  Circulation (MOC) which takes warmer water to the
  poles (as temperatures increase, this warm water
  doesnt sink and accumulates long enough at
  higher latitudes to concentrate warming) and b.
  Loss of sea ice creates a positive feedback due
  to greater IR absorption of open water (Prowse,
  1994).
• Replacement rates on existing emissions
  technology Cars 10 -15 years, Aircraft 20 -30
  years, Wind turbines 25 years, Power plants 40
  years, Trains 30 years, Electricity distribution
  40 years and Houses 70 years.
• The trading of carbon credits seeks to provide
  positive incentives to industry to reduce
  emissions. The volatility in the spot price of
  carbon since May 2006 (see below left) has raised
  questions over the effectiveness of this
  incentive. Analogies can be drawn with Production
  Tax Credits provided in the US for investment in
  renewable sources of energy. The regular lapsing
  of such credits is blamed for inconsistent levels
  of investment in renewable technologies (see
  below right)

European spot price for CO2 (/t CO2)
US wind capacity additions and fiscal incentives
Source Capoor and Ambrosi, 2006 Price at
26/9/ 06 13.75
PTC Production Tax Credit
Source Agnolucci, 2005
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References

• Achard F, Eva HD, Stibig HJ, Mayaux P, Gallego J,
  Richards T and Malingreau JP (2002).
  Determination of deforestation rates of the
  world's humid tropical forests. Science 297,
  999-1002.
• Agnolucci P (2005). Factors Influencing the
  Likelihood of Regulatory Change in Renewable
  Electricity Markets, Presentation to BIIE Annual
  Conference, St.Johns Oxford.
• Baumert K and Pershing J (2004). Climate Data
  Insights and Observations, Pew Centre on Global
  Climate Change
• Bolin, B., Doos BR, Jager J and Warrick R, (eds)
  1986. The Greenhouse Effect, Climate Change and
  Ecosystems. Scope 29 John WileyChichester.
• Brohan P, Kennedy J, Haris I, Tett S and Jones P,
  (2006). Uncertainty estimates in regional and
  global observed temperature changes a new
  dataset from 1850. Journal of Geophysical
  Research 111.
• Brown S, and Lugo AE, (1984). Biomass of
  Tropical Forest A New Estimate based on Forest
  Volumes. Science 223 1290-1293
• Bundestag (Ed), 1990. Protecting the Tropical
  Forests A High Priority International Task.
  Bonner Universitats-Buchdruckerei Bonn.
• Capoor K and Ambrosi P (2006). State and Trends
  of the Carbon Market 2006, The International
  Emissions Trading Association ad the World Bank.
• DeFries RS, Houghton RA, Hansen MC, Field CB,
  Skole D and Townshend J (2002). Carbon emissions
  from tropical deforestation and regrowth based on
  satellite observations for the 1980s and 1990s,
  Proceeding of the National Academy of Science
  (US) 29, 14,256-14,261.
• FAO Food and Agricultural Organisation of the
  United Nations (2005). FAO Statistical Databases,
  http//faostat.fao.or

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References continued

• Houghton RA, Skole DL, Nobre CA, Hackler JL,
  Lawrence KT, and Chomentowski WH. (2000). Annual
  fluxes of carbon from deforestation and regrowth
  in the Brazilian Amazon. Nature 403, 301-304.
• Johnson, B., (1991). Responding to Tropical
  Deforestation. WWF UK Godalming.
• Jordan, C.F. (ed) (1989). An Amazonian
  Rainforest The Structure and Function of a
  Nutrient Stressed Ecosystem an the Impact of
  Slash and Burn Agriculture.UNESCO Man and
  Biosphere Series Volume 2 Paris UNESCO.
• IPCC and Murphy J, 2004. Future implications of
  carbon emissions. New Scientist, 24 July 2004 ,
  45.
• Lashof. D., and B, Hare (1999). "The role of
  biotic carbon stocks in stabilizing greenhouse
  gas concentrations
• al safe levels." Environmenlal Science and Policv
  2 101-109.
• Lecocq, F., and K. Chomiiz (2001). "Optimal use
  of carbon sequestralion in a global climaie
  change strategy Is there a wooden bridge to a
  clean energy future?" The World Bank Policy
  Research Working Paper Series. 2633.
• Makundi, W. R., and J. A. Sathaye (2004). "GHG
  mitigation potential and cost in tropical
  forestry and relative role for agroforestry."
  Environment, Development and Suxtainability 6,
  235-260.
• Malhi Y. (2002). Carbon in the atmosphere and
  terrestrial biosphere in the 21st century.
  Philosophical Transactions of Applied
  Mathematical Physical Engineering Science 15,
  2,925-2,945.
• Malhi Y, Meir P and Brown S. (2002). Forests,
  carbon and global climate. Philosophical
  Transactions of Applied Mathematical Physical
  Engineering Science 3601567-91

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References continued

• Pearce F, 2004. Kyoto won't stop climate change
  New Scientist, 2004 , 6-7.
• Prowse T. D. (1994), Environmental significance
  of ice to streamflow in cold regions. Freshwater
  Biology 32241259.
• Raich JW, Russell AE, Kitayama K, Parton WJ and
  Vitousek PM (2006). Temperature influences
  carbon accumulation in moist tropical forests.
  Ecology 87, 76-87.
• Southworth, F., V.H.Dale, and R.V.O'Neill,
  (1991). Contrasting Patterns of Land Use in
  Rondonia, Brazil Simulating the Effects on
  Carbon Release. International Social Science
  Journal, 681-698
• Wernick I and Irwin F (2005). Material Flow
  Accounts A Tool For Making Environmental Policy,
  World Resources Institute.
• Wood, W.B. (1990). Tropical Deforestation
  Balancing Regional Development Demands and Global
  Environmental Concerns. Global Environmental
  Change 1.1 23-41.

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Contact Details

• Cool Earth
• 71 South Audley Street
• London
• W1K 1JA
• UK
• www.coolearth.org
• Matthew Owen 44 788 430 7476
• Vicki Booth 44 207 307 0799